a living wage

Mandelstam, any book recommendations are welcome. I did end up enjoying Frank’s “One Market Under God” after the initial bad taste in my mouth (or rather, after learning to ignore his pointless rhetoric and only focus on the relevant information he was presenting). But apart from Noziak’s older owrk (Anarchy, State, Utopia) and of course (cough) Rand I’ve got zilch in political philosophy other than “what sounds tolerable and feels right”. :slight_smile: but in fact I’ve only become interested in philosophy and public issues shortly before I joined these boards, so it has taken quite a bit of work to even be able to understand some of the issues, and of course I stumble quite a bit (hard to walk with authority when your foot is in your mouth).

Now, on with the reply.

The rule of law is important (more or less) I agree. But I mean basic laws. Laws should be the context in which peaceful people work out their issues. If that means taxes, welfare, and so on, well, that’s what it means. And I think it quite possibly does mean that. And that level of beauracracy comes at a cost. The cost is a bloated legal machine. And that crings with it the ability to delude people into thinking they can change the world by tweaking the legal machine.

[shakes head] No way. In my idyllic world a law is only written when not doing so will cause some fundamental grievance (whatever that is in the society… the basics). Otherwise, I think, people should get on and work things out themselves.

Well, for the first, none of course. The way it should be. An employee quits on the off-chance he doesn’t need to work any more. There is no problem there (except it is far more likely that the company will lay off, of course, which represents a leaning level of fairness).

Second, you don’t need to put solution in quotes. I can accept laws. I can’t accept laws as anything other than a last-ditch effort solution, or a framework. Framework would include regulating arbitrary matters like which side of the road to drive on, and solutions would be criminalizing behavior. You will agree, of course, that there is a wide range of actions between criminality and arbitrariness. This is where people can work out their own solutions.

You are feeling the bite of a bloated machine when you say something like, “…and the governing body, the National Labor Relations Board, has become very weak.” Aww, that piece of paper not helping out anymore? And your solution is to look for other paper to write on? I fundamentally do not understand.

You want to write something, get workers together and get contracts set up. I’m no “workers revolution” chap, and underlying laws are important, but even laws take people to act on them and check up on them. Someone, somewhere, still has to do work, and it might as well be the person who wants to in the first place.

No?

If that’s your only exposure to a P/Q graph (and its variants), then I submit that you really don’t understand the concept at all. An equilibrium price is not meant to be a permanent, lasting, “natural” thing – it is a snapshot, a moment in time. It tells us, “In this market for this good under these circumstances, this point is the market-clearing price.” Of course it’s always in flux – it’s meant to be! The demand and supply curves are always shifting in response to new information and feedback, so the equilibrium price is always changing.

The only time that there isn’t an equilibrium price at all is when the demand and supply curves don’t intersect at all, and that’s so rare as to be un-noteworthy. The only instance I can think of offhand would be completely ludicrous; let’s say I was selling sharp kicks in the shin. The demand curve would probably be flat, and congruent with the X axis. THere is no price at which consumers, in the aggregate, want that product. My supply curve would be an upward-sloping line moving away from the X axis. (Actually, there would be an equilibrium price: $0. At that price, I would be willing to offer 0 kicks.)

For individuals, the curves are a little different. An individual consumer’s demand curve for a given good is fairly simply, but has to take into account the price elasticity of demand and the potential for diminishing returns. If new Cadillacs were being offered at, say, $5,000, my demand curve might reflect a desired quantity of 1. Why not 2? Because my utility for the extra Cadillac at that price is low, if not zero. My demand curve for that good would probably be very price inelastic and flat; I don’t have a lot of use for additional Cadillacs, so at any given price point, my demand for an additional unit will be low, and a change in price will result in little change in demand.

An individual firm’s supply curve is approximately equal to their marginal cost curve; they will continue to produce and offer to the point where marginal cost – the cost of producing one more unit – is equal to price. After that, the cost of each additional unit exceeds the income from producing it. There are other components that play into it – the distance of the MCC from the average total cost and average variable cost curves, and whether it is rising or falling – but at its base, that’s what it is.

To say that the equilibrium price for a good is constantly changing is unremarkable. It’s supposed to be changing. To say that it doesn’t exist at all, and is a chimera? If you can prove that, you’ve got a Nobel prize and several professorships awaiting you.

Well, insofar as the concept of demand in Smith’s model is limited to the point where the concept of price forms an explicit part of its definition, I submit that the supply and demand theory is unnecessarily abstract and thus an inaccurate reflection of the real world.

msmith537 said:

which is indeed true, and for the S/D model this is an invalid proposition, causing it to fall apart. But to assume that the collapse of a model for understanding something automatically means the collapse of the world it attempts to explain is ludicrous. Did the solar system suddenly fly off into billions of tiny bits when the Copernican model finally replaced the Ptolemaic one? Did the human body suddenly undergo a profound physical transformation once scientists discovered that blood actually circulates? Of course not.

So it is with the supply and demand theory of value. The unnecessary restriction of the concept of demand therefore posits a real-world situation in which the model will not work, and therefore it is a poor model to which to refer. But since the model is only a reflection of the real world and not a manifestation of it, the collapse of the model will not spell the collapse of the world in general.

The S/D model only looks at the demand for labor power from capitalism’s point of view. They desire labor power at a certain price, over which their profits become threatened. Therefore capitalism’s demand for labor (irrespective of whether it is skilled or unskilled) drops off as the price of that labor increases. Does that lessen the need for labor power overall? Absolutely not. As I said in my last post, it is labor power that makes the existence of all other commodities possible, and it is the vital element of production no matter how it is organized. The S/D model, in failing to look at the demand for labor power from that vantage point therefore fails to take into account a real-world phenomenon. It would not work in a society where labor power is demanded for the fulfillment of human need, but that does not mean that such a society itself would not work.

Olentzero, do you spend your free time putting “One Way” street signs on two way streets? I fundamentally do not understand this labor theory of value.

Value is a two-way street. I want something, you have something. You will give it up for some quantity of goods or services, I will offer the goods and services I would be willing to do without to have such a thing. We would then say that the thing has a quantifiable value.

The aggregate function of this bartering with respect to an arbitrary unit of exchange is the supply and demand curve. Many things affect demand, and so many things affect price. In an open labor market, where anyone can work for anybody, the largest factor in demand is the price the workers demand. Contrariwise, the largest factor in supply is the price the bosses can pay. Two way street. But there are many other factors which are ignored in a pure macro model that deserve consideration when going on second and third approximations. Things like: what is the unemployment rate? (could drive prices artificially low because people will work for just about anything). What other work is available (would apply to low-skill jobs)? And so on.

Yes, first-approximations of macro economic functions are terribly inaccurate as prediction tools. This is not surprising. neither does it spell the end of capitalistic economic behavior.

When you say demand, you are refering to what economists call a want or a need. There may be a fixed number of people who want Ferarris. You might consider this to be the demand when the price is zero. Some people might not want a Ferarri at any price so there wouldn’t really be infinite demand. That does not mean that our economy should work to ensure that every individual who wants a Ferari gets one.

Economics is about deciding what you want to give up in order to obtain something else. So as the price of Ferarris increase, I may decide, “Hey, I don’t really need a Ferarri”.

Keep in mind, I don’t agree with Procacious assertion that people should be left to starve if they cannot support themselves or that the government has no right to take your money. We pay taxes in order to contribute to the common good - national defense, police, fire departments, education, etc.

Even Adam Smith did not believe that everything should be run like a business.

If you were to ask me on how to increase the standard of living for working poor people, I would suggest incentives for communities to build low cost housing instead of 1200 sf McMansions.

If you still don’t understand the labor theory of value, fine, say so. The snide remarks are quite unnecessary.

Let’s return to the example of the shovel discussed in the “abolition of money” thread a few months ago. A shovel is made out of wood and steel, and occasionally paint. The wood had to be cut and shaped and the steel had to be smelted from iron in order to be properly assembled as a shovel, and therefore have use-value as a shovel. The element that transforms the wood into a handle and the iron into steel is labor. Further back, it is labor that mined the iron and felled the trees to make the lumber, thereby transforming rocks and trees into usable raw material. And the tools used to mine the iron and fell the trees were transformed from raw material into tools, and from even more rocks and trees into raw material, by labor. And so on, and so forth.

So much for use-value. Labor power, so far, has not been treated as a commodity. This only arises under capitalism. The shovel we’re examining has a higher price than the aggregate costs of the iron ore and lumber together. This is because the cost of labor has been factored into it. And the cost of the iron ore is higher than the monetary worth of a still-buried seam, as the cost of the lumber is higher than the worth of the tree from which it was cut. Again, because of the cost of labor.

I’m certainly not asserting that the flaws in the S/D model inherently spell the doom of capitalism. What I am saying, however, is that a fundamentally flawed model is insufficient justification for rejecting the concept of a living wage out of hand. Sure, the S/D model can be used to show how a living wage may not benefit capitalism, but that just goes to underscore the increasingly irreconcilable interests between the two major classes in society today.

For clarity’s sake, then, I’ll use either of those terms. It still does not affect my assertion that the economic definition of demand is far too restricted to render the S/D model an accurate reflection of the real world.

I don’t see how you can conclude what the economy should and should not do based on the assumption that demand for all practical purposes cannot be infinite.

It is easy to analyze a shovel from a labor perspective because labor was there. But in the case of a baseball card, value fluctuates without any additional labor. This would be a labor-value mystery.

S/D isn’t the sole determiner of price, and I would be suspicious of anyone that thought so. But when other variables are accounted for, it does become the dominating factor.

The “One Way” comment was snide, yes. Because you are only looking at value one way.

I respectfully disagree, then, and leave the snide remarks aside. I’m no Collounsbury, anyway. Anything which may be traded for goods and services falls under a commodity in my book, though of course it may be a rather out of date book. Labor is finite, relatively quantifiable (WRT time or end-product of action), and above all, a key component of the creation and movement of goods (and services). People aren’t commodities, no, I agree. But their labor is.

You are confusing “value” with “price”. The value of a baseball card is negligible. The price is, quite often, not. The price of such objects is largely arbitrary and reflects not the intrinsic worth or value of the object but merely the result of an instant competition of wills between people momentarily stricken by an irrational desire to possess that particular object.

Capitalism reaches its highest form of absurdity where it erects huge market structures to trade items at prices that are poorly coupled to value, whether those things be tulips, Beanie Babies, or shares of Enron stock.

Olentzero, OK, I think I understand your argument. Tell me if this is an accurate paraphrase: The standard supply/demand model does not accurately account for the value of labor, because there is no price point on the demand curve at which producers would choose zero units of labor and still be able to continue producing.

AMEN, BRUTHAH!!! YUH PREACHIN’ TO THE CHOIR HERE!!! I have long maintained that pre-fabricated housing could go a long way to helping out poor and low-income people if only we could persuade local governments (i.e. local voters) to change zoning laws and building codes to permit it. Of course, it would take some time for this benefit to be realized.

Housing is my biggest and most burdensome expense. Cut my housing costs by one quarter or one fifth and you’ve produced a substantial increase in my standard of living. (I consider myself working poor. Some might not agree.)

Olentzero We’ve gone round and round on this labor theory of value thing. Let me try this:

According to the Labor theory, the value of something is determined by how much labor went into its production.

But what’s really happening is that the perceived value of something is what causes people to expend the labor to produce it. You are confusing cause and effect.

A large government agency spent several billion dollars worth of labor in an attempt to modernize their software. In the end, a change in market conditions along with an ineptly run software project resulted in a buggy, unusable piece of crap that was thrown in the scrap bucket.

Using the labor theory of value, explain to me where the value resulting from all that labor went.

How did you arrive at such a conclusion? I understand how it can benefit humans to think that, but not why they would conclude that it is actually true.

I will try to answer all of these questions as simply as possible. If a city or county has a tax that you dislike, you can move. The choice to live in a city or county is a choice to put up with its taxes (so you can move to a city without its own police department if you feel that taxes for a police department are unreasonable).

However, when it comes to the state and federal level, the area covered becomes too great. For a small group of people (the legislators) to say that this tax will affect everyone in their state/country is too big. I know people say, “If you don’t like it you can always leave the country”, but the country is not theirs to take away from the people. Cities are small enough that they can each have their own unique set of laws without causing too much trouble for the citizens that do not like the laws. They can move to the next city. But with state and especially federal laws, there is no where to move. If a single city chooses to have a public welfare program, fine. But the federal government most certainly should not be making that decision for us.

There are a few things that the government can spend money on and remain within their rights (e.g. interstate highways, national military, etc.). However, even though the federal government controls the military, the people should still get a say in how it is used. Taking money from the people to defend one’s own country is one thing. Taking money from the people to invade another country is quite another matter.

Our republic is not representing the people’s political will so much as representing some of the people’s political will at the cost of all the others. It is simply a strong-arm technique. A tyranny of the majority (if it even is a majority). Just because 60% of the population want something that does not mean that they can muscle part of the payment for it from the other 40%. I might accept that at the city level, but when the federal government does it there is no place to run.

I understand your concern, but while my ideas are quite uncommon, they are not based on ignorance or an attempt to intentionally anger anyone. I understand why our system functions the way it currently does, but that doesn’t mean I agree with it.

My specific reasoning went like this:

If person A steals 50 dollars from me, I can take my 50 dollars back from person A without an ethical problem.

If person A steals 50 dollars from me, I cannot take 50 dollars from person B because person B is not responsible for the actions of person A and because that means I am committing the same offense as person A (which is something I wish to avoid doing).

The money I would get from a welfare check would not necessarily be the same money that I gave to the government to begin with. Even though that is true however, I can accept that some of the money in the welfare check came from people that actually wanted it to go to a poor person (i.e. it is more or less a private donation made through the government). But some of the money was taken from people that only paid the tax because they did not want to go to jail (i.e. that money is not a private donation, but is money that was taken from someone against their will). Since I do not know which dollars are acceptable and which ones are corrupt, it is better to take none at all.

So, Procacious, do you have insurance of any sort? Automotive indemnity? Health? Life? Homeowner’s? Why? Isn’t insurance just another form of stealing, since it’s unlikely that your premiums alone went into any payment you might receive, and further rather likely that at least some of the premiums that did go into it were paid either by government money or as the result of mandatory insurance programs?

I do not currently have any insurance of any type (at least partially due to the fact that I cannot afford it). I imagine that some people in this thread have concluded that I am rather wealthy due to my take on government-funded social programs, but I am still technically poor according to America’s definition of it. (In case you are wondering, I do not have my own computer and internet access to post on the straight dope, but use someone else’s).

I agree with private insurance. If a person chooses to pay a private company money on the chance that something bad will happen that is fine. I am assuming of course that the private company will be paying out of its own pocket if the claim is a valid one. I do not agree with mandatory insurance programs that involve the government nor the use of tax-payer dollars to pay any insurance claim. Insurance should be a totally private thing (i.e. no public funds involved). Insurance programs that operate through employers, without any government involvement, are fine as well.

erislover: KellyM has quite accurately pointed out how I’m not looking at value only one way, but rather pointing out the difference between use-value and value (or price, for purposes of this discussion). It is a vital distinction.

There is nothing inherent in labor, or even its products, that predestines it to become a commodity. You are correct that labor is a commodity under capitalism, but that does not mean that it was a commodity under pre-capitalist societies or will continue to be one in post-capitalist societies.

pldennison: It’s fairly accurate, but still limited. Since both labor and its products are commodities to be sold for a price under capitalism, the only way they show up on a P/Q graph is if there is a demand for them, rather than a need or want for them. Capitalists only want to know who is able to pay for their commodities, and their price model reflects that. Looking at total need rather than just demand makes price irrelevant, yes, but that’s pretty much the point.

Sam: No, the labor theory of value only shows where value comes from, not how much value something has. On that basis, it can be further quantified using such concepts as “socially necessary labor time”, but there is nothing in the labor theory of value itself that quantifies either value or price.

As for your software project example - both value and price went into the scrap bucket with the software itself. It doesn’t matter whether the product is used or not, the labor that went into it gave it a use-value (and a price when labor is treated as a commodity).

Your “cause and effect” argument regarding value and labor is also incorrect. Labor predates the conscious appreciation of use-value by several billion years. Everything that lives, labors - to eat, to reproduce, to avoid being eaten. Only humans have been able to channel labor into efforts to make the satisfaction of immediate needs easier and more efficient. Use-value springs from labor, and it is labor alone that makes use-value possible. Again, same thing for price once labor is treated as a commodity.

This is not to say that use-value cannot be a motivation for labor, but it is not the cause of labor. Labor and use-value, once the latter sprang into being, interact with and mutually influence each other.

What would you consider a commodity, then, Olen? Also, I am not sure how to speak of value so that we all understand without some sort of arbitrary unit we are all familiar with and which is easily divisible.

Kelly

Ah, I don’t think so. I think they are two sides of the same coin.

I do not understand the meaning of “instrinsic worth”, by the way, so the rest of your post was lost on me.

I think you misunderstand my point, eris. Something - whether it’s a product or labor - becomes a commodity only under certain social circumstances. I’m not saying labor is not a commodity now, I’m saying that there’s nothing inherent in labor itself that demands it be treated as a commodity. Same thing for the products of labor.

You’re right in that value and price are two sides of the same coin, but only under those circumstances where labor and its products are treated as commodities. A shovel is no less useful a tool for not being sold off the hardware store shelf. It is not used, yes, but that does not mean it’s not useful. That’s why a number of the classical economists - Ricardo is one that springs to mind - made a careful distinction between value (what you call price) and use-value. Take away the commodification of labor and its products - that is, gear production for the meeting of human need instead of the demands of consumers on the market - and price becomes meaningless, while use-value remains.

In short - price is subjective, while use-value is objective.

On human beings being ends in themselves:
**Procacious **: “How did you arrive at such a conclusion?”

The idea that humans are ends in themselves derives from the eighteenth-century philosophy of Kant, part of what’s called the “categorical imperative.” Here in Kant’s own (translated) words.

"“Act in such a way that you always treat humanity, whether in your own person or in the person of any other, never simply as a means, but always at the same time as an end.”

At the time Kant wrote (when slavery was still institutionalized in many places, and democracy wasn’t widespread) this was a pretty rocking ethical principle.

Nowadays the idea that humans, ethically speaking, must be treated as ends in themselves is indeed “enshrined” in laws in most liberal democracies: that is, the rights of individuals are enshrined in constitutional principles, and in criminal and civil law.

Your position that this principle is arbitary with respect to (other) animals is not new. People who favor animal rights, for example, probably argue that some form of the categorical imperative must apply to animals as well as to humans. And it’s true enough that Kant’s or any moral philosophy is based on intutitions about ethics: it isn’t empirically provable, and Kant would be the last person to say that it was.

So what you seem to be questioning is the centuries-old philosophical and legal convention of treating individual humans as ends in themselves. If your purpose is to apply the same kind of rights to animals, or to argue that in practice many humans aren’t treated as ends in themselves, that’s one thing.

But I’m not sure where you coming from, since your point seems to be simply that there’s no good reason to have any kind of ethical principles at all.

Are you sure about that?

Now onto the rest of your post, which doesn’t seem very connected to your thoughts about ethics.

“The choice to live in a city or county is a choice to put up with its taxes (so you can move to a city without its own police department if you feel that taxes for a police department are unreasonable).”

What city do you know of that doesn’t have a police department? I’m not sure I can even find a town or a village that doesn’t have at least a sheriff’s office.

“But with state and especially federal laws, there is no where to move. If a single city chooses to have a public welfare program, fine. But the federal government most certainly should not be making that decision for us.”

That is an opinion, based on the somewhat flawed assumption that there are states or cities where one can avoid taxes. In actuality there are no such states because in actuality modern societies can’t function without public revenues to pay for things that make the society as we know it possible. I don’t think you’d want to live in a place that had no sewerage, no public transportation, no libraries, no roads, no police, no courts of law, no parks, no fire department…etc.

“Taking money from the people to defend one’s own country is one thing. Taking money from the people to invade another country is quite another matter.”

You’ll get no argument from me here. As a matter of fact I think that too many of my tax dollars go to “defense” spending which, IMO, doesn’t actually defend me very well–though it lines the pockets of people who make money off of such things.

However, this doesn’t amount to an argument against taxation. It amounts to an argument about the degree to which taxation and public spending is subject to democratic control. You and I may be in the minority on this issue; and/or the political process may be too bureaucratic to accommodate our views.

“Just because 60% of the population want something that does not mean that they can muscle part of the payment for it from the other 40%.”

Tyranny of the majority is indeed a problem that all democracies must face. Local control, brining things closer to the level of the individual voter, is a good thing–to the extent that it is practicable. As you point out, national defense isn’t a very good candidate for local control. Therefore this might be one area where the minority–or any concerned citizen–needs to be as active as possible. Have you considered joining a citizens group on defense spending?

But may I point that the the issue in this thread is a living wage, which doesn’t have to be a national issue. In practice “living wage” legislation is in fact being enacted at the local and state level–not at the national level. So I suspect you’ll have the chance to “run” from the living wage should it come to a village near you ;).

“I understand your concern, but while my ideas are quite uncommon, they are not based on ignorance or an attempt to intentionally anger anyone. I understand why our system functions the way it currently does, but that doesn’t mean I agree with it.”

I think your ideas are actually pretty interesting, but they’re, IMO, a bit garbled. In what I said above I didn’t mean to suggest that you should post less, or not post at all, but that it might be helpful for you to see where others have tread. Some of your views–your anti-tax sentiments–are extremely common, on this board and in the nation at large. Other views, on defense, for example, are somewhat less common.

As I see it, your views are not internally consistent: i.e., some of your views clash with other of your views. I think that looking at some threads might get your wheels turning–but it is just a suggestion.

“The money I would get from a welfare check would not necessarily be the same money that I gave to the government to begin with. Even though that is true however, I can accept that some of the money in the welfare check came from people that actually wanted it to go to a poor person (i.e. it is more or less a private donation made through the government). But some of the money was taken from people that only paid the tax because they did not want to go to jail (i.e. that money is not a private donation, but is money that was taken from someone against their will). Since I do not know which dollars are acceptable and which ones are corrupt, it is better to take none at all.”

This reasoning is based on the premise that people pay their taxes either to support welfare as a kind of state-enforced charity; or because they fear jail.

I don’t think that either of these assumptions necessary holds. I’d also like to point out from the start that the percentage of taxes that goes to non-Medicaid-related welfare programs is not, I think, very large (unfortunately I don’t have a cite handy, so someone correct me if I’m wrong there).
Personally, I’d like to see you accept whatever your state/local government can offer you by way of assistance so you can get a better paying job and buy yourself a computer. Until that time, I hope your using your local public library where, among other things, you will find books on Kant and the living wage. :wink:

FWIW, I don’t think of welfare as “charity.” I think of it as a subsidy of or, at its best, an investment in people. I would much rather pay for good daycare, Head Start, or job training for someone on welfare than to pay for jail (which among other things is very expensive).

erislover, I’m very tied up and so can’t answer your specific questions.
Apologies.

Here’s my recommendation: Contemporary Political Philosophy: An Introduction, by Will Kymlicka (Clarendon Press, 1990).

Kymlicka is very, very clear as he goes through all of the major political philosophies including Utilitarianism, libertarianism, liberalism, communitarianism, Marxism.

There’s something there for almost everyone in this thread–including Sam since Kymlicka is, I think, Canadian ;).
This book used to be used in courses all of the time so you can probably get a used paperback easily. I paid about $10 for mine. Righteous bucks.

When I hear “use-value”, Olentzero, I think of a boolean state: “does this satisfy that function?” Which then demands the question be asked, “What worth is the function?” A function also has use-value in achieving an end.

Are you suggesting that it is possible to remove price from the picture entirely?