Economics Discussion Thread

[Chernoslavia]

Why do you believe socialism or anything in that umbrella is an economically sound idea? Not the ideas of equality or that, but that it will actually work?

Define "work". A socialist system can obviously exist, because socialist systems have existed in the past. A socialist system can also obviously create a society with full employment, a high degree of economic equality and also high (or at least decent) rates of economic growth. That has also happened in the past.

So, what do you mean by "work", and what makes you think socialism can't do it?

Yes and guess what happened to them?...exactly. A socialist economy is only good up until you run out of other people’s money.

[Galloism]

You can't do it on your own. You do it with him or forgo the $500,000.

What are you talking about? If a company wants to cut costs, it can do it on it's own. Reword yourself a bit, I'm not seeing what youre trying to say

No, if the company does it on its own without help, it will lose talent to competitors. This would force them to raise wages in tight labor markets.

However, if it does it with its competitors, they can all keep wages low together and there's no place for the workers to go with their talent - as everyone (or nearly everyone) who wants their talent is paying the same low wages.

This is why they do it now even though it's illegal.

[The Portland Territory]

What are you talking about? If a company wants to cut costs, it can do it on it's own. Reword yourself a bit, I'm not seeing what youre trying to say

No, if the company does it on its own without help, it will lose talent to competitors. This would force them to raise wages in tight labor markets.

However, if it does it with its competitors, they can all keep wages low together and there's no place for the workers to go with their talent - as everyone (or nearly everyone) who wants their talent is paying the same low wages.

This is why they do it now even though it's illegal.

There we go, that makes more sense

Ok, and? Why should the government stop that? There will always be other companies not following suit and luring in those employees

[Galloism]

No, if the company does it on its own without help, it will lose talent to competitors. This would force them to raise wages in tight labor markets.

However, if it does it with its competitors, they can all keep wages low together and there's no place for the workers to go with their talent - as everyone (or nearly everyone) who wants their talent is paying the same low wages.

This is why they do it now even though it's illegal.

There we go, that makes more sense

Ok, and? Why should the government stop that?

Because it causes a race to the bottom. Race to the bottoms are economically inefficient.

There will always be other companies not following suit and luring in those employees

No, there probably won't, because businesses often pay the market rate. If all the "big" players are conspiring to fix wages, that becomes the new (artificially low) market rate, which even smaller businesses will tend to comply with or only slightly exceed, even though the true economic value of the labor is much higher.

[The Portland Territory]

There we go, that makes more sense

Ok, and? Why should the government stop that?

Because it causes a race to the bottom. Race to the bottoms are economically inefficient.

There will always be other companies not following suit and luring in those employees

No, there probably won't, because businesses often pay the market rate. If all the "big" players are conspiring to fix wages, that becomes the new (artificially low) market rate, which even smaller businesses will tend to comply with or only slightly exceed, even though the true economic value of the labor is much higher.

Again, as I stated before, what is stopping workers from striking? From forming labor unions? If all or even most programmers, keeping to your example, quit, then the corporations will have lost millions of dollars worth of value and future profits.

[Galloism]

Because it causes a race to the bottom. Race to the bottoms are economically inefficient.



No, there probably won't, because businesses often pay the market rate. If all the "big" players are conspiring to fix wages, that becomes the new (artificially low) market rate, which even smaller businesses will tend to comply with or only slightly exceed, even though the true economic value of the labor is much higher.

Again, as I stated before, what is stopping workers from striking?

Food. More specifically the lack thereof.

From forming labor unions?

Strong unions ARE a good fix for this. I'm pretty ok with strong unions in general principle.

If all or even most programmers, keeping to your example, quit, then the corporations will have lost millions of dollars worth of value and future profits.

But they won't without strong unions that can keep them fed and the lights on. Otherwise, they can't afford to quit - even in protest. Even if the treatment is unjust.

[Kubumba Tribe]

Socialism is ownership of the means of production by the workers. This requires government control which is the opposite of market economics.

How? Explain. Even if social ownership was synonymous with government ownership (hint: it isn't), how would that prevent the implementation of a functional market? Socialism doesn't hinge on central planning at all.

Well...a little bit, but not as hardline as communism

Since this is on-topic in regards to the thread, a question that I asked in the LDT a while back:

Minimum Wage: What should it be, if one at all??

Minimum wage should not exist

"Yeah, I should give my employee a penny if I feel like it!"

I think it should be a livable wage.
I think it should currently be set to $15 an hour.

Why though? If an employer sets their wages to say, $4 an hour, and the employee agrees to the contract, why should the government step in to stop this?

Because no business should be exploiting their employees.

Having said that, I am a proud authoritarian socialist and I have absolutely no problem with the government using any force necessary to crush private ownership. Capitalists are scum and should be treated as such.

I only pointed out the things in my previous post for the benefit of my non-authoritarian comrades. You don't technically need to enforce socialism with an iron fist. But I prefer the iron fist.

Sheesh, man. I don't favor capitalism either, but I don't mind people owning their own business, as long as they aren't exploiting their employees.

Why am I scum? Not gonna lie, as a fellow Christian, I'm kinda hurt

By "capitalists" I meant private business owners, not advocates of capitalism.

Private business owners are scum because market competition pretty much ensures that you have to be a selfish, greedy bastard in order to be successful in business. You have to exploit your workers. You have to brag about your products to consumers - and lie if you can get away with it - in order to increase sales. You have to be willing to fire people, without regard for their personal hardship or their families, if that's what it takes to keep your business profitable. In a word, you have to act evil.

And people who spend a lot of time acting evil, generally become evil people, even if they weren't that way when they started out.

That's why there's regulations, albeit they aren't strong enough.

That's not the reason why corporations wage-fix. They wage-fix so that there's no competition of workers, that no corporation steal another's employee.

Corporations are motivated by one thing: money.

That's not particularly a bad thing

Yes it is

Minimum wage promotes inflation...it is a form of artificial price control, which is inherently detrimental to market economics. Mind you, I'm a socialist saying this.

Strong unions are a better solution.

Unless you have a union-hating boss

That's not evil nor necessarily greedy, that's economic survival. What's wrong with showing how great your product is? As for firing people and not taking their families into consideration, well, it's an us vs. them situation. Not a happy one but in order to make sure that your own family eats, a business owner may need to lay someone off. And if the employee was good, hopefully help find him another job.

You're right, those things are necessary for economic survival (in capitalism). Which is one of the reasons why I advocate a system in which those things would NOT be necessary for economic survival.

If capitalism requires people to do bad things in order to survive, that's an argument against capitalism.

True.

By "capitalists" I meant private business owners, not advocates of capitalism.

Private business owners are scum because market competition pretty much ensures that you have to be a selfish, greedy bastard in order to be successful in business. You have to exploit your workers. You have to brag about your products to consumers - and lie if you can get away with it - in order to increase sales. You have to be willing to fire people, without regard for their personal hardship or their families, if that's what it takes to keep your business profitable. In a word, you have to act evil.

And people who spend a lot of time acting evil, generally become evil people, even if they weren't that way when they started out.

Business owners are not inherently evil, these are usually the entrepreneurs of society. Entrepreneurship is good it is the driving force of a market economy. Socialism seeks to cultivate the entrepreneurship of the people by making the highest amount of equality of opportunity and lowest cost of entry as possible. A freer market is positive and completely in line with socialist socio-economic analysis....if not the greatest expression of Socialism.

Yeah, there's nothing wrong with owning your own business

[Nordengrund]

I'm a Georgist. That's all I have to say.

[Kubumba Tribe]

I'm a Georgist. That's all I have to say.

What's that?

[Nordengrund]

I'm a Georgist. That's all I have to say.

What's that?

https://en.m.wikipedia.org/wiki/Georgism
https://en.m.wikipedia.org/wiki/Geolibertarianism

[Orostan]

Yeah, there's nothing wrong with owning your own business

There is nothing wrong with owning your own labor.

By owning a business as an individual and not with the people who actually do the work there you are owning someone else's labor, and I believe that every person is entitled to the product of their own labor (such as the money gained by selling the product).

[Kubumba Tribe]

Yeah, there's nothing wrong with owning your own business

There is nothing wrong with owning your own labor.

By owning a business as an individual and not with the people who actually do the work there you are owning someone else's labor, and I believe that every person is entitled to the product of their own labor (such as the money gained by selling the product).

But don't people get paid for their work anyway?

[United Kraven]

perhaps, one of the defining attributes of a nations economy is whether or not they have a policy of autarky. being self-sustainable is a huge plus for any nation, and would boost the internal economy. plus, it would cut down on national debt because you wouldn't need to import things from other countries as much.

[Taihei Tengoku]

A "classic Misesian planner" isn't a planner with bad priorities, who focuses on heavy industry at the expense of consumer goods. A "classic Misesian planner" is a planner who, when faced with multiple different methods of making a product, is unable to determine which method is the most efficient (due to the absence of price signals), and is forced to pick one essentially at random. That was Mises' argument. The argument was that, in the absence of prices, planners would be unable to determine what is more efficient and what is less efficient.

And my counter-arguments are in the quote above.

A classic Misesian planner is one who, in the absence of price signals, substitutes their own preferences. In the case of the USSR, this was main battle tanks--the armed forces consumed a full sixth of the economy. Perestroika introduced the price system to the Soviet above-ground economy and totally destroyed the sham price system as people could now legally express that many Soviet assets weren't worth anything, which if anything is a textbook vindication of Austrian theory. They were "somewhat right" in the sense that the GOSPLAN commissars knew that people needed to eat something (though it wasn't really good) and needed to have some kind of goods, but the gap between their guess and the actual aggregated preferences of the Soviet economy was a economic crunch twice as deep as the Great Depression.

Austrians only ignore "price distortions" if you are dumber than you take Mises to be--the foundation of the Austrian business cycle is itself the distortion of price signals by central banks and other state actors.

[Taihei Tengoku]

perhaps, one of the defining attributes of a nations economy is whether or not they have a policy of autarky. being self-sustainable is a huge plus for any nation, and would boost the internal economy. plus, it would cut down on national debt because you wouldn't need to import things from other countries as much.

>juche

[Taihei Tengoku]

What are you talking about? If a company wants to cut costs, it can do it on it's own. Reword yourself a bit, I'm not seeing what youre trying to say

No, if the company does it on its own without help, it will lose talent to competitors. This would force them to raise wages in tight labor markets.

However, if it does it with its competitors, they can all keep wages low together and there's no place for the workers to go with their talent - as everyone (or nearly everyone) who wants their talent is paying the same low wages.

This is why they do it now even though it's illegal.

Price fixing cartels sow the seeds of their own destruction--the more successful the collusion is the more any one party gains in defecting. What broke OPEC wasn't a scolding from the international community, it was Saudi Arabia+the Gulf States realizing it could make more by selling as much of its cheap oil as it could rather than restricting their production to favor the rest of the cartel.

[United Kraven]

oh. and another thing. high taxes on the rich spread the income levels more evenly, allowing the poor a better chance of starting a successful business without the rich automatically buying the market. also, when the leaders and higher positions on companies are paid the same as workers, the average income is the same, but the income for the poor is higher. i mean, if your rich its not a good thing, but who needs that speedboat anyway? also, when you remove the rich from a society, the amount of poverty decreases. the relationship between rich and the poverty levels is quite astounding. as you increase the number of rich in an economy, the number of poor increases because the rich occupy markets and obtain ridiculous amounts of money, meaning there is less money to earn for lower-class labor and office jobs.

[Orostan]

There is nothing wrong with owning your own labor.

By owning a business as an individual and not with the people who actually do the work there you are owning someone else's labor, and I believe that every person is entitled to the product of their own labor (such as the money gained by selling the product).

But don't people get paid for their work anyway?

Yes, but only as little as the employer can pay for their work. And if they were paid the full value of their labor there'd be no profit.

[Taihei Tengoku]

But don't people get paid for their work anyway?

Yes, but only as little as the employer can pay for their work. And if they were paid the full value of their labor there'd be no profit.

This is demonstrably false--the entire value of a product isn't captured by labor costs alone.

[Orostan]

Yes, but only as little as the employer can pay for their work. And if they were paid the full value of their labor there'd be no profit.

This is demonstrably false--the entire value of a product isn't captured by labor costs alone.

But there can be no product without labor. What is gold worth if you can't take it from the ground? What is a car worth if you can't build it? What is anything worth without labor?

[Galloism]

No, if the company does it on its own without help, it will lose talent to competitors. This would force them to raise wages in tight labor markets.

However, if it does it with its competitors, they can all keep wages low together and there's no place for the workers to go with their talent - as everyone (or nearly everyone) who wants their talent is paying the same low wages.

This is why they do it now even though it's illegal.

Price fixing cartels sow the seeds of their own destruction--the more successful the collusion is the more any one party gains in defecting. What broke OPEC wasn't a scolding from the international community, it was Saudi Arabia+the Gulf States realizing it could make more by selling as much of its cheap oil as it could rather than restricting their production to favor the rest of the cartel.

Yeah, that's a great platitude, but it doesn't really exist in reality as much as you would think.

Some cartels have been running for decades.

[Taihei Tengoku]

This is demonstrably false--the entire value of a product isn't captured by labor costs alone.

But there can be no product without labor. What is gold worth if you can't take it from the ground? What is a car worth if you can't build it? What is anything worth without labor?

Can you take gold out from the ground with your bare hands? Can you build a car?

Capital (both in the sense of "money" and "machine tools") is a requirement to produce anything but the most basic of goods through the simplest organizations. People who provide them (provide ideas for production, mediate between resource-owners, manage and maintain capital) add value on their own. If they did not then everyone who isn't an unskilled laborer is part of a conspiracy so large it beggars the mind, especially when there is so much to be gained by defecting and cutting out the freeloaders in capitalist rationalization.

[The Federation of Kendor]

But there can be no product without labor. What is gold worth if you can't take it from the ground? What is a car worth if you can't build it? What is anything worth without labor?

Can you take gold out from the ground with your bare hands? Can you build a car?

Capital (both in the sense of "money" and "machine tools") is a requirement to produce anything but the most basic of goods through the simplest organizations. People who provide them (provide ideas for production, mediate between resource-owners, manage and maintain capital) add value on their own. If they did not then everyone who isn't an unskilled laborer is part of a conspiracy so large it beggars the mind, especially when there is so much to be gained by defecting and cutting out the freeloaders in capitalist rationalization.

Anyway, do you learn this from Adam Smith's Wealth of Nations

[Taihei Tengoku]

Some cartels have been running for decades.

Like labor unions

[Galloism]

Some cartels have been running for decades.

Like labor unions

I mean, certainly some labor unions act like such cartels, but that's actually a form of MAD. Businesses made cartels, so labor made cartels to challenge them.

Although a lot of labor unions don't act like cartels - they act like corporations. Many members working towards a unified goal.