Re-Framing Capitalism

[steve_bank]

A partnership where one side holds greater power, unless of course management need skills that are in short supply.

It should be obvious that the market considers those skills to be in short supply. If the market were wrong at this why hasn't someone figured out how to exploit the situation?

The market doesn't 'consider' anything. The employer discovers that they cannot get people with the required skills, they then raise their rate in the hope that a higher rate of pay will attract applicants. Other companies may join in and there is competition on who offers the best deal.

A non-answer. Obviously, management skills are in short supply.

And while you are technically correct in saying the "market" doesn't consider that's only because it isn't a discrete entity but rather the combined decisions of a large number of actors. Actors that find themselves making inefficient decisions lose their place. Actors that find ways of improving upon the status quo often make large sums. Thus it is a process that strongly favors making good decisions.

You are not willing consider the answer objectively. No matter how valid the argument for the negatives of power imbalance and excessive wealth concentration, you dismiss whatever is said because it doesn't suit your defend the profits of the super rich narrative.

That is a power imbalance in favour of employees with the right skills. They may even get more than the market value of their input.

More commonly, the power lies with the employer, who can draw from a base of job seekers without consideration of offering anything but minimum rate.

If not for protection in law or equalizing the power balance through collective bargaining, the minimum tends become slave wges, working long hours, two or more jobs just to make ends meet. Peanuts for workers while the company enjoys higher profits.

Human nature 101.

How anyone can try to defend economic disparity on such a scale is astonishing.

You keep pleading morality in an economic argument. That says you know your economic position doesn't work.

I don't plead anything. I just point out the economic and ethical issues associated with excessive wealth and power in the hands of a small percentage of the worlds population, and of course in the workplace. Which has been described and supported time and again...only to be casually dismissed or ignored.

Weaslth disparity is a serius functional issue that thetens how the economy works.

owver do yiu really want 'power to the people'? That tends to mpb rule like Traumpsters.

 

[Loren Pechtel]

owver do yiu really want 'power to the people'? That tends to mpb rule like Traumpsters.

I can't recall the story but a line sticks with me:

Power to the people means one person, one vote, once.

(Look at what historically happens--power to the people movements that "succeed" elect a government that no longer allows meaningful democracy.)

 

[steve_bank]

A line from Gil Scott Heron, 'The revolution will not be televised'. 'The revolution will put you imn the driver seat'.

Power to the people was an expression of anger against racism and was adopted by young radical whites. It is a myth of a just styem run by 'the peole' without unjust politics and business.

Orewl[ls Animal Farm comes to mind. After the amimals kick out the farmer the animals that took power are worse than the farmer.


The founders did not want one person one vote deciding federal law. It would lead to chaos, direct democracy.

 

[DBT]

A partnership where one side holds greater power, unless of course management need skills that are in short supply.

It should be obvious that the market considers those skills to be in short supply. If the market were wrong at this why hasn't someone figured out how to exploit the situation?

The market doesn't 'consider' anything. The employer discovers that they cannot get people with the required skills, they then raise their rate in the hope that a higher rate of pay will attract applicants. Other companies may join in and there is competition on who offers the best deal.

A non-answer. Obviously, management skills are in short supply.

And while you are technically correct in saying the "market" doesn't consider that's only because it isn't a discrete entity but rather the combined decisions of a large number of actors. Actors that find themselves making inefficient decisions lose their place. Actors that find ways of improving upon the status quo often make large sums. Thus it is a process that strongly favors making good decisions.

You are not willing consider the answer objectively. No matter how valid the argument for the negatives of power imbalance and excessive wealth concentration, you dismiss whatever is said because it doesn't suit your defend the profits of the super rich narrative.

That is a power imbalance in favour of employees with the right skills. They may even get more than the market value of their input.

More commonly, the power lies with the employer, who can draw from a base of job seekers without consideration of offering anything but minimum rate.

If not for protection in law or equalizing the power balance through collective bargaining, the minimum tends become slave wges, working long hours, two or more jobs just to make ends meet. Peanuts for workers while the company enjoys higher profits.

Human nature 101.

How anyone can try to defend economic disparity on such a scale is astonishing.

You keep pleading morality in an economic argument. That says you know your economic position doesn't work.

I don't plead anything. I just point out the economic and ethical issues associated with excessive wealth and power in the hands of a small percentage of the worlds population, and of course in the workplace. Which has been described and supported time and again...only to be casually dismissed or ignored.

Weaslth disparity is a serius functional issue that thetens how the economy works.

owver do yiu really want 'power to the people'? That tends to mpb rule like Traumpsters.

A better balance to enable negotiation instead of declaration, that's all. Excessive power on either side is not a good thing when it comes to negotation or bargaining.

 

[steve_bank]

That is supposed to be our system dybanics. Individuals and groups aggressively pursuing an adverserial agenda. The problme is it requires the ability to compromise, which we seem to have lost.

The qusetion is can our system with growing divisions and agendas actually function and survive in the long run. China argues it will not and their form of authoritarianism will.

The more we have divisions without compromise the more opportunity exists for a Trump.

 

[DBT]

The world looks like an unstable powder keg. Not good.

 

[Harry Bosch]

The world looks like an unstable powder keg. Not good.

We can uselessly argue all day about the definition socialism. But I hope that we can all agree at least that capitalism is a system where the economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state. By this definition, Russia and China are clearly not capitalistic. Russia and China have capitalist companies within their country. But they are at the beck and control of the Russian and Chinese government. It's interesting that two of the most anti-capitalistic countries in the world are so militaristic and imperialistic. Russia is at war in Europe. China is threatening to invade Taiwan and any country that gets in its way.

 

[Swammerdami]

The world looks like an unstable powder keg. Not good.

We can uselessly argue all day about the definition socialism. But I hope that we can all agree at least that capitalism is a system where the economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state. By this definition, Russia and China are clearly not capitalistic. Russia and China have capitalist companies within their country. But they are at the beck and control of the Russian and Chinese government. It's interesting that two of the most anti-capitalistic countries in the world are so militaristic and imperialistic. Russia is at war in Europe. China is threatening to invade Taiwan and any country that gets in its way.

This is mostly correct but incomplete. Both China and Russia encourage private entrepreneurship as long as the entrepreneur adheres to the dicta of the Communist Party (in the case of China) or to the Putin crime cartel (in the case of Russia).

Viewed this way, oligarchy is the threat, not socialism.

 

[DBT]

The world looks like an unstable powder keg. Not good.

We can uselessly argue all day about the definition socialism. But I hope that we can all agree at least that capitalism is a system where the economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state. By this definition, Russia and China are clearly not capitalistic. Russia and China have capitalist companies within their country. But they are at the beck and control of the Russian and Chinese government. It's interesting that two of the most anti-capitalistic countries in the world are so militaristic and imperialistic. Russia is at war in Europe. China is threatening to invade Taiwan and any country that gets in its way.

Labels are not necessarily accurate. Does a ruling Oligarchy represent Socialism, where governence is supposed to be by the people for the benefit of the people? Is that what we see in China or Russia?

 

[JohnG]

One point I didn't see reading through these posts - Large corporations don't operate in a void, they rely heavily on the amenities that are paid for by local taxes - Schools, hospitals, roads, utilities, police, etc...

The large company I work for (Mitsubishi) pays a low corporate tax, they are foreign owned, the employ as little of the local workforce as possible minus 1, mostly automated now.

Without the local infrastructure, resources and educated workers they would not be able to exist here.

It's a mostly "take and very little give" relationship.

They do about 50 B in profit per year.

I am certainly not against capitalism but lets not pretend that the pendulum hasn't swung hard.

 

[Bomb#20]

It's a mostly "take and very little give" relationship.

They do about 50 B in profit per year.

I am certainly not against capitalism but lets not pretend that the pendulum hasn't swung hard.

Google tells me Mitsubishi's profit margin is about 4%. So 50 B in profits means 1.25 T in revenue. Customers got stuff from Mitsubishi that was worth more than 1.25 T to the customers -- they bought the stuff because they wanted it more than they wanted 1.25 T. Are you counting all that trillion-plus-worth of stuff Mitsubishi gave its customers, when you say "take and very little give"?

 

[rousseau]

It's a mostly "take and very little give" relationship.

They do about 50 B in profit per year.

I am certainly not against capitalism but lets not pretend that the pendulum hasn't swung hard.

Google tells me Mitsubishi's profit margin is about 4%. So 50 B in profits means 1.25 T in revenue. Customers got stuff from Mitsubishi that was worth more than 1.25 T to the customers -- they bought the stuff because they wanted it more than they wanted 1.25 T. Are you counting all that trillion-plus-worth of stuff Mitsubishi gave its customers, when you say "take and very little give"?

There likely is an argument to be made that the world is moving into a new era of corporate power, and isn't as state-centric as it once was. But what conclusions or responses derive from that, I really don't know.

The one thing that's certain is that human nature doesn't really change. The left will always be the left, the right will always be the right, they'll be in a permanent tug-a-war and whatever's going to happen is going to happen.

 

[steve_bank]

Were seeing avilabilty of land and prices going up with supply and demand.

Seattle continues to grow and nobody has a fucking clue where all the people moving to Seattle are going to live.

Amazon is building two towers over in Bellevue which initially will have about 10,000 people.

There are few that hold a lot of wealth. However the vast majority of business in the USA are small to medium many family owned.

It is not the same economy Maex commented on in the 19th century.

When Starbucks was arted the founders wer down at the docks humping sacks of coffee.

 

[Swammerdami]

I started skimming the thread, only to see that I'd already made some of the most important points, especially in #214.

I'll just add one more point:

A company that agrees to pay higher wages than it would have paid had the union not insisted on it is a company that will hire fewer workers than it would otherwise have hired.

If wages rise X% then Y% of workers will be laid off. The relationship between X and Y is important. Many real-world experiments show that X exceeded Y; not only are the remaining employees better off but they can afford taxes sufficient to help out those laid off.

Best is to improve the (no-strings-attached) "safety net," perhaps as Andrew Yang proposes though my version is much better.

 

[DBT]

"Millions of American adults who earn low wages rely on federal programs to meet basic needs, such as Medicaid for health care and the Supplemental Nutrition Assistance Program for food.

To learn more about the people who use these programs, we analyzed employment data from 11 states and Census data.

We found:

About 70% worked full time

Most worked for private sector employers in places like restaurants, department stores, and grocery stores

Others worked for state governments, public universities, or nonprofit organizations

Some employers in selected states had thousands of beneficiaries in their workforces."

Federal Social Safety Net Programs: Millions of Full-Time Workers Rely on Federal Health Care and Food Assistance Programs

Millions of American adults who earn low wages rely on federal programs to meet basic needs, such as Medicaid for health care and the Supplemental...

www.gao.gov

 

[Bomb#20]

I'll just add one more point:

A company that agrees to pay higher wages than it would have paid had the union not insisted on it is a company that will hire fewer workers than it would otherwise have hired.

If wages rise X% then Y% of workers will be laid off. The relationship between X and Y is important. Many real-world experiments show that X exceeded Y; not only are the remaining employees better off but they can afford taxes sufficient to help out those laid off.

Right. I was criticizing the endless self-deceptive rhetoric on this topic; I wasn't criticizing unions.

But there's something monumentally silly about going from ten workers paid $1000 each to nine workers paid $1200 each and taxed $111 each to compensate the laid off worker, meaning nine workers get a net 9% raise for doing the same work while one worker gets a full-time paid vacation. If the employers are going to pay 8% more money for 10% less labor and the monetary proceeds for the workers are going to be shared out, why the heck shouldn't the leisure proceeds also be shared out? All ten workers could get 8% more money for 10% less labor. Besides, since the intent is to out-negotiate the employer by putting up a united front, it's important to keep the workers' interests from conflicting. So they need to demand a shorter workweek. Then nobody gets laid off.

Best is to improve the (no-strings-attached) "safety net," perhaps as Andrew Yang proposes though my version is much better.

That's also a good idea.

 

[Bomb#20]

"Millions of American adults who earn low wages rely on federal programs to meet basic needs, such as Medicaid for health care and the Supplemental Nutrition Assistance Program for food.
...
About 70% worked full time
Most worked for private sector employers in places like restaurants, department stores, and grocery stores
Others worked for state governments, public universities, or nonprofit organizations
Some employers in selected states had thousands of beneficiaries in their workforces."

Cool! These are all indications that we as a society have finally started allowing labor supply and demand, employability, public assistance, and self-supportingness to become continuous monotonic functions, instead of the traditional cliffs. This is all to the good. Cliffs create massive inefficiencies and perverse incentives.

 

[Loren Pechtel]

I started skimming the thread, only to see that I'd already made some of the most important points, especially in #214.

I'll just add one more point:

A company that agrees to pay higher wages than it would have paid had the union not insisted on it is a company that will hire fewer workers than it would otherwise have hired.

If wages rise X% then Y% of workers will be laid off. The relationship between X and Y is important. Many real-world experiments show that X exceeded Y; not only are the remaining employees better off but they can afford taxes sufficient to help out those laid off.

Best is to improve the (no-strings-attached) "safety net," perhaps as Andrew Yang proposes though my version is much better.

The XY arguments I've seen have two critical flaws:

1) Raising wages rarely destroys companies now. Fundamentally, profit margins are set by market forces and can't be altered by the government in the long run. In a competitive situation profit margins gravitate to a value based on how risky the industry is. This is enforced by the twin facts that if profit is too high new players will enter and if profit is too low companies that fail will not be replaced by new players. Wages generally go up in good times, the true test comes in the next bad time--companies fail and aren't replaced. Your Y suddenly got bigger in a way you can't expect to detect statistically because it's too distant. (Detecting layoffs is already very murky due to statistical noise even in the short run.)

2) They always look at the cost to an industry--but if you're actually going to raise wages you need to push that through the whole supply chain, not merely one spot on the chain.

 

[DBT]

"Millions of American adults who earn low wages rely on federal programs to meet basic needs, such as Medicaid for health care and the Supplemental Nutrition Assistance Program for food.
...
About 70% worked full time
Most worked for private sector employers in places like restaurants, department stores, and grocery stores
Others worked for state governments, public universities, or nonprofit organizations
Some employers in selected states had thousands of beneficiaries in their workforces."

Cool! These are all indications that we as a society have finally started allowing labor supply and demand, employability, public assistance, and self-supportingness to become continuous monotonic functions, instead of the traditional cliffs. This is all to the good. Cliffs create massive inefficiencies and perverse incentives.

Subsidizing firms by subsidizing workers when the business, even though it has the means to pay a decent wage place, doesn't do so because it can get away with it?

 

[lpetrich]

It isn't indifference to ethics; it's just that trying to explain ethics to anticapitalists is exhausting and usually futile. They are trapped in a zero-sum-game mentality that got hard-wired into our brains from a million years of living as hunter-gatherers, and ten thousand years of farming hasn't been long enough to wrap their minds around the new reality that zero-sum-game thinking has become hopelessly, unethically, obsolete.

Confusing production and distribution just so one can win.

As to zero-sumism, it's treated as self-evident truth by certain opponents of labor unions. So whether zero-sumism is a fallacy or an absolute truth depends on what will help one win arguments.

Also, businesses operate collectively, especially big businesses, contrary to the individualist fantasies of pro-capitalist ideologues. In fact, such ideologues ought to hate big businesses and try to break them up on the ground that they encourage people to be collectivist.

One can ask how much each employee's work contributes to a business's revenue, and while it is not necessarily an equal amount, it is also not those at the top contributing 100% and everybody else 0%, which is what many capitalism apologists seem to believe.