Your post implies that the people who own the mines, the factories and the farms will give stuff to people who have no useful skills, just because they need it. That is not how capitalism works.
No and no; I’m not saying anyone is giving anything away, nor do I see why we should posit a situation where no-one has useful skills.
e.g. If we’re both in tattered rags, and neither of us can afford clothes the machines make, then being able to sew is a useful skill (even if I can’t do it as well as the machines).
You’re right about that at least.
People own all kinds of things. They can own land. They can own fishing rights. They can own copyrights and patents and trademarks. (Where would Bill Gates be without copyright law?) They can’t own air - or at least, nobody’s figured a way to do it yet. But they can own air waves (broadcast frequencies), and mineral rights, and contract rights, and debts, and shares of the work product of other people. In some places, and at some times, they can own people.
All those rights - the rights to own all those things - come from government.
It’s strange that some of the same people who benefit most from those things are quickest to condemn government when it suits their purposes: as if everything they have doesn’t flow from government rules and regulations in the first place.
But anyway, I’d argue that even the income you get from your property interest comes to you because of government. But for laws creating and defining things like “fiduciary duties” and trusts and partnerships it wouldn’t come to you.
While this is, technically, within the rule of attacking the argument and not the poster, it is more than a bit inflammatory in a thread that is already heated.
Please tone it down.
[ /Moderating ]
This is wrong.
The shareholders choose the board. This is basic corporate governance. It could not be more elementary. The stockholders choose the board, not the CEO. The owners of the company choose the board.
In the US, the stockholders will strangely often accept the advice of the CEO about who to appoint as directors on the board, and the CEO will in many cases be a major stockholder, but it’s still the shareholders’ discretion of who to vote for. For an example, Jamie Dimon is both CEO and the Chairman of the Board at JP Morgan, but that dual appointment wasn’t his own decision. His chairmanship was accepted by a vote of the rest of the board, and the rest of the board was selected by the owners of the company. He had to be approved. In the US, shareholders are often known for being accommodating, which is to say they tend to strongly defer to management, but it’s their choice of being so, and their own risk if they are too accommodating. Their choices didn’t exactly work out for Lehman or Bear. It is still their job to kick out management if they feel it’s necessary, and they’ll get punished if they’re wrong. If I had enough money to acquire majority ownership of JP Morgan, I could put my own flacks in place at the next vote, and I could fire Jamie Dimon from both his positions. He doesn’t choose the board.
You ought to make this your signature.
You have now admitted that your entire argument is based on a deliberate equivocation about the definition of work. Work is “tricky”, therefore you are justified in saying that owners don’t work based on your own self-serving definition. That is your entire worldview. If you don’t bother to pay attention to how other people use the language, well then, you can just make up your own language.
Same thing happened with “unearned income”:
You can “argue” whatever you want, but the rest of us have access to dictionaries.
You might be able to find a different definition that suits your purposes, and that’s the entire fucking problem. You don’t bother to find out what other people are trying to say, you just pick and choose your definitions until you find one that suits your purposes. This whole thread is based on the notion that you can deliberately exclude the work of owners as not qualifying under your own definition because the word is “tricky” enough for you to apply at your leisure, never mind the reality of the decisions that owners actually do, never mind the importance of allocating capital to productive ends, never mind the penalties that owners suffer if their decisions are wrong. You just choose a self-serving definition, and that’s your entire argument.
What’s most ridiculous about all this is that even if we accepted your notion of work as “tricky” and therefore not the province of owners, it wouldn’t make your argument any better. This is the final example.
The end of Post 269 had a direct response to this that you ignored.
We build up our stock of capital by producing without consuming.
Even if you were correct that owners do no work – because the definition of work is so “tricky” that you can insist on your self-serving definitions – you are still wrong about the consumption/production trade-off between employees and owners. Owners can gain their assets by not consuming. It’s the owner-class that sometimes spends a smaller portion of its income on consumption. This is a basic Keynesian point, part of the assumption that the spending multipliers are bigger for poorer people. Why? Because they’re consumers, rather than savers. That’s the entire rationale behind fiscal stimulus. The only way that such owners could possibly consume more than was initially saved is if their investments turned out for the best. The only way that such owners could consume more than was initially non-consumed is if their businesses – the activities toward which they actively allocated their access to resources, which is the actual work of owners – turned out to be good businesses. In the common case of a failed business, the owners must then consume less than they had originally tried to save.
Even if the premise were correct that owners produced nothing, your conclusion remains as distant as it ever was. The consumption of owners can only come as a result of previous non-consumption that was directed toward productive enterprises. It’s the non-consumption by owners that finances the future consumption of owners. You keep looking at a single time period, while ignoring the long timeline of decision-making, the non-consumption in the past that might possibly lead to more consumption in the future – if their decisions were right. This is what leads people to be owners in the first place.
We’ve been answering this question for literally the whole thread. I personally answered this question in Post 244, Post 256, Post 269, and Post 315. But rather than actually reading our posts, you just repeat your question.
Well, I’m finished. Everyone in the thread has you figured out now. We probably all figured it out a couple hundred posts ago. I never thought I’d see economic reasoning worse than a Rothbardist goldbug can offer, but amazingly, you’ve proven me wrong.
If you misrepresent one of my points, I’ll step in to correct you, but otherwise, there’s nothing more to be gained from this when you can just change your definitions again whenever you lose another argument, not to mention that I also don’t have the proper internal sense to know where tom draws the line about how to “tone it down”. There’s just no further purpose in responding here.
I’d say that she’s an extremely hard working and talented woman, whose work has definite and significant value, but that the capital gains associated with the building, as well as the rents she collects (after expenses), represent unearned income.
Manhattan rents are expensive, and real estate values have soared in value, not because of anything she did, but because of things other people did. She didn’t build Central Park, or MOMA, or attract high-paying jobs to the city, or make it a cultural magnet, or a center of arts, or commerce, or finance. She benefits from those things, but she didn’t do them. She’s been extraordinarily lucky - as well as hard-working and talented - to benefit so much from the hard work of so many other people.
So if something gains value because of circumstances out of my control, it’s unearned income?
Say I’m a farmer and I’m fortunate enough that my field is one of the few in an area not affected by the greedy chops weevil. So I get to sell my harvest for 10x what the rate was last year…that’s unearned income?
Or even if tastes change and my crop becomes more in demand? People are suddenly willing to pay more for my crop, but the side effect of it is I no longer earned that money?
Also note that while this apartment wouldn’t be worth so much without attractions nearby, the attractions wouldn’t earn so much without plenty of places for people to live or stay nearby.
Are we going to suggest that no-one here has earned anything, because of this interdependence?
Good point, but we can at the very least refuse to give such families our respect or admiration. (I’m looking at you, British royals.)
As I see it, the last human jobs after the rise of the robots will likely involve entertainment, the arts, sports. And the last items of scarcity that the people who get rich in those professions can buy that not everyone can have will go back to “location, location, location”. Meaning: land along the California coast; an upper East side apartment overlooking Central Park; the best table at a chic restaurant.
But the majority of people will not have anything anyone is willing to pay for (that is, to give them access to items of scarcity in exchange for their labour).
I think you’re thinking of it wrongly… that share in the apartments is capital. Like you said, you can sell out to the other owners, and have that as cash.
You’re choosing to keep that cash in the apartments as an owner, and to rake in your small check every year. You could just as easily withdraw and invest that money in something else- mutual funds, gold coins, pork bellies, etc…
Basically you’re providing a piece of the building where people live, and they’re paying you for that privilege. Why shouldn’t you get to keep a piece of that money?
Are you saying that at this point there won’t be items of scarcity; that everyone will have whatever they want?
I think he is basing his economic and political projections on old Star Trek reruns.
Regards,
Shodan
I don’t think so. Food won’t be scarce, clothing won’t be scarce, power won’t be scarce, electronic jimcracks won’t be scarce, media won’t be scarce. There WILL be items of scarcity, but they’ll be a lot, well, scarcer than they are right now, and they won’t be the fundamental ones that make up a decent lifestyle. The problem I see is a conflict between the generally libertarian and conservative views of the people who will own the means of production and the reality that most people are unemployable. I’m betting on regional die-offs, mass rioting, etc., in the midst of all this abundance because the rich won’t see why they should give things to the vast majority of unemployable people.
I think this is a capitulation to a variety of dystopic fiction we’ve all read and seen in movies. Unemployable people cannot pay for goods. If you give away goods (food, power, entertainment, etc) for free, what motive will the rich have to produce any of it, even if the labor force is entirely made of robots. The more likely scenario is that the rich class will disappear first.
It doesn’t make any sense.
There’s no way a new technology will make humans materially worse off.
Either the ordinary man on the street can afford all the luxuries he can today, courtesy of ED-209 or whatever, or if he can’t afford them – in which case he’ll simply trade his labour with other people who can’t afford robot-made luxuries. This will work a lot like…well…the economy as we know it.
But in reality to put humans out of work we are talking about a human-level AI to replace the mostly service jobs that we do.
It’s a scenario that’s so removed from the current day that all bets are off. If we can make bots as smart as humans today, then surely we can tweak them slightly, or network them, and make something smarter than a human tomorrow.
Perhaps this scenario will rapidly collapse to either the singularity or rise of the robots.
I don’t have a problem with people making money without working. I look forward to the day of the robot, when we can all make money without working: then we can rely on our robot minions to provide for us.
I do have a problem with people who imagine, because they have a lot of income, and are able to consume a lot, that they therefore must be very productive. They imagine, (for example) that if they pay a lot of taxes, they’re doing more than their share, rather than less.
As far as the proposals - I disagree. I think they’d have a tendency to shift income away from owners of things, and toward producers. And I think they’d increase employment, and therefore the total amount of stuff being produced. (Making everyone richer.)
Reducing interest rates, for example, has the immediate and direct effect of reducing the flow of wealth from mostly poorer people to mostly richer people. And reducing unemployment, in the long run, shifts the balance of power between owners and workers, increasing the share of income that goes to workers, and reducing the share that goes to owners (though not necessarily the absolute amount - since more employment makes everyone richer.)
Like it or not, their wealth and their taxes do accomplish as much, if not more than your added effort. When you borrow money to start a small business or buy a house, it’s their money you’re using. Your personal drop in the bucket of income taxes isn’t touching the 50% of the income tax that 5% pays.
Again, if you’d like, refer to any previous posts that you may have missed that not just disputes but disproves the notion that productivity/value is only quantifiable by labor.
You might not like it, but it’s a reality that you should really reconsider.
My vision is not completely dystopian. I think Europe, which has a strong tradition of social safety nets, will come out of it just fine. But really, how can you look at what’s been happening to America since Reagan and imagine that the rich here give a fucking shit about middle class and poor people? They don’t. And they own most of the means of production. When you want to farm, you need land, and guess who owns most of the farm land? Big corporations and rich farmers. You need machinery to mass produce goods of any kinds, and it’s the wealthy who own that. I see our hard-headed libertarians seem to be arguing that people will go back to the land and make homespun clothing and grow their own food. What a very silly thing to propose.
I think after a few mass die-off, riots, revolutions and deaths there will be a settling out when rich people realize it’s no sweat off their back if they provide goods to the poor, which will be 90 percent or more of the population. There might be a culture shift to value things like handmade arts and crafts more. But there will be a lag between the rise of all-encompassing robotic labor and that culture shift, and I fear that many people will go through hell during that lag. In Asia and Africa, hundreds of millions perhaps. But the survivors will have it much better.
To say you “rely on the rule of law to conduct your business” is one way of saying it.
To say the government - with its police powers - created your property right in the first place, is another way of saying it.
It’s easy to see how that’s true in some cases. For example, if you own a broadcast frequency - which are extremely valuable things to own, by the way - it’s easy to see how it’s the government that created that asset, and it’s government action that permits you to profit from it - specifically, by preventing other people from using your frequency without your permission.
There was a time when there was no such thing as a copyright. The idea that you had to pay someone for singing “their” song, or telling “their” story might have seemed absurd. Then there was a time when a copyright lasted 14 years. Today the government will protect your right to profit from your song, or your story, for 150 years or longer. (Or more specifically, someone else’s right to profit from your song, or your story, since you’ll probably be dead by then.)
Anyway, the point is that government does more than just allow owners to rely on the rule of law - although that is an extremely valuable and important thing that it does do. It also creates ownership rights in the first place.
Now you might say there is a natural right to ownership, entirely aside from what government does; and I’d agree with you. I’d say that people do have a natural right to own the things they make or create themselves. But capitalism isn’t about that: it’s about owning things that other people make or create.
If they could have, why didn’t they?
I actually think that’s a good point. I mean, I haven’t tried to dwell on it too much, because my actual position is that it doesn’t matter where wealth comes from: unearned income is unearned income, regardless of the source.
But since people keep coming back to the Horatio Alger version of the origins of wealth, I think it’s worth noting that real wealth is likely to come from violence, exploitation, and conquest (not to mention dumb luck). Not street urchins pinching pennies.