The Ghost of Full Employment

[Love As Arson]

After nearly two years of bad economic news, which topped off three decades of economic insecurity, perhaps it's understandable that we've grown indifferent to labor-market pains. We shrug at long-term double-digit unemployment. We greet the news of record-breaking poverty with a national yawn. We've come to believe that unconscionable levels of inequality are something natural to the social order.

The government's direct response to the jobs and poverty crisis has been simple indifference. Wedded to the idea that propping up the market will naturally lead to job growth, officials have responded with "solutions" drawn only from the narrow menu of economic fundamentalism -- tax cuts and stimulus. Now that gross domestic product is positive, the unemployment problem is mostly considered "structural" -- a skills mismatch -- and thus beyond our capacity to solve.

Yet not that long ago, in the midst of another long-term economic meltdown, politicians dared to think beyond the idea that growth alone would solve all problems. National leaders, including mainstream politicians in both parties, went so far as to propose a federally mandated and legally enforceable right to a job for every American.

That's right -- the federal guarantee of a job.

Their premise? That people's livelihoods are too important to be left to market mechanisms. As Jimmy Carter's secretary of labor, Ray Marshall, used to say, when the invisible hand goes to work in the labor market, it's all thumbs.

In 1974, when the United States faced another period of double-digit unemployment and global economic crisis, stalwart liberal Sen. Hubert Humphrey and Rep. Augustus Hawkins, an African American from Los Angeles, teamed up to advance a seductive idea: national planning that wouldn't simply promote growth, support Wall Street, or prop up consumption but ensure a job for every person.

Back then, post-World War II economic growth had lost its magic, seeming no longer capable of generating jobs in the stagflation years of the 1970s. So Humphrey and Hawkins looked to revive Franklin Roosevelt's famous Economic Bill of Rights, the core of which was, as FDR explained in 1944, "the right to a useful and remunerative job in the industries or shops or farms or mines of the nation." The aggressive Keynesianism of the Humphrey-Hawkins Act was simple in concept: Federal policy should promote full employment (defined variously as unemployment rates of only 3 percent or 4 percent), and if that failed, government would then be triggered as the employer of last resort.

Most important, supporters believed, a shared economic lot would bring people together, overriding the divisive cultural battles over Vietnam, civil rights, and affirmative action. As Humphrey argued, full employment offered "common denominators -- mutual needs, mutual wants, common hopes, the same fears" -- needed to bring Americans back together in a shared economic agenda. In the parlance of the civil-rights movement, full employment went beyond a seat at the lunch counter -- it offered everyone the ability to buy the hamburger.

Economic-planning advocates felt that our very ability to govern ourselves was at stake. "If the greatest free nation in the history of mankind has to get down on its knees in fear of something as abstract and as arbitrary as these so-called free-market forces," Humphrey explained to Congress in 1976, "well then, we're through. We might just as well haul down the flag, lock up the Capitol, go home, and admit that we don't have the courage or the imagination to govern ourselves."

To contemporary ears, the idea of a federally guaranteed job sounds like crazy talk, but the astonishing historical fact is that the Humphrey-Hawkins Act had the legitimacy to be passed and signed into law. Many of its mechanisms were cumbersome and complex, however, and a combination of fears of inflation and the lack of a history of federal planning raised big concerns despite the lobbying of labor and the civil-rights groups. Between its introduction in 1974 and the final vote in 1978, Carter and his advisers twisted and then eviscerated the Humphrey-Hawkins Act to give the Democratic base a symbolic "win" with little effect on economic planning. The national press rightfully called this latter-day incarnation "a cruel hoax" that held out "the hope -- but not the reality -- of a job." Then the administration lurched right before losing to someone who was a lot better at governing from the right wing -- Ronald Reagan.

Today, as a similar economic malaise haunts the land, we don't need the particular policies of full employment, but we sure need that spirit and imagination. Despite its failure to deliver much of anything, the Humphrey-Hawkins Act serves as a striking example of national leaders thinking boldly about the collective economic well-being of the citizenry. As Paul Krugman put it earlier this week in his New York Times column, "Our unemployment crisis could be cured very quickly if we had the intellectual clarity and political will to act."

The current economic debate has grown sterile and inbred, locked in the type of scenario Humphrey feared -- one in which we sit powerless in the face of massive economic problems. Nary a word is uttered today of alternative visions for how we might organize ourselves economically or what the government should be besides a prop to the largest and most powerful voices in the private sector. President Barack Obama's failure is not on specific policy grounds; it is in his more significant inability to help the nation reimagine a constructive role for the state. Rather than serving as protector, the government has merely proved itself a benefactor of the most wealthy and powerful, those who have already gobbled up most of the increase in wealth and income since the 1970s.

The boldness of the Humphrey-Hawkins Act remains a forgotten artifact of a bygone political era, buried deep in the ideological layers of the post-Reagan world. Perhaps it's time to dig it up and ask ourselves if we are in fact through, as Humphrey dreaded, and whether we actually have the courage and imagination to govern ourselves.

http://www.prospect.org/cs/articles?article=the_ghost_of_full_ employment

[Ricketts]

Most important, supporters believed, a shared economic lot would bring people together, overriding the divisive cultural battles over Vietnam, civil rights, and affirmative action.


This makes me want to vomit.

[Love As Arson]

And?

[<*)))><]

He is going to find an article, then copy and paste it to a website.

[Ricketts]

And?

Nothing else. Debates about policy never turn out well when conducted over the internet so that's my input.

[caveBEAR]

Nothing else. Debates about policy never turn out well when conducted over the internet so that's my input.

:ok:

[jawstheme]

Good read. I had never heard of the Humphrey-Hawkins Act.

[Scrandon]

I could get on board with something like this IF the government actively worked to control growth and prevent recessions from happening in the first place.

[x togepi x]

I could get on board with something like this IF the government actively worked to control growth and prevent recessions from happening in the first place.

why not just bite the bullet and just be socialist anyway then?

[caveBEAR]

why not just bite the bullet and just be socialist anyway then?

:viking:THE ONLY GOOD COMMUNIST IS A DEAD COMMUNIST!!!



(:rolleyes:)

[Scrandon]

why not just bite the bullet and just be socialist anyway then?

That's further down the line than I think is necessary right now.

[Zeran]

i'm 100% in support of full employment.

[x togepi x]

That's further down the line than I think is necessary right now.

except for recessions/depressions are a crucial part of capitalist economics so how do you propose the government keep them from happening? how should the government "regulate growth"given how at some point growth is going to come into conflict with resource usage?

it isn't as if communist/socialists and capitalists have different forms of economics. they share the same fundamental views on how the economy works, the groups just value/want to focus on different things about the economy.

[Scrandon]

except for recessions/depressions are a crucial part of capitalist economics so how do you propose the government keep them from happening? how should the government "regulate growth"given how at some point growth is going to come into conflict with resource usage?
It's simple, higher taxes and interest rates during periods of growth, which will curb over-consumption and over-investment. Recessions are only 'crucial' when the economy has overextended itself to begin with. If there was a central planning organization to prevent that (which was the case during WWII and ensuing decades) recessions would certainly be avoidable. Thus, we could be left with a stable trend of upward growth, as opposed to the business cycle that we all have to deal with now.

Of course, that does require politicians who are willing to prevent economic growth and a system of government that can more adequately meet the demands of a fast-paced 21st century economy.

it isn't as if communist/socialists and capitalists have different forms of economics. they share the same fundamental views on how the economy works, the groups just value/want to focus on different things about the economy.

[Love As Arson]

I don't think we need politicians. If we're going to plan the economy, I think people should be in control, since it relates to their interests and needs.

[Scrandon]

Haven't we come to the conclusion that the overwhelming majority of people don't know very much? Many cannot even be held accountable to vote for what is in their best interest, let alone plan an economy.

[Love As Arson]

Haven't we come to the conclusion that the overwhelming majority of people don't know very much? Many cannot even be held accountable to vote for what is in their best interest, let alone plan an economy.
The individuals on Wall Street had a great deal of knowledge and look what they've done. I have to imagine a worker would be better at planning an economy because his interests line up with the vast majority of the people in this country, as opposed to people planning an economy for the interests of a minority at the top.

[Scrandon]

For example, look at all the people who think that illegal immigrants are detriment to the economy, when, in fact, they are part of its foundation. How can you expect these same people to add anything of value?

[Love As Arson]

For example, look at all the people who think that illegal immigrants are detriment to the economy, when, in fact, they are part of its foundation. How can you expect these same people to add anything of value?
I would argue the idea of worker vs. worker is something inherent to the capitalist economy. Generally speaking, however, people's ideas change as they struggle and groups who were depicted as threats, when it comes to initiating reforms or rebellion, can come to be understood as allies.

[x togepi x]

It's simple, higher taxes and interest rates during periods of growth, which will curb over-consumption and over-investment. Recessions are only 'crucial' when the economy has overextended itself to begin with. If there was a central planning organization to prevent that (which was the case during WWII and ensuing decades) recessions would certainly be avoidable.

I'm not entirely sure why you think there are advantages to centralized planning that aren't involved in full borne socialism.


Thus, we could be left with a stable trend of upward growth, as opposed to the business cycle that we all have to deal with now.

except the resources thing I was talking about will make sure this is impossible. You can't have infinite growth in a finite world.

Of course, that does require politicians who are willing to prevent economic growth and a system of government that can more adequately meet the demands of a fast-paced 21st century economy.

we both know that wouldn't happen given corporate influence on politics.

[Scrandon]

I would argue the idea of worker vs. worker is something inherent to the capitalist economy. Generally speaking, however, people's ideas change as they struggle and groups who were depicted as threats, when it comes to initiating reforms or rebellion, can come to be understood as allies.

The point that was meant to illustrate the ignorance that many Americans have regarding the driving forces of the economy. Im going to put my faith in the hands of economic researchers and scholars and I'm going to vote in politicians who are willing to listen to and pursue the recommended policy. Meanwhile, the people who think that immigrants are stealing our jobs can do whatever they do best, chances are it has nothing to do with economics.

[Scrandon]

I'm not entirely sure why you think there are advantages to centralized planning that aren't involved in full borne socialism.

except the resources thing I was talking about will make sure this is impossible. You can't have infinite growth in a finite world.
It's worked so far. As one resource dries up, many others replace it.
How does socialism not require growth? The economy has to grow under either structure.

we both know that wouldn't happen given corporate influence on politics.
That could be fixed as well.

[x togepi x]

It's worked so far. As one resource dries up, many others replace it.

Yeah...try telling that to someone who lives in Africa where even fucking water is scarce. The successes of capitalism are largely built upon the exploitation of the third world.

How does socialism not require growth? The economy has to grow under either structure.

I've never said it doesn't require growth, it just doesn't put it on a pedestal like capitalism does. you're forgetting about how ideology/culture effects decisionmaking within that system. It would be much easier to make an argument against a certain kind of growth that would be harmful than it would under a capitalist system because we wouldn't be operating in a growth-based system.

That could be fixed as well.
maybe.

[Zeran]

how would a centrally planned economy under workers differ from that of the system that, say, the soviet union used? i'm not an expert, but i was reading an economics textbook the other day that listed several deficiencies that are inherent in a centrally planned economy.

[Love As Arson]

The point that was meant to illustrate the ignorance that many Americans have regarding the driving forces of the economy. Im going to put my faith in the hands of economic researchers and scholars and I'm going to vote in politicians who are willing to listen to and pursue the recommended policy. Meanwhile, the people who think that immigrants are stealing our jobs can do whatever they do best, chances are it has nothing to do with economics.
Prior to the civil rights movement, white workers thought black workers were a detriment to their economic well-being and, to a certain extent, there was merit to it because capitalism pitted them against each other; however, as the struggle progressed, and victories were won, solidarity increased. It isn't automatic, it has to be fought for. Economic scholars/researchers aren't objective, they are influenced by the same forces as we are. Milton Friedman, for example, was an exceptional scholar by most standards and yet he supported totalitarianism because it helped his free-market ideology. On the other hand, if one looks at the anarchists in the Spanish countryside in 1936, one sees democratic planning of the economy, an increase in freedoms and an economy which flourished. There are even modern examples when we look at the actions which took place at Republic Windows and Doors. These were average workers, but they realized the power they wielded in their numbers and they took action. Their "ignorance" didn't prevent them from winning concessions and that is merely a microcosm of what is possible when one considers the degree to which workers are aware of their exploitation under the current system.

how would a centrally planned economy under workers differ from that of the system that, say, the soviet union used? i'm not an expert, but i was reading an economics textbook the other day that listed several deficiencies that are inherent in a centrally planned economy.
The Soviet Union didn't have an economy which was planned by workers. The state functioned as a large corporation, essentially.

[Zeran]

right. but are there not inherent weaknesses in a centrally-planned economy, whether by the state or by workers, that are not the same as in a free-market approach?

edit:
http://econ.la.psu.edu/~bickes/rickcommand.pdf

A major problem is that detailed planning and the corresponding directives are often late,
are insufficiently detailed, may lack the requisite information, hence often cannot be effectively
coordinated, and owing to their rigidity are peculiarly vulnerable to uncertainty

Information in the command sector, by the logic of the system, tends to flow vertically, up and
down the administrative hierarchy, rather than horizontally, between buyer and seller, adding to
difficulties of demand-supply coordination by informationally isolating operational units from their
suppliers and users. In addition, problems of motivation, accountability (down as well as up),
inappropriate decision-making parameters, and divergent interests complicate the procedure.

there's more, but i don't quite understand all of it (economics isn't my strongest suit). would these types of problems though be any different under an economy planned by workers rather than the state?

[Love As Arson]

The difference between a market economy and an economy planned by workers is, the former is irrational. So, for example, because we produce so much food, we destroy a great deal in order to maintain a profit, yet we know that there is a great majority of people who go hungry on a daily basis. What Marxists argue is, socialism eradicates the basis for capitalist exchange and the market itself. Instead of an intangible market, the basis for production is material need. We have four million homes that have gone unsold after the mortgage crisis and we know millions are homeless, so those homes, for example, would be produced/given to those who are in need of them. Now to address a command economy, by virtue of the fact that it leaves in untouched much of the capitalist dynamic, remains subject to the same problems as capitalism, namely crisis and false scarcity. Part of the reason for this is those who are planning it in the state have objectively different interests from workers. It creates a situation, much like Stalinist Russia, in which an entrenched bureaucracy uses the state as a corporation which does not allocate according to the needs of the population, but rather the needs the state. These are opposing interests, insofar as the state is necessarily an institution of power which exists above and separate from the population; we saw, for example, the destruction of worker's rights in state-capitalist countries in the Eastern Bloc. In contrast, the dictatorship of the proletariat destroys such institutions of power and utilizes the productive forces in a much different context, i.e., there is no market as such, competition is done away with and solidarity based on addressing communal needs as the basis. As there is a more direct relation between those who produce and the needs for which items are being produced, there exists no basis for overproduction or miscalculation.

[GuitarR0cker1]

This thread reminds me of the time when my Macroeconomics teacher tried to say that unemployment benefits were a Socialist idea. My eyes rolled to the back of my head.

[Scrandon]

The difference between a market economy and an economy planned by workers is, the former is irrational. So, for example, because we produce so much food, we destroy a great deal in order to maintain a profit, yet we know that there is a great majority of people who go hungry on a daily basis. What Marxists argue is, socialism eradicates the basis for capitalist exchange and the market itself. Instead of an intangible market, the basis for production is material need. We have four million homes that have gone unsold after the mortgage crisis and we know millions are homeless, so those homes, for example, would be produced/given to those who are in need of them. Now to address a command economy, by virtue of the fact that it leaves in untouched much of the capitalist dynamic, remains subject to the same problems as capitalism, namely crisis and false scarcity. Part of the reason for this is those who are planning it in the state have objectively different interests from workers. It creates a situation, much like Stalinist Russia, in which an entrenched bureaucracy uses the state as a corporation which does not allocate according to the needs of the population, but rather the needs the state. These are opposing interests, insofar as the state is necessarily an institution of power which exists above and separate from the population; we saw, for example, the destruction of worker's rights in state-capitalist countries in the Eastern Bloc. In contrast, the dictatorship of the proletariat destroys such institutions of power and utilizes the productive forces in a much different context, i.e., there is no market as such, competition is done away with and solidarity based on addressing communal needs as the basis. As there is a more direct relation between those who produce and the needs for which items are being produced, there exists no basis for overproduction or miscalculation.

Out of all the possibilities of a central planning authority, you go for Soviet Russia. Nobody is arguing for the case of the Soviet Union. The kind of system I had in mind was a more robust version of the institutions we have had, that influence the economy in ways we already know that work.

No authority could effectively set prices, I agree. It's not necessary for them to be that involved to manage and stabilize the economy.

[x togepi x]

This thread reminds me of the time when my Macroeconomics teacher tried to say that unemployment benefits were a Socialist idea. My eyes rolled to the back of my head.

it is a socialist idea though.

Out of all the possibilities of a central planning authority, you go for Soviet Russia. Nobody is arguing for the case of the Soviet Union. The kind of system I had in mind was a more robust version of the institutions we have had, that influence the economy in ways we already know that work.

No authority could effectively set prices, I agree. It's not necessary for them to be that involved to manage and stabilize the economy.

you're taking a lot for granted here. you're talking about institutions that work on top of the hierarchical structure but ignoring that these institutions may not have the same solvency when someone like China takes over the title of economic top dog.

[Scrandon]

you're taking a lot for granted here. you're talking about institutions that work on top of the hierarchical structure but ignoring that these institutions may not have the same solvency when someone like China takes over the title of economic top dog.
I'm not sure what you're getting at.

[mcm1610]

Wasn't that actually a major cause for socialists 70 years ago? Unemployment benefits, that is. How can you argue they AREN'T?

[x togepi x]

I'm not sure what you're getting at.

I'm saying that your claim that we know certain types of economic policies work, in the sense that they can regulate growth and make downturns less harsh, is predicated on the fact that those policies are/were done by someone at the top of the economic ladder. given that many people believe China or the EU will take the US's place as the most powerful/important economy, I don't think you can speak with that much certainty that your idea will work.

we already know that the effectiveness of economic policies is dependent on one's status in the system based on how First World countries are able to accrue insanely large debts without really having to change their policies while the IMF punishes the Third World for doing the same thing.

I would think that the effectiveness of a planned economy is going to be, on some level, dependent on market forces, which are going to be influenced by the dominant economy.

[Scrandon]

I'm saying that your claim that we know certain types of economic policies work, in the sense that they can regulate growth and make downturns less harsh, is predicated on the fact that those policies are/were done by someone at the top of the economic ladder. given that many people believe China or the EU will take the US's place as the most powerful/important economy, I don't think you can speak with that much certainty that your idea will work.

we already know that the effectiveness of economic policies is dependent on one's status in the system based on how First World countries are able to accrue insanely large debts without really having to change their policies while the IMF punishes the Third World for doing the same thing.

I would think that the effectiveness of a planned economy is going to be, on some level, dependent on market forces, which are going to be influenced by the dominant economy.

I don't know, it's tough to say. Somehow we're getting back into that 'predicting the future' territory. I will, however, maintain that a government can have a great deal of influence over its economy, regardless of how comparatively large that economy is. The periods of most regulation during our history were at times when the USSR was a very formidable economic competitor.

[GuitarR0cker1]

it is a socialist idea though.

Doesn't the idea of unemployment benefits run against socialism because the idea of being unemployed is tied to the business cycle and thus capitalism? Obviously socialists have advocated for unemployment benefits but I don't think that makes it a socialist idea. Do you think that the idea of a social safety net is a socialist idea? I mean Bismarck implemented the first beginnings of a modern welfare state...

The real question is are modern socialist ideas/policy even socialist?

[mcm1610]

They'd surely be socialist responses to a short term problem. Short term being defined as an amount of time too short to change to a truly socialist system of existence.

[Love As Arson]

Out of all the possibilities of a central planning authority, you go for Soviet Russia. Nobody is arguing for the case of the Soviet Union. The kind of system I had in mind was a more robust version of the institutions we have had, that influence the economy in ways we already know that work.

No authority could effectively set prices, I agree. It's not necessary for them to be that involved to manage and stabilize the economy.
The person I was responding to posted an article about command economies, which is essentially what Soviet Russia was, so I used it as an example.

[<*)))><]

If full employment is achieved then inflaction would be crazy and in the long run create a higher level of unemployment.

[Love As Arson]

That isn't inevitable.

[<*)))><]

That isn't inevitable.

Explain?

[Scrandon]

Full employment creates higher unemployment. Well who knew?

[saysmydoctor]

Full employment creates higher unemployment. Well who knew?
http://www.audiobooksonline.com/media/Catch-22-Joseph-Heller-unabridged-compact-discs-Harper-Audio.jpg

[caveBEAR]

Full employment creates higher unemployment. Well who knew?

Well, duh. If everyone's working, think of all the people who won't be working.

[Scrandon]

Haha, that kid is somethin' else.

[caveBEAR]

Haha, that kid is somethin' else.

Me?

[Scrandon]

Me?

No, Fishbones and his voodoo economics.

[caveBEAR]

No, Fishbones and his voodoo economics.

Got it. I was gonna say...I knew I was being simplistic, but...

[Love As Arson]

Explain?
Assuming full employment were a real goal, it would require government intervention to a greater degree and the government can act to stabilize prices. What's more, if the employment individuals received provided good pay, benefits, and so on, it offsets the price increases.

[Scrandon]

Not to mention the point of full employment includes only modest, sustainable inflation. Nothing that's going to cause problems. It's beyond that when you run into trouble.

[x togepi x]

I don't know, it's tough to say. Somehow we're getting back into that 'predicting the future' territory. I will, however, maintain that a government can have a great deal of influence over its economy, regardless of how comparatively large that economy is. The periods of most regulation during our history were at times when the USSR was a very formidable economic competitor.

The periods you speak of are when we were in a bipolar world with one pole being supposedly anticapitalist. I don't think you can make such claims currently when there are new economic forces like China or India or the EU. The only reason you can say the US economy is comparatively large is because India and China haven't reached their full economic power yet. If they do, their economy would greatly dwarf the US given that they both have a billion people.

Doesn't the idea of unemployment benefits run against socialism because the idea of being unemployed is tied to the business cycle and thus capitalism? Obviously socialists have advocated for unemployment benefits but I don't think that makes it a socialist idea. Do you think that the idea of a social safety net is a socialist idea? I mean Bismarck implemented the first beginnings of a modern welfare state...

The real question is are modern socialist ideas/policy even socialist?


The idea of unemployment benefits doesn't run against the ideas of socialism. I agree that being unemployed is tied to the business cycle, however, a socialist/communist is going to point out that the reason this is really problematic is that having a large amount of unemployed people makes it so there's vastly increased competition for jobs which drives pay, benefits, and worker's rights down, as well as keeps people who do have jobs in line for fear of losing theirs. Unemployment benefits/right to a job would lessen this competition because people would be less likely to be desperate for work. Depending on how the system would work, one might feasibly be able to hold out for a decent job instead of taking the first thing that comes along (no matter how shitty).

It's a socialist idea because the socialists were the ones who started this advocacy. Yes, we can point out that capitalist economies have used this influence as a moderating force on their own systems, which many believe to be why we still have capitalism instead of something else, but you can't deny that idea is socialist.

[<*)))><]

Assuming full employment were a real goal, it would require government intervention to a greater degree and the government can act to stabilize prices. What's more, if the employment individuals received provided good pay, benefits, and so on, it offsets the price increases.
That would create more inflation if people suddenly got a pay raise. The more they get in pay the more prices will go and that will be a never ending cycle.

[Love As Arson]

That would create more inflation if people suddenly got a pay raise. The more they get in pay the more prices will go and that will be a never ending cycle.
The starting point is that workers do not get paid fully for the amount of work that they do in the first place, which is how profit exists. As a mere reform, paying them more doesn't necessarily increase prices since businesses still accrue profits. It may not be at the extraoridinary amounts they are used to, but it will have to suffice.

[<*)))><]

The starting point is that workers do not get paid fully for the amount of work that they do in the first place, which is how profit exists. As a mere reform, paying them more doesn't necessarily increase prices since businesses still accrue profits. It may not be at the extraoridinary amounts they are used to, but it will have to suffice.

Prices will go up because if people have more money they will spend more and then it becomes supply and demand. More demand same supply = higher prices aka inflation

[Love As Arson]

Prices will go up because if people have more money they will spend more and then it becomes supply and demand. More demand same supply = higher prices aka inflation
If more people are working, then the more productive power that is shifted toward providing those commodities. In any event, I do not think supply and demand actually function in our reality as they do as concepts in economic theory.

[<*)))><]

If more people are working, then the more productive power that is shifted toward providing those commodities. In any event, I do not think supply and demand actually function in our reality as they do as concepts in economic theory.

With full employment prices workers get paid will go up considerably because of supply and demand. Then in order to add to those commodities it takes time to build the factories and shelf space is also very limited. Supply and demand is what the stock market is based on and all of those other indexes. Just another note with full employment people are always changing jobs and at a given point in the US it averages 2%. So really 2% in the is basically full employment and if we can make that happen without forcing people into under skilled jobs then it would be a perfect economic situation.

[Love As Arson]

With full employment prices workers get paid will go up considerably because of supply and demand. Then in order to add to those commodities it takes time to build the factories and shelf space is also very limited. Supply and demand is what the stock market is based on and all of those other indexes.
The value of a commodity isn't determined by wages, though.

[<*)))><]

The value of a commodity isn't determined by wages, though.
It is valued by the person buying it and if they have more money they will be willing to spend more.

[Sonic222]

I govern myself just fine, thank you.

[x togepi x]

It is valued by the person buying it and if they have more money they will be willing to spend more.

That isn't true at all.

[<*)))><]

That isn't true at all.
Why are people willing to live in high tax state when they can get the same thing for less in a lower tax state?

[GuitarR0cker1]

The idea of unemployment benefits doesn't run against the ideas of socialism. I agree that being unemployed is tied to the business cycle, however, a socialist/communist is going to point out that the reason this is really problematic is that having a large amount of unemployed people makes it so there's vastly increased competition for jobs which drives pay, benefits, and worker's rights down, as well as keeps people who do have jobs in line for fear of losing theirs. Unemployment benefits/right to a job would lessen this competition because people would be less likely to be desperate for work. Depending on how the system would work, one might feasibly be able to hold out for a decent job instead of taking the first thing that comes along (no matter how shitty).

It's a socialist idea because the socialists were the ones who started this advocacy. Yes, we can point out that capitalist economies have used this influence as a moderating force on their own systems, which many believe to be why we still have capitalism instead of something else, but you can't deny that idea is socialist.
I'll agree with this. I won't go Stalinist on you and try and advocate that only "social fascists" would try and prop up any form of capitalism, even if in doing so you would create better conditions for workers. I just think that the idea of using unemployment benefits or any form of social policy in the West as means towards creating a socialist society has died out. Social democratic parties might use socialist ideas but they will be used towards creating an "ideal" form of capitalism. In that sense socialism is mostly dead even if some of its values and ideas have lived on.

Just curious but what is your opinion of social democracy?

[Scrandon]

Prices will go up because if people have more money they will spend more and then it becomes supply and demand. More demand same supply = higher prices aka inflation
We have inflation right now despite nearly 10% unemployment. Go figure.
With full employment prices workers get paid will go up considerably because of supply and demand. Then in order to add to those commodities it takes time to build the factories and shelf space is also very limited. Supply and demand is what the stock market is based on and all of those other indexes. Just another note with full employment people are always changing jobs and at a given point in the US it averages 2%.
You really have no idea what you're talking about, do you?

[...] basically full employment and if we can make that happen without forcing people into under skilled jobs then it would be a perfect economic situation.
Weren't you just arguing against this? Remember the inflation? Jeez.
Why are people willing to live in high tax state when they can get the same thing for less in a lower tax state?
You're kidding?
Why do we even bother with you?

[open mind]

privatization equals job cuts. there may be a few exemptions to that rule here and there, but by and large handing things over to corporations means job cuts and worse service at higher prices.

[Tec Mason]

Ah the fetish of full employment. when championing the right to work and 100% employment ask yourself:

- Am I violating someone else's rights by supporting this?
- would the world's resources be squandered?
- Would a right to work law increase people's standard of living?
- Why is full employment a good thing?

My Answers* :

1) Yes. It violates peoples right to not want to hire you.
2) Yes. in order to keep people working, the government would sponsor many make-work programs that inefficiently use resources.
3) Yes (short term) No (long term). In the short term, people who receive a paycheck would be able to use their purchasing power on current prices and benifit. Long term, there will be shortages on goods. Goods and services which are inelastic would be rationed, making them harder to get now.
4) Full Employment is a good thing because it means that everyone in the country is producing goods and services that other people need, and in return are receiving money to buy goods and services that they need. Right-to-work laws force employment artificially which does not achieve the goal of increasing everyone's standard of living. The only reason employment is good is because it is a means to an end, the end being a better life. Employment for employment's sake is a disastrous philosophy which causes shortages of goods and services, less natural resources, a violation of employer's rights, and a lower standard of living for everyone.

My Solution*: Abolish the minimum wage, get rid of every single public welfare program. Employment and Real Wages will rise. Nominal wages will fall. Nominal and Real Prices will fall. Private welfare/Charity will rise.

*these are opinions. I don't have the time for sources nor do i think people read them so I am making a very nonacademic response. I probably will not respond to a rebuttal but feel free to post why I am a luny. Hopefully I sparked a fire for you guys :)

[Love As Arson]

It is valued by the person buying it and if they have more money they will be willing to spend more.

"The dogma that “wages determine the price of commodities,” expressed in its most abstract terms, comes to this, that “value is determined by value,” and this tautology means that, in fact, we know nothing at all about value. Accepting this premise, all reasoning about the general laws of political economy turns into mere twaddle. It was, therefore, the great merit of Ricardo that in his work on the principles of political economy, published in 1817, he fundamentally destroyed the old popular, and worn-out fallacy that “wages determine prices,” a fallacy which Adam Smith and his French predecessors had spurned in the really scientific parts of their researches, but which they reproduced in their more exoterical and vulgarizing chapters."

http://www.marxists.org/archive/marx/works/1865/value-price-profit/ch01.htm#c5

[Scrandon]

Ah the fetish of full employment. when championing the right to work and 100% employment ask yourself:

- Am I violating someone else's rights by supporting this?
- would the world's resources be squandered?
- Would a right to work law increase people's standard of living?
- Why is full employment a good thing?

My Answers* :

1) Yes. It violates peoples right to not want to hire you.
The government could hire, much like they do now. I could even see them expanding into many more industries as well. There would be no motivation to cut costs by dubious means because the government really couldn't do anything with profit. All employees would be on a fixed income and there are no shareholders demanding profitability. However, they would still be held accountable for gross misuse of resources (tax dollars), as they are now.

2) Yes. in order to keep people working, the government would sponsor many make-work programs that inefficiently use resources.
The inefficiency argument is just not the right argument to be making here. We just don't care about a slight deadweight loss so long as a large number of peoples' lives are improved.

3) Yes (short term) No (long term). In the short term, people who receive a paycheck would be able to use their purchasing power on current prices and benifit. Long term, there will be shortages on goods. Goods and services which are inelastic would be rationed, making them harder to get now.
No, the price could rise and those who value the good the most would buy it. This would only be the case for certain luxury commodities so it's not really an issue that relates to quality of life.

4) Full Employment is a good thing because it means that everyone in the country is producing goods and services that other people need, and in return are receiving money to buy goods and services that they need. Right-to-work laws force employment artificially which does not achieve the goal of increasing everyone's standard of living. The only reason employment is good is because it is a means to an end, the end being a better life. Employment for employment's sake is a disastrous philosophy which causes shortages of goods and services, less natural resources, a violation of employer's rights, and a lower standard of living for everyone.
Avoiding recessions would increase everyone's standard of living. This is the intended goal.

My Solution*: Abolish the minimum wage, get rid of every single public welfare program. Employment and Real Wages will rise. Nominal wages will fall. Nominal and Real Prices will fall.
That just makes no sense. Abolishing the minimum wage will decrease the wage of nearly everyone who is employed at that level. Establishing a price floor has zero effect if the equilibrium price is above it to begin with (which you seem to be arguing).
A price floor is a government- or group-imposed limit on how low a price can be charged for a product.[1] For a price floor to be effective, it must be greater than the equilibrium price.
Therefore, if minimum wage is abolished, the wage will go down to where the equilibrium price is, which is definitely not a living wage.

Private welfare/Charity will rise.
Certainly not enough to cover what was lost from abolishing welfare.

*these are opinions. I don't have the time for sources nor do i think people read them so I am making a very nonacademic response. I probably will not respond to a rebuttal but feel free to post why I am a luny. Hopefully I sparked a fire for you guys :)
Any source would just be someone else's opinion on what would happen, since, you know, market anarchy never has existed.

[<*)))><]

"The dogma that “wages determine the price of commodities,” expressed in its most abstract terms, comes to this, that “value is determined by value,” and this tautology means that, in fact, we know nothing at all about value. Accepting this premise, all reasoning about the general laws of political economy turns into mere twaddle. It was, therefore, the great merit of Ricardo that in his work on the principles of political economy, published in 1817, he fundamentally destroyed the old popular, and worn-out fallacy that “wages determine prices,” a fallacy which Adam Smith and his French predecessors had spurned in the really scientific parts of their researches, but which they reproduced in their more exoterical and vulgarizing chapters."

http://www.marxists.org/archive/marx/works/1865/value-price-profit/ch01.htm#c5
I disagree with that passage.

[caveBEAR]

I disagree with that passage.

:lol:

[Love As Arson]

I disagree with that passage.

Why?

[<*)))><]

Why?
From what I understand it he is saying that we don't know how to asses something value. If misinterpreted please explain it.

[Love As Arson]

From what I understand it he is saying that we don't know how to asses something value. If misinterpreted please explain it.
He is saying that those who assert wages determine price do not understand how to assess value; that is, it amounts to asserting value is determined by value and it tells us nothing of where the value itself comes from. Marx argues that the value is derived from the amount of labor time that goes into producing a given commodity.

[<*)))><]

He is saying that those who assert wages determine price do not understand how to assess value; that is, it amounts to asserting value is determined by value and it tells us nothing of where the value itself comes from. Marx argues that the value is derived from the amount of labor time that goes into producing a given commodity.
But value is from the prospective of the buyer because if it took a lot of labor to make but no one wants it is worthless.

[Love As Arson]

But value is from the prospective of the buyer because if it took a lot of labor to make but no one wants it is worthless.
Even if no one buys it, it has been imbued with value because labor was spent making it. What you are referring to is use-value, which is something different in the exchange of commodities.

[Scrandon]

But value is from the prospective of the buyer because if it took a lot of labor to make but no one wants it is worthless.

Value is in the eye of the beholder.

[Tec Mason]

There would be no motivation to cut costs by dubious means because the government really couldn't do anything with profit.

*head explodes*

[Tec Mason]

Arson, Beer, i love discussing this stuff especially with you guys but help me out here. I shouldn't have to explain how government institutions have the incentive to rip people off. even you guys see that right?

EDIT: sory guys just after that Scrandon post i find it hard to discuss this stuff. It would take me hours to reply to his critiques of my claims. Instead I would like some of you pro-state people or pro-democracy/marxism people to answer the questions i asked instead of rebutting mine.

[Tec Mason]

Even if no one buys it, it has been imbued with value because labor was spent making it.

This is probably where me and Arson fundamentally see different worlds. I disagree 100% with his statement. There is nothing magical about labor that adds value. Value is an opinion of worth to a human being. different people can value the same thing in different ways according to how much utility (happiness) they gain from the thing. There is no measureable, objective thing called "value" that can be added to an object.

[Love As Arson]

This is probably where me and Arson fundamentally see different worlds. I disagree 100% with his statement. There is nothing magical about labor that adds value. Value is an opinion of worth to a human being. different people can value the same thing in different ways according to how much utility (happiness) they gain from the thing. There is no measureable, objective thing called "value" that can be added to an object.
It is not magical if one understands that labor is also a commodity, with a particular value and skill to produce value. Further, marginalism does not explain how, in the shifting needs of the masses, with varying opinions and determinations of worth, one gets uniform expression in the form of price tags.

[caveBEAR]

Arson, Beer, i love discussing this stuff especially with you guys but help me out here. I shouldn't have to explain how government institutions have the incentive to rip people off. even you guys see that right?

I think you're viewing government as it is now, not as LAA and I tend to think of 'how it could be'. If governments and government officials couldn't/didn't rip people off, they could just be beneficial.

I'm at work, hopefully I can get into this deeper tonight, but I can't right now. I apologize for such a bare reply.

[Love As Arson]

Arson, Beer, i love discussing this stuff especially with you guys but help me out here. I shouldn't have to explain how government institutions have the incentive to rip people off. even you guys see that right?
Which is why I believe it is necessary to make institutions culpable to the average person.

[crackedthesky]

This is probably where me and Arson fundamentally see different worlds. I disagree 100% with his statement. There is nothing magical about labor that adds value. Value is an opinion of worth to a human being. different people can value the same thing in different ways according to how much utility (happiness) they gain from the thing. There is no measureable, objective thing called "value" that can be added to an object.

Then money has no value either, right?

[Tec Mason]

Then money has no value either, right?
Correct. Money has no value outside what you value it as. there is no objective value of money.

perfect example is pennies and the 100 dollar bill. sure, 10,000 pennies is legally the same as a 100 dollar bill, but most people value the 100 bill greater. In the other direction, most people value five 20 dollar bills over one 100 dollar bill. This of course is getting way off track.

My point is that one cannot observe "labor" and objectively say "that has a value of 7x."

[crackedthesky]

Correct. Money has no value outside what you value it as. there is no objective value of money.

perfect example is pennies and the 100 dollar bill. sure, 10,000 pennies is legally the same as a 100 dollar bill, but most people value the 100 bill greater. In the other direction, most people value five 20 dollar bills over one 100 dollar bill. This of course is getting way off track.

My point is that one cannot observe "labor" and objectively say "that has a value of 7x."

Then your disagreement with what Arson said is incorrect. Something with little monetary value can indeed have labour value. How else do you explain the entire concept of the brand? I can go to Wal-Mart and buy a pair of jeans for $18, but that doesn't stop people from going to abercrombie and buying a pair of jeans for $100. Both sets of jeans are made of denim and probably cost the same to make, but the Abercrombie pair will likely be stylized, i.e. different labour went into it, therefore, that labor is evidently worth $82. I've just assigned a quanitfiable amount of value to labor.

[<*)))><]

Then your disagreement with what Arson said is incorrect. Something with little monetary value can indeed have labour value. How else do you explain the entire concept of the brand? I can go to Wal-Mart and buy a pair of jeans for $18, but that doesn't stop people from going to abercrombie and buying a pair of jeans for $100. Both sets of jeans are made of denim and probably cost the same to make, but the Abercrombie pair will likely be stylized, i.e. different labour went into it, therefore, that labor is evidently worth $82. I've just assigned a quanitfiable amount of value to labor.

That is just precieved value, when someone goes to Abercrombie they think that these jeans will some how help while the Walmart jeans will not. There is nothing different in terms of labor but people just think one is better then the other. It is the same with money look at a dollar bill and it will say it is backed by the US Goverment which the only value it has is te goverment saying it has some value.

[crackedthesky]

That is just precieved value, when someone goes to Abercrombie they think that these jeans will some how help while the Walmart jeans will not. There is nothing different in terms of labor but people just think one is better then the other. It is the same with money look at a dollar bill and it will say it is backed by the US Goverment which the only value it has is te goverment saying it has some value.

You're changing the subject. What I said stands regardless of whether anybody buys the pants or not. I was talking about the differences in the pants themselves, design differences. That has nothing to do with prospective buyer perception. It's true that people will think the more expensive ones are better, but the more expensive ones will be designed differently to capture this. Thus, different labor goes into them, and thus, that labor is worth more.

[<*)))><]

You're changing the subject. What I said stands regardless of whether anybody buys the pants or not. I was talking about the differences in the pants themselves, design differences. That has nothing to do with prospective buyer perception. It's true that people will think the more expensive ones are better, but the more expensive ones will be designed differently to capture this. Thus, different labor goes into them, and thus, that labor is worth more.

That makes no sense at all, If no one buys it has no value.

[Jason Tate]

That is just precieved value, when someone goes to Abercrombie they think that these jeans will some how help while the Walmart jeans will not. There is nothing different in terms of labor but people just think one is better then the other. It is the same with money look at a dollar bill and it will say it is backed by the US Goverment which the only value it has is te goverment saying it has some value.
Eh, there's a whole lot of variables you're skipping here. There's costs associated with the Abercrombie jeans, not associated with Walmart jeans - and there's a difference in scale. There's probably a marginal increase in cost for appearance as well. But supply/demand is going to still be at play.

[Jason Tate]

Correct. Money has no value outside what you value it as. there is no objective value of money.

perfect example is pennies and the 100 dollar bill. sure, 10,000 pennies is legally the same as a 100 dollar bill, but most people value the 100 bill greater. In the other direction, most people value five 20 dollar bills over one 100 dollar bill. This of course is getting way off track.

My point is that one cannot observe "labor" and objectively say "that has a value of 7x."
Quick question ... have you ever read Ludwig von Mises' "The Theory of Money and Credit"? I'd recommend it.

[crackedthesky]

That makes no sense at all, If no one buys it has no value.

Monetary value =/= value.

[mattmatumbo]

Haven't we come to the conclusion that the overwhelming majority of people don't know very much? Many cannot even be held accountable to vote for what is in their best interest, let alone plan an economy.

QFT

[Tec Mason]

Quick question ... have you ever read Ludwig von Mises' "The Theory of Money and Credit"? I'd recommend it.

Haven't read it yet. Im trying to get through Man, Economy, and State but crap is it long.

[mcm1610]

I think one of my least favorite feelings is being backed up on books. I'm working, teaching, coaching, and going to grad school, so I have a mountain of books I own and need to read and an ever-growing list of books to check out. Summer can't come soon enough. Although I love winter.

[Jason Tate]

Haven't read it yet. Im trying to get through Man, Economy, and State but crap is it long.
I'd recommend it for its (extensive) talk on money and "value."

[Tec Mason]

Yeah ive seen a few lectures on the topic from the Mises institute, the best of which is Value, Utility, and Price.
I found it difficult to disagree with.

Here it is if anyone is interested:
Video: http://media.mises.org/video/MU2009/03_Herbener_MU2009.wmv
Audio: http://media.mises.org/mp3/MU2009/MU2009_Herbener_07-27-2009.mp3

Sorry i dont know how to do hyperlinks.

[Love As Arson]

Correct. Money has no value outside what you value it as. there is no objective value of money.

perfect example is pennies and the 100 dollar bill. sure, 10,000 pennies is legally the same as a 100 dollar bill, but most people value the 100 bill greater. In the other direction, most people value five 20 dollar bills over one 100 dollar bill. This of course is getting way off track.

My point is that one cannot observe "labor" and objectively say "that has a value of 7x."
That is not what Marxism posits. First, the analysis is generalized to the average amount of time to create a given commodity; second, if you or I worked in a chair factory, the chairs we produced would each be of the same value, regardless of whether or not you or I worked harder.

[Love As Arson]

http://www.marxists.org/archive/hilferding/1904/criticism/ch03.htm

[Tec Mason]

thanks for the link

[Tec Mason]

I haven't finished reading the Hilferding link yet yet, but I really like this excerpt (even though I disagree with it).

"The capitalist mode of production (this is its historic significance, and this is why we can regard it as a preliminary stage on the way to socialist society) socializes mankind to a greater extent than did any previous mode of production, that is to say, capitalism makes the existence of the individual man dependent upon the social relationships amid which he is placed. It does so in an antagonistic form, by the establishment of the two great classes, making the performance of social labor the function of one of these classes, and enjoyment of the products of labor the function of the other."

That seems to me a very clear explanation of capitalism from the perspective of marxism.

EDIT: sorry i know this stuf is off topic. if you can find a way to link this discussion to employment go for it XD

EDIT 2: Ooooh. love this quote, "The individual is not yet an 'immediate' of society, that is, he does not yet possess a direct relationship to society, for his economic position is determined by his position as member of a class. The individual can only exist as a capitalist because his class appropriates the product of the other class, and his own share is solely determined by the total surplus value, not by the surplus value individually appropriated by him." Again, I don't agree with his class based understanding of society, but at least he clearly explains what he is talking about.

[Tec Mason]

Okay I think this is where we deviate big time. "With Marx, in fact, every individual relationship is excluded from the conception of value-creating labor; labor is regarded, not as something which arouses feelings of pleasure or its opposite, but as an objective magnitude, inherent in the commodities, and determined by the degree of development of social productivity."

I do not see how the "objective magnitude" of labor can be "determined." is it measured in time? I am very ignorant in Marxism.

EDIT: on topic, when an employer hires an employee, they trade money for labor.
Do you guys believe this trade to be unfair?
Is it unethical to pay people below a certain amount of money?
How do you determine that amount?
Is it ever ethical to refuse to hire someone?
How does that fit into your desire for full employment?

EDIT2:( lol sorry for the edits) I just discovered the band American Football....Iv'e been missing out.

[Scrandon]

The wage should be determined not only by the value brought to he employer, but should satisfy the laborer as well. We could start by reforming the system that provides wages that keep workers below the poverty level while the shareholders earn huge profits.

[Jason Tate]

The wage should be determined not only by the value brought to he employer, but should satisfy the laborer as well. We could start by reforming the system that provides wages that keep workers below the poverty level while the shareholders earn huge profits.
What's a company that does that? And what's a "huge profit" to a share holder? Dividends? Selling the stock?

[Tec Mason]

The wage should be determined not only by the value brought to he employer, but should satisfy the laborer as well. We could start by reforming the system that provides wages that keep workers below the poverty level while the shareholders earn huge profits.

1.How do you quantify the "value brought to the employer?"
2.At what point is a laborer "satisfied"?
3.Is it unethical or wrong to have people living "below the poverty level?" (remember that the poverty level is subjectively and politically defined and varies depending on place
)
These are tough questions that i don't expect you can provide objective answers to.

So as not to appear offensive, I will give my answers to the questions i ask you as well.
1. unquantifiable. It is impossible to know objectively the amount of utility an employer gains from an employee's labor. the value of the labor is subject to the observer of the labor.
2. Laborer's are satisfied at their "reservation wage." the reservation wage is the amount of money they are willing to accept to preform x amounts of labor. This amount is often below government minimum wages.
3. No it is not unethical to have people below the poverty line. The poverty line is an arbitrarily defined divide between the "poor" and middle/upper classes (also arbitrarily defined). We live in a world of resources and desires, where the ability to match the two are asymetrical.

Thats my opinion of course :)

[Scrandon]

What's a company that does that? And what's a "huge profit" to a share holder? Dividends? Selling the stock?

Any company that pays their workers minimum wage and employs them 39 hours per week to surpass those icky benefits.

[Jason Tate]

Any company that pays their workers minimum wage and employs them 39 hours per week to surpass those icky benefits.
What benefits kick in at 40 hours that aren't there at 39? Part-time work is treated for all practical purposes in the same way as full-time work under federal law, specifically, the Fair Labor Standards Act (FLSA) applies to both types of workers in the same way. The U.S. Department of Labor uses a definition of 34 or fewer hours a week as part-time work, but this definition is only used to gather statistical information.

[Scrandon]

How do you quantify the "value brought to the employer?"
That's the easy part. It's how a company sets their wage. They don't take into account anything else, except any applicable laws.

At what point is a laborer "satisfied"?
Is it unethical or wrong to have people living "below the poverty level?" (remember that the poverty level is subjectively and politically defined and varies depending on place
The concentration of wealth we have now is pretty unethical.

These are tough questions that i don't expect you can provide objective answers to.

[Scrandon]

What benefits kick in at 40 hours that aren't there at 39? Part-time work is treated for all practical purposes in the same way as full-time work under federal law, specifically, the Fair Labor Standards Act (FLSA) applies to both types of workers in the same way. The U.S. Department of Labor uses a definition of 34 or fewer hours a week as part-time work, but this definition is only used to gather statistical information.

A company not only can, but frequently does employ workers up to the upper boundary of 'part-time' without providing them with full-time benefits. I might have been a little off with the specific numbers, but they aren't important.

[Tec Mason]

1.How do you quantify the "value brought to the employer?"
These are tough questions that i don't expect you can provide objective answers to.

with respect, simply highlighting that you did not provide objective answers. I didn't either, which is my point. It is impossible to say "this guy worked x hours building y good putting z amount of labor. he deserves w in wages." and conclude with an objective computation.

[Jason Tate]

A company not only can, but frequently does employ workers up to the upper boundary of 'part-time' without providing them with full-time benefits. I might have been a little off with the specific numbers, but they aren't important.
From my understanding, a company doesn't have to provide "full-time" benefits. The FLSA applies to both workers - and there is no legal definition for a part or full time worker. I'm looking for an example that I could see so I could see if I agree or disagree with the practice; from first reading of it (if it's taking place how I think you're describing it) - I don't really see the problem.

[Tec Mason]

A company not only can, but frequently does employ workers up to the upper boundary of 'part-time' without providing them with full-time benefits. I might have been a little off with the specific numbers, but they aren't important.

My company I work for does that to me. They work with minimal labor and spread it around so that they don't have to pay overtime or benifits. What is unethical about that? I might not get what I want (overtime hours), but who is to say that I should get what I want?

[Scrandon]

with respect, simply highlighting that you did not provide objective answers. I didn't either, which is my point. It is impossible to say "this guy worked x hours building y good putting z amount of labor. he deserves w in wages." and conclude with an objective computation.

Why not? You don't agree with this? (http://tutor2u.net/economics/revision-notes/a2-micro-wage-determination-competitive-markets.html)

That's all free-market stuff by the way.

[Tec Mason]

That link shows how wages are determined. You said wages should be determined based on the value they provide to employers. Employers obviously value many of their employees more than the wage that they pay them. You are confusing price of labor with value of labor.

[Scrandon]

My company I work for does that to me. They work with minimal labor and spread it around so that they don't have to pay overtime or benifits. What is unethical about that? I might not get what I want (overtime hours), but who is to say that I should get what I want?

Why should the employer get what they want?

[Scrandon]

That link shows how wages are determined. You said wages should be determined based on the value they provide to employers. Employers obviously value many of their employees more than the wage that they pay them. You are confusing price of labor with value of labor.

Price of Labor = Wage
Value of Labor (to the company) = Marginal revenue product (MRP).

Employees are hired up to the point where W=MRP.

[Tec Mason]

Why should the employer get what they want?

No person should ever get what they want at the expense of another person. that is the core of libertarianism. The beauty of wages is that it is a mutually beneficial trade. the employee purchases money with labor. The employer purchases labor with money. Win/win

You may not like that employers "win more" by earning a profit, which i understand. but I would never say that the employer wins and employee looses.

[Tec Mason]

Price of Labor = Wage
Value of Labor (to the company) = Marginal revenue product (MRP).

Employees are hired up to the point where W=MRP.

up to.

[Love As Arson]

I do not see how the "objective magnitude" of labor can be "determined." is it measured in time? I am very ignorant in Marxism.
"labor is regarded, not as something which arouses feelings of pleasure or its opposite, but as an objective magnitude, inherent in the commodities, and determined by the degree of development of social productivity."



on topic, when an employer hires an employee, they trade money for labor.

Under capitalism, it isn't a trade, rather, labor is a commodity which the worker sells on the market.

.
Do you guys believe this trade to be unfair?
The relationship is inherently unfair because the worker must submit to the authority of the capitalist or starve, a situation which is compounded by their production of the goods that are then sold by the capitalist for a profit. The profit is derived from the portion of the labor they aren't paid for.



Is it unethical to pay people below a certain amount of money?
Yes.



How do you determine that amount?
As it stands, a worker is paid the basic means of subsistence, meaning just enough to ensure they can go on producing. An adequate wage, in terms of reform within capitalism, takes into consideration their ability to eat, be creative, go to school, afford health care, maintain a home, provide for themselves,etc.

Is it ever ethical to refuse to hire someone?
The question is a bit vague. It depends on the context. I think, if one cannot find a job in one place, there should be an available job with good pay elsewhere.


How does that fit into your desire for full employment?
It doesn't necessarily. It fit more into the discussion that had evolved over the last page or so.

[Scrandon]

No person should ever get what they want at the expense of another person. that is the core of libertarianism. The beauty of wages is that it is a mutually beneficial trade. the employee purchases money with labor. The employer purchases labor with money. Win/win

You may not like that employers "win more" by earning a profit, which i understand. but I would never say that the employer wins and employee looses.
The employer always benefits more from the transaction. Especially when you consider the fact that the working people don't really have the choice to enter a 'voluntary' transaction, yet the employer always does. Add that up across all employees and it starts to look more and more unethical.
up to.
What?

[Tec Mason]

What?

You said that employees should be paid based on their value to the employers plus some extra amount (i will find the quote in a second).

The wage should be determined not only by the value brought to he employer, but should satisfy the laborer as well. We could start by reforming the system that provides wages that keep workers below the poverty level while the shareholders earn huge profits.

I said that value cannot be objectively determined.

You rebutted saying that even free marketeers can determine the value, and that the value to employers is up to the MRP.

My argument still stands. People are paid wages between two points: the reservation wage of the employee and the MRP their labor provides to the employer. It is still impossible to calculate the objective value of an employee to an employer.

EDIT: props to LAA for answering my questions :-)

[Scrandon]

You said that employees should be paid based on their value to the employers plus some extra amount (i will find the quote in a second).

I said that value cannot be objectively determined.

You rebutted saying that even free marketeers can determine the value, and that the value to employers is up to the MRP.

My argument still stands. People are paid wages between two points: the reservation wage of the employee and the MRP their labor provides to the employer. It is still impossible to calculate the objective value of an employee to an employer.

EDIT: props to LAA for answering my questions :-)

You hire 20 workers, and your firm makes $500.
You hire 1 more worker and your revenue is increased to $550.
The objective value of that employee is $50. It's not much harder than that.

[Tec Mason]

The employer always benefits more from the transaction.

That is an opinion. How can you show mathmatically that the employer benefits more? If you define benifit as "monetary gain" then you can objectively calculate the gain and compare to the employee. But that definition would be arbitrary and subjective.

[Tec Mason]

You hire 20 workers, and your firm makes $500.
You hire 1 more worker and your revenue is increased to $550.
The objective value of that employee is $50. It's not much harder than that.

unfortunately it is much harder than that.

Your model does not account for time. It also does not account for human action (the ability for each worker to be more productive or less productive at any given time). It also does not account for psychological affects (effects? affects? lol).

Revenue increases by 50$. It is possible and plausible that the 21st worker's productive capabilities decreases revenue by 20$. one of the original 20 workers has a good day and increases revenue by 70$. the net increased revenue is 70-20= 50$. It is impossible to objectively determine that the 21st worker increased the revenue

[Scrandon]

That is an opinion. How can you show mathmatically that the employer benefits more? If you define benifit as "monetary gain" then you can objectively calculate the gain and compare to the employee. But that definition would be arbitrary and subjective.
"Monetary gain" is not a subjective definition. The only reason the worker enters the transaction in the first place is for monetary gain. That is all that either party intends to get from the transaction.

Take, for instance, an employer hiring at minimum wage. The employer will never hire a worker who does not earn their wage. However, they can easily hire workers who earn the firm much more than the firm pays out in wages.

[Tec Mason]

The only reason the worker enters the transaction in the first place is for monetary gain. That is all that either party intends to get from the transaction.

Wrong. All human beings enter transactions for an increase in utility (happiness), not money. money is one of many ways to increase happiness, but it is not the only way.

I work for papa john's. I love making money by driving around in my car and listening to music while making money. If I was offered a job at Wal-Mart for more money I would not take it. I would make more money but my happiness would go down.

[Scrandon]

unfortunately it is much harder than that.

Your model does not account for time. It also does not account for human action (the ability for each worker to be more productive or less productive at any given time). It also does not account for psychological affects (effects? affects? lol).

Revenue increases by 50$. It is possible and plausible that the 21st worker's productive capabilities decreases revenue by 20$. one of the original 20 workers has a good day and increases revenue by 70$. the net increased revenue is 70-20= 50$. It is impossible to objectively determine that the 21st worker increased the revenue

While many econometric methods represent applications of standard statistical models, there are some special features of economic data that distinguish econometrics from other branches of statistics. Economic data are generally observational, rather than being derived from controlled experiments. Because the individual units in an economy interact with each other, the observed data tend to reflect complex economic equilibrium conditions rather than simple behavioral relationships based on preferences or technology. Consequently, the field of econometrics has developed methods for identification and estimation of simultaneous equation models. These methods allow researchers to make causal inferences in the absence of controlled experiments.

http://en.wikipedia.org/wiki/Econometrics

[Tec Mason]

I follow the Austrian school of economics which rejects many of the methods of modern econometrics. If you want to debate Austrian vs. Mainstream/Neoclassical Econ, We can do that in another thread. Your post on what econometrics attempts to do does not show me how value is objective, nor does it show how employees are "underpaid" or deserve full employment.

[Scrandon]

Okay then.

[Love As Arson]

Wrong. All human beings enter transactions for an increase in utility (happiness), not money. money is one of many ways to increase happiness, but it is not the only way.[/I]
Capitalism gives society its character, so an increase in utility is intrinsically connected to commodity relations and one's position in regard to them. A poor person may have a subjective moment of happiness when they listen to their favorite band or something, however, if they cannot pay their mortgage or purchase health care, this has an objective effect on their life, in terms of their psychological and physical well-being. Recently, there was a study released which said that most people dislike their jobs, yet they persist in working there. It does not make them happy, in your terms, but they remain at the job. This is because the utility is not in achieving a subjective happiness, but the objective requirements of survival in a world of price tags.

[mcm1610]

What benefits kick in at 40 hours that aren't there at 39? Part-time work is treated for all practical purposes in the same way as full-time work under federal law, specifically, the Fair Labor Standards Act (FLSA) applies to both types of workers in the same way. The U.S. Department of Labor uses a definition of 34 or fewer hours a week as part-time work, but this definition is only used to gather statistical information.

Kaleida Health - the company in charge of the non-county hospitals around the Buffalo area. They love to hire people as per-diem nurses or employ them in the mid-30-hour range so they can avoid giving them benefits. It was a lot worse about 10 years ago, but they are by no means angels right now.

[Tec Mason]

This is because the utility is not in achieving a subjective happiness, but the objective requirements of survival in a world of price tags.

Do you believe that a world without prices is both achievable and good?

Edit: OFF TOPIC: dear god this is a great performance by Portugal. The Man. thought id share it with you guys while we debate :-)
http://www.youtube.com/watch?v=9Qifj2gys0Y&feature=related

[Love As Arson]

Do you believe that a world without prices is both achievable and good?

Edit: OFF TOPIC: dear god this is a great performance by Portugal. The Man. thought id share it with you guys while we debate :-)
http://www.youtube.com/watch?v=9Qifj2gys0Y&feature=related
Yes. They have a basis in a specific arrangement of social relations and if it were to be changed, then there is no longer a foundation for them. The social basis for capitalism is production for profit and commodity exchange. What Marxists advocate is, production for need and communal use of the means of production to provide for that need. So, for example, food prices do not correspond to reality, as we have a great deal of food that is destroyed in order to artificially create a profit. I would advocate using the technologies we have for mass production to satisfy the needs of a significant portion of the world's population that goes to sleep without having had a meal.

[saysmydoctor]

unfortunately it is much harder than that.

Your model does not account for time. It also does not account for human action (the ability for each worker to be more productive or less productive at any given time). It also does not account for psychological affects (effects? affects? lol).

Revenue increases by 50$. It is possible and plausible that the 21st worker's productive capabilities decreases revenue by 20$. one of the original 20 workers has a good day and increases revenue by 70$. the net increased revenue is 70-20= 50$. It is impossible to objectively determine that the 21st worker increased the revenue
$50 isn't that bad compared to $70.

[caveBEAR]

I work for papa john's. I love making money by driving around in my car and listening to music while making money. If I was offered a job at Wal-Mart for more money I would not take it. I would make more money but my happiness would go down.

This is meaningless. I'd work at Wal-Mart instead for more money, as that would lead me to more happiness than being a delivery driver (again). You can argue that happiness drives people over money, but you can't argue that people will turn down money for happiness, when people can view that money as an avenue towards that happiness.

[Tec Mason]

you can't argue that people will turn down money for happiness, when people can view that money as an avenue towards that happiness.

I don't think I understand you. It sounds like you are saying I cannot argue that people will turn down money for happiness, which is super untrue. Do I need to give examples of people throughout the world that everyday turn down the chance for more money?

Happiness > Money to every person. always. Money can absolutely assist a person in being more happy, but it is false to say "given the choice between more money or being happier, people would ever choose money."

People always choose the option that they believe will make them better off regardless of whether they actually end up better off after the fact Would you agree?

[mcm1610]

You can't argue that as absolute - some people just have odd priorities.

[paper halo]

From a psychological standpoint, the premise that everyone is subject to this cultural emphasis on the pursuit of happiness does not hold.

[loveisdead]

Yeah. You guys can't seriously testify to what makes each person in the world happy.

[Love As Arson]

I don't think I understand you. It sounds like you are saying I cannot argue that people will turn down money for happiness, which is super untrue. Do I need to give examples of people throughout the world that everyday turn down the chance for more money?

Happiness > Money to every person. always. Money can absolutely assist a person in being more happy, but it is false to say "given the choice between more money or being happier, people would ever choose money."

People always choose the option that they believe will make them better off regardless of whether they actually end up better off after the fact Would you agree?
In a world of commodities, happiness itself takes on the form of a transaction which requires money. Further, the psychological stress of financial insecurity is enough to cause an anxiety which is perpetual, regardless of whether or not one has subjective experiences of happiness. For example, we know that financial stress is the number one cause of divorce; the subjective experiences of happiness may have been innumerable, however, material insecurity can undermine its social expression.

[Scrandon]

I understand what Tec Mason is saying though - to some extent. If you have a job and could apply somewhere that pays, say... $.50/hr more, you might not switch jobs.

You might like your job to some degree, you might have made friends there, your boss might be like-able, etc. Money is a means to happiness that comes from financial stability, but it is not everything.

In the end, it doesn't really counter the point I made because the decision to hire a worker always benefits the employer more than the employee and these "intangibles" are simply irrelevant. You can make friends anywhere - making friends cannot be considered a "perk" of working somewhere.

[caveBEAR]

I don't think I understand you. It sounds like you are saying I cannot argue that people will turn down money for happiness, which is super untrue. Do I need to give examples of people throughout the world that everyday turn down the chance for more money?

Happiness > Money to every person. always. Money can absolutely assist a person in being more happy, but it is false to say "given the choice between more money or being happier, people would ever choose money."

I get the sneaking suspicion that you and I are not talking about the same thing. My point is; for the better part of two years I was a delivery driver for a mom and pop pizzeria. I, too, thought it was the best job in the world. Easy work, great tips, music all night, freedom, etc. However, as I grew up, the economy changed, the business changed hands, etc., I found myself longing for getting out of the business and into anything else, and looking for the highest paying position with the most hours. Why? Because at this point in my life, my happiness does not derive from work, but what I do outside of it, and most of those things, living in the society we do, in some form or another require money.

My point is you can't say that someone will never choose money over happiness, because that leaves out the obvious possibility of choosing money to seek happiness, however that person may be doing it.

People always choose the option that they believe will make them better off regardless of whether they actually end up better off after the fact Would you agree?

Yes, but I don't think that inherently means they'll choose 'happiness' over 'money'. In any case, a person is just as likely to pick either one, and either choice could work out better or worse for them in the end. A person choosing a 'happier' job could work there until the day they die and love every day, or could end up broke and miserable 15 years later. A person choosing a job for money can end up lonely and souless (but well-off) or could take their money, retire to the tropics, and die happier than we will ever know.

People aren't cookie cut.

[Jason Tate]

I understand what Tec Mason is saying though - to some extent. If you have a job and could apply somewhere that pays, say... $.50/hr more, you might not switch jobs.

You might like your job to some degree, you might have made friends there, your boss might be like-able, etc. Money is a means to happiness that comes from financial stability, but it is not everything.

In the end, it doesn't really counter the point I made because the decision to hire a worker always benefits the employer more than the employee and these "intangibles" are simply irrelevant. You can make friends anywhere - making friends cannot be considered a "perk" of working somewhere.
I disagree with this. There's a formula involved. Sometimes hiring a new worker is not the best move.

[Jason Tate]

You hire 20 workers, and your firm makes $500.
You hire 1 more worker and your revenue is increased to $550.
The objective value of that employee is $50. It's not much harder than that.
There's more to it than that (http://web.mit.edu/e-club/hadzima/how-much-does-an-employee-cost.html).

[Scrandon]

I disagree with this. There's a formula involved. Sometimes hiring a new worker is not the best move.
I'm saying that if someone is hired, the transaction benefits the employer more.
There's more to it than that (http://web.mit.edu/e-club/hadzima/how-much-does-an-employee-cost.html).
Yes, and if all those costs were to add up to less than $50, they should hire the worker.

[Jason Tate]

I'm saying that if someone is hired, the transaction benefits the employer more.

Yes, and if all those costs were to add up to less than $50, they should hire the worker.
I don't see how you could measure that. I'd say it's usually mutually beneficial. The gain for the employee is usually going to have a larger impact on their life than that of the employer.

[Scrandon]

I don't see how you could measure that. I'd say it's usually mutually beneficial. The gain for the employee is usually going to have a larger impact on their life than that of the employer.

Both parties benefit, wouldn't argue against that, but the employer benefits more. It's as simple as looking at who makes the decision in the transaction. The employer always makes the final decision. They do not have to compromise because, if the employee is not hired, the employer can still put food on the table. The same cannot be said for the worker.

I'm just trying to get at this idea of a 'mutually beneficial, free trade of labor for a wage' as being shortsighted. The worker doesn't really have as much freedom in the decision as some would have you think.

[Jason Tate]

Both parties benefit, wouldn't argue against that, but the employer benefits more. It's as simple as looking at who makes the decision in the transaction. The employer always makes the final decision. They do not have to compromise because, if the employee is not hired, the employer can still put food on the table. The same cannot be said for the worker.

I'm just trying to get at this idea of a 'mutually beneficial, free trade of labor for a wage' as being shortsighted. The worker doesn't really have as much freedom in the decision as some would have you think.
I don't think you can jump to such a conclusion. The marginal increase in productivity or profit for the employer isn't always as large as the difference the income makes to the employee. You increase profits by (random number) Y% due to one employee - yet the employee's difference in income is either 100% (no job) or whatever the difference between the "next best work" would be (X%) if X is greater than Y, than it benefits the employee more.

By your example, it shows that the employee benifits more: "if the employee is not hired, the employer can still put food on the table. The same cannot be said for the worker."

That seems to be an argument against what you're saying.

The worker doesn't need the freedom in the decision to benefit.

[Scrandon]

I don't think you can jump to such a conclusion. The marginal increase in productivity or profit for the employer isn't always as large as the difference the income makes to the employee. You increase profits by (random number) Y% due to one employee - yet the employee's difference in income is either 100% (no job) or whatever the difference between the "next best work" would be (X%) if X is greater than Y, than it benefits the employee more.
Why would you use percent terms? That makes no sense in this case.

A rational employer is only going to hire an additional employee if they bring as much additional revenue as was paid out in their wage.
If not, the manager is grossly incompetent, end of story.

By your example, it shows that the employee benifits more: "if the employee is not hired, the employer can still put food on the table. The same cannot be said for the worker."

That seems to be an argument against what you're saying.

The worker doesn't need the freedom in the decision to benefit.
They need freedom for it to be considered free trade in the free market.

[Jason Tate]

Why would you use percent terms? That makes no sense in this case.

A rational employer is only going to hire an additional employee if they bring as much additional revenue as was paid out in their wage.
If not, the manager is grossly incompetent, end of story.

They need freedom for it to be considered free trade in the free market.
Uhm, yes it does. As with virtually everything in business - the % is far more important than any dollar amount.

And that would make sense in a business where you could calculate the exact dollar amount they bring in - which is almost impossible in most businesses. Which is why that's not how things are looked at. Especially if the employee isn't in sales. This is all cost/benefit analysis. The variable cost of a new secretary, for example, is not going to be in dollars and cents. It's going to be in opportunity cost for the rest of the employees.

No they don't.

[Scrandon]

Uhm, yes it does. As with virtually everything in business - the % is far more important than any dollar amount.

And that would make sense in a business where you could calculate the exact dollar amount they bring in - which is almost impossible in most businesses. Which is why that's not how things are looked at. Especially if the employee isn't in sales. This is all cost/benefit analysis. The variable cost of a new secretary, for example, is not going to be in dollars and cents. It's going to be in opportunity cost for the rest of the employees.

No they don't.

So then... what are you saying? Businesses hire just to hire? How are wages determined if the company doesn't know how much they will benefit from hiring the employee?

Could you define free trade for me then? I must be way off here. Apparently free doesn't mean free.

[Jason Tate]

So then... what are you saying? Businesses hire just to hire? How are wages determined if the company doesn't know how much they will benefit from hiring the employee?

Could you define free trade for me then? I must be way off here. Apparently free doesn't mean free.
I'm not saying businesses hire just to hire at all. Wages are determined a variety of ways. And a variety of variables play into the wage (laws, benefits, etc.).

Free trade allows traders to act and transact without interference from government. What you said was "The worker doesn't really have as much freedom in the decision as some would have you think." -- and they don't need that freedom to benefit.

[mcm1610]

I don't even know where to jump in this debate because it's all over the place, but I've taken multiple classes, undergrad and grad, on labor econ.

Worst milestone post ever.

[Love As Arson]

The worker has to sell their labor. The employer doesn't. That relation demonstrates the drastic difference in power, such that it is not a mutual trade amongst equals, rather, it is wage slavery.

[mcm1610]

But the worker sells it on his or her own terms. Of course, those can and often are limited by opportunity, but not everyone hates the idea of working and feels exploited by his or her employer.

[Jason Tate]

I recommend self-employment.

[Love As Arson]

But the worker sells it on his or her own terms..
I'm not sure what exactly you are referring to. I interpret it as deciding which company they may or may not choose to put in an application for. I am concerned with the broader circumstances, which is the fact that they must sell their labor. Those terms are negotiable.

Of course, those can and often are limited by opportunity, but not everyone hates the idea of working and feels exploited by his or her employer.
Regardless of one's subjective feelings of exploitation, it remains that they aren't getting paid for a portion of their labor; I would liken it to living in a monarchy, where one might be content with their station in life, but objectively we know there is a deficit in their freedoms. In any case, it isn't that some hate working itself, it is that work has taken on an oppressive and alienating form. One of the short-term ways to curb those feelings of helplessness would be unionization, so that there is an organization to counter-balance to the employers power.

[mcm1610]

I'm not sure what exactly you are referring to. I interpret it as deciding which company they may or may not choose to put in an application for. I am concerned with the broader circumstances, which is the fact that they must sell their labor. Those terms are negotiable.


Regardless of one's subjective feelings of exploitation, it remains that they aren't getting paid for a portion of their labor; I would liken it to living in a monarchy, where one might be content with their station in life, but objectively we know there is a deficit in their freedoms. In any case, it isn't that some hate working itself, it is that work has taken on an oppressive and alienating form. One of the short-term ways to curb those feelings of helplessness would be unionization, so that there is an organization to counter-balance to the employers power.Whether or not to sell your labor is completely negotiable. If you want to be self-sufficient, go for it. You don't need to work for anybody.

I don't understand what you mean when you say " it remains that they aren't getting paid for a portion of their labor".
Except my first job when I was in high school, I honestly cannot think of a job I've held that I've in the slightest felt was oppressive in any way. I get to pick what jobs I want to take, which have led me to teaching, and I can honestly say that if I didn't like the conditions, I wouldn't do it. I also work at an ice rink, and I'm itching for that to start back up next week so I can skate after hours. There's ways to exist in that employees are at least getting a fair return on their labor, if not benefiting from it.
I don't think unionization is necessary, just a collective awakening of people to realize that they don't have to go work at Walmart if Walmart is going to belittle them and pay them minimum wage, then force them to restock after punching out. Society on the whole loses out a little bit at a time when someone ignorantly enters an unfair agreement like that.

[<*)))><]

This isn't the industrial revolution

[jawstheme]

Whether or not to sell your labor is completely negotiable. If you want to be self-sufficient, go for it. You don't need to work for anybody.

I don't understand what you mean when you say " it remains that they aren't getting paid for a portion of their labor".
Except my first job when I was in high school, I honestly cannot think of a job I've held that I've in the slightest felt was oppressive in any way. I get to pick what jobs I want to take, which have led me to teaching, and I can honestly say that if I didn't like the conditions, I wouldn't do it. I also work at an ice rink, and I'm itching for that to start back up next week so I can skate after hours. There's ways to exist in that employees are at least getting a fair return on their labor, if not benefiting from it.
I don't think unionization is necessary, just a collective awakening of people to realize that they don't have to go work at Walmart if Walmart is going to belittle them and pay them minimum wage, then force them to restock after punching out. Society on the whole loses out a little bit at a time when someone ignorantly enters an unfair agreement like that.

Not everyone is as lucky as you, apparently. Just because you haven't personally ran into major problems doesn't mean they aren't there.

[Scrandon]

Unions are only relevant to the Industrial Revolution?

[Scrandon]

Not everyone is as lucky as you, apparently. Just because you haven't personally ran into major problems doesn't mean they aren't there.
Exactly.
The ability to quit a job if you don't like the conditions is only there if you are not forced into financial obligations.

[mcm1610]

Exactly.
The ability to quit a job if you don't like the conditions is only there if you are not forced into financial obligations.

Forced into what financial obligations? What slavery institutions are you guys roped into?

[jawstheme]

Forced into what financial obligations? What slavery institutions are you guys roped into?

I have very little connections and there aren't very many jobs right now. I can't just quit working and find something blissful, plus the job-hunt is difficult when I'm working 40+ hours a week to pay rent, car insurance, and every other bill.

Trust me, I'd love to live in your world.

Student loans are a bitch too.

[Love As Arson]

Whether or not to sell your labor is completely negotiable. If you want to be self-sufficient, go for it. You don't need to work for anybody.
Social institutions ensure that the vast majority of the population have to sell their labor.



I don't understand what you mean when you say " it remains that they aren't getting paid for a portion of their labor".
http://www.isreview.org/issues/49/capital.shtml


Except my first job when I was in high school, I honestly cannot think of a job I've held that I've in the slightest felt was oppressive in any way. I get to pick what jobs I want to take, which have led me to teaching, and I can honestly say that if I didn't like the conditions, I wouldn't do it. I also work at an ice rink, and I'm itching for that to start back up next week so I can skate after hours. There's ways to exist in that employees are at least getting a fair return on their labor, if not benefiting from it.
I imagine feudal peasants didn't necessarily feel oppressed. They accepted their station and that was it. There is an obvious difference between subjective experience, which is often obscured by ideological norms (the ruling ideas are the ideas of the ruling class), and objective forms of oppression.


I don't think unionization is necessary, just a collective awakening of people to realize that they don't have to go work at Walmart if Walmart is going to belittle them and pay them minimum wage, then force them to restock after punching out. Society on the whole loses out a little bit at a time when someone ignorantly enters an unfair agreement like that.
The point is, people often have no choice, particularly in today's economic circumstances. The only protection people have from corporate exploitation is formal organization; otherwise, all one has is a series of individual grievances, all of which point to a systemic problem, but can't actually address it in any serious manner.

[mcm1610]

I don't want to read a whole article, as I have about 700 pages of reading to do for class, but what portion of their labor aren't they getting paid for?

And I guess the rest of it is just difference of opinion.. I can see how you can argue that way, but I don't think it's that extreme. That's probably why I'm not in a socialist party. (Not intended to be a shot at you, if that's how it comes across.)

[Love As Arson]

I don't want to read a whole article, as I have about 700 pages of reading to do for class, but what portion of their labor aren't they getting paid for?

And I guess the rest of it is just difference of opinion.. I can see how you can argue that way, but I don't think it's that extreme. That's probably why I'm not in a socialist party. (Not intended to be a shot at you, if that's how it comes across.)
The source of surplus value lies in what takes place after capitalists buy commodities and before they sell them. Most capitalists do not simply buy and sell the same commodities; they use the commodities they have bought to produce something new. Wood and screws are used to produce a table. Steel, rubber, glass, and many other components are used to build an aircraft. But of course it is not capitalists who actually produce these items. They are produced, instead, by workers, who are hired to contribute their labor to the process of production. So capitalists buy commodities and hire workers, and the labor of the latter on the former results in new commodities with an increased value. This is how capitalists are able to make a profit. What they purchase is labor power-the capacity that workers have to perform labor. Now if we accept Marx's account of value, the value of labor power is equivalent to the labor time socially necessary to produce it (and not to the amount of labor it is capable of performing)-in other words the labor needed to clothe, feed, educate, and so on, workers so that they are capable of performing the work that they are hired to do.20 Marx's key insight is that the value of labor power is less than the value of the labor that it can perform. For instance, it may take on average four hours of socially necessary labor time to prepare a worker to perform eight hours of labor. Because of this, labor power is a commodity that can add more than its initial value during the process of production. By contrast, other commodities can add to the final product no more than their initial value, because they perform no labor in the process of production-they do not work but are worked upon.

" Marx's explanation of the origin of surplus value demonstrates that capitalist profits are the result of exploitation, i.e., paying workers less than the value they add to the commodities that they produce. Exploitation is thus built into the very nature of capitalism, even though the manner in which it takes place is different to (and often less obvious than) the manner of exploitation in earlier class societies. As Marx put it, “The essential difference between the various economic forms of society, between, for instance, a society based on slave-labor, and one based on wage-labor, lies only in the mode in which the surplus-labor is in each case extracted from the actual producer, the laborer.” (217) The extraction of surplus value is the special form that exploitation takes under capitalism. “[C]apitalistic private property…rests on exploitation of the nominally free labor of others, i.e. on wage-labor.” (762)

If workers are exploited by capitalists, why do they sell their labor power to them in the first place? The simple answer is that they have no choice. Workers have the ability to perform labor, but unlike, say, feudal peasants, they do not possess the means of labor, such as tools, raw materials, or a workplace. In order to gain access to these things, workers have no choice but to sell their labor power to those who control them, the capitalists. From the capitalists' point of view, the wage bargain is a fair one, at least so long as workers are paid the market value of their labor power, but they are nevertheless able to take advantage of the workers' situation by paying them less than the value that their labor contributes in production and thereby extracting surplus value from them. For this reason Marx writes that even if capitalists purchase labor power “at its full price, so that equivalent is exchanged for equivalent, yet the transaction is for all that only the old dodge of every conqueror who buys commodities from the conquered with the money he has robbed them of"

[mcm1610]

I dunno, I guess that's reasonable enough.

My friends ask me this, and I don't really fill that much of my day with politics and stuff like that, but, when you believe your whole life is some constant battle against exploitation, do you have fun?
All I know of you is the posts I've read in the few weeks I've been hanging around here, so you could be entirely different when you walk away from the computer, but it just seems like you're very consumed with this belief that life is miserable slavery.

[Love As Arson]

I dunno, I guess that's reasonable enough.

My friends ask me this, and I don't really fill that much of my day with politics and stuff like that, but, when you believe your whole life is some constant battle against exploitation, do you have fun?
All I know of you is the posts I've read in the few weeks I've been hanging around here, so you could be entirely different when you walk away from the computer, but it just seems like you're very consumed with this belief that life is miserable slavery.

“Do not think that one has to be sad in order to be militant, even though the thing one is fighting is abominable. It is the connection of desire to reality (and not its retreat into the forms of representation) that possesses revolutionary force”