Workers getting paid what they are worth

[Axulus]

Very interesting research paper about worker compensation released not too long ago:

"An increasing fraction of jobs in the U.S. labor market explicitly pay workers for their performance using a bonus, a commission, or a piece rate. In this paper, we look at the effect of the growing incidence of performance pay on wage inequality. The basic premise of the paper is that performance pay jobs have a more “competitive” pay structure that rewards productivity differences more than other jobs. Consistent with this view, we show that compensation in performance pay jobs is more closely tied to both measured (by the econometrician) and unmeasured productive characteristics of workers. We conclude that the growing incidence of performance pay accounts for 25 percent of the growth in male wage inequality between the late 1970s and the early 1990s, and for most of the growth in top-end wage inequality (above the 80th percentile) during this period." (emphasis added)

See for yourself:

http://www.econ.ubc.ca/lemieux/papers/ppsept06.pdf

[Loren Pechtel]

Oh, come on now--pay the workers what they are actually worth? What a horrible idea!

The problem is that there is a considerable tendency for people to see their ability as higher than it really is and thus their ideas of what they are is higher than where they really are.

[EricK]

So what accounts for the other 75% of the growth in wage inequality?

How can you in your title claim workers are getting paid what they are worth when this paper has only accounted for a minority of only the growth in wage inequality.

[Axulus]

So what accounts for the other 75% of the growth in wage inequality?

How can you in your title claim workers are getting paid what they are worth when this paper has only accounted for a minority of only the growth in wage inequality.

Because the topic of the paper is very specific, it only examines direct pay for performance. The fact that it explains 25% of the growth in income inequality overall and even more for the top 20th percentile is pretty significant. There are more factors than just this one thing to explain the growth in income inequality. Some other explanations include the increasing returns to human capital (income difference between getting a college degree vs. high school drop-out or high school graduate but no college is widening) and the increasing value of skilled labor as information and intellectual property becomes ever more important to our economy.

[Metaphor]

I'm guessing high end CEOs were excluded from the study.

[Bonniedundee]

Technically the workers create all the value of the business, if there is coercion making them take less than that in wages then it is exploitation.

Currently there is masses of exploitation.

[Nitrousoxide]

And how, euro, how are business coercing those employees? Are they sticking a gun to their head? No, these people with full knowledge and with the freedom to refuse at any point in the process chose to agree to particular payment amounts.

So long as that is true, whether they produce more or less than what they are paid is irrelevant to whether they were coerced into working for the company.

[Bonniedundee]

And how, euro, how are business coercing those employees? Are they sticking a gun to their head? No, these people with full knowledge and with the freedom to refuse at any point in the process chose to agree to particular payment amounts.The state creates the coercion, it protects capital from competition with labour, in a free market capital and labour would have equal bargaining power reducing the returns on capital to almost zero, destroying capitalists.

[Nitrousoxide]

But labor in any sector of the economy has plenty of opportunities elsewhere.

Even with monopolies in the the production of some product, there can be a healthy competition for that labor. Consider factory workers. Perhaps there might be a monopoly in the production of toothbrushes, but those same factory workers can go elsewhere. They can work in a factory for cars, or one for soft drinks.

It's A LOT harder to get a monopoly in BOTH the end product market AND in the labor market. Getting a monopoly in the labor market is, in fact, near impossible because so many different products can use the same sorts of laborers.

[Bonniedundee]

But labor in any sector of the economy has plenty of opportunities elsewhere.Less than they naturally would.

Even with monopolies in the the production of some product, there can be a healthy competition for that labor. Consider factory workers. Perhaps there might be a monopoly in the production of toothbrushes, but those same factory workers can go elsewhere. They can work in a factory for cars, or one for soft drinks.

It's A LOT harder to get a monopoly in BOTH the end product market AND in the labor market. Getting a monopoly in the labor market is, in fact, near impossible because so many different products can use the same sorts of laborers.There are plenty of limits on the labour market, the very fact we have wage labour shows this.

There is primitive accumulation.the land monopoly, money monopoly, state regulations and support etc etc.

If there was wage labour in a free market fine, but we don't live in a free market, so opportunities are cut off.

[Nitrousoxide]

Okay... hold on here.

Wage labor is apparently sufficiant for a non-free labor market. But in a free market, it's apparently okay to have wage labor.

So which is it? Is wage labor sufficiant or is it not sufficiant to show that we don't have a free market. And why is it bad now, but not in an anarchy?

[Bonniedundee]

Wage labor is apparently sufficiant for a non-free labor market. But in a free market, it's apparently okay to have wage labor.
Yep because the workers have complete freedom to choose, there is no coercion being applied, I doubt of course it would be very popular.

So which is it? Is wage labor sufficiant or is it not sufficiant to show that we don't have a free market. And why is it bad now, but not in an anarchy?It is bad now because there is coercion being applied and the bargaining power of workers is drastically reduced. In a free market you'd have complete freedom.

[Nitrousoxide]

Do you realise how horrible that logic is?

Wage labor is apparently both sufficiant to prove that a system is not free, and not sufficiant to prove that a system is not free.

To prove to me that our labor market is not free, you've needed to say p & ~p.

[Stinger]

Do you realise how horrible that logic is?

Wage labor is apparently both sufficiant to prove that a system is not free, and not sufficiant to prove that a system is not free.

To prove to me that our labor market is not free, you've needed to say p & ~p. The problem with liberals is that they want to decide for others what is good for them. I'm very content being a wage slave. I don't want to be an owner. Maybe it's because I'm a little older (40) and getting rich isn't as high on my list of important things as it use to be.

[Axulus]

Technically the workers create all the value of the business, if there is coercion making them take less than that in wages then it is exploitation.


Nope, the entrepreneurs who figure out what tasks the workers should be performing, provide motivation and training, and also those who provide the equipment, buildings, and resources to do what needs to be done is extremely valuable.

[Bonniedundee]

Do you realise how horrible that logic is?

Wage labor is apparently both sufficiant to prove that a system is not free, and not sufficiant to prove that a system is not free.

To prove to me that our labor market is not free, you've needed to say p & ~p.

You not one to lecture of logic.

I was simply saying that widespread wage slavery is a good indication the system is not free.

[Bonniedundee]

The problem with liberals is that they want to decide for others what is good for them. I'm very content being a wage slave. I don't want to be an owner. Maybe it's because I'm a little older (40) and getting rich isn't as high on my list of important things as it use to be.
Who are you calling a liberal? I'm for free markets than you are!:wave:

[Bonniedundee]

Nope, the entrepreneurs who figure out what tasks the workers should be performing, provide motivation and training, and also those who provide the equipment, buildings, and resources to do what needs to be done is extremely valuable.Alot of the "work" the capitalists do is not necessary to actual production, but when it is, it is counted as labour like the rest.

Labour creates those buildings, in a free market if you want to lend your capital that is fine you should be rewareded as capital is just past labout, but when the state gives you far, far higher bargaining power so as to greatly increase your returns it is not fair at all.

[Bonniedundee]

Axulus, Murray Rothbard, a real free marketeer, said it best.

"On the free market, everyone earns according to his productive value in satisfying consumer desires. Under statist distribution, everyone earns in proportion to the amount he can plunder from the producers."

[Loren Pechtel]

So what accounts for the other 75% of the growth in wage inequality?

How can you in your title claim workers are getting paid what they are worth when this paper has only accounted for a minority of only the growth in wage inequality.

Read it again.

25% is attributable to directly measurable performance pay. Many people are in fields for where such measurements aren't possible. That doesn't mean that employers aren't adjusting pay based on worker performance, just that it's things lacking excellent yardsticks.

[Loren Pechtel]

Technically the workers create all the value of the business, if there is coercion making them take less than that in wages then it is exploitation.

Currently there is masses of exploitation.

:rolling: :rolling: :rolling: :rolling:


Just because Marx fucked up and missed the value of management doesn't mean that you need to repeat his mistake.

I've watched what happens with the same workers but good management vs bad management.

[untermensche]

Just because Marx fucked up and missed the value of management doesn't mean that you need to repeat his mistake.

I've watched what happens with the same workers but good management vs bad management.
What is missed is the easy ability of workers to manage themselves and the direction their enterprises take.

A special managerial class that does no manual labor is superfluous and a drain to any production system.

[Loren Pechtel]

The state creates the coercion, it protects capital from competition with labour, in a free market capital and labour would have equal bargaining power reducing the returns on capital to almost zero, destroying capitalists.

And taking the society with it. No capital = pre-renissance life. 90% of the human race dies.

Since that society can't get at anything that needs to be mined even more die.

[Bonniedundee]

And taking the society with it. No capital = pre-renissance life. 90% of the human race dies.So you support state coercion then, to avoid what you think free markets will do?

[Loren Pechtel]

The problem with liberals is that they want to decide for others what is good for them. I'm very content being a wage slave. I don't want to be an owner. Maybe it's because I'm a little older (40) and getting rich isn't as high on my list of important things as it use to be.

Yeah, there are a lot of us who don't want the headaches of being the boss.


Something that the leftists consistently miss is that you get quite a bit of security by being an employee. You'll get your paycheck regardless of the ups and downs of the business--only when things are really bad will you suffer.

For the last several years my wife has worked entirely on a basis of getting paid when her boss got paid. This means she gets on average more money but it makes for major ups and downs in her paycheck. I'd like to see some of our liberal types live on that sort of income. It also means there's no such thing as paid vacation or even sick days.

Long ago one of the liberal types on here felt that she was being ripped off because she didn't get 100% of what was collected due to her billings. I never got an answer when I asked what was supposed to pay the rent, the power bill, the front desk, the billing office, the records office etc.

[Bonniedundee]

Yeah, there are a lot of us who don't want the headaches of being the boss.Perhaps they should be given the full choice, in a free market.

[untermensche]

Yeah, there are a lot of us who don't want the headaches of being the boss.

Something that the leftists consistently miss is that you get quite a bit of security by being an employee. You'll get your paycheck regardless of the ups and downs of the business--only when things are really bad will you suffer.

For the last several years my wife has worked entirely on a basis of getting paid when her boss got paid. This means she gets on average more money but it makes for major ups and downs in her paycheck. I'd like to see some of our liberal types live on that sort of income. It also means there's no such thing as paid vacation or even sick days.

Long ago one of the liberal types on here felt that she was being ripped off because she didn't get 100% of what was collected due to her billings. I never got an answer when I asked what was supposed to pay the rent, the power bill, the front desk, the billing office, the records office etc.
Nobody said trying to really make it legitimately as a capitalist is easy. Capitalism is a jungle. And worker security is a thing of the past as we have seen for decades as job after job went, and still goes, overseas so companies making a profit could make a bigger profit.

But the US economy is not based on capitalism. That is what most are forced into. The brutal system of capitalism.

The most dynamic part of the US economy has nothing to do with capitalism. It is government directed funding into research and development which when it finds something that can be sold for profit the profit making goes into private hands. In other words, the public takes all the risk, does all the hard research, and the profits are all made by private individuals.

This huge government funded structure rests on all others forced to exist in what is left to fight over in the real world of capitalism.

[Nitrousoxide]

You not one to lecture of logic.

I was simply saying that widespread wage slavery is a good indication the system is not free.

You don't have a clear indicator of what makes a market free or not. I asked you to tell me how I can tell when a market is free. You proceeded to tell me that wage labor is an indicator of an unfree market, except in a free market, when it's not.

That is not an answer at all. It's nonsense. How am I to know whether wage labor is indicative of a free market unless I already know whether it's a free market in the first place? If I don't know whether the market is free, I can't say whether it's an indicator for a free market or not. And if I already knew that, I wouldn't be asking the question. So your answer does NOTHING to help the individual who doesn't know whether a market is free or not tell if it is, in fact, free.

[Bonniedundee]

You don't have a clear indicator of what makes a market free or not. I asked you to tell me how I can tell when a market is free. You proceeded to tell me that wage labor is an indicator of an unfree market, except in a free market, when it's not.I do not think you asked me to tell you what makes a market free. And I said that wage labour is okay if done by completely free choice ie in a free market but that it wouldn't occur hardly at all in this setting as people won't choose to do it.

Hence to see alot of it shows the market is not free. This is pretty simple to understand.


A free market is simple, it is a society where there is no legitimised coercion, from legitimate liberal property rights all legitimised transactions(not those that are recognised as criminal.) are completely voluntary, which means no compulsory taxation, regulations or any other kind of state intervention.

A free market is a market where the price of an item is arranged by the mutual consent of sellers and buyers, with the supply and demand of that item not being regulated by a government or subject to manipulation by traders (see supply and demand); the opposite is a controlled market, where supply and price are set by a government or influenced by traders.

This definition is for one product, but in fact for anything product to have a free market, all products have to have them because state coercion can effect other products in many, many ways. One large intervention would be enough to make almost no markets for any single product free because of its price distorting effects.
That is not an answer at all. It's nonsense. How am I to know whether wage labor is indicative of a free market unless I already know whether it's a free market in the first place? If I don't know whether the market is free, I can't say whether it's an indicator for a free market or not. And if I already knew that, I wouldn't be asking the question. So your answer does NOTHING to help the individual who doesn't know whether a market is free or not tell if it is, in fact, free.Again I don't recall you asking this question and if there is widespread wage labour it is a good indicator it is an unfree market, this is all I said. I really don't know what you are talking about, you seem to have got the complete wrong end of the stick.

[Stinger]

The problem with liberals is that they want to decide for others what is good for them. I'm very content being a wage slave. I don't want to be an owner. Maybe it's because I'm a little older (40) and getting rich isn't as high on my list of important things as it use to be.

Yeah, there are a lot of us who don't want the headaches of being the boss.


Something that the leftists consistently miss is that you get quite a bit of security by being an employee. You'll get your paycheck regardless of the ups and downs of the business--only when things are really bad will you suffer.

For the last several years my wife has worked entirely on a basis of getting paid when her boss got paid. This means she gets on average more money but it makes for major ups and downs in her paycheck. I'd like to see some of our liberal types live on that sort of income. It also means there's no such thing as paid vacation or even sick days.

Long ago one of the liberal types on here felt that she was being ripped off because she didn't get 100% of what was collected due to her billings. I never got an answer when I asked what was supposed to pay the rent, the power bill, the front desk, the billing office, the records office etc.
I think that there are some people who are born to be entrepreneurs. However, IMO, for the vast majority of people - it is very stressful. You have to pledge all your assets at risk, work 90 hours a week, make a gizzillion decisions - any one of which could put you out of business, and etc. I make a lot of money for my company. And my pay is less than what I generate for them. But that's okay. I still ask for a pay raise every year. If I have any peers that make substantially more than me, I'll walk. But I'm happy to work my 45 hours a week, collect a paycheck that is less than what I'm actually generating, and sleep very soundly at night.

[Stinger]

Yeah, there are a lot of us who don't want the headaches of being the boss.Perhaps they should be given the full choice, in a free market. How is your system a choice? You want to force everyone to be the boss. I don't want to be a boss.

[Axulus]

Axulus, Murray Rothbard, a real free marketeer, said it best.

"On the free market, everyone earns according to his productive value in satisfying consumer desires. Under statist distribution, everyone earns in proportion to the amount he can plunder from the producers."

If a single person figures out a new way to organize the work of the workers so that the value of what is produced is increased, then that single person is solely responsible for that increase in value and should receive the majority of the rewards for that increase in value. The workers did not create the value that is derived from figuring out what to work on and how.

If I decide to create or buy a machine for my workers that increases the value of what is produced, then my creation or purchase of the machine is solely responsible for the increase in value and I should receive the majority of the rewards from the increase in value that results.

[Loren Pechtel]

If a single person figures out a new way to organize the work of the workers so that the value of what is produced is increased, then that single person is solely responsible for that increase in value and should receive the majority of the rewards for that increase in value. The workers did not create the value that is derived from figuring out what to work on and how.

If I decide to create or buy a machine for my workers that increases the value of what is produced, then my creation or purchase of the machine is solely responsible for the increase in value and I should receive the majority of the rewards from the increase in value that results.

Oh, but we already know everything! There's no gain in doing things more efficiently, thus your scenario is bogus.

[untermensche]

If a single person figures out a new way to organize the work of the workers so that the value of what is produced is increased, then that single person is solely responsible for that increase in value and should receive the majority of the rewards for that increase in value. The workers did not create the value that is derived from figuring out what to work on and how.

If I decide to create or buy a machine for my workers that increases the value of what is produced, then my creation or purchase of the machine is solely responsible for the increase in value and I should receive the majority of the rewards from the increase in value that results.
The way we figure the value of your workers is to take them away from you and see what you have by your own efforts. Any increase over what your own efforts could bring you is their worth.

[Axulus]

The way we figure the value of your workers is to take them away from you and see what you have by your own efforts. Any increase over what your own efforts could bring you is their worth.

You have a severe flaw in your argument:

The way we figure out the value of capital and resources is to take them away from the workers and see how much value they can create with their own efforts.

The way we figure out the value of airplane pilots is to take away the pilots and determine the difference in value of an airplane flight without a pilot vs. an airplane flight with pilots.

The way we figure out the value of electricity is to take it away from a company and find the resulting difference in value.

The value of 4 tires is determined by removing them from a car and finding the difference in the value derived from the usefulness of a car without any tires vs. a car with tires.

Complete nonsense. That is why value is determined from a common price agreed upon by a willing buyer and a willing seller. Just because a machine can not run without an individual cog does not mean that the value of the individual cog is equal to the value of the whole machine.

If that were the case, than the value of each individual part of the machine that is required for it to run would be equal to the value of the whole machine, which doesn't make any sense. The total value is derived from each individual part working together. The only approach to determine the value of each of those individual parts that makes sense is from supply and demand.

[untermensche]

You have a severe flaw in your argument:

The way we figure out the value of capital and resources is to take them away from the workers and see how much value they can create with their own efforts.

The way we figure out the value of electricity is to take it away from a company and find the resulting difference in value.

Complete nonsense. That is why value is determined from a common price agreed upon by a willing buyer and a willing seller.
That is no flaw in my argument.

My argument concerns the worth of your workers to you, not the worth of anything to your workers, which is a completely different topic.

[Axulus]

That is no flaw in my argument.

My argument concerns the worth of your workers to you, not the worth of anything to your workers, which is a completely different topic.

There is a big flaw if you are trying to argue that workers should be paid the difference in value that would result if they were removed. If you add up the value of each part based on the resulting difference in value if that part were removed, you would get a value that is much greater than the value of everything together.

A machine has 3 cogs, the machine is worth $10,000. If any of those three cogs are missing, the machine is useless and has no value. You saying that each individual cog is worth $10,000 (the difference in value that results if it were missing). You then must conclude that, since each cog is worth $10,000, and there are 3 cogs, than the total value of the cogs is $30,000, which is nonsense.

[untermensche]

There is a big flaw if you are trying to argue that workers should be paid the difference in value that would result if they were removed. If you add up the value of each part based on the resulting difference in value if that part were removed, you would get a value that is much greater than the value of everything together.

A machine has 3 cogs, the machine is worth $10,000. If any of those three cogs are missing, the machine is useless and has no value. You saying that each individual cog is worth $10,000 (the difference in value that results if it were missing). You then must conclude that, since each cog is worth $10,000, and there are 3 cogs, than the total value of the cogs is $30,000, which is nonsense.
There was no discussion of pay. It was a truism concerning value.

The value to any person who commands workers, of their workers, is the increase in productivity that comes from more people doing a specific task.

But as you say the workers also get value in being commanded. A productive task is accomplised, that not one individual could do alone. So they don't deserve all the increase. Just a fair portion of it.

What is fair is the whole modern argument.

[Loren Pechtel]

The way we figure the value of your workers is to take them away from you and see what you have by your own efforts. Any increase over what your own efforts could bring you is their worth.

And see how far your workers get without the capitalist providing the machinery and organization.

[Loren Pechtel]

That is no flaw in my argument.

My argument concerns the worth of your workers to you, not the worth of anything to your workers, which is a completely different topic.

What you are missing is that the whole is greater than the sum of the parts.

That difference is what is added by management.

[Loren Pechtel]

But as you say the workers also get value in being commanded. A productive task is accomplised, that not one individual could do alone. So they don't deserve all the increase. Just a fair portion of it.

And that's what they get.

The problem is that so many on your side don't think they should get anything.

[Stinger]

That is no flaw in my argument.

My argument concerns the worth of your workers to you, not the worth of anything to your workers, which is a completely different topic.

What you are missing is that the whole is greater than the sum of the parts.

That difference is what is added by management. It's called "going concern". For example: the owner establishes a going concern by hiring and training the right workers, establishing a manufacturing process, developing a marketing and distribution system, investing in the right assets, and etc. If it were so easy for workers to make money then we probably would have a true socialist system. The fact of the matter is that it is very difficult to make money in a competitive market. The people who say that the owner and/or managers don't bring anything to the table just don't know what they are talking about. No offense to the workers. But when bankers and investors evaluate a business, they evaluate the management. Management is by far the most important characteristic of any business.

[untermensche]

And that's what they get.

The problem is that so many on your side don't think they should get anything.
You get what is fair when you have two parties with equal power in a transaction.

This is why wages when unions negotiate with management are the closest to equitable.

The individual against a huge corporation has little negotiating power.

[untermensche]

What you are missing is that the whole is greater than the sum of the parts.

That difference is what is added by management.
What do a bunch of managers get without people to manage?

What profits do they get then?

[Stinger]

What you are missing is that the whole is greater than the sum of the parts.

That difference is what is added by management.
What do a bunch of managers get without people to manage?

What profits do they get then? The simple truth is that the managers would hire new workers. I'm not saying that workforce isn't very important. But there isn't a successful plant in the US that could fire all it's owners and managers, replace them with existing workers, that would be in business for more than a month. The most successful ESOPs are those that retain their key managers.

[untermensche]

The simple truth is that the managers would hire new workers. I'm not saying that workforce isn't very important. But there isn't a successful plant in the US that could fire all it's owners and managers, replace them with existing workers, that would be in business for more than a month. The most successful ESOPs are those that retain their key managers.
That is not the question.

What would these clever managers have with nobody to manage?

[Stinger]

The simple truth is that the managers would hire new workers. I'm not saying that workforce isn't very important. But there isn't a successful plant in the US that could fire all it's owners and managers, replace them with existing workers, that would be in business for more than a month. The most successful ESOPs are those that retain their key managers.
That is not the question.

What would these clever managers have with nobody to manage?
The question is moot. Successful managers willing to pay never have problems attracting workers. On the other hand, plants fail due to lack of management every single day. I'm trying to not devalue workers. However, you're the one making the point that managers don't bring anything to the table. And it's just wrong. You don't have to believe me. Ask any banker or any investment person: the most critical measure of a company is management.

[untermensche]

The question is moot. Successful managers willing to pay never have problems attracting workers. On the other hand, plants fail due to lack of management every single day. I'm trying to not devalue workers. However, you're the one making the point that managers don't bring anything to the table. And it's just wrong. You don't have to believe me. Ask any banker or any investment person: the most critical measure of a company is management.
The question is not moot. It is a very legitimate question if we are to decide the value of these managers.

THEIR value is in what that can do on their own.

Bring in any other people and you are now talking about more than THEIR value.

[coloradoatheist]

The simple truth is that the managers would hire new workers. I'm not saying that workforce isn't very important. But there isn't a successful plant in the US that could fire all it's owners and managers, replace them with existing workers, that would be in business for more than a month. The most successful ESOPs are those that retain their key managers.
That is not the question.

What would these clever managers have with nobody to manage?

You are right, it isn't a moot question hence why workers are paid for their work. If a company doesn't pay enough, they won't find qualified workers and if they behave badly they'll get turnover, bad customer service, and they will go out of business.


Mike

[untermensche]

You are right, it isn't a moot question hence why workers are paid for their work. If a company doesn't pay enough, they won't find qualified workers and if they behave badly they'll get turnover, bad customer service, and they will go out of business.


Mike
You talk as if the natural state of man is in need of some other person to provide for their survival.

You can ignore the question, if you like.

But this does not address it at all.

We want to determine the worth of some crafty managers.

Their worth is their worth. We don't bring anybody else in to determine their base worth.

You for some reason do not want to even consider their base worth.

All you want to talk about is their worth when others agree to cooperate with them, which is the worth of the whole not the worth of the managers alone.

[coloradoatheist]

You are right, it isn't a moot question hence why workers are paid for their work. If a company doesn't pay enough, they won't find qualified workers and if they behave badly they'll get turnover, bad customer service, and they will go out of business.


Mike
You talk as if the natural state of man is in need of some other person to provide for their survival.

You can ignore the question, if you like.

But this does not address it at all.

We want to determine the worth of some crafty managers.

Their worth is their worth. We don't bring anybody else in to determine their base worth.

You for some reason do not want to even consider their base worth.

All you want to talk about is their worth when others agree to cooperate with them, which is the worth of the whole not the worth of the managers alone.

Once society moved past the agrarian form of living where everyone farmed people started to depend on oter people. A blacksmith had to provide a service, a baker had to produce breads other people wanted. People don't want to spend their entire life farming and socialsim, especially EA wants to return to that, move society back hundreds if not thousands of years.

A business produces value thats greater than the sum of its parts.

Mike

[untermensche]

Once society moved past the agrarian form of living where everyone farmed people started to depend on oter people. A blacksmith had to provide a service, a baker had to produce breads other people wanted. People don't want to spend their entire life farming and socialsim, especially EA wants to return to that, move society back hundreds if not thousands of years.

A business produces value thats greater than the sum of its parts.

Mike
My point exactly. It takes the whole to give the managers any real value. On their own, as seperate parts, they have little utility.

[Axulus]

The question is moot. Successful managers willing to pay never have problems attracting workers. On the other hand, plants fail due to lack of management every single day. I'm trying to not devalue workers. However, you're the one making the point that managers don't bring anything to the table. And it's just wrong. You don't have to believe me. Ask any banker or any investment person: the most critical measure of a company is management.
The question is not moot. It is a very legitimate question if we are to decide the value of these managers.

THEIR value is in what that can do on their own.

Bring in any other people and you are now talking about more than THEIR value.

You clearly missed my point earlier. You are falling into the same fallacy, just the opposite direction (where earlier you were arguing that the value of something is the difference in value that results if it were removed). The value of an individual cog in a machine is not what it can do on its own (nothing) and it is not equal to the difference in value of the machine if it were removed.

[Axulus]

You are right, it isn't a moot question hence why workers are paid for their work. If a company doesn't pay enough, they won't find qualified workers and if they behave badly they'll get turnover, bad customer service, and they will go out of business.


Mike
You talk as if the natural state of man is in need of some other person to provide for their survival.


Its not "natural", just a rational decision based on the fact that a successful organization, with all its resources, expertise, and capability, can increase the value of your labor more than what it would otherwise be without the organization. Because of competition among other organizations that can similarly increase the value of your labor, there is competition among them driving up the amount they are willing to pay for your labor, which happens to be much more than you would be able to make (for most people) without the organization.

[untermensche]

You clearly missed my point earlier. You are falling into the same fallacy, just the opposite direction (where earlier you were arguing that the value of something is the difference in value that results if it were removed). The value of an individual cog in a machine is not what it can do on its own (nothing) and it is not equal to the difference in value of the machine if it were removed.
A fallacy is not found in asking rhetorical questions.

As you say, the managers are simply a part of a greater whole. They do not have worth apart from the whole.

So it is the whole that determines their worth. Their worth is not simply determined by them.

[Stinger]

Once society moved past the agrarian form of living where everyone farmed people started to depend on oter people. A blacksmith had to provide a service, a baker had to produce breads other people wanted. People don't want to spend their entire life farming and socialsim, especially EA wants to return to that, move society back hundreds if not thousands of years.

A business produces value thats greater than the sum of its parts.

Mike
My point exactly. It takes the whole to give the managers any real value. On their own, as seperate parts, they have little utility. I'm starting to wonder if you're reading my posts. Let me ask you this: if managers don't bring anything to the table, then why are they paid so much by the owners? Managers are very expensive. Do you think that owners care about worker costs but not about manager costs?

Secondly, if you are right, why don't we see employee only companies beating companies with managers?

[untermensche]

Its not "natural", just a rational decision based on the fact that a successful organization, with all its resources, expertise, and capability, can increase the value of your labor more than what it would otherwise be without the organization. Because of competition among other organizations that can similarly increase the value of your labor, there is competition among them driving up the amount they are willing to pay for your labor, which happens to be much more than you would be able to make (for most people) without the organization.
Only rational when decisions are limited.

That is how it works when replacement of a worker is difficult. Which is usually very rare.

When there is a greater ease in replacing a worker, the worker is paid the lowest possible price. Not any price arrived at through equal negotiation, but the lowest price enough people will take.

[Axulus]

You clearly missed my point earlier. You are falling into the same fallacy, just the opposite direction (where earlier you were arguing that the value of something is the difference in value that results if it were removed). The value of an individual cog in a machine is not what it can do on its own (nothing) and it is not equal to the difference in value of the machine if it were removed.
A fallacy is not found in asking rhetorical questions.

As you say, the managers are simply a part of a greater whole. They do not have worth apart from the whole.

So it is the whole that determines their worth. Their worth is not simply determined by them.

But there are different values to the contributions of each individual to the whole. That value is based on the rarity of what the individual brings to the organization (the supply) and how much what that individual brings is needed by all organizations (the demand). This is the only rational determination of value.

A good manager is rare, and every business organization needs at least one, therefore the value of a good manager is relatively high.

[untermensche]

But there are different values to the contributions of each individual to the whole. That value is based on the rarity of what the individual brings to the organization (the supply) and how much what that individual brings is needed by all organizations (the demand). This is the only rational determination of value.
Who says there is different value between directing and acting?

[Axulus]

Its not "natural", just a rational decision based on the fact that a successful organization, with all its resources, expertise, and capability, can increase the value of your labor more than what it would otherwise be without the organization. Because of competition among other organizations that can similarly increase the value of your labor, there is competition among them driving up the amount they are willing to pay for your labor, which happens to be much more than you would be able to make (for most people) without the organization.
Only rational when decisions are limited.

That is how it works when replacement of a worker is difficult. Which is usually very rare.

When there is a greater ease in replacing a worker, the worker is paid the lowest possible price. Not any price arrived at through equal negotiation, but the lowest price enough people will take.

Value is based in large part on rarity. If a worker can be easily replaced, that individual worker isn't all that valuable, and is paid accordingly.

The key to being paid well is to become not easily replaceable.

[Axulus]

But there are different values to the contributions of each individual to the whole. That value is based on the rarity of what the individual brings to the organization (the supply) and how much what that individual brings is needed by all organizations (the demand). This is the only rational determination of value.
Who says there is different value between directing and acting?

It is based on the relative need for good directors and actors, and the relative availability of them.

Also, there are limited resources, so we only want directors and actors to utilize their talents on making movies that will be watched by the most people (thus maximizing the entertainment value of the movie) and we only want a movie to be made if the entertainment value of that movie exceeds the cost in making that movie. Those who figure these things out add tremendous value to the economy by minimizing the waste of resources.

[Stinger]

But there are different values to the contributions of each individual to the whole. That value is based on the rarity of what the individual brings to the organization (the supply) and how much what that individual brings is needed by all organizations (the demand). This is the only rational determination of value.
Who says there is different value between directing and acting?
Business owners say so. Why would business owners pay more for a "director" than an "actor" if they didn't have to?

[Axulus]

Also, the bargaining power of an individual business when it comes to hiring an employee is vastly exaggerated. There is more than one company that a person can work for. A company does not have the power to pay less than the going rate for that job or else it will not be able to hire and keep enough competent employees.

[Axulus]

Who says there is different value between directing and acting?
Business owners say so. Why would business owners pay more for a "director" than an "actor" if they didn't have to?

But that is partly his argument, that there is no connection between the value of a worker/manager and what they are paid, they are only paid what the owners have to pay. This is the wrong mindset in my opinion.

[Nitrousoxide]

Business owners say so. Why would business owners pay more for a "director" than an "actor" if they didn't have to?

I'm reminded of the famous Publilius Syrus quote, "Everything is worth what its purchaser will pay for it."

[untermensche]

Value is based in large part on rarity. If a worker can be easily replaced, that individual worker isn't all that valuable, and is paid accordingly.

The key to being paid well is to become not easily replaceable.
Every human is extremely rare, and each brings rare talents to a cooperative endeavor.

There are many times obstacles created in artificial heirarchies that those in power designate as requirements for management. It has nothing to do with real skill or talent at managing others. Mostly to do with grades in a classroom. It is a slot in a power structure, and the power can be used over those below, and the person will succeed, or the power will not be used sufficiently and the person will fail.

But the managers generally did not create the power structure. They meet the arbitrary requirements and gain a slot in an already functioning power structure.

In other words, they could be easily replaced from outside the required pathways because thay have no real talents of managing others. But because of the arbitrary requirements, they are made rare.

[untermensche]

Business owners say so. Why would business owners pay more for a "director" than an "actor" if they didn't have to?
If you want to funnel the value people within an organization create away from them, you can pay others to do it for you under capitalism.

They pay them more because they have a dirtier job than the people laboring to create the value.

[Axulus]

Value is based in large part on rarity. If a worker can be easily replaced, that individual worker isn't all that valuable, and is paid accordingly.

The key to being paid well is to become not easily replaceable.
Every human is extremely rare, and each brings rare talents to a cooperative endeavor.

There are many times obstacles created in artificial heirarchies that those in power designate as requirements for management. It has nothing to do with real skill or talent at managing others. Mostly to do with grades in a classroom. It is a slot in a power structure, and the power can be used over those below, and the person will succeed, or the power will not be used sufficiently and the person will fail.

But the managers generally did not create the power structure. They meet the arbitrary requirements and gain a slot in an already functioning power structure.

In other words, they could be easily replaced from outside the required pathways because thay have no real talents of managing others. But because of the arbitrary requirements, they are made rare.

In an entrepreneurial economy like the U.S., the "power structure" becomes increasingly irrelevant. Those who are able to successfully utilize the talents of others to their greatest potential can topple the "power structure" of a stodgy, unresponsive business and make it adapt or go out of business. Any time that people's talents are not being used to their maximum potential, there is a profit opportunity available to those who discover this fact and successfully utilize those talents, to the benefit of both the person who discovered this fact and successfully capitalized on it and the person who had the talent.

[untermensche]

In an entrepreneurial economy like the U.S., the "power structure" becomes increasingly irrelevant. Those who are able to successfully utilize the talents of others to their greatest potential can topple the "power structure" of a stodgy, unresponsive business and make it adapt or go out of business. Any time that people's talents are not being used to their maximum potential, there is a profit opportunity available to those who discover this fact and successfully utilize those talents, to the benefit of both the person who discovered this fact and successfully capitalized on it and the person who had the talent.
From what book on fairytales did you read the US economy was an "entrepreneurial economy"?

It is mostly based on massive amounts of tax dollars spent on scientific reasearch that yeilds new technologies that are then given to private corporations.

It is public financed risk with private gain. A great scam if you can get a piece of it.

And below this dynamic part of the US economy is the capitalism most are forced to exist in, which is a horribly innefficient and impersonal system. Which could not exst except for the massive government spending made to keep it going. And the massive exploitation of third world labor.

[Loren Pechtel]

And that's what they get.

The problem is that so many on your side don't think they should get anything.
You get what is fair when you have two parties with equal power in a transaction.

This is why wages when unions negotiate with management are the closest to equitable.

The individual against a huge corporation has little negotiating power.

In general when the unions negotiate with management the result is they get too much. Note how basically every big unionized business in the country is in deep trouble.

The individual doesn't need negotiating power--the labor market itself provides the power.

[Loren Pechtel]

The simple truth is that the managers would hire new workers. I'm not saying that workforce isn't very important. But there isn't a successful plant in the US that could fire all it's owners and managers, replace them with existing workers, that would be in business for more than a month. The most successful ESOPs are those that retain their key managers.

I don't think the biggies would go down quite that fast. Inertia would keep things running for a while. The ultimate failure rate would be 100%, though.

[Loren Pechtel]

The simple truth is that the managers would hire new workers. I'm not saying that workforce isn't very important. But there isn't a successful plant in the US that could fire all it's owners and managers, replace them with existing workers, that would be in business for more than a month. The most successful ESOPs are those that retain their key managers.
That is not the question.

What would these clever managers have with nobody to manage?

Why do you insist on using this discredited framing of the problem?

The workers aren't going to do any better without the managers and capitalists as the managers and capitalists will do without the workers.

You need all three: Workers, managers and capital.

[Axulus]

From what book on fairytales did you read the US economy was an "entrepreneurial economy"?


There is something like 20 million different business entities (whether they be sole proprietorships or multinational corps like ExxonMobil) in the U.S. based on tax returns, or were you unaware of this fact?


It is mostly based on massive amounts of tax dollars spent on scientific reasearch that yeilds new technologies that are then given to private corporations.


Much more private money is spent on R&D and product development than government money. Money is only given to corporations by the government to conduct research that it has the resources to conduct that would otherwise not be researched. This may or may not be valuable to the country as a whole, but that is a whole different debate.


It is public financed risk with private gain. A great scam if you can get a piece of it.


It is also public gain. In the case of a corporation, the public gets 40% of the gain though the form of double taxation of that corporation, not to mention any other benefit the consumer received from products that utilized that research. Also, the corporation spends its resources to best utilize and profit from that research, so it is not like the corporation takes on no risk. Once again, this is a completely different debate. I am not very sympathetic to government handouts, so you are essentially attacking a strawman.


And below this dynamic part of the US economy is the capitalism most are forced to exist in, which is a horribly innefficient and impersonal system. Which could not exst except for the massive government spending made to keep it going. And the massive exploitation of third world labor.

These wild assertions need their own separate thread as they are too numerous to discuss here.

[Loren Pechtel]

The question is not moot. It is a very legitimate question if we are to decide the value of these managers.

THEIR value is in what that can do on their own.

Bring in any other people and you are now talking about more than THEIR value.

The worker's value is what they can do on their own. Nothing.

[Loren Pechtel]

We want to determine the worth of some crafty managers.

Their worth is their worth. We don't bring anybody else in to determine their base worth.

You for some reason do not want to even consider their base worth.

All you want to talk about is their worth when others agree to cooperate with them, which is the worth of the whole not the worth of the managers alone.

Lets try some other things.

What's the worth of a car? Very little, about all it provides is a bit of shelter from the elements.

What's the worth of a nail gun? Nothing.

What's the worth of a computer? A few bucks--it serves as a small heater.

What's the worth of electricity? Nothing.

What's the worth of money? Virtually nothing.

What's the worth of Marx? Zero.

[Loren Pechtel]

Only rational when decisions are limited.

That is how it works when replacement of a worker is difficult. Which is usually very rare.

When there is a greater ease in replacing a worker, the worker is paid the lowest possible price. Not any price arrived at through equal negotiation, but the lowest price enough people will take.

The reason there is little negotiation when a worker is hired is that the market has already done the negotiating. It's the sum of all the workers who were offered various pay rates, some accepted, some went elsewhere.

[Axulus]

What's the worth of a computer? A few bucks--it serves as a small heater.


That is the value of the computer when electricity is flowing though it. The heater would not function without the electricity. You ignore even contemplating the base value of the computer by itself.

[Bonniedundee]

How is your system a choice? You want to force everyone to be the boss. I don't want to be a boss.When did I do this? I speculated that wage labour would decline to almost nothing in a free market but other than that I just quoted Murray Rothbard on the fact people are only paid what they are worth in a free market.

You do know who Rothbard is? You claim to be an American style libertarian so you should.

All I was doing was agreeing with Rothbard that in a statist economy like ours people are not paid what they are worth.

[Bonniedundee]

If a single person figures out a new way to organize the work of the workers so that the value of what is produced is increased, then that single person is solely responsible for that increase in value and should receive the majority of the rewards for that increase in value. The workers did not create the value that is derived from figuring out what to work on and how.

If I decide to create or buy a machine for my workers that increases the value of what is produced, then my creation or purchase of the machine is solely responsible for the increase in value and I should receive the majority of the rewards from the increase in value that results.

What does this have to do with this Rothbard quote you were replying to?

"On the free market, everyone earns according to his productive value in satisfying consumer desires. Under statist distribution, everyone earns in proportion to the amount he can plunder from the producers."

I simply corrected you and agreed with Rothbard that people are paid what they are worth, or closest to it in a completely free market and that because we live in a statist non-free market people are not paid what they worth.

[Bonniedundee]

What's the worth of Marx? Zero.Loren's debating technique(In that and most posts)? Can you guess what it's worth?

[Nitrousoxide]

"On the free market, everyone earns according to his productive value in satisfying consumer desires. Under statist distribution, everyone earns in proportion to the amount he can plunder from the producers."

I simply corrected you and agreed with Rothbard that people are paid what they are worth, or closest to it in a completely free market and that because we live in a statist non-free market people are not paid what they worth.

It's absolute bullocks. Even in your "super free" market, people working for a company and not for themselves are going to be subject to the supply and demand for their labor. THAT is the primary driving force behind what employees (or as you like to call them, wage slaves) earn. It has nothing to do with how much employers can screw them for.


If you have 10,000 computer programmers available to work, but the market only wants products which require 1,000 programmers, the pay of employed programmers will be less than if the market required some 5,000 programmers. Your "super free" market does NOTHING to prevent those 1,000 programmers from earning less than the value of what the produce, because you're completely ignoring the seperate market for labor and assuming pay is based on the value final product.

[PaineInTheBrain]

"On the free market, everyone earns according to his productive value in satisfying consumer desires. Under statist distribution, everyone earns in proportion to the amount he can plunder from the producers."

I simply corrected you and agreed with Rothbard that people are paid what they are worth, or closest to it in a completely free market and that because we live in a statist non-free market people are not paid what they worth.
It's absolute bullocks. Even in your "super free" market, people working for a company and not for themselves are going to be subject to the supply and demand for their labor. THAT is the primary driving force behind what employees (or as you like to call them, wage slaves) earn. It has nothing to do with how much employers can screw them for.
Skilled labor is subject to supply and demand for a particular skill; unskilled labor, the labor that's generally wage labor, is paid the absolute minimum, with the easiest jobs being the margin. Employees being screwed becomes the norm to the point that competition requires it.

[Nitrousoxide]

Skilled labor is subject to supply and demand for a particular skill; unskilled labor, the labor that's generally wage labor, is paid the absolute minimum, with the easiest jobs being the margin. Employees being screwed becomes the norm to the point that competition requires it.

Unskilled labor too is subject to supply and demand. It's just that the supply for unskilled labor is (usually) far in excess of the demand. There are, after all, far more available janitors than there are jobs for janitors.

Of course, there are also cases where unskilled labor is quite dangerous, which raises the minimum price people are willing to be paid to work the job. Fishing and mining are good examples of this. They earn rather more than their janitorial counterparts because the people are unwilling to work for less. This makes the potential supply for those jobs far lower at low pay ranges than in other unskilled professions.

There's nothing at all wrong with paying fast food workers or janitors such a meager amount. It's simply the end result of supply and demand in the job market. Low paying low skilled jobs help to entice people to aim for high paying, high skilled jobs. On the other hand the more you pay people in low skilled jobs, the more appealing those jobs are and the fewer people will aim at the higher skilled jobs.

Whether a person earns exactly what he produces is irrelevant so long as he freely agrees to a pay amount and is free to leave that arrangement (within the limits of the contract he originally agreed to).

[PaineInTheBrain]

Skilled labor is subject to supply and demand for a particular skill; unskilled labor, the labor that's generally wage labor, is paid the absolute minimum, with the easiest jobs being the margin. Employees being screwed becomes the norm to the point that competition requires it.
Unskilled labor too is subject to supply and demand. It's just that the supply for unskilled labor is (usually) far in excess of the demand. There are, after all, far more available janitors than there are jobs for janitors.
Right. It's not really supply and demand anymore; it's simply the least amount people are willing to work for (or the least amount legally permissible).

Of course, there are also cases where unskilled labor is quite dangerous, which raises the minimum price people are willing to be paid to work the job. Fishing and mining are good examples of this. They earn rather more than their janitorial counterparts because the people are unwilling to work for less. This makes the potential supply for those jobs far lower at low pay ranges than in other unskilled professions.
Right. Like I said, the easiest of the unskilled labor is the margin, and tougher jobs pay better relative to this amount.

There's nothing at all wrong with paying fast food workers or janitors such a meager amount. It's simply the end result of supply and demand in the job market. Low paying low skilled jobs help to entice people to aim for high paying, high skilled jobs. On the other hand the more you pay people in low skilled jobs, the more appealing those jobs are and the fewer people will aim at the higher skilled jobs.
I disagree. I agree with your point that the pay should be less, relative to "high paying, high skilled jobs," but it's a non-sequitur to say that, because of this, there's nothing wrong with the meager amount earned by low-skilled labor. All labor earns less than it should, in general, for the simple fact that labor is at a disadvantage in terms of bargaining power, if nothing else because there aren't enough jobs to go around.

Whether a person earns exactly what he produces is irrelevant so long as he freely agrees to a pay amount and is free to leave that arrangement (within the limits of the contract he originally agreed to).
Well, he isn't. That's the problem. When there aren't enough jobs for workers, a certain percentage are simply forced to work for whatever they can get; they are the margin to which all other wages are relative. This is why the rich get richer while the state of the poor remains relatively constant.

[Nitrousoxide]

But the labor market IS highly competitive, both on the supplier side (workers) and on the buyer side (companies). Even though the suppliers need to compete with one and other, the companies also need to compete to make their payments appealing to the sellers. The fact is, even though Burger King may have a large market share for the fast food industry, the same people who can work there can also work not only at other fast food places, but in factory jobs, in slower food service jobs, at hair salons, and at any number of other business types.

Sure, the number of business will always be less than the number of labor sellers, but that's just in the nature of the beast. It MUST be that way so long as a business consists of more than 1 person. That business should have somewhat more bargaining power because of a reduced number of players in their side of the supply/demand graph is just in the nature of business and it cannot be escaped except by EVERYONE being their own business owner in a company with only one employee, themselves.

Any economy is not about attaining some IDEAL condition whereby every single person who wants a job is employed where they want to be. Hell, "full employment" in the economic sense is considered to be a 5% unemployment rate. There is an range where things are to be considered "good enough."

[PaineInTheBrain]

Sure, the number of business will always be less than the number of labor sellers, but that's just in the nature of the beast. It MUST be that way so long as a business consists of more than 1 person. That business should have somewhat more bargaining power because of a reduced number of players in their side of the supply/demand graph is just in the nature of business and it cannot be escaped except by EVERYONE being their own business owner in a company with only one employee, themselves.
That's not the problem. The problem is that there aren't as many jobs as workers, not that there aren't as many employers as workers. You say that the employers are highly competitive, but you need to understand that they're competing among a pool of labor which will not all find employment. If you and I are competing for laborers from a pool of a hundred people, and between us we offer 90 jobs, we may compete somewhat for laborers, but the wages we pay would be less that what they would be if we needed all 100 laborers (or if there was actually a greater demand for labor than what existed).

Any economy is not about attaining some IDEAL condition whereby every single person who wants a job is employed where they want to be.
Why not? Isn't it the case that the economy is nothing more than individuals working together to provide for their needs? Shouldn't it be the case, then, that the economy's ideal is to best serve each individual?

Hell, "full employment" in the economic sense is considered to be a 5% unemployment rate.
Yeah, that's a neat trick by apologists for our current system. The unemployed are engaged in "job search," much the way bums wandering our cities are engaged in "home search." Gotta love defining away the problem.

There is an range where things are to be considered "good enough."
Yes, but I've found that those who find it "good enough" are rarely those who are constantly engaged in "job search."

[Nitrousoxide]

That's not the problem. The problem is that there aren't as many jobs as workers, not that there aren't as many employers as workers. You say that the employers are highly competitive, but you need to understand that they're competing among a pool of labor which will not all find employment. If you and I are competing for laborers from a pool of a hundred people, and between us we offer 90 jobs, we may compete somewhat for laborers, but the wages we pay would be less that what they would be if we needed all 100 laborers (or if there was actually a greater demand for labor than what existed).



But that's actually a great thing about the job market. What has happened in that case is that there is an over-abundance of available workers in that particular sort of business. When salaries are reduced because of that over-abundance of workers it does two things. First it discourages new workers from entering the field, which would only increase the over-abundance still more. It also encourages those already in the field to find work doing other things which helps to get rid of that over-abundance of workers and puts them to work in areas which have an under-abundance of workers.



Sure, there will be periods in which there are too many or too few, but the market will constantly work to compensate for those numbers by changing the going rate for work. If you start fixing these prices or forcing companies to employ a certain number you suffer from over-consumption of work on the part of the companies, which is inefficient.



Too often people only look at the short run affects of an over-abundance or under-abundance but fail to see that in the long run, the economy strives for just the right number of workers.




Why not? Isn't it the case that the economy is nothing more than individuals working together to provide for their needs? Shouldn't it be the case, then, that the economy's ideal is to best serve each individual?



Yes, the reason economies exist is to try and meet the desires and needs of individuals, however like you mentioned, there are constant over-abundances, under-abundances, unexpectedly low sales numbers, and other features which prevent any system from reaching absolute perfection. To expect that is to expect the impossible. The market helps to rid us of many of those problems, but it does take time, and other issues spring up in different areas of a nation's market as those old ones are fixed.




Yes, but I've found that those who find it "good enough" are rarely those who are constantly engaged in "job search."


Yes, there are individuals who during short or long times can find themselves out of work. No one is denying this. However, provided that these people are not really unworthy employees (for instance, being a jackass to your boss makes you quite difficult to hire) times will improve. The economy needs to run adjustments which benefit some sectors which leaving others in slumps. Things do tend to turn around for those areas which are experiencing slumps, unless there is new technology which is making them obsolete, like, for instance the widespread use of robotics in manufacturing these days.

But even then, such a boom in robotics produces benefits and jobs for the robotics and mechanics industry as you need more people to design and maintain those robots. So while we see a slump in the number of factory workers demanded by companies, we see a growth in the number of workers demanded by companies like Honda and their robotics division, as well as local and regional maintenance companies which help to keep those robots up and running in the factories.

[PaineInTheBrain]

But that's actually a great thing about the job market. What has happened in that case is that there is an over-abundance of available workers in that particular sort of business. When salaries are reduced because of that over-abundance of workers it does two things. First it discourages new workers from entering the field, which would only increase the over-abundance still more. It also encourages those already in the field to find work doing other things which helps to get rid of that over-abundance of workers and puts them to work in areas which have an under-abundance of workers.
I'm not talking about any one industry, but industry as a whole. There's a lot of jobs that require virtually no skill; these jobs would theoretically be completely interchangeable, but that doesn't matter, because there's never as many jobs as there are workers.

Sure, there will be periods in which there are too many or too few, but the market will constantly work to compensate for those numbers by changing the going rate for work. If you start fixing these prices or forcing companies to employ a certain number you suffer from over-consumption of work on the part of the companies, which is inefficient.
I'm not interested in fixing prices or forcing companies to employ people; I know enough to know that such solutions never work.

Too often people only look at the short run affects of an over-abundance or under-abundance but fail to see that in the long run, the economy strives for just the right number of workers.
No, in the long run the economy provides about 5% too few jobs. That's the problem.

Yes, there are individuals who during short or long times can find themselves out of work. No one is denying this. However, provided that these people are not really unworthy employees (for instance, being a jackass to your boss makes you quite difficult to hire) times will improve. The economy needs to run adjustments which benefit some sectors which leaving others in slumps. Things do tend to turn around for those areas which are experiencing slumps, unless there is new technology which is making them obsolete, like, for instance the widespread use of robotics in manufacturing these days.
Forget about individual people being unemployed. That in and of itself is problematic, but my point is that the fact that at any given time a sizable proportion of potential workers cannot find work leads to a situation where employers are in a relatively strong bargaining position when compared to workers (particularly unskilled workers).

[Nitrousoxide]

5% unemployment isn't necessarily indicative that there is a shortage of jobs. That number can come about just from people being fired in one area and looking to find another job in another sector of the economy. The demand for the efforts of the workers can still be out there, it just takes a bit for the supply to move to meet that demand. They are merely the set of people who are moving from one job to another. It's the movement of people from sectors with an over-abundance of available workers to sectors with an under-abundance of available workers. But of course they are unemployed in the interim.

Now, when that number reaches above the 5% value, you actually have fewer jobs than there are people looking for them. That is a real problem and the see it in a lot of European countries, especially France.

[Loren Pechtel]

That's not the problem. The problem is that there aren't as many jobs as workers, not that there aren't as many employers as workers. You say that the employers are highly competitive, but you need to understand that they're competing among a pool of labor which will not all find employment. If you and I are competing for laborers from a pool of a hundred people, and between us we offer 90 jobs, we may compete somewhat for laborers, but the wages we pay would be less that what they would be if we needed all 100 laborers (or if there was actually a greater demand for labor than what existed).

100 jobs for 100 laborers will never exist. It's an utterly unstable situation that's going to go boom when a butterfly flaps it's wings on the other side of the world. Somebody gets sick and what happens???

Furthermore, it will never exist because the demand for labor isn't fixed. The higher the price of labor the fewer laborers a company will hire. (As the price of labor goes up the least productive aspects of the job will become uneconomic and will be dropped.)

As you get too close to 100% the scarcity of jobs drives up wages--and makes companies not want to hire them. This is asymptotic as you approach 100%.

Furthermore, there are some garbage workers that will keep getting passed from company to company and thus keep showing up on the unemployment rolls.

There are also those who move without the lower-earning partner also having a job in the new location yet, not to mention turnover caused by school etc.

Historically we have found that a 5% margin is needed to keep the economy in control, anything "better" triggers inflation.

Recently we have seen slightly lower unemployment rates without trouble arising but that's probably a case of bad data--things like the underemployed. They don't count as unemployed but they do count from a standpoint of keeping things running smoothly.

Yeah, that's a neat trick by apologists for our current system. The unemployed are engaged in "job search," much the way bums wandering our cities are engaged in "home search." Gotta love defining away the problem.

You think people can magically find a job instantly? Job searches are inevitable!

Yes, but I've found that those who find it "good enough" are rarely those who are constantly engaged in "job search."

And if someone is constantly engaged in a job search there is probably something wrong with them.

All systems require a bit of slack in them to make them work.

[Nitrousoxide]

As you get too close to 100% the scarcity of jobs drives up wages--and makes companies not want to hire them. This is asymptotic as you approach 100%.

I think you meant "workers" rather than "jobs" there.

[PaineInTheBrain]

5% unemployment isn't necessarily indicative that there is a shortage of jobs. *snip*
Well, for starters, that 5% figure is wildly understated by most accounts. But even if you claimed that such a percentage was "natural," the real world will prove that it is not merely people engaged in job-search, but a certain percentage who simply won't find a job at all. There's a ghetto in every major city; either people are systematically lazy in certain parts of large cities, or there aren't enough opportunities for gainful employment. I think it's pretty clear which is the case.

[Gamera]

[

But that's actually a great thing about the job market. What has happened in that case is that there is an over-abundance of available workers in that particular sort of business. When salaries are reduced because of that over-abundance of workers it does two things. First it discourages new workers from entering the field, which would only increase the over-abundance still more. It also encourages those already in the field to find work doing other things which helps to get rid of that over-abundance of workers and puts them to work in areas which have an under-abundance of workers.]


This assumes owners are passive in this transaction. In fact they are not. They are actively engaged in activities to reduce wages. The most obvious method is to hire illegal workers, who can be exploited more effectively than American workers. But for those illegals being hired, the owners would have to raise wages to meet the market price of labor in America. That's why they hire illegals.

Similarly outsourcing and the threat of outsources (which are constructed policies not economic inevitabilities as the discourse of market fundis claim) produces more unemployment.

Owners want high unemployment to force wages down, and hence maximize profits for themselves. Thus they actively promote internal and government policies that lead to unemployment.

The whole "invisible hand" nonsense is pure naivety.

[PaineInTheBrain]

That's not the problem. The problem is that there aren't as many jobs as workers, not that there aren't as many employers as workers. You say that the employers are highly competitive, but you need to understand that they're competing among a pool of labor which will not all find employment. If you and I are competing for laborers from a pool of a hundred people, and between us we offer 90 jobs, we may compete somewhat for laborers, but the wages we pay would be less that what they would be if we needed all 100 laborers (or if there was actually a greater demand for labor than what existed).
100 jobs for 100 laborers will never exist. It's an utterly unstable situation that's going to go boom when a butterfly flaps it's wings on the other side of the world. Somebody gets sick and what happens???
Production is temporarily reduced, and prices increase (really this wouldn't even be the case because, given a large population, there'd be a constant percentage who are sick at any given time, with a very moderate ebb and flow).

Furthermore, it will never exist because the demand for labor isn't fixed. The higher the price of labor the fewer laborers a company will hire. (As the price of labor goes up the least productive aspects of the job will become uneconomic and will be dropped.)
Demand isn't fixed, that's quite true. Rather, demand is infinite. At one time, everyone wanted food. Once everyone had food, everyone wanted shelter. On and on it goes, but the point is that there is never a shortage of demand; we only see a "shortage of demand" because large numbers of people are living in poverty.

As you get too close to 100% the scarcity of jobs drives up wages--and makes companies not want to hire them. This is asymptotic as you approach 100%.
In our system it is. The companies with the best cartels are profiting on the basis of pseudo-wage-slavery; all other companies must compete with these companies, so a roll of unemployed must always be present so that workers are compelled to work for less than their full value.

Furthermore, there are some garbage workers that will keep getting passed from company to company and thus keep showing up on the unemployment rolls.

There are also those who move without the lower-earning partner also having a job in the new location yet, not to mention turnover caused by school etc.
Far more who should be aren't counted among the unemployed, compared to the other way around.

Historically we have found that a 5% margin is needed to keep the economy in control, anything "better" triggers inflation.
Yep. For the reason I mentioned above. How good is our system if we are forced to choose between masses of unemployed or inflation?

You think people can magically find a job instantly? Job searches are inevitable!
That should be like 1%; and even then, they should easily be able to find something temporary.

Yes, but I've found that those who find it "good enough" are rarely those who are constantly engaged in "job search."
And if someone is constantly engaged in a job search there is probably something wrong with them.
Like being born in the wrong area.

[Loren Pechtel]

As you get too close to 100% the scarcity of jobs drives up wages--and makes companies not want to hire them. This is asymptotic as you approach 100%.

I think you meant "workers" rather than "jobs" there.

Oops! You're right.

[Nitrousoxide]

This assumes owners are passive in this transaction. In fact they are not. They are actively engaged in activities to reduce wages. The most obvious method is to hire illegal workers, who can be exploited more effectively than American workers. But for those illegals being hired, the owners would have to raise wages to meet the market price of labor in America. That's why they hire illegals.

Similarly outsourcing and the threat of outsources (which are constructed policies not economic inevitabilities as the discourse of market fundis claim) produces more unemployment.

Owners want high unemployment to force wages down, and hence maximize profits for themselves. Thus they actively promote internal and government policies that lead to unemployment.

The whole "invisible hand" nonsense is pure naivety.

In all of that, you ignore one very very important point. In fact, it's an entire half of the equation. Higher unemployment translates into fewer sales which translates into lower profits.

A country with 30% unemployment has low prices for work, but few people have the money to buy the products which the companies want to produce. Companies BENEFIT from having a vast majority of people employed as it increases the sales and thus their profits.

You're also assuming that the companies of an entire nation, nay, of the entire world are all caught up in one giant cartel. Not only does that notion have NO evidence to support it, it would be impossible to stop rampant cheating of the price fixing on the companies part. An individual company could increase production immensely by cheating on the cartel's employment limits and hiring more workers to increase production to sell more product. But this, of course, reduces the number of unemployed people raising the price for labor. Most companies would do this because their individual profits benefit greatly while individually not doing very much to affect the labor market.

But of course when most of those companies in this fictitious cartel cheat, it destroys the labor fixing.

You see this problem with OPEC right now as individual nations produce more than their quotas. And that's an immensely tiny cartel compared to the one you seem to think exists.

Outsourcing is not the end of the world like many folks claim. There are numerous benefits to both the nation outsourcing the work, and the nation where the work is being outsourced to. In the nation outsourcing the work, cheaper production costs translate into higher profits which enable greater investment or cheaper product. In the case of greater investment, more jobs are created to work those projects. In the case of cheaper product, the consumer will buy both more of the product being offered by the company outsourcing, and they will also have more money to buy products offered by other companies, which translates into those companies needing to hire more workers to meet that demand.

The company which the work is outsourced to also gains jobs which pay more than many home grown business, putting more money into the hands of those workers doing the outsourced work. This permits them to buy more products which increases demand for other goods within that country.

Both economies grow as a result of outsourcing. People are just afraid of needing to switch jobs to meet the new jobs being demanded by the companies.

[Loren Pechtel]

In our system it is. The companies with the best cartels are profiting on the basis of pseudo-wage-slavery; all other companies must compete with these companies, so a roll of unemployed must always be present so that workers are compelled to work for less than their full value.

It's not that approaching closer to full employment simply raises wages. It's that companies have to pass along the increased cost of labor as increased prices. This causes an inflationary spiral that benefits nobody. That's what the fed is trying to avoid and it says that the workers *ARE* getting full value.

Yep. For the reason I mentioned above. How good is our system if we are forced to choose between masses of unemployed or inflation?

And what do you suggest we do about it? What else works better????

That should be like 1%; and even then, they should easily be able to find something temporary.

Depends on what sort of work they do. The more skilled the work the longer it's going to take and the less practical temporary things are.


And if someone is constantly engaged in a job search there is probably something wrong with them.
Like being born in the wrong area.

Such people rarely own much of anything. Move! Plenty of illegal immigrants do it, why can't Americans?

[Autonemesis]

How do you reconcile this:

If that were the case, than the value of each individual part of the machine that is required for it to run would be equal to the value of the whole machine, which doesn't make any sense. The total value is derived from each individual part working together.

With this:

If a single person figures out a new way to organize the work of the workers so that the value of what is produced is increased, then that single person is solely responsible for that increase in value and should receive the majority of the rewards for that increase in value. The workers did not create the value that is derived from figuring out what to work on and how.

It seems you have a different set of criteria for evaluating the value of the machine purchaser's contribution, and the worker's contribution. Explain that.

[PaineInTheBrain]

In our system it is. The companies with the best cartels are profiting on the basis of pseudo-wage-slavery; all other companies must compete with these companies, so a roll of unemployed must always be present so that workers are compelled to work for less than their full value.
It's not that approaching closer to full employment simply raises wages. It's that companies have to pass along the increased cost of labor as increased prices. This causes an inflationary spiral that benefits nobody. That's what the fed is trying to avoid and it says that the workers *ARE* getting full value.
Nonsense. Why do they have extra costs with more employees? This presumes that, somehow, the added employees are a cost to the company, whereas the existing employees were an asset. More workers should not only be able to produce more in proportion to the number of added employees, they should be able to produce greater than in proportion to the number of employees added.

And what do you suggest we do about it? What else works better????
That's a tough question!

Depends on what sort of work they do. The more skilled the work the longer it's going to take and the less practical temporary things are.
From the perspective that new employees are costs, perhaps. But if there was equal bargaining, I'd think that companies would try to take on employees.

Like being born in the wrong area.
Such people rarely own much of anything. Move! Plenty of illegal immigrants do it, why can't Americans?
How did such areas become "wrong" in the first place?

[Gamera]

This assumes owners are passive in this transaction. In fact they are not. They are actively engaged in activities to reduce wages. The most obvious method is to hire illegal workers, who can be exploited more effectively than American workers. But for those illegals being hired, the owners would have to raise wages to meet the market price of labor in America. That's why they hire illegals.

Similarly outsourcing and the threat of outsources (which are constructed policies not economic inevitabilities as the discourse of market fundis claim) produces more unemployment.

Owners want high unemployment to force wages down, and hence maximize profits for themselves. Thus they actively promote internal and government policies that lead to unemployment.

The whole "invisible hand" nonsense is pure naivety.

In all of that, you ignore one very very important point. In fact, it's an entire half of the equation. Higher unemployment translates into fewer sales which translates into lower profits.

A country with 30% unemployment has low prices for work, but few people have the money to buy the products which the companies want to produce. Companies BENEFIT from having a vast majority of people employed as it increases the sales and thus their profits.

You're also assuming that the companies of an entire nation, nay, of the entire world are all caught up in one giant cartel. Not only does that notion have NO evidence to support it, it would be impossible to stop rampant cheating of the price fixing on the companies part. An individual company could increase production immensely by cheating on the cartel's employment limits and hiring more workers to increase production to sell more product. But this, of course, reduces the number of unemployed people raising the price for labor. Most companies would do this because their individual profits benefit greatly while individually not doing very much to affect the labor market.

But of course when most of those companies in this fictitious cartel cheat, it destroys the labor fixing.

You see this problem with OPEC right now as individual nations produce more than their quotas. And that's an immensely tiny cartel compared to the one you seem to think exists.

Outsourcing is not the end of the world like many folks claim. There are numerous benefits to both the nation outsourcing the work, and the nation where the work is being outsourced to. In the nation outsourcing the work, cheaper production costs translate into higher profits which enable greater investment or cheaper product. In the case of greater investment, more jobs are created to work those projects. In the case of cheaper product, the consumer will buy both more of the product being offered by the company outsourcing, and they will also have more money to buy products offered by other companies, which translates into those companies needing to hire more workers to meet that demand.

The company which the work is outsourced to also gains jobs which pay more than many home grown business, putting more money into the hands of those workers doing the outsourced work. This permits them to buy more products which increases demand for other goods within that country.

Both economies grow as a result of outsourcing. People are just afraid of needing to switch jobs to meet the new jobs being demanded by the companies.

Your analysis leaves out (a) hiring illegal workers; and (b) outsourcing. In each case, there is higher unemployment in America, but the firm's production continues unabated.

That's why firms hire illegals and outsource.

Further, your analysis of outsourcing as good for the economy has been rebutted over and over again by economists who point out that there is a differential benefit. Namely, the rich in both economies benefit, and poor unskilled laborers suffer. A macroeconomic analysis leaves this out. People don't buy groceries with marcroeconomics. They buy groceries with wages, and national policies should be to increase the wages of working people, since the rich really don't need further governmental support. They're doing fine.

[Nitrousoxide]

I'll just quote Loren from the other thread on illegal workers...

(Note: Sweatshops in the US with illegal workers are a very different issue. There the factory does have undue influence due to the illegal status of the workers and they don't pay market value for the labor received.)
The fact that certain job types are drying up is of no concern really. New, higher skilled jobs open up as a result of outsourcing. It just helps to entice people to learn either a skilled trade to maintain those high tech machines which are so prevelent today, or go to college and become a designer of those products or a manager of those teams which design those products.

It really shouldn't be troubling that some low skilled jobs are drying up as humanity advances. Just like how we don't need as many people farming these days to yield the same returns, so it'll be in the future that we need fewer and fewer people in other low skilled jobs to get the same or more output.

This isn't troubling, it's progress.

[Gamera]

I'll just quote Loren from the other thread on illegal workers...

(Note: Sweatshops in the US with illegal workers are a very different issue. There the factory does have undue influence due to the illegal status of the workers and they don't pay market value for the labor received.)
The fact that certain job types are drying up is of no concern really. New, higher skilled jobs open up as a result of outsourcing. It just helps to entice people to learn either a skilled trade to maintain those high tech machines which are so prevelent today, or go to college and become a designer of those products or a manager of those teams which design those products.

It really shouldn't be troubling that some low skilled jobs are drying up as humanity advances. Just like how we don't need as many people farming these days to yield the same returns, so it'll be in the future that we need fewer and fewer people in other low skilled jobs to get the same or more output.

This isn't troubling, it's progress.


It's troubling if you're one of the tens of millions (and growng) of unskilled workers in a country run by an ideology that profits from low wages and makes higher education so expensive you probably can't afford it.

Your macroeconomic analysis doesn't change the indisputable fact that outsourcing results in lower wages in America for unskilled workers. They live now, not in the future. For you to cavelierly call that "progress" suggest how mired you are in market fundimentalism discourse.

How about this -- since the well off benefit differentially from outsourcing (which is a governmentally constructed POLICY put into effect with treaties and other governmental action), increase their taxes to provide for retraining for the unskilled workers who lost their jobs. Is that a deal?

That would be progress -- to make the top 1% who benefit so much from policies actually pay for those policies.

[Axulus]

How do you reconcile this:

If that were the case, than the value of each individual part of the machine that is required for it to run would be equal to the value of the whole machine, which doesn't make any sense. The total value is derived from each individual part working together.

With this:

If a single person figures out a new way to organize the work of the workers so that the value of what is produced is increased, then that single person is solely responsible for that increase in value and should receive the majority of the rewards for that increase in value. The workers did not create the value that is derived from figuring out what to work on and how.

It seems you have a different set of criteria for evaluating the value of the machine purchaser's contribution, and the worker's contribution. Explain that.

I don't understand your question. In the first scenario, it was assumed that the value of the labor itself is equal to the difference in value that results in the absence of labor, which I pointed out didn't make any sense because then you would have to say that the value of anything and everything that is required is by itself equal to the total value of whatever is being produced.

In the second scenario, we have two situations using the same number of resources. However, the value of what is being produced in one scenario is greater than the value of what is being produced in the other scenario. The difference between the two situations must account for the difference in value. The difference in the two situations is how the workers are organized to carry out their task. Therefore, the person who figured out the better way to organize the workers to increase the value of the product is the one almost solely responsible for that increase in value.

To make it clear what I am saying, you can have a worker dig holes and then fill them back in. This creates no value. However, if you organize those workers to dig sites for graves, to dig ditches, or to dig something else that is of some use and value to society (based on what the market is willing to pay for the end product), than the sole increase in value results from how the workers are organized. Both scenarios involve the same task and the same amount of resources (digging holes with a shovel, let's say). If someone spots a situation where you can get the same workers to do the same work but on a different task that creates greater value, that person should get most of the reward to give the most incentive for people to find such value added measures since it was the sole actions of that person that found the better way to do things that resulted in the increase in value. However, due to competition, people often copy the new techniques, so the rewards are temporary, and the profit from the new technique decreases, often to the benefit of the consumer (which ultimately benefits workers as consumers).

[Axulus]

It's troubling if you're one of the tens of millions (and growng) of unskilled workers in a country run by an ideology that profits from low wages and makes higher education so expensive you probably can't afford it.


There are record percentages of the population enrolled in college in the U.S. Also, there are very few people who don't enter college because they can't afford it. There are many options available to everyone to help pay for college.


Your macroeconomic analysis doesn't change the indisputable fact that outsourcing results in lower wages in America for unskilled workers. They live now, not in the future. For you to cavelierly call that "progress" suggest how mired you are in market fundimentalism discourse.


Automation and new technology displaces workers all the time. If instead of outsourcing to a foreign country a machine was developed to do the exact same task for the exact same cost as outsourcing to a foreign country, would you decry "the fact that the automation is resulting in decreased wages for unskilled labor"? Also, I would say that an increased number of jobs available for people in a poorer country at the expense of a slightly lower wage for someone in the U.S. is a pretty reasonable trade off.


How about this -- since the well off benefit differentially from outsourcing (which is a governmentally constructed POLICY put into effect with treaties and other governmental action), increase their taxes to provide for retraining for the unskilled workers who lost their jobs. Is that a deal?


They already pay a huge portion of the U.S. taxes. The top 1% pays over 25% of all U.S. taxes. The bottom 42% pay no taxes and many of them get transfer payments from entitlement programs.


That would be progress -- to make the top 1% who benefit so much from policies actually pay for those policies.

They already do. The consumer also gets lower prices as well. Also, the manufacturing jobs we've been losing pay quite poorly. The median annual wage for a job in 2006 was 30,180 while the median wage for a manufacturing job was $27,800. We created about 1.2 million jobs that pay a median of $32,000 or greater in 2005 and about 1 million jobs that pay a median below $27,800. We are thus creating good paying jobs faster than low paying jobs.

[Bonniedundee]

Even in your "super free" marketWhat super free market? You do realise I'm currently only arguing for the complete free market with lockean property rights(provisos intact.) that is the goal of American libertarianism and anarcho-capitalism. You do understand this?

Don't try and pretend your statism is free markets, it is not, I will not let you get away with that.

people working for a company and not for themselves are going to be subject to the supply and demand for their labor. THAT is the primary driving force behind what employees (or as you like to call them, wage slaves) earn. It has nothing to do with how much employers can screw them for.


If you have 10,000 computer programmers available to work, but the market only wants products which require 1,000 programmers, the pay of employed programmers will be less than if the market required some 5,000 programmers. Your "super free" market does NOTHING to prevent those 1,000 programmers from earning less than the value of what the produce, because you're completely ignoring the seperate market for labor and assuming pay is based on the value final product.

Credit and land would be extremely cheap, mutual banks would be numerous, sio that you could set up a co-op or your own business as easy as work for someone else.

There being no money monopoly and therefore no legal tender you'd go to a mutual bank and mortgage some of your property for an interest rate that competition would push down to the labour costs of banking ie less than 1% and you'd recieve the bank's curreny. You'd also agree to accept the bank's curreny as payment.
You'd be able mortgage off all sorts of your property not just buildings and land and you'd even be able to take out loans on future labour.

[untermensche]

What super free market? You do realise I'm currently only arguing for the complete free market with lockean property rights(provisos intact.) that is the goal of American libertarianism and anarcho-capitalism. You do understand this?

Don't try and pretend your statism is free markets, it is not, I will not let you get away with that.

Credit and land would be extremely cheap, mutual banks would be numerous, sio that you could set up a co-op or your own business as easy as work for someone else.

There being no money monopoly and therefore no legal tender you'd go to a mutual bank and mortgage some of your property for an interest rate that competition would push down to the labour costs of banking ie less than 1% and you'd recieve the bank's curreny. You'd also agree to accept the bank's curreny as payment.
You'd be able mortgage off all sorts of your property not just buildings and land and you'd even be able to take out loans on future labour.
The question one can ask now is: How easy is it for workers to join together to borrow capital to begin businesses?

Are there any barriers to this kind of activity?

Going to the banks and cutting out the deadwood of production. The managers that do not also perform physical labor.

[Bonniedundee]

The question one can ask now is: How easy is it for workers to join together to borrow capital to begin businesses?In a free market, even using the standard lockean rights of American libertarians(albeit with the provisos they usually ignore.) it would be almost as easy as going to work as a wage slave.


Are there any barriers to this kind of activity?In a free market there would be not, as long as there is no fraud or coercion.

Going to the banks and cutting out the deadwood of production. The managers that do not also perform physial labor.
Huh?

[coloradoatheist]

What super free market? You do realise I'm currently only arguing for the complete free market with lockean property rights(provisos intact.) that is the goal of American libertarianism and anarcho-capitalism. You do understand this?

Don't try and pretend your statism is free markets, it is not, I will not let you get away with that.

Credit and land would be extremely cheap, mutual banks would be numerous, sio that you could set up a co-op or your own business as easy as work for someone else.

There being no money monopoly and therefore no legal tender you'd go to a mutual bank and mortgage some of your property for an interest rate that competition would push down to the labour costs of banking ie less than 1% and you'd recieve the bank's curreny. You'd also agree to accept the bank's curreny as payment.
You'd be able mortgage off all sorts of your property not just buildings and land and you'd even be able to take out loans on future labour.
The question one can ask now is: How easy is it for workers to join together to borrow capital to begin businesses?

Are there any barriers to this kind of activity?

Going to the banks and cutting out the deadwood of production. The managers that do not also perform physical labor.

Hopefully Stinger will come answer since he did or does work at a bank. But most companies don't start out going to the bank but use their own capi