Mijin, meet Blake. Blake, Minjin.
Me: What I’m saying is: whatever the owner’s profit is for, it’s not for having built a factory - because he didn’t build it.
Providing’s not the same as building.
Creating’s not the same as building either.
May I just pop in to ask if the USSR was such an economic and industrial superpower tghen why the hell were there chronic shortages of almpost all goods and long lines at any store that had anything to sell? What am I missing?
Their achievements in space were to a large degree driven by kidnapped German scientists.
LinusK, is there any chance that you will actually address the points made, or are we wasting our time?
Totally unlike us. cough Werner von Braun cough
That was not my experience when I visited the USSR in 1990, except for long lines at McDonalds and shortages of Western designer jeans. I was not led to a Potemkin Village, and in fact most of the people I met were (foolishly, IMO) anti-Gorbachev. But there were plenty of wares in the stores and restaurants I visited, at incredibly cheap prices. And the ice cream was the best I’ve had anywhere, BTW.
No, I’m saying that workers, generally, assembled the parts and smelted the ore and did all the work at every stage of production.
That some did their work in the factory and others worked elsewhere is neither here nor there.
You’re really reaching here.
The loan wasn’t constructed by the owner. At most, he might have applied for a loan. The loan was constructed by bankers.
And there’s nothing saying the owner himself applied for the loan. Filling out an application is more the work of someone in the finance department. Even signing for it - assuming that was needed - would likely be done by someone in management.
Nor did he fabricate the workforce. They were almost certainly created by their parents. At most, he might have hired them. Then again, lots of companies have HR departments, so the owner doesn’t have to bother with things like that.
What you’re talking about - someone who applies for loans and hires people - is someone who is managing his own business. Maybe a small business owner. Someone like that is combining two roles - the roles of owner and manager. He’s working for himself, otherwise known as self-employed. There’s nothing wrong with that. There are thousands of people who do it.
But defending ownership by pointing out that some owners also work at their own businesses is like defending speeders by pointing out that some speeders also sometimes drive the speed limit.
You’re using a very poor definition for what it means for something to be “voluntary”. That something is voluntary isn’t the same as saying that somebody had a choice.
For example, I could say, “Sign this, or I’ll shoot you in the face.” You have a choice: you can sign it, or get shot in the face.
But your choice is not voluntary.
The fact that one choice is better than another does not mean the choice is not, in some way, compelled.
Human Action has already responded to this, twice, but FTR I was responding just now to your point that the owner didn’t build the factory.
Whereas my post in post #10 was about what the owner brought to the table compared to the workers.
The owner is bringing a factory to the table: it wouldn’t exist without the owner’s investment. But, assuming he didn’t actually build the factory, then he didn’t actually build the factory.
Well, it will always either involve taking a risk or it will require tying up capital (where it cannot be used for buying material goods or making other investments).
Otherwise it’s hard to see how the original transaction could have taken place.
It’s not written, it’s just how things are in a free market. If you have capital to invest, you can potentially make a profitable investment. If not, you have to try to earn some.
I should say at this point that I am no libertarian. I do believe in a robust social safety net, and progressive taxation.
We didnt have to kidnap von Braun much less hold him against his will; we didnt keep German POW’s either and make then slave laborers for a decade.
And of you believe there werent consistent shortages of all types of goods in the USSR for its entire history, then you are letting ideological blinders blind you.
oo
I am reporting my personal experience in five major Soviet cities. You are peddling shopworn bromides about which I highly doubt you have any direct corroboration.
ETA: Von Braun and his team chose to surrender to American rather than Soviet forces. After that, there are reports of his disillusionment with the U.S.; the assertion that he was fully free to go where he liked and do what he liked strikes me as laughably naive.
I have a Russian Post Doc friend at UCLA who grew upon what is today Stalingrad. Hos Grandmother watched German POW’s clear and rebuild the city. These men did not return to Germany until the 1950’s. For the brief window that the USSR archives were open and available to scholars, many Soviet crimes were revieled…including massive incidents of rape (1 in 3 of ALL German women) , looting and destruction as Soviet armies ,moved westward. Scholarly papers discuss these events.Russia has shut its archives.
What nonsense. Unlike the Soviets, we couldnt threaten to kill him or his family. And he was not a prisoner. We was a political appointee.
Nuthin more boring than a British Communist.
I see your tourist visit to Russia of the 90’s and raise you being born and raised in the USSR in the 60’s and 70’s. Now, do you still feel like there are things you can teach me about life in communist Russia? :dubious:
I feel like we’re sort of wandering into the weeds a little bit here.
I mean, things can be justified in moral terms and in practical terms. For example, that people should be paid for their work can be justified in practical terms: people won’t work unless they can enjoy at least some of the value of the things they create. (In fact they won’t be able to work, unless they get to keep something.) If no work is done, everybody dies.
You can also make a moral claim: that, absent some superior justification, the person who makes a thing ought to be entitled to its use and enjoyment.
You can make a practical defense of profits, too, although it’s a bit more complicated: if you’re going to have things, those things are going to need to be owned. If things are owned, that means the owner can deprive others of their use (that’s what it means to own something). If people can deprive others of the use of a thing, they will do it, unless they get something in return. Which means, whenever some people own a lot of things (or very important things) they will be able to subsist on the efforts of others, without having to work themselves. Which is what it means to have profits.
Profits, in other words, are a consequence (or side effect) of owning things.
If you want the benefits of one, you have to put up with the consequences of the other. (Sort of like if you want chemotherapy you have to put up with the nausea and the hair loss.)
To address the role of risk specifically: sometimes there’s a project where there’s some risk involved. There’s a risk, at the end of the project, that the owner won’t get all (or even any) of his property back.
In that case, the owner will demand a risk premium. In that case, it looks like this: owner’s total profit = (pure profit) + (risk premium).
All I’m trying to get you to do is acknowledge, in the case where there is a risk premium, it doesn’t explain all the profits, only some of them.
Anyway, all of that is related to the practical justification for profits: that owners of things, once they’re given - or get - property rights, won’t let others use their stuff without getting paid.
So how much do owners want? The answer is: they want as much as they can possibly get; up to and including everything except the minimum necessary to the workers from dying, or passing out in the middle of the work day. And it turns out the more poverty there is, the more unemployment, the less you have to pay the workers to keep them working.
But what about the moral justification for profits?
I’m arguing that there isn’t one. Or rather, that the ones that are advanced are transparently flimsy.
That doesn’t mean - as some people keep claiming - that I’m trying to abolish private property. Or that I’m a Marxist or a communist.
I’m merely arguing we should try to minimize the side effects. Not that we should stop taking the medicine.
All of that ignores the points I just made, and have been made many times in this thread.
The notion of “pure profit” as you put it, is a fantasy.
To own something I have to earn it – I have to accumulate the capital to buy it somehow.
Then, if that something is not an end in itself but a means to accumulate more capital, then I’m taking a risk.
I’m risking my investment being worthless, or, at the least, I’m tying up capital that could have been used for something else.
You’re deliberately leaving out the issue of how the factory owner came to be the owner of a factory.
It can mean either creating something, or permitting its use. The important thing is that workers do the first thing (create stuff) and owners do the second (permit things to be used). Unfortunately, people sometimes use the word “provide” to obscure the difference.
You’re combining name calling with a straw-man argument here.
Anyway, it does matter whether there’s a moral right to profit. If there is, then we should be doing everything we can to make sure owners get as much profit as possible. Any other policy is an unfair “taking” by the state. (This is fundamentally the right-wing/libertarian argument as regards to profit.)
That’s ignoring a far more compelling practical defense. For people to have lives of comfort and dignity, there must be wealth. To create wealth requires capital. To actually get wealth out of the capital requires someone who is vested in seeing to its productive use. Stated crudely, someone has to give a shit. If Bob owns a factory, he’s going to do everything in his power to turn a profit. Otherwise, he loses his principal and is worse off than when he started. How do you turn a profit with a factory? Make products people want, in the most efficient way possible.
Now, imagine that the state owns the factory instead. They assign a manager, Rick. If Rick’s factory doesn’t do well, he loses nothing. If Rick’s factory performs amazingly, Rick gains nothing. Rick doesn’t have to give a shit, and neither do the people under him. The factory can’t go under when it’s state-owned. Nor can it be amazingly profitable and earn them raises and promotions.
The Soviets realized this was a problem early on, and responded by making poor job performance a crime.. But you can’t threaten people into running a great factory operation when the incentives are all wrong. What actually happened was corruption and bribery on [a massive scale:](http://lcweb2.loc.gov/cgi-bin/query/r?frd/cstdy:@field(DOCID+ru0209)
The incentives in the Soviet system were set up to ensure its failure. It did create a massive black market, where people were able to profit and thus worked hard.
Private ownership of capital ensures that it will be put to productive, efficient use, except when the government pays people not to put it to use. As a bonus, the free market causes capital that isn’t being put to productive, efficient use to change ownership, in the form of owners selling a failing business, bankruptcy proceedings, foreclosure, etc. The capital changes hands until someone can make it work.
You keep talking about projects, while ignoring that the ownership itself is a risk. Again, anything that can be owned can gain or lose value, be it from market trends, disasters, or anything else. What you don’t own can’t lose value. If you’re convinced that risk-free profit can be had by buying land, can you explain why people invest in anything else?
Do you know what workers want? They want as much as they can possibly get, up to and including everything except the minimum necessary to keep their employer’s business from dying. Or, in the case of some unions in some industries, even more than that. When the owners want as much as they can get, and the workers want as much as they can get, what happens is a negotiation to a figure in the middle.
Your morals are your business. If you want to call ownership or profit evil, go right ahead. You get to define what you think is evil. But you don’t get to decide what works or doesn’t work. Private ownership of capital clearly works, and state ownership does not. In between, mixed economies, may or may not work.
Money can be provided to fund a project, which is neither creating something, nor permitting its use, as such.
Say I’m a wealthy patron of the arts. I give you a $10,000 commission to paint whatever your heart desires. You use it to buy paint made by someone else, a canvas made by someone else, and room and board in an apartment building made by someone else for you to work in.
A month later, you finish the painting.
Who created it? Me? You? The guys at the paint factory? The canvas maker? Your landlord?
We all did. Without the contributions of any of us, the painting doesn’t exist. You can say the artist painted the painting, but he didn’t solely create it.
In the same way, if I give a contractor $10 million to build me a factory, and uses it to buy materials and hire workers, who created the factory? We all did. The workers built it, but that was only possible because of the money put up by the owner. The owner paid for it, but that was only possible because the workers built it.
You say owners only permit things to be used, ignoring that the things wouldn’t exist without the owners.
What I was talking about is “How do we get the landowner to allow his land to be used productively?”
The question you seem to be trying to answer is “How do we get one landowner to buy land from another?”
The answer to the first question is important, because if the landowner can’t be paid - if he can’t get royalties, or sell a lease or an easement, or collect rent - he won’t allow it to be used. In other words, if the landowner can’t profit from the work of the farmer, or the rancher, or the oilman, he has no incentive to allow them to do their work.
On the other hand, if what you’re interested in is making sure that the land can be used productively, in principle it doesn’t make much difference whether owner A or owner B owns the land, so long as either one is willing to allow it to be used, in exchange for rent.
In any case, it’s whether the land can be used productively - and whether the owner (whoever he is) can get a cut of the production - that makes the land valuable in the first place. And it’s the fact that it is valuable that makes one owner willing to buy it from another.
I appreciate all that. What I am saying to you is that you’re repeatedly dodging the issue of how the factory owner came to be a factory owner. To get that wealth he had to trade it for wealth (or build it himself).
Calling that “pure profit”, and repeatedly implying they didn’t earn it, is as misleading as saying that someone who owns a Bugatti Veyron with a full tank of fuel gets to travel quickly “for free”.