Smoot-Hawley Act

[Rhea]

Does economics belong in this forum? If not, mods please move as appropriate. I put it in here instead of politics because I'm interested in numbers discussions more than ideological posturing.

From Wikipedia on the topic:

By the late 1920s the economy of the United States had made exceptional gains in productivity due to electrification, which was a critical factor in mass production. Horses and mules had been replaced by motorcars, trucks and tractors. One-sixth to one-quarter of farmland previously devoted to feeding horses and mules was freed up, contributing to a surplus in farm produce.

Although nominal and real wages had increased, they did not keep up with the productivity gains. As a result the ability to produce exceeded market demand, a condition that was variously termed overproduction and underconsumption.

Senator Smoot contended that raising the tariff on imports would alleviate the overproduction problem; however, the US had actually been running a trade account surplus, and although manufactured goods imports were rising, manufactured exports were rising even faster. Food exports had been falling and were in trade account deficit; however the value of food imports were a little over half that of manufactured imports.[6]

That was not the last time we had a massive increase in productivity. automation and computerization produced similar leaps.

If productivity increases massively, but wages do not, that means the money went somewhere besides the producers of the goods. This is the same pattern as the later waves of productivity increase. Where did it go? And was that wise?

What if Smoot and Hawley recognized that wealth accumulation was what was stalling consumption? What if we recognized that now? A bunch of new money was made - and it did not contribute to economic growth. What can we do with that information?

 

[bigfield]

What if Smoot and Hawley recognized that wealth accumulation was what was stalling consumption? What if we recognized that now? A bunch of new money was made - and it did not contribute to economic growth. What can we do with that information?

In what way did the Smoot-Hawley Act respond to wealth concentration?

The tariffs increased demand for domestic goods, but there is no indication that workers received an increased share of the revenues received by domestic factories. The wiki article only states that 'factory payrolls, construction contracts, and industrial production all increased sharply', which probably means that factories just hired more workers in line with overall growth.

The aim of Smoot-Hawley was simple protectionism: create a high barrier for foreign suppliers so that domestic suppliers can achieve greater growth.

A bunch of new money was made - and it did not contribute to economic growth. What can we do with that information?

You would start a thread in PD suggesting government policies that redistribute wealth to people who will use it to engage in economic activity.

 

[Loren Pechtel]

If productivity increases massively, but wages do not, that means the money went somewhere besides the producers of the goods. This is the same pattern as the later waves of productivity increase. Where did it go? And was that wise?

What if Smoot and Hawley recognized that wealth accumulation was what was stalling consumption? What if we recognized that now? A bunch of new money was made - and it did not contribute to economic growth. What can we do with that information?

The money goes two places:

1) To the workers that made the tools that increased that productivity.

2) To those who provided the capital for those tools.

 

[fromderinside]

If productivity increases massively, but wages do not, that means the money went somewhere besides the producers of the goods. This is the same pattern as the later waves of productivity increase. Where did it go? And was that wise?

What if Smoot and Hawley recognized that wealth accumulation was what was stalling consumption? What if we recognized that now? A bunch of new money was made - and it did not contribute to economic growth. What can we do with that information?

The money goes two places:

1) To the workers that made the tools that increased that productivity.

2) To those who provided the capital for those tools.

Fixed it.

 

[untermensche]

If productivity increases massively, but wages do not, that means the money went somewhere besides the producers of the goods. This is the same pattern as the later waves of productivity increase. Where did it go? And was that wise?

What if Smoot and Hawley recognized that wealth accumulation was what was stalling consumption? What if we recognized that now? A bunch of new money was made - and it did not contribute to economic growth. What can we do with that information?

The money goes two places:

1) To the workers that made the tools that increased that productivity.

2) To those who provided the capital for those tools.

It must always be remembered that a market wage is not a fair wage, it is not an equitable wage, it is not a negotiated wage.

It is the lowest wage possible in prevailing economic conditions.

It is a coerced wage. The worse economic conditions become the lower the market wage can get.

The more desperate people are the less you can pay them.

These tools were paid for by coerced theft from workers.

 

[Loren Pechtel]

The money goes two places:

1) To the workers that made the tools that increased that productivity.

2) To those who provided the capital for those tools.

Fixed it.

1) It wasn't broken, I didn't specify sizes in the first place.

2) It depends on how much tooling is needed. In my experience with automation the automation spending well exceeded what the owners got.

 

[Loren Pechtel]

The money goes two places:

1) To the workers that made the tools that increased that productivity.

2) To those who provided the capital for those tools.

It must always be remembered that a market wage is not a fair wage, it is not an equitable wage, it is not a negotiated wage.

It is the lowest wage possible in prevailing economic conditions.

It is a coerced wage. The worse economic conditions become the lower the market wage can get.

The more desperate people are the less you can pay them.

These tools were paid for by coerced theft from workers.

If your economics were right we would see a major advantage towards sole proprietors. We don't. Thus your economics don't pass the reality test.

 

[untermensche]

It must always be remembered that a market wage is not a fair wage, it is not an equitable wage, it is not a negotiated wage.

It is the lowest wage possible in prevailing economic conditions.

It is a coerced wage. The worse economic conditions become the lower the market wage can get.

The more desperate people are the less you can pay them.

These tools were paid for by coerced theft from workers.

If your economics were right we would see a major advantage towards sole proprietors. We don't. Thus your economics don't pass the reality test.

Capitalism is organized theft.

The market wage is theft.

 

[Loren Pechtel]

If your economics were right we would see a major advantage towards sole proprietors. We don't. Thus your economics don't pass the reality test.

Capitalism is organized theft.

The market wage is theft.

Quit preaching. You're not addressing my point at all--if you're right then there should be a major pay advantage to the sole proprietor.

 

[untermensche]

Capitalism is organized theft.

The market wage is theft.

Quit preaching. You're not addressing my point at all--if you're right then there should be a major pay advantage to the sole proprietor.

Just giving the facts.

You constantly relate this to some startup.

That is minor activity at the fringes.

I'm talking about established corporate structures.

Where market wage is paid most often.

And it is theft every time.

 

[Loren Pechtel]

Quit preaching. You're not addressing my point at all--if you're right then there should be a major pay advantage to the sole proprietor.

Just giving the facts.

You constantly relate this to some startup.

That is minor activity at the fringes.

I'm talking about established corporate structures.

Where market wage is paid most often.

And it is theft every time.

You still are just preaching rather than addressing the point.

It doesn't matter that most jobs pay market wage. What matters is that sole proprietors exist.

A sole proprietor is in the position of the business owner. If the owner makes a huge profit off the workers then sole proprietors should far far better than employees.

The reality is they don't.

 

[untermensche]

Just giving the facts.

You constantly relate this to some startup.

That is minor activity at the fringes.

I'm talking about established corporate structures.

Where market wage is paid most often.

And it is theft every time.

You still are just preaching rather than addressing the point.

It doesn't matter that most jobs pay market wage. What matters is that sole proprietors exist.

A sole proprietor is in the position of the business owner. If the owner makes a huge profit off the workers then sole proprietors should far far better than employees.

The reality is they don't.

Your insanity doesn't follow.

Just because most people are stolen from in modern capitalism, that is how the system works, it is an aristocratic invention of masters and slaves, this says nothing about what is happening in a company comprised of one person, some "sole" member of the company.

If you need other people to accomplish your goals you are not the "sole" anything. In capitalism you are allowed to see yourself as the supreme dictator however.

You can either pay people in accordance to the value produced with group labor or you can steal from them and pay them a market wage.

We know that by and large in modern capitalism theft is most commonly seen.

 

[bilby]

Does economics belong in this forum? If not, mods please move as appropriate. I put it in here instead of politics because I'm interested in numbers discussions more than ideological posturing.

Well we managed almost four posts.

I don't think that any reasonable discussion of this topic is possible on this forum. There are too many ideologues who can't resist riding their hobby horses roughshod over any attempt to discuss anything else.

 

[Horatio Parker]

AFAICT, Smoot Hawley was about protecting domestic producers.

That makes products more expensive for domestic consumers, which slows consumption.

How that could demonstrate that SH was aware of unequal distribution of productivity gains I have no idea.

 

[Loren Pechtel]

You still are just preaching rather than addressing the point.

It doesn't matter that most jobs pay market wage. What matters is that sole proprietors exist.

A sole proprietor is in the position of the business owner. If the owner makes a huge profit off the workers then sole proprietors should far far better than employees.

The reality is they don't.

Your insanity doesn't follow.

Just because most people are stolen from in modern capitalism, that is how the system works, it is an aristocratic invention of masters and slaves, this says nothing about what is happening in a company comprised of one person, some "sole" member of the company.

If you need other people to accomplish your goals you are not the "sole" anything. In capitalism you are allowed to see yourself as the supreme dictator however.

You can either pay people in accordance to the value produced with group labor or you can steal from them and pay them a market wage.

We know that by and large in modern capitalism theft is most commonly seen.

You're still avoiding the fundamental issue--if you are right about owners stealing from workers then the sole proprietor should have a great advantage.

Pretending the sole proprietor isn't makes no sense.

 

[untermensche]

Does economics belong in this forum? If not, mods please move as appropriate. I put it in here instead of politics because I'm interested in numbers discussions more than ideological posturing.

Well we managed almost four posts.

I don't think that any reasonable discussion of this topic is possible on this forum. There are too many ideologues who can't resist riding their hobby horses roughshod over any attempt to discuss anything else.

I've never understood this form of complaining.

In a forum like this many conversations can go on at once.

You just ignore the stuff you think is a side track and focus on the great meat of these pressing matters.

Protectionism in one form or another is how all great nations become great.

None do it with this fictional idiocy "free trade".

 

[bilby]

Well we managed almost four posts.

I don't think that any reasonable discussion of this topic is possible on this forum. There are too many ideologues who can't resist riding their hobby horses roughshod over any attempt to discuss anything else.

I've never understood this form of complaining.

I have neither the time, nor the energy, to care about the vast number of things that you've never understood.

[YOUTUBE]http://www.youtube.com/watch?v=anwy2MPT5RE[/YOUTUBE]

 

[untermensche]

I've never understood this form of complaining.

I have neither the time, nor the energy, to care about the vast number of things that you've never understood.

Fuck you!!!

Assholes like you have no right to Monty Python.

They made fun of assholes that complained about things like, being off topic in an incredibly slow moving forum.

The horror!!!!