Well, in the ordinary course of things, the people who do the building - the carpenters and electricians and plumbers and whatnot - they don’t get a share of the profits of the building. They get wages or salaries instead.
It is true that no one would finance the payment of all those wages and salaries, without the prospect of future profits.
I would argue that the owners of money have a problem: they have money, but they want more of it. They want to pay the people who make the building as little as possible, and charge the renters as much as they can. That’s how you maximize your profits.
So what you’d like to see, as an owner, is lots of unemployment. The more people there are looking for work, the less you have to pay for workers.
On the other side of the coin, what you’d like to see is as few other apartment buildings going up as possible. The fewer other options renters have, the more they’ll have to pay to live in your building.
So workers, then, want the opposite: they want lots of employment, and lots of apartment buildings going up. And nicer and nicer, and bigger and bigger ones, if possible.
So there is a way, using purely market forces, to shift income away from owners to workers: keep unemployment low. Keep people working, so that they’re producing lots of apartment buildings (or whatever) so that consumers (meaning the workers themselves) have lots of choices, and the prices of things (like apartments) stay low.
People without work can’t afford your rent so either you lower your prices or they live somewhere cheaper. Maybe a tent.
TrueBut… you’d like for all of them to live in your building and pay you rent so you’d be smart to build more buildings, not less. But since you can’t (and shouldn’t) control who builds what where…
True. This is what the current (Western) economic model is based on. Everybody wins. Except income is not being “shifted from owners to workers” in the way that you imagine/define it. It’s a balancing act between market forces (supply & demand) and some gov’t controls (taxes, etc) to keep the ship as right as possible.
That is their choice. It is something they agreed upon. And I’m going to let you in a little secret, they also don’t get a share of the losses. They get paid* up front, long before anyone moves in, and loooong before their are any profits.
How long do you think it takes to build an apartment building? And I mean from the start of the planning stages with an empty lot, until the point that people pay their first month’s rent?
Overall, how long do you think before the owner sees any profit?
I doubt you’re able to answer that, so maybe you could answer a different question: how much profit is made if no one moves in and the apartment sits empty?
What you refuse to understand is that the carpenters and electricians got paid*, regardless of how many renters the owner has.
*With the obvious exception for cases where the project goes bust early on.
You are an owner of money, and you, like everyone else, want transactions to be as favourable to you as possible. If I can buy a shirt at one place for $50, and an identical shirt at another place for $25, of course I am going to buy from the second place.
You could see it as everyone exploiting everyone always.
Or you could see it as everyone trying to avoid being exploited themselves.
So countries with lower unemployment should have better salaries, right? Or just less profits for “owners”? Cheaper property?
Frankly, this, and the line you keep persisting in that money is “flowing” from workers to owners suggest to me that you are not aware of even the most fundamental concepts in economics, and seem unwilling to learn any of them.
I was about to write something to the effect of “Nothing is stopping the owner from saying to the contractors that instead of wages or a lump sum, they can renegotiate the contract to be paid $10/room/month for every month that room is occupied by a renter into perpetuity. It’s just that nobody would accept that contract. The electricians and plumbers are hardly being exploited here.” but I like what you wrote better.
Tangentially, this also reminds me of a single-panel comic I saw a few years back. A man is being handed a mop by another man. The caption reads “Congratulations. You have won our lottery jackpot of $1 million. Payments will be divided into $8 increments, collectable hourly for the next 30 years. Must be present to collect.”
That was established several pages ago. Why do you think people keep giving up on trying to explain it to him? He’s latched onto his ‘labor theory of value’, and anything that doesn’t fit it ‘does not compute!’
Forgot to respond to this. The original “Spirit of '76” was indeed very individualistic, laissez-faire, small government oriented, and the South persisted in that spirit to the present day. I am no fan of this “spirit”. But once they junked the Articles of Confederation, they began to embark on a path I consider the right direction and you likely see differently. I want us to continue leftward to a more centralised government operating in a communitarian manner. And it looks as though we will.
Really? Are we going to have to have this fucking conversation with you now?.. How far back in human history do you intend to drag us to try to make your case?
This has become tedious.
And not because many of us couldn’t find agreement with you on some issues. I think most of us would like to see a more just society where the poor and sick and unemployed have a robust and effective social network, where the middle class is not shrinking, where the very wealthy corporations contribute more to the society which enables them to do so well. There are certainly good arguments to be made for a more just tax system as well as federal gov’t programs that support large national infrastructure projects using tax dollars, implemention of a national health care program that covers everyone and (why the hell not?) more accessible public university education.
I gather these are all the things you could get behind too. Right?
But your approach to getting this done is so simplistic and ill thought out that it’s difficult to agree with anything you have to say on this subject. Though we’re essentially on the same side of the issue, I find myself wishing we weren’t and I don’t want anyone with opposing views thinking that your ideology reflects mine because it’s wrong and it makes my argument so much harder to make.
No OnmiMegaCorp and very little economic activity I think. It’s hard to see how the industrial revolution could have happened without people being able to trade land, or even move to a different area easily.
Note that in the example, I can’t sell up even if I want to. I might not care where my fish shop is, and be quite happy to sell that land to OMC and move my shop elsewhere. All parties are happy with this transaction, but you’re saying it cannot take place.
So it’s a system where we have less freedom, and we’re most likely dirt poor.
You’re right: market forces affect wages just like profits. Whether income is earned depends on whether it’s for work or for owning something. Weevils have nothing to do with it.
There’re several reasons that doesn’t work. One is that in the ordinary course of things people don’t have that much trouble distinguishing between income from work, and income from ownership. The tax code makes that distinction, and people seem to be able to handle it.
There is, of course, an overlap. Some people get income from more than one source: for example, if they manage their own businesses.
I mean, ultimately it is a definitional thing, and if you choose to ignore the definition, or to say there is no difference, I probably can’t convince you. I will say, if we were talking in another context, and I asked what interest or dividends were for, you’d say they were for owning stock or money. Not for deciding to own money or stocks.
Also, I didn’t say work was arbitrary, I said it can be tricky. For example, if I play basketball, it’s not work (it’s barely even basketball). When Kobe Bryan plays, it is.
Doesn’t address at all the post you’re supposedly replying to, or make any attempt to resolve the apparent contradiction.
However, both things can be collectively called earnings.
So there is at least one person here who cannot “handle” the terminology.
Yes, in different contexts I might phrase things differently. There’s no sleight of hand however, as ownership and the decision to become (or continue to be) an owner are fundamentally inseparable.
Can be tricky, or has to be tricky? I’m not quite sure what you’re saying here. Are you saying if I paid you to play basketball for me, you wouldn’t have earned it?
I’m not sure what you mean by the “agree” part of it. I mean, if it’s my land, and people live there, they have to pay me, right? And as far as leaving my land, why should I allow it? They’d have to travel through my land in order to get out of it, right?
Why should I allow that?
That would be trespassing.
Wouldn’t I be better off negotiating for, say, 100% of everything they have, plus 100% they ever will have, plus all their wives and children?
Isn’t that the true value of my contribution?
But aren’t they, themselves, the army that protects them?
But aren’t they themselves the teachers, and the cops, and the engineers, and literally every other person does any work at all, that provides any benefit for anyone?
Seriously?
You’d rather pay 50% of your income in rent, than 25% of your income in taxes?
The nation’s better off, because they no longer have to support Mr. Galt, who was (before he left for Galt island) consuming half of all the nation’s income.
Mr. Galt is worse off, because he no longer has anyone to provide for him.
Well, this is sort of off-topic, but returns from stocks are not 10% per year, over any ten year period. In fact, returns, over the long term, can’t be greater than the growth of the economy as a whole. Since profits are part of the economy, they can’t be greater than the whole thing. If the real growth rate of the economy is 2 or 3%, the real real growth rate of profits can’t more than that, over the long term. They can can take more than that, over short periods of time, by taking over a greater share from workers. But there’s a limit to how much profits can grow at the expense of workers.
To put it differently: the absolute theoretical limit to the amount owners can take is everything. They can’t take more than 100%.
But anyway, regardless of how easy you think it is to buy an apartment complex (by the way, how many do you own?), the fact is that for some people to be rich enough to own apartment buildings, others have to be poor enough to have to rent. For some people to be rich enough to hire others to build apartment buildings, others have to be poor enough to have to take the job of building the buildings. And on and on. The idea that everyone can be rich (if they just work hard enough, or save enough, or whatever) is ridiculous: some people must be poor, in order for others to be rich.
Not everyone can be the tallest person in the room, not everyone can have the best seat in the house, and not everyone can do nothing while everyone else does all the work.
You haven’t been reading my posts, but there’s a lot of them, so I don’t really expect you to: my official position is that I’m 100% in favor of inheritance, whenever I’m the beneficiary. Whenever it’s someone else, I don’t really care one way or the other.
I do have some ideas about addressing the problem, but it doesn’t really make sense to talk about how to fix it unless you think there’s a problem in the first place.
My ideas involve things like increasing deficit spending, fiddling with tax rates, and monetizing the debt. Not theft.
This is not a fact, it’s not even close to true, and once again shows just how little you understand about what’s going on. Renting is not about being poor. I realize nothing is going to get through to you, but for anyone on the fence consider this thought experiment:
Let’s say you fly some where to go on vacation. While there you need a car and a place to live. Would you ever consider buying a condo, and buying a car, for the week while you need it, and then trying to sell it before you go*?
Of course not, that would be absurd and unnecessary. Instead, you rent. Not because you’re poor, but because buying then selling (ie owning) would be really fucking stupid. So you are willing to pay a premium for the ability to “own” a car and a condo for a week. That premium is LinusK keeps calling profit. I am certainly not worse off by having to pay that premium, in fact I am very thankful that there are owners who are willing to let me use their property/possessions for a short period of time.
Here is one more thought experiment: In 2005 my wife and I were renting a condo, paying rent so that the owner could have profit. Every couple of months the owner would offer to sell us the condo at what we thought was an hilarious price. Meanwhile, our friends were caught up in the hype that was the 2005 housing market and eagerly bought 3 bedroom condos, and 4 bedroom townhouses.
Does anyone remember what happened in 2008? Those that owned suddenly woke up to realize that their property was worthless. Meanwhile those that rented giggled, then offered them a fraction of what they paid just 3 years earlier. To add insult to injury, some of us even got $8000 from the government for doing that.
I didn’t rent because I was poor, I rented because owning carries risk. If you don’t understand that statement it’s no surprise you’d think profits are a tax on labour.
*I looked into doing this in Australia and you need to be there a pretty long time before it works out in your favour.
If renting has nothing to do with being poor, why do you suppose poor people generally rent and wealthy people generally own homes? Coincidence? Or CONSPIRACY???