Question for those in charge of hiring employees

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Re: Question for those in charge of hiring employees

Postby Pedro I Rengel » Sun Apr 07, 2019 5:29 am

Ecamdnu: capitalism is like rock paper sissors, but there is only capital.

Only capital beats capital. But it beats it every time.
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Re: Question for those in charge of hiring employees

Postby promethean75 » Sun Apr 07, 2019 12:24 pm

In short, my contention is that the capitalist contributes risk-taking, initiating action, and organizing the enterprise.


the interpretation of what these terms mean and entail is different for the bourgeois and proletarian class, which means there will be an incommensurable understanding of what is defined by such terms. this is to say that such actions as 'risk taking', 'initiating action' and 'organizing' won't be defined the same way, so they cannot constitute a fair assessment of the value of the capitalist's involvement in the modes of production. as such, one wouldn't be able to defend the role of the capitalist in those modes of production by raising such points. here is an example of what i mean:

if by 'taking a risk' we mean 'investing surplus capital', then this will not be considered by the proletariat to be a legitimate instance of 'risk', because by failing (if the capitalist fails), he's lost nothing, since what he has invested was surplus capital... something generated by the exploitation of workers and not the labor of the capitalist himself. the proletariat simply cannot qualify such as a 'risk' that is equivalent to what he understands and experiences as 'risk'. the proletariat risks his own labor force, his own money, his own time... something that, if he fails at being successful in doing, counts as a loss of direct and immediate resources rather than a loss of surplus resources.

if you found a bike on the side of the road, took it into your possession, and then lost it later, would it be the same kind of loss a person who built a bike from scratch and then lost it, would experience? see what i mean? what is at stake in the former case is not the same as what is at stake in the latter case. this might exemplify how the two opposing classes simply can't have the same understanding of the meaningfulness of the term 'risk'. analogy; failing at a business venture and losing money you 'found' is not the same as failing at a business venture and losing money you 'made'.

the same difference of understanding exists for the activity of 'initiating action'. the capitalist 'initiates action' by investing exploited surplus into new modes of production. to the proletariat, this translates into: the capitalist transforms the profit he generated from one exploited worker into another mode with which he'll exploit another worker, ad infinitem. here, there is no real 'action' in the sense that the proletariat understands and experiences it, because the proletariat understands 'action' to be labor. this is to say that there is a fundamental difference in the nature of 'action' as the two perform it, so there can be no qualification of the meaning of the word as the capitalist uses it in an attempt to defend his role. simply said, the proletariat cannot accept this defense.

'organizing' amounts to the same thing, more or less. it's another kind of 'action' that does not involve the same kind of activity for the capitalist and proletariat.

really what this comes down to is something like trying to get two completely different species to come to agreement on words they use and understand to mean different things.

The point Pedro makes, as I understand it, is that the cost of the final good includes whatever amount the capitalist takes for herself. If that's the case, and if the capitalist adds nothing of value, then a competing good could be produced for less by paying the capitalist less, with the market price settling around the equilibrium of paying the capitalist zero or near-zero. The fact that this doesn't happen seems like strong prima facie evidence that the capitalist does indeed add value.


but that's the point; the market could settle at a lower equilibrium in practice, but not until the private ownership of the means of production is abolished. the fact that the market functions as it does now is something that happens because it has to happen in this particular arrangement. one simply can't buy something from a private business that is not priced to include the desired profit the capitalist wishes to attain from its sale. but this still doesn't prove the capitalist 'adds any value' to this exchange/interaction between producers and consumers. if anything, he adds cost, not value. to say commodity x is 'worth more' because it's more expensive is a misnomer; this only means that the price of the commodity has been inflated to include a cost that is not proportionate to the labor required to produce it. it means the price of the product is more than all the costs required to produce it.

Separate from (a) and separate from the value-to-who arguments I've been making, let's see if we can specify the price of 'what [the worker] produces' Call it P(w). It can't be equal to the price of the widget, because the widget is composed of raw materials that cost money. We'd also need to subtract the pro-rata price of the tools and their maintenance, and the power to run them.


i dunno man, but you're still trying to fudge the capitalist into this equation to make him relevant. again, everything involved in the manufacture and distribution of commodities is produced by the worker. worker's labor made the raw materials, worker's labor runs the power plant that produces electricity, worker's labor produced the tools used in the factory, worker's labor produced the factory, etc., etc. the capitalist does not produce any of these means... he 'appropriates', takes up and makes use of what was already there, and does not add anything to the process. so regardless of what is added or subtracted from the 'costs' of how and what is produced, everything that 'costs' something is produced by the worker, not the capitalist. as such, the capitalist never 'loses' a product of his own labor; if he 'loses' money, this means he no longer controls the surplus that was generated by the labor of workers... but that surplus belongs to the workers in the first place, so the capitalist cannot be said to have 'lost' it.

does this make sense to you? no? okay, think of it like this. capitalists exploit workers to produce goods and services they then sell to each other. capitalist x uses money made from exploiting workers to buy tools from capitalist y, then has his workers use those tools to produce goods he will then sell at a price higher than what it cost him to have those goods produced. he'll then take that money and invest it in more opportunities to exploit workers.

in reality, capitalist x didn't buy those tools ('buy' is a semantic formality for: use money representative of labor)... workers he previously exploited bought those tools, because it was their labor that produced the money that bought them. likewise, capitalist y didn't sell those tools ('sell' is a semantic formality for: receive representative money of labor)... workers he exploited previously sold those tools, because it was their labor that produced them. the entire exchange takes place through the unnecessary 'ghost' intermediary of the capitalist. workers make the means of production and then use the means of production to further produce. they are the source, the organism, of this entire process.
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Re: Question for those in charge of hiring employees

Postby phyllo » Sun Apr 07, 2019 1:13 pm

The same thing that happens to everyone who arrives at the store after the shelves are bare. The difference is that prices that track supply and demand minimize the number of people who don't get water.
Nonsense. There is no way that a shopkeeper knows enough about the supply and requirements to set the ideal price which minimizes the the number of people who don't get water.
Furthermore, he is very likely acting to maximize profits rather that distributing water in the optimum manner.
But I don't think it's better that more people die so long as the decision is made based on how early they got to the store instead of on wealth (especially because I expect 'how early they get to the store' to correlate with wealth anyway).
You don't know that "more people die" in that case. Prices could be kept low and purchase quantities restricted. That could be a better or fairer distribution strategy.
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Re: Question for those in charge of hiring employees

Postby Karpel Tunnel » Sun Apr 07, 2019 4:06 pm

Ecmandu wrote:There's the inherent problem of monopolies.

Amazon, Google, and others like them have unbelievable power, not just over their markets but over people's minds. They can make a monstrous corporation like Walmart look like a victim.
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Re: Question for those in charge of hiring employees

Postby Karpel Tunnel » Sun Apr 07, 2019 8:09 pm

Carleas wrote:But how much of this is just framing? Take the question in a more abstract form: I have an item that you want to buy, and we know that you will get >$1000 worth of value from that item. What's a fair price to ask of you for that item? Framed this way, it's much less morally repulsive, and it's very similar to Serendipper's question.
The moral repulsiveness is not affected by the PR. One can frame it ways that sound neutral and inevitable, but that doesn't mean that something repulsive is not happening.

But it's the same question, we're really supposing as part of the hypothetical that the bottle of water is worth >$1000 to you. So, two people value a good differently, and we're trying to find a fair price so that the two people split the surplus. If you're really going to die, you likely value the water bottle at much greater that $1000.
Absolutely. So the market could probably bear me agreeing that my wife and I get raped so our daughter gets the water. Thats not the value of the water, it is still morally repulsive. And I might choose to be raped over working in a mine for 40 years, and I might do both if my options were filed down to that by people who are repulsive members of what should be a social mammal group - iow with empathy amongst their processes of interaction.

And my example is not one off. Corporations can and do create the desperation, by non-democratic means, influending legislation, enforcement and economic policy in general. It is not, like in your example below, like the weather. They will take us to war for their profits. Trafficked humans, miners who have to shop at the company store, sweat shop workers all have to make choices in situations often partially or even completely created by people who can set market prices.

And those same employers will make damn sure that their labor - or even no labor at all - gets paid at a value they like. They made the financial crisis through making the government pass laws that allowed them to make even more money through not laboring. IOW they can make an incredible market value for having someone else play with derivatives, based on products with little value. And in the process fuck up the whole planets economy and never make the slightest noise about paying anything back for their non-labor getting the value of billions of hours of other people's labor.

This reframing is not dishonest, it's only a difference of emphasis. I agree that intuitive morality says we should just give the dying person water, but we might reframe intuitive morality as naive morality.
Really? You're there and you would charge a huge sum of money. I doubt it. You might vote for polices that end up being similar, but face to face with that guy, I truly doubt you would be repulsive.

For example, take price gauging in the run-up to a hurricanes. People have strong intuitions against it, but price gauging in those situations serves a very important function that has positive social spill over. First, it maximizes the supply that will be available in the affected area, by compensating people for the risk and expense of making more supply available. Second, it limits hoarding: without price gauging, cases of water sell out in a few hours, but if they have to pay a price that accurately reflects the value they expect from the water, they will be more careful to buy only what they need and leave more for other people to buy. Price gauging looks opportunistic, but letting prices track value aggregates information and allocates scarce resources efficiently. That's what the market's for.
I am sure some cherry picked examples like this one exist. I would guess there are other ways to prevent the problems, but not coincidentally these benefit the corporations, wherease the others might primarily benefit the people in need.

That's a bit different from a one-off, dying in the desert situation, but it does demonstrate that economic exchanges that are intuitively icky can be socially beneficial. Sometimes our gut reaction is wrong.
Of course it sometimes is. But I am not presenting a blanket rule countering yours. I am saying that this idea of the market determining value somehow justifies repulsivness doesnt work.

That bottle of water does not have that value.
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Re: Question for those in charge of hiring employees

Postby Silhouette » Sun Apr 07, 2019 8:40 pm

Carleas wrote:
Silhouette wrote:This whole area of thought seems to be trespassing on the realm of the Naturalistic fallacy, or the Is-ought problem.

I'm not sure how to think of morality in the context of the market. A market economy takes values as inputs, so it seems like the concept of trying to decide our values about such a system generates the messy problems of recursion. What oughts can be offered about a system that takes oughts as inputs and generates is's as outputs? That is not entirely rhetorical, but it is not something I have an answer for.

Suffice it to say that the market is as morally pluralist as its participants, that most of the outcomes are a-moral, and that rationality for the purpose of economic analysis is scoped to preference self-consistency.

I think I can see the issue that you're pointing out here, and I think the issue can be cleared up by breaking it down a little more.

It's interesting that quantities, e.g. in math are named "values". The value of "1", or any other number is a product of valuing relative "extension" in the world. Extension is independent of opinion or how one feels about it - perhaps the units used reflect something of the kinds of scales that one is interested in, but that's about it.
This is in stark contrast to qualitative valuations that are much harder to reduce to discrete units: what is "1 consent"?

This is why critics of Capitalism have qualms over the authority of pricing. I would suggest that the market doesn't take in qualitative inputs or procude qualitative outputs - like a computer it takes in quantities and spits out quantities, but what matters is the qualities that these quantities represent when evaluated by the humans determining the inputs and the outputs. When determining pricing, the price maker's interests are in setting the price so that when it's multiplied by the number of people who buy the thing, a maximum value is achieved. The price taker's interests are in paying the minimum price without having to forego the purchase. To the extent to which the latter is included in the former, the price maker wants the maximum price without the price taker foregoing the purchase - and we see a clear conflict of interest.
The problem I'm posing is the qualitative valuation of foregoing the purchase on the side of the price taker: when this valuation is high enough, both paying the price and foregoing the purchase are not preferable when the price maker can use their power to take advantage of this fact: their power residing in the degree to which they'll be fine either way. I've read you arguing that both sides of any trade "profit", but this simply isn't true to the degree that the relative situations of both the price maker and price taker differ.

I've not denied the power of the market dispassionately rationing the myriad quantitative inputs that it receives, and I acknowledge that the price makers are dispassionate when rationalising the course of action that achieves the most profit for them. The problem is the price takers picking up the pieces - their situation can be lose-lose in proportion to the inequality in qualitative valuation at either side of the quantitative market mechanism. The lack of qualitative sympathy of the quantitivative market mechanism, and the possibility for price makers to consider nothing more than how to operate the market machinery, is where the immorality lies.

It reminds me of the changes in military training since the world wars where soldiers would suffer from "trigger finger" and become unable to reconcile the stresses of their lives being in immediate and potentially unknown danger, and inflicting the same upon the enemy who they are required to kill whether they are ok with that or not. Since then, soldiers were instead training to reflexively pull the trigger as soon as the proper kind of target revealed itself - bypassing the brain or at least any moral valuation that they would otherwise encounter. They dispassionately operate the firearm as a price maker would the market, and it's too bad what happens to the target, or the price taker. Drone strikes are an even better example, since the price maker is removed from the consequences of operating the mechanism.

I don't think there's any messy recurssion when the situation is broken down as above.

Carleas wrote:While I agree with the general point that a certain amount of redistribution can improve the information the market generates, I don't think it's true that participants needs to be equals in order to generate a 'real' value. As I argue above to Karpel and Promethean, there is no such value independent of the participants, and economic exchanges require that the participants value the things exchanged differently. Decreasing inequality will decrease the spread between people, but only up to a point, so there are diminishing returns in terms of information. And redistribution is itself distorting, so significant redistribution to drastically reduce inequality will at some margin eliminate more information than it produces.

Think of government as just another customer/company. The market itself is nothing but a system of distribution and redistribution - profit itself is redistribution: everyone in the business does their part to bring in revenues that come into everyone in the business, but the employees are contracted to take their standardised share such that there is enough that can be redistributed to the employer in order to make a profit. Government redistribution is just the same as for any other employer, except they can serve to bolster the price-making power of otherwise price takers, which is the whole problem in the eyes of the Capitalist price makers. So long as Capitalists can overpower government, the redistribution effects of the government's custom tends instead to simply reinforce and justify the status quo for the powerful, or even swing the power even more in favour of the powerful - as you mentioned later on in your post. As such, the information isn't diminished, it's just altered just the same as if a huge customer like the government entered the market and disrupted the power imbalance that would otherwise ensue if there was no regulation. A government working in favour of the price takers generates a more real value in that it's not so influenced by power imbalance - and like you say only up until the point which is this more real value that could otherwise be reached if not for the free market.

Carleas wrote:There's a lot of wiggle room in "almost purely", but to offer a small defense of advertising as a rational and pro-social enterprise: advertising reduces search costs, which benefits consumers by making it easier to find the goods they want to buy. The internet has obviated this a bit by decreasing search costs across the board, but advertising is still a reliable signal of legitimacy, it strengthens brands, which in turn incentivize quality. Where it's intentionally deceptive, it's bad, and you're right that it can encourage irrationality even when it isn't lying. But it is not without benefit for rational consumers.

I do agree that rational and pro-social advertising in the sense of providing raw information, such as pricing, where to get something, how long it will take etc - quantative facts that can be checked objectively - this is good. Not enforced upon you though, just easily available if you want to look - but equally not present in everyday life if you don't want to look. Reducing search costs? Fine by me. Branding? This one needs to be broken down. There's "having a name", and there's branding this name into everyone's brain using psychologically manipulative techniques from simple repetition, through associations encouraged by the company irrespective of the customer's direct experience with the company, to intentionally tricking potential consumers into desiring a product or service in which they would otherwise not have had any interest. The rationale of the last one is of course "the customer doesn't know what they want (subtext: so we'll tell them what they want)". Let them figure it out for themselves! Proving your company name through quality and reaping the benefits: yes. The use of irrationality in and around this goal? No.

I think we're on the same page here.

Carleas wrote:The problem is that government needs to be the most powerful enterprise, it needs to be more powerful than every company it oversees, or else the rich can succeed in capturing society by capturing the largest companies. But if government is more powerful than every company, then it will always be worth capturing.

Yeah this is true. Who watches the watchmen?

Carleas wrote:But I don't see the alternatives doing much better here. Centralizing power away from the free market just seems to expedite the process. And other solutions seem to depend on the idea that people just magically won't do that anymore. I think there is no solution, it's a balance that must continue to be fought for.

AI is a third option - surpassing the ability of decentralising power to tend towards monopoly, surpassing the centralisation of power to potentially only expedite the same process, taking the ability for humans to be immoral away from humans. Each has its issues of course.

Carleas wrote:
Silhouette wrote:Who is a high marginal utility spender? Someone like Elon Musk (used to be?) or Bill Gates before him when he was helping create the world's most popular operating system rather than simply renting it like he does now - these are figureheads of bringing technologies that empowered humanity in a very real sense.

This is an interesting suggestion, not at all what I had in mind but I can see the line of thinking and I think there's some merit to it. When I think of high marginal utility spenders, I'm thinking of the people struggling to make rent or feed their families. An extra dollar to those people is very, very valuable. An extra dollar to Musk or Gates seems wasted, given how many dollars they're sitting on. By moving excess dollars that lay idle with the rich (or that the rich use for another car or another vacation or another molecular gastronomy meal) to the poor who will immediately put it to use in ways that will measurably improve their lives, we can increase the effective value in the economy, and get better information about what things are worth.

It's more natural for humans to think multiplicatively rather than additionally - that is to say that people tend to value proportionally, just how you're describing. Valuing $1 when you have $1000 just the same as if you have $10 is something you have to learn against your instincts. And even if you do, you won't find the richest people counting pennies quite like the poorest people - that is, if it's you who's making the decision. Certain types of people will defend a cent being taken from them with much the same conviction that they will defend any amount, even if they wouldn't bend down to pick up plenty of them if they were lying unclaimed on the street with nobody looking.

It's these contradicting valuations, which are all too human, that get in the way of the obvious utility in "moving excess dollars that lay idle with the rich" as you say.

Carleas wrote:But it's true that some desperately poor people will put the money into drugs or gambling, and Musk has at times leveraged himself to the hilt to create multiple enterprises that have immense social good. Still, I think that's the exception. Most successful people, even when they generally use money wisely, are also comfortable and consume wasteful luxuries. And most poor people, even when they generally make financial mistakes, will use more money in socially positive ways. On average, I would expect the marginal dollar to be more valuable in the hands of the poor than in the hands of the very rich.

Plenty of incredibly rich people will put the money into drugs or gambling... never mind the poor!

Investment itself is a gamble, and in that sense capitalism is itself gambling, and the payoff is the drug. It's the employees who pay the price for the gamble, and who supply the capitalist's drugs.
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Re: Question for those in charge of hiring employees

Postby Karpel Tunnel » Mon Apr 08, 2019 6:49 am

Carleas-
cherry picking the hurricane situation doesn't counter what I am saying. my position is not that the market never reaches an effective or good value for a product, just that it's radically insufficient. And further there are other ways to prevent hoarding and solve the problems you brought up. They might not give the businesses as much profit, however, since they would help people in need. Those with power can affect the circumstances of those without, in a sense creating the situation of the guy in the desert who needs the water. Whom, by the way, you personally would not charge 1000bucks, but would give him your water bottle if this was no risk to your life. So we have a system that regularly acts against how you would act. In 2008 when a lot of products the rich were selling way beyond their value affected radically the lives of people around the world, the rich made no call to compensate, though they call with great effectiveness when it affects the value of the products of their labor and even the products of their not-labor. In that that's where the crisis came from. They manipulated democracy to fit their desire to be able to make more money through not laboring and such is their power that they could easily get a democrat to approve this. So they then had other people play with derivatives for them. More value for no product.

They take us to war for their products.

They undermine democracy in ohter countries and have started, since gaining independence form the West, doing this domestically also in more complete ways. Once the type of games they played with the IMF and the third world, where dictators would build up loans and the IMF later forced the gutting of social systems and any protectionist practices, democratically arrived at or not, are now games they are playing in the West.

You are treating the market price's context as if it is weather, and the price of labor as if it is weather. But it's not. My one off as you call it is actually a kinder to them example. That guy needing water might very well be an idiot. But when the corporation create the desperate conditions themselves it is even more morally repugnant.

I mean, if the guy in the desert was a dad, perhaps he'd sell his wife to human traffickers so his daughter got the water before he died. I don't think it makes any sense or is naive,
morally or otherwise,

to say choosing to have his wife turned into a sexual slave

is NOT the value of a bottle of water.

But both parents might very well choose to pay this price to save their child.

It's apples and bicycles...yes, your framing sounds better.

But it's still morally repugnant behavior.

Note the irony: they frame the issues allow 'our' determining of value to set the price, almost as if we are in control. When it is precisely the opposite.
Last edited by Karpel Tunnel on Mon Apr 08, 2019 2:22 pm, edited 1 time in total.
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Re: Question for those in charge of hiring employees

Postby Silhouette » Mon Apr 08, 2019 12:50 pm

Jakob wrote:
a) the capitalist does not add anything to the chain of production that wouldn't be there if he did not exist.

Except, of course, the whole chain of production.
Which he started.

Minor detail.

Anyone with money can take someone else's idea, employ someone who knows about it and/or someone who knows about setting up a business and/or someone who knows how to manage one and/or some number of people to actually fulfill the business operations...

There is literally nothing inherent in the role of "Capitalist" that necessarily involves adding anything at all to the chain of production, starting/adding the chain of production itself, or even coming up with the idea of the chain of production. The fact that there are examples of Capitalists doing any of these things is "undistributed" where your point is "distrubuted".

Minor detail.

Your formal fallacy is affirming the consequent (P→Q, Q) → P:
Capitalists in a capitalist society set up businesses, therefore to set up businesses you need capitalists in a capitalist society. Wrong.
Another formal fallacy that fits your thinking is the modal fallacy: a capitalist society is possible, it's possible for a capitalist to set up businesses, therefore it's necessarily capitalists who set up businesses and/or you need a capitalist society to do so.
Your informal fallacy is the fallacy of association, where you associate setting up businesses with capitalists, when this is only circumstantial to capitalist society.

Just think of all the people with ideas for businesses, who don't have the money and/or know how to set up a business and/or have the contacts/credit score to set one up...

Just think of all the ingenuity and creativity that could be present in this world if only you didn't have to be a capitalist to realise it.
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Re: Question for those in charge of hiring employees

Postby promethean75 » Mon Apr 08, 2019 1:11 pm

Damn, jake. That nigga busted out the formal fallacies on ya ass. It's over for ya, kid. Time to pack ya shit and jump ship, zip ya lips and move your hips, to a different groove. Change ya mood to socialistic 'cause these heuristics aren't for mystics, I insisted, but you missed this.
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Re: Question for those in charge of hiring employees

Postby Carleas » Fri Apr 12, 2019 6:45 pm

promethean75 wrote:if by 'taking a risk' we mean 'investing surplus capital'...the capitalist 'initiates action' by investing exploited surplus...'organizing' amounts to the same thing, more or less.

For the purpose of this question ('what value does the capitalist add?'), I think it makes most sense to treat the capitalist as a role rather than as a static identity. So the person in the role of capitalist for business X may have been the worker for business Y. The money she brings to the table may be earned in any number of ways, or found, or inherited, or declared by fiat -- none of that matters for the purpose of the question at hand. This goes to your last few paragraphs as well: the capitalist is not an identity, not a species of human, it's a role that any human may step into and out of with respect to a specific endeavor. A person may play the capitalist for one enterprise in their spare time, and a worker for another to earn the capital the other enterprise requires.

So, I do not grant the distinction you're making. If we are agnostic about where people were before they came to the business, and about where the money and skills they have come from, we can still answer the question of whether the capitalist, as a role, adds anything to a specific enterprise. And the answer is yes.

promethean75 wrote:but that's the point; the market could settle at a lower equilibrium in practice, but not until the private ownership of the means of production is abolished.

What's preventing it from settling lower now? A group of noble workers could pool their resources and start a business where they pay the management nothing and don't compensate anyone for the risks they take. Nothing seems to prevent that, other then that management and risk are valuable and zero is below the market clearing price.

phyllo wrote:There is no way that a shopkeeper knows enough about the supply and requirements to set the ideal price which minimizes the the number of people who don't get water.
...
Prices could be kept low and purchase quantities restricted.

I would turn your first point around on you and point out that no one know enough about the supply and requirements to set the ideal price, nor to set proper restrictions on the amount that an individual is allowed to purchase -- the head-of-household for a family of 7 surely needs more than for a family of 2; people who retain water don't need as much as people for whom it passes right through them; adults need more than children; etc. etc. etc., the distinction of who really needs more and how much more is not simple.

And while it's true that no store owner knows enough to peg the price, 1) store owners have better incentives to get it right, 2) the store owner can vary the price if they get it wrong at first, and they have good incentives to do that, and 3) every store owner is making the calculation independently, so even if one store gets it wrong, another can make a different guess, and the market as a whole will tend to produce a better result.

And let me emphasize that I'm not saying a perfect result, I'm saying a better result. In the midst of an emergency, no one has sufficient information to act perfectly, and that isn't the standard. Market pricing set by people on the ground aggregates more information and does a better job than do bureaucratic quotas.

Karpel Tunnel wrote:Corporations can and do create the desperation...

I do think the moral calculus is different when the person charging the high price creates the situation that requires you to accept it. I'm not at all defending that, and it isn't part of the hypothetical to which I was responding.

Karpel Tunnel wrote:Really? You're there and you would charge a huge sum of money. I doubt it. You might vote for polices that end up being similar, but face to face with that guy, I truly doubt you would be repulsive.

Sure, and I give to charity and I run this site from my own pocket. But whether doing so is better is different from whether asking to split the surplus of the transaction would be morally permissible. I don't think there's tension between those.

Karpel Tunnel wrote:not coincidentally these benefit the corporations, wherease the others might primarily benefit the people in need.

I think this is a significant misunderstanding of capitalism. First, in an emergency situation, the people that enjoy the windfall from price gauging are the end seller, not the central supplier. They are likely to be individuals rather than large corporations. Second, as I've argued to Phyllo, price gauging actually does benefit the most people in need, by limiting shortfalls and ensuring that resources are used efficiently.

Karpel Tunnel wrote:That bottle of water does not have that value.

Out of context, the bottle of water does not have any value. The value comes from what people are willing to pay for it, and in the context of the hypo, that's what someone crawling out of the desert values it at.

Karpel Tunnel wrote:In 2008 when a lot of products the rich were selling way beyond their value affected radically the lives of people around the world, the rich made no call to compensate, though they call with great effectiveness when it affects the value of the products of their labor and even the products of their not-labor. In that that's where the crisis came from. They manipulated democracy to fit their desire to be able to make more money through not laboring and such is their power that they could easily get a democrat to approve this. So they then had other people play with derivatives for them. More value for no product.

The rich work very hard to suppress market forces and manipulate laws and prices to retain control of society. I'm not arguing in favor of that, and it doesn't follow from what I'm arguing. I am arguing on behalf of market forces; my claim is that they produce morally neutral outcomes that on average are the best we can do at allocating scarce resources in ways to maximize the satisfaction of preferences. That claim extends to the price of labor.

Silhouette wrote:I would suggest that the market doesn't take in qualitative inputs or procude qualitative outputs - like a computer it takes in quantities and spits out quantities, but what matters is the qualities that these quantities represent when evaluated by the humans determining the inputs and the outputs.

I think the quantity/quality distinction here is tricky. The market takes as input a binary result of a comparison between two things; in the case of cash transactions, a sum of money and a good or service. The binary result is: 1, transaction happens, or 0, it doesn't. But that binary is really just the answer to the question, do you value thing 1 more than thing 2? And the answer to that latter question must be qualitative (or else we are using the term 'qualitative' differently).

Silhouette wrote:The problem I'm posing is the qualitative valuation of foregoing the purchase on the side of the price taker: when this valuation is high enough, both paying the price and foregoing the purchase are not preferable when the price maker can use their power to take advantage of this fact: their power residing in the degree to which they'll be fine either way. I've read you arguing that both sides of any trade "profit", but this simply isn't true to the degree that the relative situations of both the price maker and price taker differ.

I take your point, but let me ask: do you see this as an edge case? The guy-crawling-out-of-the-desert hypothetical is unusual, and, as I've argued, in other cases of apparent desperation, the desperate are generally made better off by market pricing that appears to take advantage of their situation. A similar argument can be made for e.g. sweatshop labor, a favorite boogeyman of people in the first world who can't understand how someone would choose to work hard labor at a few cents a day, but for which there's strong evidence that over time it actually benefits the workers whose desperation it exploits (see e.g. China, India, the Phillipines, Indonesia, all rising economically and developing middle classes as a result of their cheap labor).

The difference seems to be whether there's a market: if there are two competing sellers of water bottles, and they're bidding on the thirst of the guy-crawling-out-of-the-desert, then the price settles at a reasonable equilibrium. I had somehow not noticed before, but the hypothetical also bakes in monopoly power, and I agree that can cause problems.

So, to your point, I would argue that, no, it's not about the difference in bargaining power, so long as there is an actual market. Two extraordinarily wealthy people who each want to hire a single desperately poor person will still bid up the price on that person's labor to close to the maximum that the poor person's labor is worth, i.e. the best price for the poor person at which both the buyer and the seller are made better off. The issue in difference of bargaining power arises when we additionally constrain choices to remove the negotiation from any market pressure.

One other point worth mentioning is that things break down quickly when the desperate person's labor is not worth anything, the so-called 'zero marginal product' worker. But I would argue that it isn't the buyer's responsibility to buy what they don't value, but the state's (and I think a basic income is the best solution).

Silhouette wrote:Think of government as just another customer/company.

I don't think this works. Most importantly, interactions with government are not voluntary. Taxes are paid at the implied point of a gun.

In a democracy, voting does aggregate a different kind of information, but most real-world voting systems do a really bad job (first-past-the-post voting misrepresents voter preferences; representatives are imperfect and have misaligned incentives). And people's votes aren't constrained in the way spending decisions are, so they vote on issues that don't affect them, or in ways that don't track to their knowledge or even very well to the actual economic impacts. The best voting systems are effectively market systems (e.g. futarchy). In existing governments, decisions are made on very poor quality information, so not much information is being passed into the market.

Plus, the government is so big that its buy/sell decisions can be very distorting when made on such bad information. A decisions by the federal government buy something for everyone in the army can absolutely swamp any competing good, and prop up entire industries that service demand that's concocted on bad information and motivated reasoning.

And government policies aren't simple buy/sell decisions, but decisions to alter the way that every other buy/sell decision is made. When a good is taxed or subsidized, it changes how every person in the economy behaves, it effects countless comparisons between the targeted goods and services and other goods and services that might be bought.

Even where the government wants to do good, where its aim is to support the 'price taker', its mechanisms are poorly suited to that, and end up distorting information more than they add information.

Silhouette wrote:Certain types of people will defend a cent being taken from them with much the same conviction that they will defend any amount, even if they wouldn't bend down to pick up plenty of them if they were lying unclaimed on the street with nobody looking.

While it's true that subjective valuations matter, there's an objective sense in which it must be the case that each marginal dollar is worth less than the preceding dollar. It's hard to compare across individuals, but within each individual we can say that if you desire two things of equal market price of $X, but value one thing at $Y and the other at $Z such that Y>Z, if you are given $X you will buy the thing you value more and get $Y-X surplus per item, and if you are given $2X you will buy both and get (Y+Z)-2X < Y-X surplus per item. So the first $X has gotten you more value than the second.

So if on average people's preferences are of equal weight, then redistributing the second $X to someone with nothing will on average add $Y-Z to society (ignoring the costs inherent in redistribution and the distortion it causes).
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