It's not dogma. It's just that at some point you hit upon a foundation. We each have our foundations. You're no different to me in that regard. The problem is that I recognise a foundation when I see it, and act accordingly, wheras you keep pressing. — Sapientia

I don't think it's a foundation cause it's not a basic idea, we can go beyond that and ask why it is wrong? And we have to reach some notion of harm, or to show how each doesn't get what they deserve (so first we'd need to determine what each SHOULD get, and then see if they do or don't). That would be the basic idea.

So what should the entrepreneur get? What should his wage, if he is responsible for starting massive industrial production, be? And what should the paramedic's wage be? If the entrepreneur, through his efforts, earns 1,000,000x the paramedic's earnings, is that a problem so long as the paramedic can meet all his basic needs with what he gets?

We don't disagree about what fairness is - fairness is each getting what they deserve. We disagree what each deserves, but fortunately, that's something that can be calculated mathematically and determined scientifically.

Well yeah, the ratio of crime rates of those subject to the intervention and the per capita rate in the general community excluding the people subject to the intervention is a good statistic for that. Doesn't need 100% success rate to be a good thing, nor to be shown to be a good thing.

Yes, obviously poverty and inequality can be temptations for immoral behaviour. That's what statistics show. But that kind of inequality has nothing to do with 1% owning 99% and the others owning just 1%. It has to do with whether the 99% have their basic needs met.

I think this is a relevant difference. There are different statistics to measure these things. The overall level of inequality in terms of wealth possession is something that could be decreased through wealth redistribution measures, and funded in a variety of ways (in the UK and US actually enforcing its fucking tax laws on multinationals would go a long way, not that there are enough staff to do it in the UK for some reason :(). So this is the kind of inequality that would be measured by the 99% and 1% sharing equal amounts of money.

Another way, somewhat maxi-min inspired, of measuring inequality would be a survey of expenditures of those within the lowest 5%, then the proportion of their total income which would be devoted to necessities. Another way of finding this threshold would be to construct a budget from local prices for housing, food, electricity etc then looking at communities in these areas which would struggle to obtain these things on average.

I'm of the opinion that the latter measure, and measures inspired by ratios of living expenses (or minimal living expenses) to incomes more generally, are much more sensitive to deprivation, and provide metrics for evaluating improvement in targeted communities. A very high proportion of total income spent solely on basic sustenance on average would make a community a good candidate for intervention. Targeting the worst off areas to incentivise investment in small businesses there (tax incentives without their abuse), providing community education, organising community policing from those within the community and neighbourhood watches and doing whatever can be done to increase the healthcare of those in the areas (like needle banks in areas with heroin problems).

The stats will tell you where those target areas for intervention are. They'll also give you feedback on policy effectiveness, at the same time as personal interviews (payed, of course) with those who engage and do not engage with the intervention measures.

I don't care whether you think it ridiculous. It's called justice. — Sapientia

It's ridiculous that you think this is justice.

What stops your average person from starting a business and being successful? — Agustino

Why are you even asking me that? What if I don't want to start a business? What if I want to become a paramedic? I'm arguing for decent wages for decent jobs, and an end to excessive wages which don't truly reflect contribution. I don't care how many brownies you make, put things into perspective. We can live without brownies, but paramedics play a vital role in society.

And decent wages for decent jobs doesn't mean that a decent job should have an income which is 1% of what it could be. If that same job could have an income, say, 20% more than what it does, but the reason that it doesn't is because wealth is disproportionately concentrated elsewhere, without justification, then, when put into perspective, that's hardly a decent wage.

It's ridiculous that you think this is justice. — Michael

:-d

Yah, but you keep talking as if you were in the stone ages of business when you put the whip on workers and forced them to work while starving in your factory... Today it's not the same, at least not in the West. That may happen though, unfortunately, in places like China. Business has evolved and changed. — Agustino

Of course I am aware that industry and business has changed. Only 9% of American workers labor in factories. Larger percentages work in transportation, warehousing, wholesale, and retail of physical products. Service work employs the bulk of the remainder in a wide variety of fields, everything from bio-molecular research to fabric design to night watchmen. You are a service worker, albeit self-employed. There are also a large number of people engaged in entrepreneurial work, mostly providing one kind of service or another.

The nature of business, however, has not changed since the stone age. Whether a product is being made or a service being performed, the object is to add value through labor (in your case, typing furiously away on your computer). When hired help perform service labor, the value they receive in pay for their work must be considerably exceeded by the value of the services sold. If it isn't considerably exceeded, then either no profit is produced, or not enough profit is produced to satisfy the desires of the proprietor. So whether one is talking about workers in an early 19th century cotton mill or workers writing code for a killer iPhone app, it's pretty much all the same.

Your POV of business is from the proprietors' side. My POV is from the workers side. I could enthuse about the glories of free enterprise from your POV, but you are already doing that. NO NEED further adulation.

The situation of labor--excluding elite laborers in academic institutions, industrial research, civil service, the arts, entertainment, and such--is not great. I'll speak only for the US situation. Here there has been a continual slide of income and purchasing power since the 1970s. It has gradual, rather than precipitous. The "good times" of the post-WWII economic boom ended in the 1970s, It isn't that people were suddenly reduced to begging on the streets, such as happened in the Great Depression. Rather, the average worker's standard of living has been ratcheted down, notch by notch.

The reason people have not experienced worse consequences is that workers have greatly increased the number of hours worked. First spouses (e.g., women) started working part-time jobs to supplement household income. Then these spouses started looking for full time jobs. The previous full-time male started adding small part-time jobs. sometimes older children also started taking jobs (like 15-17 year olds)--and not stuff like mowing lawns.

The increased labor helped a great deal. Another approach that households have used to hold on to the standard of living that they previously had, or if younger--think they should have--is credit card debt. Buy it now! Don't save up for some decent furniture; the replacement car; the replacement or new whatever -- buy it on credit. This works quite well, as long as one limits credit use and pays it off as quickly as possible. That's not usually what happens.

Home equity loans are another approach that many workers have employed to hold on to what they felt to be reasonable expectation. Their house needed work (normal wear and tear, added children, relatives moving in, etc.). The quickest and supposedly least risky way to obtain the funds was through a home equity loan: You have, say, $40,000 in equity. You might borrow $30,000 against that. It's essentially a second mortgage. What often happens is that some of the money is spent on repairs (new roof, kitchen replacement) and then credit card debt is paid down. However, the kitchen product didn't get finished, and credit card debt starts recurring. Plus, there is the second mortgage to pay on.

At this point, any slippage in standard of living is likely to be permanent, because the options to stave it off have been used. All this has been going on since the 40+ year decline in income and living starts started. A substantial share of the working class has now been economically dried out. They don't have any more.

Some people, in the upper portion of the working class--the people who call themselves middle class--have had to do the same thing, except that their incomes are higher and generally they have not been drained of economic resources.

The uppermost portions of the working class, the actual petite and haute bourgeoisie, and the super rich have, of course, not experienced any losses at all. They have benefitted from the economic policies since the Reagan administration (1980-1988) and following that were intended to benefit them. People like you (not you, personally, of course) take well off people as the standard model, who if they need to work are often quite industrious, and say to the working class: "Well, if you were industrious, you too could be well off! All that you have to do is get off your fat asses and get to work."

Yeah, because the paramedic's employer certainly deserves the benefits of Mike's brownie business, he did a lot of work for it. >:) — Agustino

Yeah, because the rest of society ought to fail to reach its true potential because of Mike's selfishness in relation to his brownie business. Mike ought to learn to share for the benefit of society. What would Jesus do?

People do not exist in vacuums. Z entrepreneur is not solely responsible for starting "massive industrial production". He is relying on existing societal systems, technology, knowledge, and on the labour of others.

As such, without X societal conditions, Y entrepreneurial project cannot materialize. Therefore, profits coming from such projects were not generated solely by Z entrepreneur, not even mostly by him, and he doesn't deserve most of the profits.

As others have mentioned, Z is replaceable in regards to whether Y materializes or not. X isn't.

But most Z don't believe this. They believe they come out of vacuum, that they deserve most of the wealth being produced by Y, never taking into account that without education and nurturing provided by society, they wouldn't be Z at all.

I think what Sapientia is saying is that society should, justly, get more of the wealth produced by Ys.

As to what's wrong if 1% of people own 99% of the wealth, Baden and Erik already spoke beautifully on the topic.

Consider Coca Cola and Pepsi Cola. They make simple products: drinks made out of water, a secret syrup, carbon dioxide plus aluminum, plastic, and (mostly in the past) glass. A significant portion of their income comes from selling just water in a plastic bottle.

What is there not to like about Coke and Pepsi? Nothing. Actually, 50% of hard core Stalinists prefer Pepsi, and the other 50% prefer Coke

How could one criticize these inexpensive universally loved products which people individually choose to buy and drink? Who wouldn't like to buy the world a coke? It's the real thing! So buy it, asshole.

First, soft drinks, without regard to the brand or the maker, are expensive forms of nutrition-free beverages. The drinks are high in sugar, contain caffeine, a mildly addicting alkaloid, or are sugar free but contain artificial sweeteners which have zero positive function in the body.

Second, they are environmental unsound. It isn't so much the syrup (which is a combination of cola nut extract, fruit juices, and some other unknown stuff). It's the environmental costs of petrochemicals and aluminum used to contain the product. There is also the cost of shipping and cooling the nutritionally useless product. (It isn't even as good as plain water.)

Speaking of water, in India Coke and Pepsi are drawing down critical aquifer to make their products. They also draw down aquifers containing unusually good water to sell as... water. How much does Pepsi and Coke pay for the water diverted from normal human usage to abnormal "bottled water" usage? Nothing.

Coke, Pepsi, Fanta, Royal Crown, 7UP, and every other bottled drink company externalize the cost of the 200 billion cans per year. 2% of the world's energy is used in mining and refining aluminum, the highest energy cost for any metal. The energy needed to make 4 aluminum cans is about the same amount of energy in a 12 oz can of gasoline.

About 93,250,000 cans have been recycled so far this year. 93.5 million vs. 200 billion made and wasted.

17,000,000 barrels of oil 535,500,000 gallons per year go into making plastic bottles. 190,000 homes could be heated with the the energy needed to make a years worth of plastic bottles. Last year the average American used 167 disposable water bottles, but only recycled 38.

Bottled water is not more healthful than typical tap water in Europe, OZ, NZ, and North America (and some other countries, as well).

Coke gives life? Not really.

How could one criticize these inexpensive universally loved products which people individually choose to buy and drink? Who wouldn't like to buy the world a coke? It's the real thing! So buy it, asshole. — Bitter Crank

Yes, and it seems like it's almost patriotic to drink it in the U.S. That's how deep the rot is. Whereas makers of this kind of semi-toxic crap actually should be ostracized, their product labelled as dangerous to health, advertising banned and heavy taxes put on it to pay to clean up the environmental mess it contributes to. These are the kind of practical steps I'd like to see taking place now.

. What would Jesus do? — Sapientia

Hopefully we aren't looking to Jesus to provide economic models.

I don't care whether you think it ridiculous. It's called justice. — Sapientia

The concern is that redistributing the wealth of successful businesses is going to screw up the market's valuation. We can say that Lebron James (famous basketball player) shouldn't make more than X amount that a school teacher does. Alright, but then what happens to the market as a result of setting that proportional value which has nothing to do with what value the market would set? You're going to be sending weird pricing signals to consumers and producers.

I don't think justice applies here. It's a balancing act of wanting a fair society where a small number can't dominate politics and marketing, while still wanting the economy to work well enough.

Haven't you noticed the boilerplate Marxism I've been peddling?

l thought you were just facing facts.

Have you noticed that throughout our history there is a cycle in which groups of people sieze power in some way and use this to accumulate and hoard wealth from the population. Then when it becomes out of hand the mob arrives at their door with pitch forks. The mob seizes back the power and wealth and the cycle then gradually repeats itself.

Now that we are in a global capitalist system, the cycle seems to be happening again. Can we somehow defuse the situation, or are we going to have to grab the pitch forks?

I'm a bit late to this party.

We have a system of laws that regulate the market in a certain way. So I'll just put a few (value-laden?) questions out there along which lines people can think and why to me, the current setup is not fair and probably not sustainable in the long run.

Who here thinks that tax policy and laws, liability laws, bankruptcy laws, financial laws and anti-trust laws have not been heavily influenced this century by corporations with the purpose of minimizing the effects of those regulations to their bottom line?

In the case of taxes, given the costs of running a government, where do the funds come from if not a fair part from capital gains taxes?

In the case of liability laws, if damages exceed the capital of a corporation, who pays for them?

In the case of bankruptcy laws, if debt exceeds the capital of a corporation, who bears the consequence?

in the case of financial laws, who bears the costs when banks invest with other people's money while their algorithm cannot take every conceivable risk into account and those risks realise themselves?

In the case of anti-trust laws, who bears the costs if capital is further concentrated (with the subsequent possibility to exercise more power)?

Who here thinks such influence has decreased rather than increased over time, or, has it remained relatively the same?

Who here thinks it is as easy for mortal natural persons with rather disparate dreams, motives, intelligence and interest to organise themselves in the same manner as immortal corporations can, who, at a bare minimum share the motive to make profits?

The questions I think we should be asking ourselves are, for starters (and therefore non-exhaustive):

What is a fair level of taxation for labour vs. capital? Are current levels fair or an expression of power (through cash)?

I'd argue that we should introduce a land tax (to the extent countries don't have them) and increase taxes on capital gains and profit to the extent that they are more or less equal to the taxes typical wage labourers pay. I mean really, if corporations want to be "persons" so badly, they should be treated like them.

What is a fair distribution of power (the ability to make decisions), risks and benefits? It is often argued "capital" takes the most risk but is this really so? Capital already has power to make decisions and as such it "risks" what it can influence. Its risks are mitigated further by limited liability and bankruptcy laws. Any debt and damages exceeding capital of a corporation are paid for by the wider community, whereas the wider community has zero power in whatever decisions "capital" took that led to bankruptcy or liability. It's not clear why this is fair. Meanwhile, a labourer risks his livelihood and in a debt-fueled economy tends to risk his house, car and whatnot, that haven't been fully paid off yet. The labourer opting to work for company A instead of B takes a risk that management aren't a bunch of nitwits and that's assuming he has a choice where to work to begin with.

Ideally, I'd see a repeal of limited liability if possible and an introduction of personal liability for shareholders. We can immediately set fire to all IFRS and GAAP rules as the standard of reporting will be set by shareholders who now have a vested interest in being properly informed and in a manner that meets their specific requirements. I suspect insurance companies will be willing to offer a new insurance to cover the risks for these shareholders. Obviously, the costs of doing business will increase but it buys us fairness - and principles cost money. Sorry.

I don't think it's a foundation cause it's not a basic idea, we can go beyond that and ask why it is wrong? And we have to reach some notion of harm, or to show how each doesn't get what they deserve (so first we'd need to determine what each SHOULD get, and then see if they do or don't). That would be the basic idea.

So what should the entrepreneur get? What should his wage, if he is responsible for starting massive industrial production, be? And what should the paramedic's wage be? If the entrepreneur, through his efforts, earns 1,000,000x the paramedic's earnings, is that a problem so long as the paramedic can meet all his basic needs with what he gets?

We don't disagree about what fairness is - fairness is each getting what they deserve. We disagree what each deserves, but fortunately, that's something that can be calculated mathematically and determined scientifically. — Agustino

I meant that we disagree over what, more precisely, constitutes fairness - which, like you say, relates to what each deserves. That's where we hit upon a foundation, or at least come very close. (And I hope that you're not trying to contrast your position from mine by suggesting that I would not likewise utilise mathematics to determine fair pay - although I'm not sure what role you imagine that science could play here).

Now, given that I've already addressed - although perhaps not answered to your satisfaction - the issues that you raise here, do you have any productive questions to ask or points to raise? I told you that I'm not an expert, that I'm not best equipped to give you the finer details which you seek, that I can only give you a rough outline, and that I don't think that it's necessary to go into every little detail or present a fully formed plan in order to discuss and debate the essentials.

What I can do is, as I've explained, point to examples, like those that I've already given, which, in my view, indicate excess or undervaluation, and explain as much as I'm capable of explaining why that's the way that I see it. I've already done this to some extent, so I suggest you start there and think about any issues you have with what I've said thus far which have not been covered or which don't lead to a dead end.

To answer your question about whether it's a problem that an entrepreneur, through his efforts - and, I would add, of necessity, the efforts of countless others (something which should not be glossed over) - should get (not "earn", which would be begging the question) a million times what the paramedic gets, provided that the paramedic can meet all his basic needs with what he gets: yes, it's a problem, and a problem which strikes me as obvious. The problem would be that, in my assessment - which I think is the right assessment - the entrepreneur doesn't deserve to get that much, because he has not earned that amount for himself, but has instead earned some lesser proportion for himself, and the remainder has been earned for the progression of society, so that it might be spent on things like public services, infrastructure, or alleviating underpay.

(And I hope that you're not trying to contrast your position from mine by suggesting that I would not likewise utilise mathematics to determine fair pay - although I'm not sure what role you imagine that science could play here). — Sapientia

Well, I'm saying that so far you haven't used mathematics and science to determine what fairness is in this economic context. The reason for that is that you have not even explained what, economically speaking, constitutes value, and how fairness is to be calculated or arrived at. So you're effectively engaged, at the moment, in a non-scientific polemic. You haven't shown a mathematical way to determine how much X should get paid, and how this should relate to his activity.

Now, given that I've already addressed - although perhaps not answered to your satisfaction - the issues that you raise here, do you have any productive questions to ask or points to raise? — Sapientia

My productive question is that I'd like you to clarify for yourself and for the rest of us how fairness can be mathematically assessed by laying down a framework for determining what each person should get paid based on the value they provide.

I told you that I'm not an expert, that I'm not best equipped to give you the finer details which you seek, that I can only give you a rough outline, and that I don't think that it's necessary to go into every little detail or present a fully formed plan in order to discuss and debate the essentials. — Sapientia

Right, an outline is what I'm looking for. It would also be useful if you analyse a particular case to show how it would work.

indicate excess or undervaluation — Sapientia

How have you determined this? That's the science and mathematics I'm interested in. Otherwise, it's just a polemic.

So let's go to the very basics. Economics deals with the production and distribution of value through a society. Money is merely a means to quantify and trade that value within society, but, like all approximations, it is not perfect, since not everything can be quantified (easily) in money.

Let's take a very easy example. Suppose I spend 2 hours setting up a Google Adwords campaign for a client, which helps him earn $10,000 in net profit. What value did my work/services bring to society in that case - well it depends on what goods I've sold, and a whole host of other factors - but let's take a first approximation for the sake of calculation and say that this value corresponds to the increase in net sales. Would it be fair for me to get paid $1000 (10%) in that exchange for 2 hours worth of work?

Another example. Suppose I am an engineer and independent contractor working on ship engines. I specialise in a particularly new class of ships that many world transportation companies are acquiring. There are very few people who specialise in this ship. Something goes wrong in one of those ships, and it no longer functions to transport the goods. My client moves $6,000,000 worth of goods each day using that ship (maybe those are much needed medicines, which save lives). So if he doesn't get me to fix it, then he (and all of society which depends on those goods) will lose $6,000,000/day. Is it fair that I am paid $600,000 for 10 hours of work?

Please remember through this discussions that money is nothing but a way to quantify the value of certain goods/services for society.

Take another case. Suppose I am a paramedic saving 5 lives a week. That's 260 lives per year. What's the value of 1 life to society? Well, the average value that person can produce or distribute. Say that's 30K/year*20 years left on average (most people saved being older, and 30K being the average income of those saved). 600K. So 10% of that value? 5%? 30-60K\year seems fair given the value they provide.

To generalise. It seems that economic fairness consists in person X producing or distributing value to society, and being paid a small portion of that value, the rest going to the well-being of society. Correct? So unfairness would come from person X appropriating too great of a percentage from the portion of value he provides to the economy.

Value is usually quantified in money, and in the first 2 examples I've given above (all which are realistic examples, by the way), it is relatively easy to quantify the value in financial terms. But there are other, non-financial terms too. For example, do the goods produced/distributed cause hidden costs to society that aren't usually taken into account - health, environmental, etc. So it's a bit more complicated. Those hidden costs can also be calculated in money - if we screw up the environment, we need to spend money and resources to fix it and avoid worse consequences, etc. etc.

To increase fairness it seems we have two problems.

1) We have to be able to quantify this value more accurately in financial terms, even for things that are non-financial in nature (saving lives). There's also things like the preservation of life, such as in the case of old people, who are not DIRECTLY productive anymore (maybe they can be productive through their wisdom though). How much of our society's resources should be devoted to preserving or saving the lives of those people? By increasing resources, we can save more and more lives, but there obviously will be a break-even point - at some point, allocating more resources to this will have negative effects, since we won't have anymore resources for other things we do need.

2) How many resources should be allocated to people who simply cannot be productive (to each according to his need part)? And how should we incorporate this together with (1)? This refers to people with illnesses, etc.

There are a lot more details, but basically, do you agree or follow the ideas above so far?

Examples do not imply general statements. But I do agree with the conclusion - at a certain level, unregulated capitalism objectifies the worker and creates wealth inequality.

Well, I'm saying that so far you haven't used mathematics and science to determine what fairness is in this economic context. The reason for that is that you have not even explained what, economically speaking, constitutes value, and how fairness is to be calculated or arrived at. So you're effectively engaged, at the moment, in a non-scientific polemic. You haven't shown a mathematical way to determine how much X should get paid, and how this should relate to his activity. — Agustino

You haven't yet explained how science could be applied to that end, despite my specifically raising that issue in my last reply - although perhaps you do so later on. (I haven't gotten that far yet). And I have explained why I haven't gone into that detail. I don't understand why you think that that's necessary. It would be necessary if it was down to us to implement what I've been outlining, but that's not the case. This is just a presentation of an idea to work on. I'm not going to delve too deeply into numbers. You're not going to get precision. What I can tell you is that, for example, £615,000-per-week for being a professional footballer is too much, and part of that amount should be redistributed. Why do you need a number? £300,000-per-week, 60%-per-week, it doesn't matter for the purpose of this discussion. It's just for arguments sake. Can't you use your imagination?

My productive question is that I'd like you to clarify for yourself and for the rest of us how fairness can be mathematically assessed by laying down a framework for determining what each person should get paid based on the value they provide. — Agustino

That's not productive for the reasons that I've given. I think you expect too much of me. If you hire me an expert to come up with something like that, then I'll get back to you. Otherwise you'll have to make do.

How have you determined this? That's the science and mathematics I'm interested in. Otherwise, it's just a polemic. — Agustino

Based on the job role and what that job role should earn. If professional football is not as valuable as the emergency services, as I would maintain, then why doesn't the pay reflect that? It doesn't do so because that's just how it works out under the current economic model. Surely that can and should change.

Do you really need to ask why I think that professional football is not as valuable as the emergency services? You've played down the role of paramedics. Are you going to do that across the board? Surgeons? Firefighters? Police? Are you going to put professional footballers on a pedestal?

Please remember through this discussion that money is nothing but a way to quantify the value of certain goods/services for society. — Agustino

It is, according to Marx's analysis in Das Kapital - which I know nothing about, having never read the book - the universal mirror or equivalent that keeps company with all other ordinary commodities. It is in fact no more than a commodity itself, because it is a representation of the exchange value of the ordinary commodity. It is both the means of exchange and the measure of value. But it is not the same as an ordinary commodity, because it is primarily considered in light of its exchange value rather than its use value, or, put differently, in light of its quantitative dimension rather than its qualitative dimension. And:

As use values, commodities are, above all, of different qualities, but as exchange values they are merely different quantities, and consequently do not contain an atom of use value.

[...]

The exchange of commodities is evidently an act characterised by a total abstraction from use value. — Marx, Das Kapital

To generalise. It seems that economic fairness consists in person X producing or distributing value to society, and being paid a small portion of that value, the rest going to the well-being of society. Correct? So unfairness would come from person X appropriating too great of a percentage from the portion of value he provides to the economy. — Agustino

Yeah, and that describes the current state of affairs.

To increase fairness it seems we have two problems.

1) We have to be able to quantify this value more accurately in financial terms, even for things that are non-financial in nature (saving lives). There's also things like the preservation of life, such as in the case of old people, who are not DIRECTLY productive anymore (maybe they can be productive through their wisdom though). How much of our society's resources should be devoted to preserving or saving the lives of those people? By increasing resources, we can save more and more lives, but there obviously will be a break-even point - at some point, allocating more resources to this will have negative effects, since we won't have anymore resources for other things we do need.

2) How many resources should be allocated to people who simply cannot be productive (to each according to his need part)? And how should we incorporate this together with (1)? This refers to people with illnesses, etc.

There are a lot more details, but basically, do you agree or follow the ideas above so far? — Agustino

Yes, the gist of it at least. These are the finer details that can be worked on and a resolution found.

Yah, but you keep talking as if you were in the stone ages of business when you put the whip on workers and forced them to work while starving in your factory... Today it's not the same, at least not in the West. That may happen though, unfortunately, in places like China. Business has evolved and changed. — Agustino

"Marxism is finished. It might conceivably have had some relevance to a world of factories and food riots, coal miners and chimney sweeps, widespread misery and massed working classes. But it certainly has no bearing on the increasingly classless, socially mobile, postindustrial Western societies of the present. It is the creed of those who are too stubborn, fearful or deluded to accept that the world has changed for good, in both senses of the term".

Right? Wrong. (That's covered in the first chapter).

Thank you.

How much would workers get if they owned the factory and profit wasn't an issue. It might work out something like this:

A factory employing 500 workers turns out 100 cars a day. The cars market value is $8,000 each, or $800,000. How much should each factory worker be paid, per day? $1,600? No.

Costs must be deducted from the expected income from the 100 cars.

- the cost of obtaining the daily supply of raw materials and parts (steel, aluminum, rubber, plastic, copper, upholstery, engines, glass, motors, fans, pumps, fasteners, etc. or 20% of retail) approximately $160,000

- the cost of daily operating the factory (electricity, water, gas, etc.) approximately $5,000 (a guess)

- preparing for the cost of replacing worn out tools and plant (approximately 1%) $8,000

- contributions to the cost of operating society (roads, railroads, schools, hospitals, services, etc. 20% of expected income) $160,000

- cash reserve to pay for supplies, unexpected or unbudgeted costs (accidents, supply price spikes, income shortfalls, cash purchases; 5%) $40,000

Without having to earn a profit for stockholders or highly paid executives, workers in this factory would earn $106.76 per hour. $427,000 after expenses / (500 workers x 8 hours) = $106.75 per hour. This is substantially less than many lawyers, consultants, and certainly highly paid executives get now, but it is also substantially more than many workers now get paid. Further, 20% of the factory income goes to what would normally be covered by taxes.

Over the course of 250 days, the workers would have produced $200,000,000 worth of goods (at retail) and contributed about $40,000,000 to social needs. Two million would have been set aside at the end of the year for repair and maintenance of plant and equipment. $10,000,000 would have been set aside for unexpected expenses (like storm damage, increase in raw materials, decrease in income, etc.

These figures can be adjusted, of course. The factory can make more cars, raise the price, cut their own wages, or find and use cheaper materials. The point is, without profit and the overhead of parasite classes, the workers would be taking home over 1/2 of the income the plant produced, and there would be no parasites getting money for nothing.

The workers deserve this because they are bearing the risk of failure. Maybe too few of their cars are sold, or aluminum and rubber become much more expensive.

Of course, in a rational, ecologically sensitive economy, personal autos would be obsolete--replaced by other kinds of transportation. But some kind of transportation would still be needed (unless we had to walk everywhere, then shoes would be the thing).

Another good reply, Comrade Crank! (Y)

Yah, but you keep talking as if you were in the stone ages of business when you put the whip on workers and forced them to work while starving in your factory... T — Agustino

You have apparently not heard of the working poor in the United States. A "living wage" is reckoned to be... around $16 per hour. $16 was cited 17 years ago, it would certainly need to be higher now. Many workers earn less than the "living wage" (from which one can support children adequately, supply food, clothing, housing, and perhaps medical care). It probably isn't quite enough to support a spouse too, so $20 would be closer to the living wage for a married family of 4 people. 16 an hour about $33,600 a year. The average income is $48,000. The MEDIAN income about $44,000. So, a lot of people--50%--are below the median wage. Quite a few are below the "living wage" (which is somewhat higher than the poverty level).

16 per hour is less than it seems, because it doesn't include the cost of dentistry, transportation for two adults, various school costs (above and beyond free tuition for K-12), or any kind of disaster recovery costs (like when the furnace breaks down) and various other costs. Obviously both parents will have to work. If they both work, their very young children will need day care and pre-school, which for 2 children in a good program (not elite, just solid) can cost nearly as much as one parent makes.

American workers are either poor, or they are working hard for wages too low to support a family reasonably well.

So, FYI, the stone ages aren't over.

Have you noticed that throughout our history there is a cycle in which groups of people sieze power in some way and use this to accumulate and hoard wealth from the population. Then when it becomes out of hand the mob arrives at their door with pitch forks. The mob seizes back the power and wealth and the cycle then gradually repeats itself.

Now that we are in a global capitalist system, the cycle seems to be happening again. Can we somehow defuse the situation, or are we going to have to grab the pitch forks? — Punshhh

Yes, I have noticed that. And that's a very good question to which I do not know the answer. I hope that it's the former, but my hope is not enough. Clearly some kind of action would need to be taken. As Marx said, the philosophers have only interpreted the world in various ways; the point, however, is to change it.

Buy it now! Don't save up for some decent furniture; the replacement car; the replacement or new whatever -- buy it on credit. — Bitter Crank

Yes, whatever you do, buy a new one! Ending is better than mending. The more stitches, the less riches.

Hopefully we aren't looking to Jesus to provide economic models. — Marchesk

Not quite, but countless people - including Agustino, to whom my reply was directed - would claim to seek the ethical foundation for their thinking from the teachings of Jesus, and would claim that the teachings of Jesus are of the utmost importance.

The concern is that redistributing the wealth of successful businesses is going to screw up the market's valuation. We can say that Lebron James (famous basketball player) shouldn't make more than X amount that a school teacher does. Alright, but then what happens to the market as a result of setting that proportional value which has nothing to do with what value the market would set? You're going to be sending weird pricing signals to consumers and producers.

I don't think justice applies here. It's a balancing act of wanting a fair society where a small number can't dominate politics and marketing, while still wanting the economy to work well enough. — Marchesk

Yes, that's a concern. But I reckon that it can be made to work, albeit perhaps with some comprises here and there. I haven't reason enough to conclude that it cannot be made to work.

Welcome to the party. Here are some related questions. Why is Phillip Green so despised? Do we need more like Phillip Green or less? Should we do something about this, or should we sit on our hands?

I don't understand why you think that that's necessary. — Sapientia

Because you need to show that you have a framework that can scientifically and mathematically determine how X needs to be rewarded, otherwise how will you determine it? By your gut feeling & prejudice?

What I can tell you is that, for example, £615,000-per-week for being a professional footballer is too much, and part of that amount should be redistributed. Why do you need a number? £300,000-per-week, 60%-per-week, it doesn't matter for the purpose of this discussion. It's just for arguments sake. Can't you use your imagination? — Sapientia

I don't see why that's too much for the professional footballer. You've done no analysis of the value he provides in the economy, so...

This is what an analysis looks like:

Another example. Suppose I am an engineer and independent contractor working on ship engines. I specialise in a particularly new class of ships that many world transportation companies are acquiring. There are very few people who specialise in this ship. Something goes wrong in one of those ships, and it no longer functions to transport the goods. My client moves $6,000,000 worth of goods each day using that ship (maybe those are much needed medicines, which save lives). So if he doesn't get me to fix it, then he (and all of society which depends on those goods) will lose $6,000,000/day. Is it fair that I am paid $600,000 for 10 hours of work? — Agustino

So I want you to think about the value that footballer produces - for his employers, for the spectators, etc. I want you to consider the number of people affected by his work too.

You've played down the role of paramedics. — Sapientia

I haven't played it down, I've assessed how much value they provide individually.

If professional football is not as valuable as the emergency services, as I would maintain, then why doesn't the pay reflect that? — Sapientia

Who said he's not as valuable? Have you done any analysis of his impact to determine that? :s

It is, according to Marx's analysis in Das Kapital, the universal mirror or equivalent that keeps company with all other ordinary commodities. It is in fact no more than a commodity itself, because it is a representation of the exchange value of the ordinary commodity. It is both the means of exchange and the measure of value. But it is not the same as an ordinary commodity, because it is primarily considered in light of its exchange value rather than its use value, or, put differently, in light of its quantitative dimension rather than its qualitative dimension. — Sapientia

Right - money is only valuable qua commodity because of the value we agree to accord to it in governing our economic transactions.

Yes, the gist of it at least. These are the finer details that can be worked on and a resolution found. — Sapientia

Ok, so if you agree, then I presume that you're fine with doing this analysis for a footballer, or for any particular case you think is unfair, to determine their value right? Then from that we can see if they are earning a fair amount or not.

"Marxism is finished. It might conceivably have had some relevance to a world of factories and food riots, coal miners and chimney sweeps, widespread misery and massed working classes. But it certainly has no bearing on the increasingly classless, socially mobile, postindustrial Western societies of the present. It is the creed of those who are too stubborn, fearful or deluded to accept that the world has changed for good, in both senses of the term".

Right? Wrong. (That's covered in the first chapter). — Sapientia

Marx may have been right, but in a different way than you think.

How much would workers get if they owned the factory and profit wasn't an issue. It might work out something like this:

A factory employing 500 workers turns out 100 cars a day. The cars market value is $8,000 each, or $800,000. How much should each factory worker be paid, per day? $1,600? No. — Bitter Crank

Well right, no - of course not, because, to begin with, not every worker adds as much value as the next.

- the cost of obtaining the daily supply of raw materials and parts (steel, aluminum, rubber, plastic, copper, upholstery, engines, glass, motors, fans, pumps, fasteners, etc. or 20% of retail) approximately $160,000

- the cost of daily operating the factory (electricity, water, gas, etc.) approximately $5,000 (a guess)

- preparing for the cost of replacing worn out tools and plant (approximately 1%) $8,000

- contributions to the cost of operating society (roads, railroads, schools, hospitals, services, etc. 20% of expected income) $160,000

- cash reserve to pay for supplies, unexpected or unbudgeted costs (accidents, supply price spikes, income shortfalls, cash purchases; 5%) $40,000 — Bitter Crank

What about costs with marketing and advertising, probably the single most important aspect of business?

Without having to earn a profit for stockholders or highly paid executives, workers in this factory would earn $106.76 per hour. $427,000 after expenses / (500 workers x 8 hours) = $106.75 per hour. — Bitter Crank

So the cars sell by themselves right? :s

The way this works is that one person - whoever their leader happens to be - will need to go around and build relationships - with car dealerships, with governments, etc. - he will need to close big value contracts for them. Maybe 80% of the revenue will come from 10% of the contracts. Without his intelligence and leadership, the workers may produce value, but they cannot distribute it to society.

How much should this person get paid?

Maybe too few of their cars are sold, or aluminum and rubber become much more expensive. — Bitter Crank

Well, too few of their cars will certainly be sold if all they bother to do is produce them :s ...

Because you need to show that you have a framework that can scientifically and mathematically determine how X needs to be rewarded, otherwise how will you determine it? By your gut feeling & prejudice? — Agustino

I don't need to do that. Someone with greater expertise can do that. And I don't need to rely on gut feeling and prejudice. Anyone with common sense can, from observation, rightly conclude that a building has collapsed. But you'd need an expert to assess with due precision what exactly caused the building to collapse. Are you suggesting that you do not possess this common sense?

I don't see why that's too much for the professional footballer. You've done no analysis of the value he provides in the economy, so... — Agustino

Then you must think that he has earned that amount. How is that possible? It's only possible within a selfish and greedy framework. That is a framework that clashes with the teachings of Jesus. You yourself mention John 2:15.

And making a whip of cords, he drove them all out of the temple, with the sheep and oxen. And he poured out the coins of the money-changers and overturned their tables. — John 2:15

Or do you abide by a different teaching?

And making a whip of cords, he stood back and did nothing. They all remained in the temple, with the sheep and oxen. The coins remained in the money-changers and the tables stayed exactly where they were. Business carried on as usual,
with no disturbances. — Trump 2:15

So I want you to think about the value that footballer produces - for his employers, for the spectators, etc. I want you to consider the number of people affected by his work too. — Agustino

I have thought about that. Here are my thoughts: a footballer is considered valuable insofar as you enjoy watching, or making money out of, men or women playing a game which involves kicking around a ball on a field whilst lots of people stare at this on a screen or in the stands and moronically cheer, jeer, chant, and gesticulate. This is nowhere near as valuable as protecting the public and saving lives.