Yes and if I found myself negotiating with someone like that in private practice, i would tell my client “this guy is a pig, you should see if there isn’t someone else you can do business with” and if my client insisted on getting raped, then I would try to make the terms as favorable as possible. Most of the time you have a choice. Obama didn’t and he gambled that he could win some Republican support by showering them with concession that they couldn never have extracted and they responded by asking for concession that they knew Obama could never give, WTF did they have to lose.
They’re making a lot more sandwiches, there is more to what they do that slicing the deli meat, that was just the most time consuming part.
My point is that they have increased the value that they added because their labor has now been leveraged by that automation.
There are two reasons that Americans are the most productive workers in the world. We work longer hours than MOST other countries and we are highly automated so that the hours we do work are leveraged to be more productive.
Your point seems to be that ALL of that increased productivity should be attributed to the new deli slicer and whoever paid for that deli slicer.
I don’t see how this analogy makes any sense. You’ve used it a couple of times now and I don’t get the analogy.
Labor is doing more than standing next to you in a casino and capital does more than bet on black or red.
I still don’t get your analogy. You are saying that labor is merely a specator while capital is the active component. The opposite seems more true to me.
He is making more sandwiches.
The guy that works in a Deli does not have an infinite supply of hours with which to make sandwiches.
Neither does the owner of capital. They can go pour beer for a living as well.
I’m not saying the guy pouring beer at teh concession stand should be profitsharing. this thread is about the shift in relative power between capital and labor, not whether we should operate corporations as collectives.
You define risk differently than I do.
What makes a neurosurgeon valuable is the value of his labor, not his risk of loss.
Starving? Homelessness? These are the factors taht may drive them to take that really really shitty job with teh really really shitty boss. They don’t do it because that is what they choose to do, they do it becauser that is what they must do. And that is fine. They don’t add enough value to warrant more pay, then fine but your obsession of attributing value only to those who risk monetary loss seems a bit myopic.
Oh so labor can be compensated based on productivity.
Bullshit. If saturn goes out of business, why can’t he get a job at toyota?
Perhaps you can clarify your definition of risk.
Risk in this context of business is putting money or effort on the table for some hope of future payout. The surgeon risked borrowing money for tuition and the opportunity cost of the time in school to go to medical school in hopes of the later payout of high wages. The bar owner risked personal capital to purchase the bar in hopes that he would sell enough drinks to someday make more money.
I have health insurance and I support universal health care in much the same way that I support universal education.
You forgot a third reason. We have an extremely flexible economy. The downside of that is that your job or industry is not as secure. However, the loss of unprofitable companies or jobs has the benefit of freeing up labor and capital to be used elsewhere in the economy. It is that “creative destruction” that lets our economy quickly adapt to changing economic conditions, relative to other nations.
We also happen to be a large country with a lot of natural resources as well.
People vote Republican for all sorts of reasons, mostly because they’re scared.
That is an investment or deferred gratification. There isn’t a whole lot of risk associated with becoming a doctor. its not the “hopes” of a later payout that makes peopel become neurosurgeons, its the near certainty of it. Their labor has simply gotten more valuable.
In the context of investments, assuming rational investors, returns are always adjusted for risk.
So if you had a million dollars you could avoid all risk and buy treasury inflation protected securities and get a 5 year yield of somewhere around 2.25% adjusted for inflation which would yield $47,500 in real interest every eyar for the next 30 years or you could buy GM bonds that yield around 10% over the next ten years and take a significantly higher risk that you will lose your principal. Or you can invest the money in a restaurant. Capital has all sorts of choices about the risk/reward it want’s to subject itself to.
The question is how much of the profits from the enterprise should go to the dishwasher/waittress/chef in the form of compensation for their time and how much should go to the shareholder in the form of risk adjusted return on capital.
Considering that these days capital can diversify and tehreby reduce its risk, it is nto clear that investors should be able to command so much of the added value associated with increased productivity over the last 30 years.
If you claim to be a Democrat, why do you use the language of partisan Republicans? :dubious:
He’s an old school Democrat obviously…look at his board name. Remember that the way things are today is not the way they have always been, and that the Democratic party hasn’t always been ‘associated with the defense of black interests’.
-XT
I think you mean we have a flexible LABOR market. Capital is just as free in other industrialized nations as it is in ours.
Its a balancing act. I think the French labor system is counterproductive (you keep paying 60% of the salary for the people you fire for up to two years after you fire them (three years if you fire anyone over 50). The high cost of firing people makes people reluctant to hire people. But I think the US system is approaching or has already reached the point where the system no longer serves the citizens best interests, it serves the system’s best interests.
My understanding is they use temp labor to get around those restrictions in Europe. But in Europe, unlike the US, many job benefits are guaranteed by the state (paid sick days, paid vacation days, health care, etc). So it wouldn’t be as bad as it is here.
Because before the mid 70s workers did share in the increased wealth created by automation. Automation and the increased standard of living has been pretty much constant since the 18th century. In the 40s-70s, productivity led to higher wages, then it stopped.
You seem to be implying that skilled vs. unskilled labor makes a difference. My understanding is that skilled labor has seen its share of wealth decline the same as unskilled labor has. Fundamentally I think it is just oversupply of labor in the US. We have legal and illegal immigration, outsourcing and union busting. All take any ability of labor to demand better treatment away. People are treated as nicely as you are forced to treat them (more or less). If they can’t force you, you don’t have to. Labor lost the ability to use clout to demand more wealth in the market 30 years ago.
Not only that but automation usually requires a whole new set of skills in many cases.
The dishwasher can diversify just as easily and thereby reduce his risk. How? He isn’t just locked into working at a restaurant. He is capable of working in all sorts of industries that need unskilled general labour. Pushing a mop is pretty consistent from one floor to the next.
Not so for the neurosurgeon. He is so highly specialized that he doesn’t have options. Each city needs maybe a couple. If a hospital closes he has no choice but to search the entire country for the few neurosurgeon jobs available.
“The question is how much of the profits from the enterprise should go to the dishwasher/waittress/chef in the form of compensation for their time and how much should go to the shareholder in the form of risk adjusted return on capital.”
The answer is none, flat out, zilch. The employees are paid from the revenue, and are compensated for their time and efforts. As I said several times in the other thread, they get paid independently of profits. That means, if the business is a success they get paid, if it is a failure they get paid (assuming enough solvency to pay debts).
One more time for those at home:
Profit = revenue - costs
Employee salaries are part of the costs, just like gas and supplies. They get paid, and then the investors get what ever is left.
Some people are paid hourly, some as a function of sales. The investor is paid from the profits.
Originally Posted by Susanann workers so stupid as to continually vote to get rid of their own jobs"? Other countries, like Canada, China, Mexico, some European countries, etc actually WANT to keep jobs and have policies to attract jobs.
Actually, it was the Democrats who most wanted/want NAFTA, CAFTA, trade with Communist China, unequal trade agreements with Japan, outsourcing, continued record immigration, and the end of trade tariffs that used to protect American workers. For example, Clinton signed the NAFTA agreement. Furthermore, it was Teddy Kennedy who was most responsible for the Immigration Act of 1965 which flooded our labor markets and ended high wages.
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Losing your job means not being able to pay your bills? Haven’t you heard? Losing your job means you can take a trip to Spain! (Really, that has been said around here.)
Actually it isn’t. Capital isn’t completely free here - we have a lot of regulations around it (tax, SEC, et. al) - especially when and if you take your company public - but even with a private investment you’ll face tax regulations. Other countries have other regulations - some more free, some less (there are countries where only citizens of that country can own capital, for example, no foreign investment - or the corporation must be majority held by citizens). And some countries have little or no free capital (of course, they aren’t exactly economic powerhouses - Cuba, North Korea).
The ability to choose between different investments is not diversification. SIMOULTANEOUSLY investing in uncorrelated investments is diversification. IOW, for investors, risk means something different than the “all-in” situation of a small business owner who is going for broke with their new small business.
A neurosurgeon can’t push a mop?
You’re missing the point. HOw much should they get compensated from revenue? I am saying that the wage level reflects a shift of how revenue (if you prefer that word to profit) is split between labor and capital.
OK, I see what’s going on, you are focusing on the right of owners to profit (i.e. whatever is left after everyone else gets paid) rather than how the revenue gets split to determine the owners profits.
You keep leaving out the fact that this “creative destruction” frees up a whole lot of labor to the unemployment line. It has also created a perpetual employer’s market. Were we any less dynamic and adaptive when we had job security? What was America’s standard of living back then, relative to the rest of the world? It was better. Far better.
The unavoidable fact is, we gave the owners of capital too much leeway and got nothing out of it that we wouldn’t have gotten by keeping them in check like we did before the 1970s with things like fairer trade, higher taxes on the rich, etc.
The inability to answer these basic problems is why you should do more than just *memorize[ and regurgitate/i] economic theory. Trickle-down economics is delivering truckloads of unintended and harmful consequences.