Everything's out of whack again.
October 17, 2011 10:26 PM Subscribe
Four charts explain what the Wall Street protesters are angry about.
Here are the four key points:
1. Unemployment is at the highest level since the Great Depression,
2. At the same time, corporate profits are at an all-time high,
3. Wages as a percent of the economy are at an all-time low, and
4. Income and wealth inequality in the US economy is near an all-time high:
- The top earners are capturing a higher share of the national income than they have anytime since the 1920s.
- CEO pay and corporate profits have skyrocketed in the past 20 years, "production worker" pay has risen 4%.
- After adjusting for inflation, average earnings haven't increased in 50 years.
Here are the four key points:
1. Unemployment is at the highest level since the Great Depression,
2. At the same time, corporate profits are at an all-time high,
3. Wages as a percent of the economy are at an all-time low, and
4. Income and wealth inequality in the US economy is near an all-time high:
- The top earners are capturing a higher share of the national income than they have anytime since the 1920s.
- CEO pay and corporate profits have skyrocketed in the past 20 years, "production worker" pay has risen 4%.
- After adjusting for inflation, average earnings haven't increased in 50 years.
"Importantly, the inequality that has developed in the economy over the past couple of decades is not just a moral issue. It's a practical one. It is, as sociologists might say, 'de-stabilizing.' It leads directly to the sort of social unrest that we're seeing right now."
posted by free hugs at 10:39 PM on October 17, 2011 [13 favorites]
posted by free hugs at 10:39 PM on October 17, 2011 [13 favorites]
Interesting stuff. Unfortunately, those charts don't really dovetail with my reasons to be angry with Wall Street.
posted by 2N2222 at 10:42 PM on October 17, 2011
posted by 2N2222 at 10:42 PM on October 17, 2011
Thanks for this, forwarding on to a few Tea Party advocates I know.
posted by arcticseal at 10:44 PM on October 17, 2011 [1 favorite]
posted by arcticseal at 10:44 PM on October 17, 2011 [1 favorite]
Correct me if I'm wrong, but isn't the main problem with Wall Street is that they led us into a financial slump because they bet against the American economy?
Please do correct me if I'm wrong
posted by PostIronyIsNotaMyth at 10:46 PM on October 17, 2011
Please do correct me if I'm wrong
posted by PostIronyIsNotaMyth at 10:46 PM on October 17, 2011
"One day the poor will have nothing left to eat but the rich"
And Cake.
posted by fullerine at 10:49 PM on October 17, 2011 [1 favorite]
And Cake.
posted by fullerine at 10:49 PM on October 17, 2011 [1 favorite]
The cake is a lie.
posted by eddydamascene at 10:52 PM on October 17, 2011 [12 favorites]
posted by eddydamascene at 10:52 PM on October 17, 2011 [12 favorites]
- CEO pay and corporate profits have skyrocketed in the past 20 years, "production worker" pay has risen 4%.
I understand protesting about the fact that the top earners (both corporate and individuals) are insufficiently taxed. Top earners can pay more, so they should - perfectly sensible.
But I'm unclear on the issue with CEO remuneration. Yes, CEOs in big companies get paid an obscene amount. But they (the companies) are private entities. What they pay is between the company and the employee (in this case, the CEO). The shareholders get a say, but it is frankly nobody else's business. Does anyone actually believe protesting about that will change anything?
posted by His thoughts were red thoughts at 10:54 PM on October 17, 2011 [5 favorites]
I understand protesting about the fact that the top earners (both corporate and individuals) are insufficiently taxed. Top earners can pay more, so they should - perfectly sensible.
But I'm unclear on the issue with CEO remuneration. Yes, CEOs in big companies get paid an obscene amount. But they (the companies) are private entities. What they pay is between the company and the employee (in this case, the CEO). The shareholders get a say, but it is frankly nobody else's business. Does anyone actually believe protesting about that will change anything?
posted by His thoughts were red thoughts at 10:54 PM on October 17, 2011 [5 favorites]
I suppose the question is, why has worker pay stopped increasing in line with productivity? And how can it go back to the way it was in the 50s to the 80s? How do you make employers pass on the gains?
posted by His thoughts were red thoughts at 10:57 PM on October 17, 2011 [8 favorites]
posted by His thoughts were red thoughts at 10:57 PM on October 17, 2011 [8 favorites]
I disagree with that assertion, PostIronyIsNotaMyth. Ain't never been a recession caused by short sellers. There have however been several recessions caused by bubbles and/or fraud, i.e. lying about some investment vehicle's risks. Aren't such people betting on the American economy, albeit stupidly or fraudulently?
posted by jeffburdges at 10:58 PM on October 17, 2011 [1 favorite]
posted by jeffburdges at 10:58 PM on October 17, 2011 [1 favorite]
I suppose the question is, why has worker pay stopped increasing in line with productivity? And how can it go back to the way it was in the 50s to the 80s? How do you make employers pass on the gains?
You really can't because many of the high-paying jobs at large companies have been automated away or just straight up eliminated (e.g. management tiers.) The best solution is for more people to own businesses, or work to increase market demand for things that require handcraft.
posted by michaelh at 11:03 PM on October 17, 2011 [2 favorites]
You really can't because many of the high-paying jobs at large companies have been automated away or just straight up eliminated (e.g. management tiers.) The best solution is for more people to own businesses, or work to increase market demand for things that require handcraft.
posted by michaelh at 11:03 PM on October 17, 2011 [2 favorites]
More good charts
Cool. Where do they come from?
Here's a start:
The first one comes from the NYT.
The second one has text on the bottom telling where it 's from.
The third and fourth are from this interactive graph (previously).
posted by -jf- at 11:03 PM on October 17, 2011 [3 favorites]
Cool. Where do they come from?
Here's a start:
The first one comes from the NYT.
The second one has text on the bottom telling where it 's from.
The third and fourth are from this interactive graph (previously).
posted by -jf- at 11:03 PM on October 17, 2011 [3 favorites]
Thanks for the charts, tbm.
Related: Danny Glover speaks at Occupy Oakland (really really great).
posted by wemayfreeze at 11:06 PM on October 17, 2011 [6 favorites]
Related: Danny Glover speaks at Occupy Oakland (really really great).
posted by wemayfreeze at 11:06 PM on October 17, 2011 [6 favorites]
Yes, because if people get angry enough CEO's might remember that guillotines are cheap enough that almost any angry mob can afford them.
One of the intangible things that lower corporate salaries buy is the absence of giant targets for angry, violent mobs.
posted by concreteforest at 11:06 PM on October 17, 2011 [7 favorites]
One of the intangible things that lower corporate salaries buy is the absence of giant targets for angry, violent mobs.
posted by concreteforest at 11:06 PM on October 17, 2011 [7 favorites]
The fifth I haven't tracked down yet, but this graph from the WSJ seems to be using the same data.
posted by -jf- at 11:07 PM on October 17, 2011
posted by -jf- at 11:07 PM on October 17, 2011
Correct me if I'm wrong, but isn't the main problem with Wall Street is that they led us into a financial slump because they bet against the American economy?
I would argue that the beef is really with the banking and finance sector as a whole:
a) firstly with the ridiculous mortgage practices (lending to people who couldn't afford it, leading to a glut of defaults and the flooding of the housing market leading to the collapse of the housing bubble),
b) the creation of mortgage backed securities and, in particular, the rating of those securities as AAA despite the fact that they were comprised of crappy high risk mortgages, and
c) the ridiculous scam of credit default swaps - insurance that only works if nothing bad ever happens.
Bam. Credit crisis - nobody can borrow to create anything new, development stagnates, economy goes into a tailspin, repeat.
posted by His thoughts were red thoughts at 11:11 PM on October 17, 2011 [3 favorites]
I would argue that the beef is really with the banking and finance sector as a whole:
a) firstly with the ridiculous mortgage practices (lending to people who couldn't afford it, leading to a glut of defaults and the flooding of the housing market leading to the collapse of the housing bubble),
b) the creation of mortgage backed securities and, in particular, the rating of those securities as AAA despite the fact that they were comprised of crappy high risk mortgages, and
c) the ridiculous scam of credit default swaps - insurance that only works if nothing bad ever happens.
Bam. Credit crisis - nobody can borrow to create anything new, development stagnates, economy goes into a tailspin, repeat.
posted by His thoughts were red thoughts at 11:11 PM on October 17, 2011 [3 favorites]
Related: Danny Glover speaks at Occupy Oakland yt (really really great).What does it say that I read that as "Donald Glover" and was confused for a second, thinking "Who's that old guy?" before I caught up.
posted by delmoi at 11:17 PM on October 17, 2011 [8 favorites]
I've always loved this graph and this chart.
posted by jeffburdges at 11:17 PM on October 17, 2011 [2 favorites]
posted by jeffburdges at 11:17 PM on October 17, 2011 [2 favorites]
the ridiculous scam of credit default swaps - insurance that only works if nothing bad ever happens.
More that too many swaps were created and traded on leverage. They work just fine until the payee runs out of money.
posted by michaelh at 11:18 PM on October 17, 2011 [1 favorite]
More that too many swaps were created and traded on leverage. They work just fine until the payee runs out of money.
posted by michaelh at 11:18 PM on October 17, 2011 [1 favorite]
What they pay is between the company and the employee (in this case, the CEO). The shareholders get a say, but it is frankly nobody else's business.
CEO pay didn't increase from 50 times the average worker to 450 times the average worker by accident. The management has lobbied (using shareholder dollars) to create laws and regulations concerning corporate management that facilitate the looting of shareholder value. The laws and regulations prevent or make it extremely difficult for shareholders to challenge management. They water down regulations concerning transparency and reporting of management compensation and perks to prevent detection of their looting behavior. They allow management to create poison pills that prevent rivals from taking over mismanaged corporations and firing them. They weaken regulations requiring truly independent boards of directors to oversee management. The corporation is granted a license and certain privileges by the state. When corporations become corrupt, they are using this state privilege to steal from the shareholders.
posted by JackFlash at 11:18 PM on October 17, 2011 [80 favorites]
CEO pay didn't increase from 50 times the average worker to 450 times the average worker by accident. The management has lobbied (using shareholder dollars) to create laws and regulations concerning corporate management that facilitate the looting of shareholder value. The laws and regulations prevent or make it extremely difficult for shareholders to challenge management. They water down regulations concerning transparency and reporting of management compensation and perks to prevent detection of their looting behavior. They allow management to create poison pills that prevent rivals from taking over mismanaged corporations and firing them. They weaken regulations requiring truly independent boards of directors to oversee management. The corporation is granted a license and certain privileges by the state. When corporations become corrupt, they are using this state privilege to steal from the shareholders.
posted by JackFlash at 11:18 PM on October 17, 2011 [80 favorites]
Those are some of the things that the Occupants are angry about.
Yes, because if people get angry enough CEO's might remember that guillotines are cheap enough that almost any angry mob can afford them.
This quote from Al Franken's book "Lies and the Lying Liars Who Tell Them" is circulating around the web lately:
"Any time that a liberal points out that the wealthy are disproportionately benefiting from Bush’s tax policies, Republicans shout, “class warfare!”
In her book A Distant Mirror: The Calamitous Fourteenth Century, Barbara Tuchman writes about a peasant revolt in 1358 that began in the village of St. Leu and spread throughout the Oise Valley. At one estate, the serfs sacked the manor house, killed the knight, and roasted him on a spit in front of his wife and kids. Then, after ten or twelve peasants violated the lady, with the children still watching, they forced her to eat the roasted flesh of her dead husband and then killed her.
That is class warfare.
Arguing over the optimum marginal tax rate for the top one percent is not.”
posted by charlie don't surf at 11:19 PM on October 17, 2011 [102 favorites]
Yes, because if people get angry enough CEO's might remember that guillotines are cheap enough that almost any angry mob can afford them.
This quote from Al Franken's book "Lies and the Lying Liars Who Tell Them" is circulating around the web lately:
"Any time that a liberal points out that the wealthy are disproportionately benefiting from Bush’s tax policies, Republicans shout, “class warfare!”
In her book A Distant Mirror: The Calamitous Fourteenth Century, Barbara Tuchman writes about a peasant revolt in 1358 that began in the village of St. Leu and spread throughout the Oise Valley. At one estate, the serfs sacked the manor house, killed the knight, and roasted him on a spit in front of his wife and kids. Then, after ten or twelve peasants violated the lady, with the children still watching, they forced her to eat the roasted flesh of her dead husband and then killed her.
That is class warfare.
Arguing over the optimum marginal tax rate for the top one percent is not.”
posted by charlie don't surf at 11:19 PM on October 17, 2011 [102 favorites]
What they pay is between the company and the employee (in this case, the CEO). The shareholders get a say, but it is frankly nobody else's business.
The SEC requires that detailed information about CEO compensation be made public so that potential investors can make informed decisions about a company; so, legally, pretty much public information that anyone has a right to kvetch over.
posted by eddydamascene at 11:20 PM on October 17, 2011 [2 favorites]
The SEC requires that detailed information about CEO compensation be made public so that potential investors can make informed decisions about a company; so, legally, pretty much public information that anyone has a right to kvetch over.
posted by eddydamascene at 11:20 PM on October 17, 2011 [2 favorites]
I agree that income inequality is a growing problem, but I think several of the graphs are problematic.
First graph looks kosher.
Second graph doesn't adjust for inflation. Given the long timescale, it would have to be inflation-adjusted to be meaningful, IMO.
Third graph blows up the vertical scale 5x to exaggerate the decline. Its still significant, but it bothers me that they did this.
Fourth graph is good and interesting, but I wish it ran from 0-100% instead of 25-50% so that the visual proportions matched the actual proportions.
Fifth graph is interesting too. I assume its inflation adjusted given the minimum wage curve?
Sixth graph is definitely adjusting for inflation. Though its incidentally the one that benefits their point the most to be inflation-adjusted.
posted by Hither at 11:24 PM on October 17, 2011 [3 favorites]
First graph looks kosher.
Second graph doesn't adjust for inflation. Given the long timescale, it would have to be inflation-adjusted to be meaningful, IMO.
Third graph blows up the vertical scale 5x to exaggerate the decline. Its still significant, but it bothers me that they did this.
Fourth graph is good and interesting, but I wish it ran from 0-100% instead of 25-50% so that the visual proportions matched the actual proportions.
Fifth graph is interesting too. I assume its inflation adjusted given the minimum wage curve?
Sixth graph is definitely adjusting for inflation. Though its incidentally the one that benefits their point the most to be inflation-adjusted.
posted by Hither at 11:24 PM on October 17, 2011 [3 favorites]
But I'm unclear on the issue with CEO remuneration. Yes, CEOs in big companies get paid an obscene amount. But they (the companies) are private entities.It's complicated. But the CEO of Toyota makes $900k a year. The wages for CEOs in other countries is a lot less, yet, those companies have no trouble competing with U.S. companies. In fact, they may compete better due to less money getting sucked away by CEOs.
The shareholders get a sayHahaha, not really. The board gets a say. But who's on the board? CEOs of other companies. So it becomes, essentially, a bunch of people giving each-other raises. The actual shareholders in these huge companies are often state pension funds and lots of people with 401(k)s. They don't pay attention to what's going on and the people managing their money often belong to the same super-elite class.
Do you see what the problem is here? It doesn't really have anything to do with 'shareholder value' or anything like that. It's rich CEOs and wallstreet types giving themselves a bigger and bigger piece of the pie.
posted by delmoi at 11:26 PM on October 17, 2011 [45 favorites]
So if corporate profitability is high and labor is cheap what is stopping new company start-ups or existing company expansion using some of this cheap labor to take a slice of these profits? What are these profits, and why are they apparently immune to competition? Or what have I misunderstood?
posted by alasdair at 11:26 PM on October 17, 2011 [1 favorite]
posted by alasdair at 11:26 PM on October 17, 2011 [1 favorite]
When corporations become corrupt, they are using this state privilege to steal from the shareholders.
Shareholders are complicit in that process. It seems to me that, by and large, shareholders could give a dam what a company does providing that the value of their shares increase. No one is obliged to invest in a company whose practices, inducing CEO remuneration, they abhor.
The SEC requires that detailed information about CEO compensation be made public so that potential investors can make informed decisions about a company; so, legally, pretty much public information that anyone has a right to kvetch over.
I don't dispute that - kvetch away, as is your right. What I don't understand is what the protesters think that they will be able to achieve with an argument that equates to "That CEO is way richer than me. No fair!". How do they propose to end obscene CEO salaries? By government regulation?
posted by His thoughts were red thoughts at 11:27 PM on October 17, 2011 [1 favorite]
Shareholders are complicit in that process. It seems to me that, by and large, shareholders could give a dam what a company does providing that the value of their shares increase. No one is obliged to invest in a company whose practices, inducing CEO remuneration, they abhor.
The SEC requires that detailed information about CEO compensation be made public so that potential investors can make informed decisions about a company; so, legally, pretty much public information that anyone has a right to kvetch over.
I don't dispute that - kvetch away, as is your right. What I don't understand is what the protesters think that they will be able to achieve with an argument that equates to "That CEO is way richer than me. No fair!". How do they propose to end obscene CEO salaries? By government regulation?
posted by His thoughts were red thoughts at 11:27 PM on October 17, 2011 [1 favorite]
In fact, if you have a 401(k) or other retirement account then you absolutely have the right to bitch as you probably are a stockholder. So what's the problem with stockholders bitching about CEO pay?
posted by delmoi at 11:27 PM on October 17, 2011 [4 favorites]
posted by delmoi at 11:27 PM on October 17, 2011 [4 favorites]
...or a damn, even.
posted by His thoughts were red thoughts at 11:29 PM on October 17, 2011
posted by His thoughts were red thoughts at 11:29 PM on October 17, 2011
Correct me if I'm wrong, but isn't the main problem with Wall Street is that they led us into a financial slump because they bet against the American economy?—PostIronyIsNotaMythThat's wrong. Short answer: we're in a slump because a finance bubble burst.
Longer answer: we're in a slump because Wall Street created a number of complicated, new securities that disguised their risk and outright misled investors about this and along the way also made it effectively impossible for even them to know what their risk exposure really was. When people started to figure this out, everyone panicked about their risk and, in conjunction with that, essentially the entire worldwide credit market came to a screeching halt and stopping the global economy with it. Even as some of that mess started to get straightened out and short-term emergency measures were taken to avoid a full-scale global economic apocalypse, the variety of factors that always start to assert themselves after a financial bubble collapse began to take hold and caused pretty much everyone to be skittish and pessimistic about their money and to slow down or stop spending and investing. As demand collapsed, businesses began to lay-off workers. Demand is still very low.
I suppose the question is, why has worker pay stopped increasing in line with productivity? And how can it go back to the way it was in the 50s to the 80s? How do you make employers pass on the gains?—His thoughts were red thoughtsPeople come up with complicated theories about this, trying to think of reasons why these productivity gains are qualitatively different than the past. That's not necessary.
The real reason this has happened is the decline of organized labor. Organized labor was the counterbalance to corporate influence. As labor has declined, corporate influence has risen unchecked and this has resulted in deregulation, regulatory capture, and much less progressive tax structure. Organized labor was the main force that maintained wage pressure in the face of increasing corporate profits. Without it, corporations quite naturally transfer as little of their revenue as possible to labor and, instead, reward their executive class and their investors.
But I'm unclear on the issue with CEO remuneration. Yes, CEOs in big companies get paid an obscene amount. But they (the companies) are private entities. What they pay is between the company and the employee (in this case, the CEO). The shareholders get a say, but it is frankly nobody else's business. Does anyone actually believe protesting about that will change anything?—His thoughts were red thoughtsI don't know and it's a serious problem. It's difficult or impossible for those with the responsibility, the shareholders, to do anything about this because of how the system works. The shareholders are represented by the board of directors. The individuals on the boards of directors are almost exclusively chosen from the executive class. A director on a compensation committee decided the salary of a CEO today may had his CEO salary decided by that CEO sitting on a different compensation committee tomorrow. As individuals of the executive class, the people sitting on boards of directors have an incentive to set the salaries of the executive class high, not low. And it's usually sold to the shareholders as "being competitive" with other corporations.
Also, usually they set their compensation goals to be some percentage above the average level. When everyone does this, it just means that salaries just go up and up and up.
These crazy high salaries—much, much higher than European and Asian executive salaries, by the way—are not in the shareholder's interests. They're in no one's interests except the executives who get the money. This is an example of a market failure. Market failures are what make regulation necessary.
posted by Ivan Fyodorovich at 11:29 PM on October 17, 2011 [65 favorites]
So if corporate profitability is high and labor is cheap what is stopping new company start-ups or existing company expansion using some of this cheap labor to take a slice of these profits? What are these profits, and why are they apparently immune to competition? Or what have I misunderstood?Nothing. But how many startup founders were middle class when they started? Startups cost money. A lot of money. And venture capitalists invest in companies started by people they know. Typically the people you know are in the same social class as you. So, the result is rich people helping other rich people get rich. Meanwhile labor costs stay low and "productivity" (i.e. the amount of profit the corporations can squeeze out of the average worker) go up.
Or what have I misunderstood?The fact that the "free market" isn't magical and people pretending to quote Adam Smith have never even read his books (in which he talks about the problems caused by monopoly and the need for the government to break them up, stop collusion, etc for the market to work). Or maybe they're quoting Ayn Rand. The point is, the free market isn't magical, it doesn't solve all problems and fixed costs are a real issue in starting a bussiness.
posted by delmoi at 11:32 PM on October 17, 2011 [7 favorites]
If a market is truly free, does that mean there's nothing stopping an actor in that market from doing anything, regardless of ethics or fairness, to outplay everyone else in that market and dominate it?
posted by ZeusHumms at 11:38 PM on October 17, 2011
posted by ZeusHumms at 11:38 PM on October 17, 2011
Thanks, Ivan. i hadn't thought about the effects of labour unions. I am not familiar with them in the US context.
I think delmoi's point about institutional investors like superannuation providers (in Australia) and 401K funds in the US is especially relevant - because of them, many, many people have skin in the game but no means to control or influence it in even the slightest way.
posted by His thoughts were red thoughts at 11:40 PM on October 17, 2011 [3 favorites]
I think delmoi's point about institutional investors like superannuation providers (in Australia) and 401K funds in the US is especially relevant - because of them, many, many people have skin in the game but no means to control or influence it in even the slightest way.
posted by His thoughts were red thoughts at 11:40 PM on October 17, 2011 [3 favorites]
More good charts
Cool. Where do they come from?
Here's a start:
The first one comes from the NYT.
The second one has text on the bottom telling where it 's from. (link to original)
The third and fourth are from this interactive graph (previously).
The fifth I haven't tracked down yet, but this graph from the WSJ seems to be using the same data.
Number 7 comes from Mother Jones.
Three of the graphs (10,15,16) come from this report (pdf).
Number 11 comes from here.
posted by -jf- at 11:50 PM on October 17, 2011 [2 favorites]
Cool. Where do they come from?
Here's a start:
The first one comes from the NYT.
The second one has text on the bottom telling where it 's from. (link to original)
The third and fourth are from this interactive graph (previously).
The fifth I haven't tracked down yet, but this graph from the WSJ seems to be using the same data.
Number 7 comes from Mother Jones.
Three of the graphs (10,15,16) come from this report (pdf).
Number 11 comes from here.
posted by -jf- at 11:50 PM on October 17, 2011 [2 favorites]
Nothing. But how many startup founders were middle class when they started? Startups cost money. A lot of money. And venture capitalists invest in companies started by people they know. Typically the people you know are in the same social class as you. So, the result is rich people helping other rich people get rich. Meanwhile labor costs stay low and "productivity" (i.e. the amount of profit the corporations can squeeze out of the average worker) go up.
Many startup founders are middle class (I wanted to find how many successful entrepreneurs are but could not, but the number of middle class who start companies is quite high), and startups are more easily funded now than ever. Venture capital as something necessary is an old concept now -- it's about small seed investments from small funds and individuals. Introductions are made any way possible because nobody in the business of investing would be dumb enough to only give money to his or her rich friends lest the fund investors leave because of poor returns. There are many non-profits and programs to assist entrepreneurs, especially ones without much money. In addition to starting a proper business there is consulting, an easy way to stop being underpaid.
This is a great time to start a company. I think that is evidence that many of the people at the low end of the wage gap aren't really worth more money because their jobs aren't hard to do or particularly valuable outside of the standardized, automated large company culture that treats them as interchangeable because, sadly, they are.
posted by michaelh at 11:58 PM on October 17, 2011
Many startup founders are middle class (I wanted to find how many successful entrepreneurs are but could not, but the number of middle class who start companies is quite high), and startups are more easily funded now than ever. Venture capital as something necessary is an old concept now -- it's about small seed investments from small funds and individuals. Introductions are made any way possible because nobody in the business of investing would be dumb enough to only give money to his or her rich friends lest the fund investors leave because of poor returns. There are many non-profits and programs to assist entrepreneurs, especially ones without much money. In addition to starting a proper business there is consulting, an easy way to stop being underpaid.
This is a great time to start a company. I think that is evidence that many of the people at the low end of the wage gap aren't really worth more money because their jobs aren't hard to do or particularly valuable outside of the standardized, automated large company culture that treats them as interchangeable because, sadly, they are.
posted by michaelh at 11:58 PM on October 17, 2011
I suppose one might reply that if a majority of people are not worth a decent wage to the economy, something is wrong with the economy.
posted by Nothing at 12:10 AM on October 18, 2011 [12 favorites]
posted by Nothing at 12:10 AM on October 18, 2011 [12 favorites]
I suppose one might reply that if a majority of people are not worth a decent wage to the economy, something is wrong with the economy.
I would hope so since something is wrong.
posted by michaelh at 12:15 AM on October 18, 2011
I would hope so since something is wrong.
posted by michaelh at 12:15 AM on October 18, 2011
Cracked list
I'm trying to figure out what Occupy Sydney are angry about
posted by Lovecraft In Brooklyn at 12:21 AM on October 18, 2011
I'm trying to figure out what Occupy Sydney are angry about
posted by Lovecraft In Brooklyn at 12:21 AM on October 18, 2011
I'd argue that high executive pay isn't a problem in and of itself.
If the rest of us were free, happy, safe and financially secure, I wouldn't give two shits what the top 1% were making. The problem is, we're increasingly not free, happy, safe or secure. And when we gripe about it, the ones on top talk about austerity and self-discipline and tell us it's inevitable, we all just have to tighten our belts.
So here's why it's important to call attention to the distribution of income. It's because when those fuckers say "this is a hard time for everyone" and tell us our well-being just won't fit in this year's budget, anyone smart enough to look at their paycheck can tell that they're lying.
posted by nebulawindphone at 12:26 AM on October 18, 2011 [58 favorites]
If the rest of us were free, happy, safe and financially secure, I wouldn't give two shits what the top 1% were making. The problem is, we're increasingly not free, happy, safe or secure. And when we gripe about it, the ones on top talk about austerity and self-discipline and tell us it's inevitable, we all just have to tighten our belts.
So here's why it's important to call attention to the distribution of income. It's because when those fuckers say "this is a hard time for everyone" and tell us our well-being just won't fit in this year's budget, anyone smart enough to look at their paycheck can tell that they're lying.
posted by nebulawindphone at 12:26 AM on October 18, 2011 [58 favorites]
This is a great time to start a company.
In a country with a working healthcare system, doing a startup would certainly be a less risky proposition.
posted by Blazecock Pileon at 12:36 AM on October 18, 2011 [27 favorites]
In a country with a working healthcare system, doing a startup would certainly be a less risky proposition.
posted by Blazecock Pileon at 12:36 AM on October 18, 2011 [27 favorites]
PostIronyIsNotaMyth: "Correct me if I'm wrong, but isn't the main problem with Wall Street is that they led us into a financial slump because they bet against the American economy?
Please do correct me if I'm wrong"
The main problem with Wall Street is they bet against the US economy, caused a slump, and then came back from it entirely unscathed. That last part is key: the wealthy are doing better now in 2011 than they were in 2008, while almost everyone else is basically struggling. That's the product of an economy in which the wealthy always have safety nets in place so they never have face consequences for their behavior. Remember: socialize risk, privatize profit.
Basically, if this was the late 1920s, early 1930s the rich would be really worried about being attacked by the poor and would enact a bunch of social programs as a bandaid to fix the economy an placate the impoverished. Fortunately for the wealthy, this is the 21st century. American socialism is dead, the labor unions are neutered, and fighting for income equality is generally regarded as un-American and unpatriotic.
posted by Deathalicious at 12:42 AM on October 18, 2011 [15 favorites]
Please do correct me if I'm wrong"
The main problem with Wall Street is they bet against the US economy, caused a slump, and then came back from it entirely unscathed. That last part is key: the wealthy are doing better now in 2011 than they were in 2008, while almost everyone else is basically struggling. That's the product of an economy in which the wealthy always have safety nets in place so they never have face consequences for their behavior. Remember: socialize risk, privatize profit.
Basically, if this was the late 1920s, early 1930s the rich would be really worried about being attacked by the poor and would enact a bunch of social programs as a bandaid to fix the economy an placate the impoverished. Fortunately for the wealthy, this is the 21st century. American socialism is dead, the labor unions are neutered, and fighting for income equality is generally regarded as un-American and unpatriotic.
posted by Deathalicious at 12:42 AM on October 18, 2011 [15 favorites]
michaelh: "In addition to starting a proper business there is consulting, an easy way to stop being underpaid."
Once you factor in paying your own taxes and healthcare, consistently logging enough hours, the hours spent networking and in self-training, consulting is really only a viable option for a few people. Not everyone can run their own business, and not everyone should. Not to mention that if everyone became consultants, the market would be saturated and the price differential between being an paid worker and a consultant would vanish while you'd still enjoy all the drawbacks of owning and running your own business.
posted by Deathalicious at 12:48 AM on October 18, 2011 [7 favorites]
Once you factor in paying your own taxes and healthcare, consistently logging enough hours, the hours spent networking and in self-training, consulting is really only a viable option for a few people. Not everyone can run their own business, and not everyone should. Not to mention that if everyone became consultants, the market would be saturated and the price differential between being an paid worker and a consultant would vanish while you'd still enjoy all the drawbacks of owning and running your own business.
posted by Deathalicious at 12:48 AM on October 18, 2011 [7 favorites]
Many, many more charts in the original version of this that went up at Business Insider last week.
posted by Sonny Jim at 12:52 AM on October 18, 2011 [2 favorites]
posted by Sonny Jim at 12:52 AM on October 18, 2011 [2 favorites]
alasdair: "So if corporate profitability is high and labor is cheap what is stopping new company start-ups or existing company expansion using some of this cheap labor to take a slice of these profits? What are these profits, and why are they apparently immune to competition? Or what have I misunderstood?"
You haven't misunderstood, you've probably just been misled. For example, tradition economics assumes that all companies are competing on an equal footing. They aren't.
posted by Deathalicious at 12:56 AM on October 18, 2011 [3 favorites]
You haven't misunderstood, you've probably just been misled. For example, tradition economics assumes that all companies are competing on an equal footing. They aren't.
posted by Deathalicious at 12:56 AM on October 18, 2011 [3 favorites]
LiB : Occupy Sydney/Melbourne/Brisbane are just the local protest mob out in solidarity. In Australia with 5% unemployment, universal health care and greater income mobility what's driven the Tea Party and Occupy folks just doesn't apply here.
There is a nice critique of Occupy Australia at pangeekery
posted by sien at 1:08 AM on October 18, 2011 [2 favorites]
There is a nice critique of Occupy Australia at pangeekery
posted by sien at 1:08 AM on October 18, 2011 [2 favorites]
Very cool, but where's the chart that shows government complicity?
posted by gern at 1:09 AM on October 18, 2011 [3 favorites]
posted by gern at 1:09 AM on October 18, 2011 [3 favorites]
If a market is truly free, does that mean there's nothing stopping an actor in that market from doing anything regardless of ethics or fairness, to outplay everyone else in that market and dominate it?
Any market has rules, whether established by legislation or acknowledged by convention. In Elizabethan England you could get hanged for clipping coins. In modern America, you can get sent to prison for decades if you run an out-and-out Ponzi scheme. You can't have a free market without some kind of protection against fraud, for example.
The more intelligently ruthless are aware that money can be turned into political leverage. The very wealthy can lobby to change the rules of the market to be more to their advantage. It may be quite some time before news that the rules have changed even filters down to an unsophisticated investor like me.
Another tactic of the ruthless wealthy has been to attack the regulators with what amounts to a denial of service attack. A sufficiently complex investment scheme or tax shelter can take a huge amount of regulator-hours just to decipher. Even if the regulator detects illegality, they need to be able to explain the problem to a judge. Even if they succeed at that, the perpetrator is likely to get off with a small penalty. (It was wrong, but they had a semi-defensible argument for it...) We may all live under the same laws, but billionaires are less constrained by them than the rest of us since a little money spent on a team of lawyers and accountants can buy a lot of probably-legal loopholes.
These are not new tactics.
The freedom to game the rules of the market isn't a freedom that I value or respect. A well and truly gamed market is better at defending privilege than it is at rewarding innovation. We can't have a free market if there are no political forces in our society capable of pushing back against people who want to bend or change the rules to their own private advantage. The problem isn't ethics or economics, it's politics.
posted by justsomebodythatyouusedtoknow at 1:13 AM on October 18, 2011 [19 favorites]
Any market has rules, whether established by legislation or acknowledged by convention. In Elizabethan England you could get hanged for clipping coins. In modern America, you can get sent to prison for decades if you run an out-and-out Ponzi scheme. You can't have a free market without some kind of protection against fraud, for example.
The more intelligently ruthless are aware that money can be turned into political leverage. The very wealthy can lobby to change the rules of the market to be more to their advantage. It may be quite some time before news that the rules have changed even filters down to an unsophisticated investor like me.
Another tactic of the ruthless wealthy has been to attack the regulators with what amounts to a denial of service attack. A sufficiently complex investment scheme or tax shelter can take a huge amount of regulator-hours just to decipher. Even if the regulator detects illegality, they need to be able to explain the problem to a judge. Even if they succeed at that, the perpetrator is likely to get off with a small penalty. (It was wrong, but they had a semi-defensible argument for it...) We may all live under the same laws, but billionaires are less constrained by them than the rest of us since a little money spent on a team of lawyers and accountants can buy a lot of probably-legal loopholes.
These are not new tactics.
The freedom to game the rules of the market isn't a freedom that I value or respect. A well and truly gamed market is better at defending privilege than it is at rewarding innovation. We can't have a free market if there are no political forces in our society capable of pushing back against people who want to bend or change the rules to their own private advantage. The problem isn't ethics or economics, it's politics.
posted by justsomebodythatyouusedtoknow at 1:13 AM on October 18, 2011 [19 favorites]
In a country with a working healthcare system, doing a startup would certainly be a less risky proposition.
In general, not really if you're referring to actual countries because of increased startup cost and complexity elsewhere, although Canada would probably be better than the USA that way.
Once you factor in paying your own taxes and healthcare, consistently logging enough hours, the hours spent networking and in self-training, consulting is really only a viable option for a few people. Not everyone can run their own business, and not everyone should. Not to mention that if everyone became consultants, the market would be saturated and the price differential between being an paid worker and a consultant would vanish while you'd still enjoy all the drawbacks of owning and running your own business.
That is why small consulting partnerships/companies are generally the best option. They hit a sweet spot where everyone can exercise strengths and still make more money than a salaried employee at a large company. Every employee can't start to consult because everyone is not good -- it's a move for people who are underpaid for what they do.
posted by michaelh at 1:14 AM on October 18, 2011
In general, not really if you're referring to actual countries because of increased startup cost and complexity elsewhere, although Canada would probably be better than the USA that way.
Once you factor in paying your own taxes and healthcare, consistently logging enough hours, the hours spent networking and in self-training, consulting is really only a viable option for a few people. Not everyone can run their own business, and not everyone should. Not to mention that if everyone became consultants, the market would be saturated and the price differential between being an paid worker and a consultant would vanish while you'd still enjoy all the drawbacks of owning and running your own business.
That is why small consulting partnerships/companies are generally the best option. They hit a sweet spot where everyone can exercise strengths and still make more money than a salaried employee at a large company. Every employee can't start to consult because everyone is not good -- it's a move for people who are underpaid for what they do.
posted by michaelh at 1:14 AM on October 18, 2011
Just to be above board, my opinion about what jobs should look like is in line with John Ruskin, G.K. Chesterton, Christopher Alexander, etc. I think some of y'all are worried I like people being paid to do brain-dead work that makes a few people money.
posted by michaelh at 1:20 AM on October 18, 2011 [1 favorite]
posted by michaelh at 1:20 AM on October 18, 2011 [1 favorite]
Looking at metrics can show the symptoms. As eye-opening (and damning) as these charts are, it's important to parse just what it is that has happened these last 30 years, and the Faustian deal that was made with Supply-Side economics and the deification of Wall Street as the engine of prosperity instead of a system subsidiary and dependent on the needs of Main Street, and the systemic breakdown within it that corrupted it with criminality, manipulation, scheming, over-speculation and a thousand and one, ponzi/con games.
And the attendant break down in law that went with that corruption that allowed so many bankers and investors to fudge their crimes and walk away from them AND still keep their jobs, keep their bonuses, get a massive taxpayer funded bail-out and return to business (and criminality) as usual.
I think everyone realizes, and if it doesn't realize it itself, it must be made to realize it, that Wall Street is broken. It's a systemic abomination built on dysfunction after dysfunction and is THE sickness at the heart of the dysfunction in Washington and the pols, both GOP and Dem that get their money from it...
Feel like a broken record here. But I guess at this point I just want to be part of the discussion as much as possible and I'd say many people do and it's why the OWS movement is blazing to incredible heights of involvement and rage. And I'd say this is just the beginning, there's a lot of combustible stuff here from so many sectors and strata of the country.
posted by Skygazer at 1:31 AM on October 18, 2011 [7 favorites]
And the attendant break down in law that went with that corruption that allowed so many bankers and investors to fudge their crimes and walk away from them AND still keep their jobs, keep their bonuses, get a massive taxpayer funded bail-out and return to business (and criminality) as usual.
I think everyone realizes, and if it doesn't realize it itself, it must be made to realize it, that Wall Street is broken. It's a systemic abomination built on dysfunction after dysfunction and is THE sickness at the heart of the dysfunction in Washington and the pols, both GOP and Dem that get their money from it...
Feel like a broken record here. But I guess at this point I just want to be part of the discussion as much as possible and I'd say many people do and it's why the OWS movement is blazing to incredible heights of involvement and rage. And I'd say this is just the beginning, there's a lot of combustible stuff here from so many sectors and strata of the country.
posted by Skygazer at 1:31 AM on October 18, 2011 [7 favorites]
What they pay is between the company and the employee (in this case, the CEO). The shareholders get a say, but it is frankly nobody else's business.
CEO pay didn't increase from 50 times the average worker to 450 times the average worker by accident.
First, it's our business because massive CEO pay destabilizes the wider economy as they seek out bubbles.
Second, there's a ratchet effect as they've learned to use cosy relationships and peer benchmarking to escalate their pay. Each CEO demands that they're paid more than other CEOs, so their pay escalates regardless of their value to the business.
posted by TheophileEscargot at 3:14 AM on October 18, 2011 [6 favorites]
CEO pay didn't increase from 50 times the average worker to 450 times the average worker by accident.
First, it's our business because massive CEO pay destabilizes the wider economy as they seek out bubbles.
Second, there's a ratchet effect as they've learned to use cosy relationships and peer benchmarking to escalate their pay. Each CEO demands that they're paid more than other CEOs, so their pay escalates regardless of their value to the business.
posted by TheophileEscargot at 3:14 AM on October 18, 2011 [6 favorites]
More good charts
That's a great chart, summarizes the issue rather succinctly. I also think it will remain uncommented and un-influential, as mathematical stuff goes, unless it has a pithy marketable name to it, a la "long tail", "double dip", "hockey stick" etc.
Allow me, then, to suggest some metaphors here: Great Prosperity in the Valley of Flowers (for the Flower Children) compared to the hard winter on the Millenial Mountains. Albeit with global warming, it isn't snowing there anymore.
posted by the cydonian at 3:28 AM on October 18, 2011 [1 favorite]
That's a great chart, summarizes the issue rather succinctly. I also think it will remain uncommented and un-influential, as mathematical stuff goes, unless it has a pithy marketable name to it, a la "long tail", "double dip", "hockey stick" etc.
Allow me, then, to suggest some metaphors here: Great Prosperity in the Valley of Flowers (for the Flower Children) compared to the hard winter on the Millenial Mountains. Albeit with global warming, it isn't snowing there anymore.
posted by the cydonian at 3:28 AM on October 18, 2011 [1 favorite]
ZeusHumms: The market /is/ the rules, or at least the subclass that is instantiated as any given market.
The word 'free' when people prepend it to 'market' is a glittering generality used to disguise the real meaning: "a market regulated in a way that benefits me and mine best". For which they should be prodded vehemently with a toasting fork.
Ha Joon Chang explains it much better in Bad Samaritans (at least I thought it was him, can't find the section browsing through it).
posted by titus-g at 4:14 AM on October 18, 2011 [4 favorites]
The word 'free' when people prepend it to 'market' is a glittering generality used to disguise the real meaning: "a market regulated in a way that benefits me and mine best". For which they should be prodded vehemently with a toasting fork.
Ha Joon Chang explains it much better in Bad Samaritans (at least I thought it was him, can't find the section browsing through it).
posted by titus-g at 4:14 AM on October 18, 2011 [4 favorites]
Right author, wrong book, it's actually Thing 1 in 23 Things They Don't Tell You About Capitalism
posted by titus-g at 4:24 AM on October 18, 2011 [1 favorite]
posted by titus-g at 4:24 AM on October 18, 2011 [1 favorite]
This is all just a warm-up for the agribusiness riots, isn't it.
posted by seanmpuckett at 4:59 AM on October 18, 2011 [2 favorites]
posted by seanmpuckett at 4:59 AM on October 18, 2011 [2 favorites]
>>In a country with a working healthcare system, doing a startup would certainly be a less risky proposition.
>In general, not really if you're referring to actual countries because of increased startup cost and complexity elsewhere, although Canada would probably be better than the USA that way.
I do think, though, that the ridiculous health care situation in the US is functioning as a huge drag on the economy, but in a mostly unseen way. I have at least three coworkers who would love to quit their jobs and start their own businesses, but who can't because of needing healthcare for themselves or a spouse. So not only are their businesses staying just ideas, they are staying in their current positions, instead of three new people being hired. That's economically inefficient, and I am sure could be multiplied by hundreds of thousands or millions of people.
Yes, I want my cake and to eat it too -- I want access to French health care while keeping the US's current low barriers to starting a new business, and those two things may not really be separable, I don't know. But I don't think that this kind of inefficiency is completely separate from the long-term trends towards greater inequalities that the charts in this FPP describe. A system that fucks over middle class people is going to increasingly have these kinds of barriers to social and geographical mobility.
posted by Forktine at 5:03 AM on October 18, 2011 [5 favorites]
>In general, not really if you're referring to actual countries because of increased startup cost and complexity elsewhere, although Canada would probably be better than the USA that way.
I do think, though, that the ridiculous health care situation in the US is functioning as a huge drag on the economy, but in a mostly unseen way. I have at least three coworkers who would love to quit their jobs and start their own businesses, but who can't because of needing healthcare for themselves or a spouse. So not only are their businesses staying just ideas, they are staying in their current positions, instead of three new people being hired. That's economically inefficient, and I am sure could be multiplied by hundreds of thousands or millions of people.
Yes, I want my cake and to eat it too -- I want access to French health care while keeping the US's current low barriers to starting a new business, and those two things may not really be separable, I don't know. But I don't think that this kind of inefficiency is completely separate from the long-term trends towards greater inequalities that the charts in this FPP describe. A system that fucks over middle class people is going to increasingly have these kinds of barriers to social and geographical mobility.
posted by Forktine at 5:03 AM on October 18, 2011 [5 favorites]
But I'm unclear on the issue with CEO remuneration. Yes, CEOs in big companies get paid an obscene amount. But they (the companies) are private entities. What they pay is between the company and the employee (in this case, the CEO). The shareholders get a say, but it is frankly nobody else's business. Does anyone actually believe protesting about that will change anything?
Depends on how organized they get. A consumer goods company could easily find itself boycotted. Various regulations could be passed at the local level to make things tough on government contractors. If the populace was pissed enough even the state and federal legislators could be convinced to throw a few of their corporate friends under the bus.
(there's not likely to be real change at that level, but nobody wants to be the one under the bus)
A bunch of people with protest signs does not a revolution make, but history has shown that its the sort of thing leaders need to stay aware of if they want to keep leading.
posted by Tell Me No Lies at 5:03 AM on October 18, 2011
Depends on how organized they get. A consumer goods company could easily find itself boycotted. Various regulations could be passed at the local level to make things tough on government contractors. If the populace was pissed enough even the state and federal legislators could be convinced to throw a few of their corporate friends under the bus.
(there's not likely to be real change at that level, but nobody wants to be the one under the bus)
A bunch of people with protest signs does not a revolution make, but history has shown that its the sort of thing leaders need to stay aware of if they want to keep leading.
posted by Tell Me No Lies at 5:03 AM on October 18, 2011
I want access to French health care while keeping the US's current low barriers to starting a new business, and those two things may not really be separable, I don't know.
Where do you get this idea? I live in bloody socialist Sweden Forktine. The Swedish heath care system is the envy of the free-market French and I have started two businesses here. In my former life I started two businesses in the United States. (Yes, I am a serial unsuccessful businessman.)
I can assure you, there are NO special barriers to starting a new business in Europe and any suggestion to the contrary is complete nonsense. Indeed, because heath insurance is independent of employment, I can quit my job and take the risk to start a new business without putting the health and welfare of my family at risk.
So access to Swedish medical care and low barriers to starting a new business are not mutually exclusive. Indeed they are mutually dependent.
posted by three blind mice at 5:20 AM on October 18, 2011 [31 favorites]
Where do you get this idea? I live in bloody socialist Sweden Forktine. The Swedish heath care system is the envy of the free-market French and I have started two businesses here. In my former life I started two businesses in the United States. (Yes, I am a serial unsuccessful businessman.)
I can assure you, there are NO special barriers to starting a new business in Europe and any suggestion to the contrary is complete nonsense. Indeed, because heath insurance is independent of employment, I can quit my job and take the risk to start a new business without putting the health and welfare of my family at risk.
So access to Swedish medical care and low barriers to starting a new business are not mutually exclusive. Indeed they are mutually dependent.
posted by three blind mice at 5:20 AM on October 18, 2011 [31 favorites]
But I'm unclear on the issue with CEO remuneration.
That money is stolen from the shareholders and the employees.
The power of the shareholder has diminished dramatically - shareholder lawsuits are rarely prosecuted, and if prosecuted, rarely won. A lot of this is due to "fluidity" - the shares are part of larger financial vehicles - index funds and mutual funds - and the largest shareholders at any given moment are automated systems playing arbitrage games with each other. Who's going to make sure the CEO isn't overpaying himself when no-one buys-and-holds individual stocks anymore?
So the only real brake on CEO power is the board of directors, who are now also obscenely overpaid, and likely to be obscenely overpaid CEOs themselves (or hope to be soon).
So they are taking gains in productivity and putting it into their pocket, and robbing society of its fair share, in terms of providing jobs an wage increases. Now they've decided they don't want to pay taxes, either.
The first tea-party overthrew the last vestiges of feudalism and aristocracy. The new Tea Party heralds and hastens its return.
posted by Slap*Happy at 5:23 AM on October 18, 2011 [8 favorites]
That money is stolen from the shareholders and the employees.
The power of the shareholder has diminished dramatically - shareholder lawsuits are rarely prosecuted, and if prosecuted, rarely won. A lot of this is due to "fluidity" - the shares are part of larger financial vehicles - index funds and mutual funds - and the largest shareholders at any given moment are automated systems playing arbitrage games with each other. Who's going to make sure the CEO isn't overpaying himself when no-one buys-and-holds individual stocks anymore?
So the only real brake on CEO power is the board of directors, who are now also obscenely overpaid, and likely to be obscenely overpaid CEOs themselves (or hope to be soon).
So they are taking gains in productivity and putting it into their pocket, and robbing society of its fair share, in terms of providing jobs an wage increases. Now they've decided they don't want to pay taxes, either.
The first tea-party overthrew the last vestiges of feudalism and aristocracy. The new Tea Party heralds and hastens its return.
posted by Slap*Happy at 5:23 AM on October 18, 2011 [8 favorites]
I can assure you, there are NO special barriers to starting a new business in Europe and any suggestion to the contrary is complete nonsense. Indeed, because heath insurance is independent of employment, I can quit my job and take the risk to start a new business without putting the health and welfare of my family at risk.
This, a thousand times. I cannot understand why small business isn't a huge proponent of single-payer healthcare. Having health insurance independent of employment would increase individual entrepreneurship, and would increase social mobility. In the current system, I might be able to sacrifice some or all of my income for a period of time in order to train for a new industry, etc., but also giving up health insurance seems like too big a risk.
posted by sriracha at 5:30 AM on October 18, 2011 [6 favorites]
This, a thousand times. I cannot understand why small business isn't a huge proponent of single-payer healthcare. Having health insurance independent of employment would increase individual entrepreneurship, and would increase social mobility. In the current system, I might be able to sacrifice some or all of my income for a period of time in order to train for a new industry, etc., but also giving up health insurance seems like too big a risk.
posted by sriracha at 5:30 AM on October 18, 2011 [6 favorites]
Here in the UK when I started my business I even got free business training (including vocation specific) and 12 months of support payments (essentially like the dole, a basic living allowance). I did have to have a convincing business plan et al. -- but without that and not having to worry about healthcare I wouldn't have lasted the year, and probably have ended up back on the forestry, or some other no-qualifications-required job. As it is I'm still in business, and paying taxes, 13 years later.
If I'd been in the U.S. I doubt I'd have ever dared the risk.
posted by titus-g at 5:33 AM on October 18, 2011 [11 favorites]
If I'd been in the U.S. I doubt I'd have ever dared the risk.
posted by titus-g at 5:33 AM on October 18, 2011 [11 favorites]
Second graph doesn't adjust for inflation. Given the long timescale, it would have to be inflation-adjusted to be meaningful, IMO.
I think it is. The graph immediately beneath it is Corporate profits divided by GDP, which should remove any inflation effects, and the graph is similar.
posted by empath at 5:38 AM on October 18, 2011 [1 favorite]
I think it is. The graph immediately beneath it is Corporate profits divided by GDP, which should remove any inflation effects, and the graph is similar.
posted by empath at 5:38 AM on October 18, 2011 [1 favorite]
Class warfare is when the non-rich fight back.
posted by DU at 5:48 AM on October 18, 2011 [4 favorites]
posted by DU at 5:48 AM on October 18, 2011 [4 favorites]
I guess a bunch of people had similar ideas at the same time. I started #OWS Charts last week (and posted on Projects). I try to track down and link to the original source material as much as possible.
posted by gwint at 5:57 AM on October 18, 2011 [2 favorites]
posted by gwint at 5:57 AM on October 18, 2011 [2 favorites]
First, it's our business because massive CEO pay destabilizes the wider economy as they seek out bubbles.
Second, there's a ratchet effect as they've learned to use cosy relationships and peer benchmarking to escalate their pay. Each CEO demands that they're paid more than other CEOs, so their pay escalates regardless of their value to the business.
I agree that that CEO pay affects the rest of society in the way you describe. I just don't understand what protests about CEO pay are supposed to achieve. I might think that law firm partners get paid way too much, given that most of the work is done by the associates, but no amount of protesting outside a law firm will make the partners reconsider how they set their pay.
I simply can't see any Government regulator trying to limit how much a company can pay its employees or officers. The internal mechanisms no longer work - directors are complicit in the CEO pay scam, and shareholders are apathetic or even unknowing.
So, what is there to be done? About CEO pay? Probably nothing - but the wider problems may have some solutions.
I would say, start by forcing the companies and high earners to shoulder the fair share of the tax burden - this is a no brainer. Rectify the problem of regulatory capture - campaign finance reform would assist in that regard. Stop socialising the losses of private enterprise, especially those that screwed everything up in the first place.
The threshold question is how to get elected representatives and the governments to actually do these things, when they have already been captured by corporate interests.
posted by His thoughts were red thoughts at 5:58 AM on October 18, 2011 [1 favorite]
Second, there's a ratchet effect as they've learned to use cosy relationships and peer benchmarking to escalate their pay. Each CEO demands that they're paid more than other CEOs, so their pay escalates regardless of their value to the business.
I agree that that CEO pay affects the rest of society in the way you describe. I just don't understand what protests about CEO pay are supposed to achieve. I might think that law firm partners get paid way too much, given that most of the work is done by the associates, but no amount of protesting outside a law firm will make the partners reconsider how they set their pay.
I simply can't see any Government regulator trying to limit how much a company can pay its employees or officers. The internal mechanisms no longer work - directors are complicit in the CEO pay scam, and shareholders are apathetic or even unknowing.
So, what is there to be done? About CEO pay? Probably nothing - but the wider problems may have some solutions.
I would say, start by forcing the companies and high earners to shoulder the fair share of the tax burden - this is a no brainer. Rectify the problem of regulatory capture - campaign finance reform would assist in that regard. Stop socialising the losses of private enterprise, especially those that screwed everything up in the first place.
The threshold question is how to get elected representatives and the governments to actually do these things, when they have already been captured by corporate interests.
posted by His thoughts were red thoughts at 5:58 AM on October 18, 2011 [1 favorite]
I cannot understand why small business isn't a huge proponent of single-payer healthcare.
Well, the 45% "employers" tax might be one reason. National health care isn't free in Sweden. It is paid for by what is called "arbetsgivareavgift" - literally employers fee - which is 45%.
So if I want to pay someone 100 kronor, it costs my business 145 kronor. Then the employee has to pay her own taxes (progressive depending on income from 28% to 51%.) Taxes on corporate profits, on the other hand, at 28% are lower than in the US.
In other words, for employees at the upper end of the pay scale (about 50k USD annually), for every 145 kronor the business pays, the employee gets to keep 49 kronor.
This is not a barrier to starting a business, but it is a barrier to sustaining one and I think it is fair to be honest about this. You see in socialist countries it is not simply a matter of taxing the rich to pay for the poor - everyone - everyone - pays dearly.
Sorry I will get out of my own thread, but I thought this could be helpful to the discussion.
posted by three blind mice at 6:02 AM on October 18, 2011 [5 favorites]
Well, the 45% "employers" tax might be one reason. National health care isn't free in Sweden. It is paid for by what is called "arbetsgivareavgift" - literally employers fee - which is 45%.
So if I want to pay someone 100 kronor, it costs my business 145 kronor. Then the employee has to pay her own taxes (progressive depending on income from 28% to 51%.) Taxes on corporate profits, on the other hand, at 28% are lower than in the US.
In other words, for employees at the upper end of the pay scale (about 50k USD annually), for every 145 kronor the business pays, the employee gets to keep 49 kronor.
This is not a barrier to starting a business, but it is a barrier to sustaining one and I think it is fair to be honest about this. You see in socialist countries it is not simply a matter of taxing the rich to pay for the poor - everyone - everyone - pays dearly.
Sorry I will get out of my own thread, but I thought this could be helpful to the discussion.
posted by three blind mice at 6:02 AM on October 18, 2011 [5 favorites]
three blind mice - I learned a lot from this thread. Thanks!
posted by His thoughts were red thoughts at 6:03 AM on October 18, 2011
posted by His thoughts were red thoughts at 6:03 AM on October 18, 2011
So, what is there to be done? About CEO pay?
90% tax on all executive compensation sounds about right, descending back to 35% if the executive's company has 1) added jobs in proportion to its profits, or declined to lay off workers in the face of a loss, and 2) total compensation is less than 30 times that of the lowest paid employee.
Either business creates and protects jobs and wage growth, or the government will, through expanded programs and infrastructure investment.
posted by Slap*Happy at 6:13 AM on October 18, 2011 [2 favorites]
90% tax on all executive compensation sounds about right, descending back to 35% if the executive's company has 1) added jobs in proportion to its profits, or declined to lay off workers in the face of a loss, and 2) total compensation is less than 30 times that of the lowest paid employee.
Either business creates and protects jobs and wage growth, or the government will, through expanded programs and infrastructure investment.
posted by Slap*Happy at 6:13 AM on October 18, 2011 [2 favorites]
Compensation Consultants:
Anyone that thinks that upper management compensation is market driven is deluded. It's a cartel. You are a 'compensation consultant' hired by the same people whose wages you are deciding, to provide 'independent advice' on how much of the trough is suitable for piggy to snarf. If you decide low, you don't get hired again. As pointed out above, the system is rigged.
posted by lalochezia at 6:25 AM on October 18, 2011 [8 favorites]
Anyone that thinks that upper management compensation is market driven is deluded. It's a cartel. You are a 'compensation consultant' hired by the same people whose wages you are deciding, to provide 'independent advice' on how much of the trough is suitable for piggy to snarf. If you decide low, you don't get hired again. As pointed out above, the system is rigged.
posted by lalochezia at 6:25 AM on October 18, 2011 [8 favorites]
the Faustian deal that was made with Supply-Side economics and the deification of Wall Street as the engine of prosperity instead of a system subsidiary and dependent on the needs of Main Street
It's more than that though, it's this perverse belief in money as some sort of reality, rather than just a social construct. The idea that we should get all our smartest people together and have them sit in offices and dream up brilliantly advanced, complicated ways of shuffling around numbers on computers, and that would make us rich
No one eats money. No one is sheltered by money. No one is healed by money. Money is just lubricant for our economic actions in the real world - the things we invent and build and grow and do that have value for other people. You arguably do need some sort of banking system to effectively store and re-allocate the money we have, the money that records the value of what we've done for others in society. But the idea that "financial innovation" will make us richer is like the idea that new procedural moves in the US Senate rules is "political innovation" that will make us more democratic
And as part of this problem we've come to judge our society's progress based on almost meaningless aggregate dollar figures. Instead of asking whether we want to have the kind of society that has all this sickness and poverty and crime and unfairness, we just go "GDP is up 5%, we're doing great". If the real world effect of that is one guy gets another yacht and 25 of us get to work on it for pennies well, so what? The millionaire reporting to you from a billion dollar corporate media conglomerate-owned news station thinks it's progress, and so should you, citizen
posted by crayz at 6:30 AM on October 18, 2011 [21 favorites]
It's more than that though, it's this perverse belief in money as some sort of reality, rather than just a social construct. The idea that we should get all our smartest people together and have them sit in offices and dream up brilliantly advanced, complicated ways of shuffling around numbers on computers, and that would make us rich
No one eats money. No one is sheltered by money. No one is healed by money. Money is just lubricant for our economic actions in the real world - the things we invent and build and grow and do that have value for other people. You arguably do need some sort of banking system to effectively store and re-allocate the money we have, the money that records the value of what we've done for others in society. But the idea that "financial innovation" will make us richer is like the idea that new procedural moves in the US Senate rules is "political innovation" that will make us more democratic
And as part of this problem we've come to judge our society's progress based on almost meaningless aggregate dollar figures. Instead of asking whether we want to have the kind of society that has all this sickness and poverty and crime and unfairness, we just go "GDP is up 5%, we're doing great". If the real world effect of that is one guy gets another yacht and 25 of us get to work on it for pennies well, so what? The millionaire reporting to you from a billion dollar corporate media conglomerate-owned news station thinks it's progress, and so should you, citizen
posted by crayz at 6:30 AM on October 18, 2011 [21 favorites]
Companies making record profits by laying off employees was written over a year ago but that trend is continuing: Verizon, Cisco, Merck, all laying off employees while making billions and paying their CEOs obscene amounts. Ordinarily what the CEOs make would not concern me but what these companies are doing is writing a huge check to one guy while firing 2,000-- thereby forcing the rest of their employees to work harder. Maybe this is good business but I don't find it moral or ethical and I don't think it is good for America. As has so often been pointed out that one guy is going to hold onto his enormous check, whereas the 2,000 would have spent their money on rent and food and services.
posted by Secret Life of Gravy at 6:43 AM on October 18, 2011 [9 favorites]
posted by Secret Life of Gravy at 6:43 AM on October 18, 2011 [9 favorites]
Albeit with global warming, it isn't snowing there anymore.
Although. ALTHOUGH. Not albeit. Can't even blame iPhone's autocorrect for this one.
posted by the cydonian at 6:43 AM on October 18, 2011
Although. ALTHOUGH. Not albeit. Can't even blame iPhone's autocorrect for this one.
posted by the cydonian at 6:43 AM on October 18, 2011
Danny Glover speaks at Occupy Oakland
Photo of Danny Glover at a rally in 2007. He's certainly got a consistent rally look.
posted by kirkaracha at 6:47 AM on October 18, 2011
many, many people have skin in the game but no means to control or influence it in even the slightest way.
Yup.
An economist was on my local CBC radio morning show this morning spouting the "Occupy protesters have no solid demands" drivel. I couldn't tell if he was being disingenuous or was really that clueless. The connection between that and this thread, though, is that he also was of the impression (or wanted to give the impression) that the concerns of the Occupy movement are limited to just being upset over the existence of wealth inequality. If all a large group of people want is some wealth distribution, there are some far quicker and more direct routes to accomplishing that than occupying a public square.
Rather, my observation is that the Occupy protesters are concerned about the grossly unequal distribution of power that has facilitated, and is increased by, the grossly unequal distribution of wealth. People are upset that there is so much economic inequality, and that they feel powerless to do anything about it (through peaceful and legal means, at least).
posted by eviemath at 6:49 AM on October 18, 2011 [5 favorites]
Yup.
An economist was on my local CBC radio morning show this morning spouting the "Occupy protesters have no solid demands" drivel. I couldn't tell if he was being disingenuous or was really that clueless. The connection between that and this thread, though, is that he also was of the impression (or wanted to give the impression) that the concerns of the Occupy movement are limited to just being upset over the existence of wealth inequality. If all a large group of people want is some wealth distribution, there are some far quicker and more direct routes to accomplishing that than occupying a public square.
Rather, my observation is that the Occupy protesters are concerned about the grossly unequal distribution of power that has facilitated, and is increased by, the grossly unequal distribution of wealth. People are upset that there is so much economic inequality, and that they feel powerless to do anything about it (through peaceful and legal means, at least).
posted by eviemath at 6:49 AM on October 18, 2011 [5 favorites]
I'm trying to figure out what Occupy Sydney are angry about
Well its not like the rampant and unchecked speculation and ridiculous garnishing of wealth only happens on Wall Street.
I think there are some universal concerns raised in the OWS movement and a crisis brings a lot of things to light. What have we been letting our fellow man get up to? Does it make sense to let things continue as they are?
I went looking for the Universal Rights of Financial Traders, but noone has had the gall to write such a thing down. I did find the Universal Declaration of Human Rights though, and this it's first entry.
All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood.
That was written up after a world war and they aren't empty words. Fairness is not some abstract concept, a lack of fairness can cause trouble. Capitalism doesn't have to stop people acting in the spirit of brotherhood, but systems of governance need to be maintained so that it is fairness which keeps the peace, not threats of violence.
posted by vicx at 6:54 AM on October 18, 2011 [9 favorites]
Well its not like the rampant and unchecked speculation and ridiculous garnishing of wealth only happens on Wall Street.
I think there are some universal concerns raised in the OWS movement and a crisis brings a lot of things to light. What have we been letting our fellow man get up to? Does it make sense to let things continue as they are?
I went looking for the Universal Rights of Financial Traders, but noone has had the gall to write such a thing down. I did find the Universal Declaration of Human Rights though, and this it's first entry.
All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood.
That was written up after a world war and they aren't empty words. Fairness is not some abstract concept, a lack of fairness can cause trouble. Capitalism doesn't have to stop people acting in the spirit of brotherhood, but systems of governance need to be maintained so that it is fairness which keeps the peace, not threats of violence.
posted by vicx at 6:54 AM on October 18, 2011 [9 favorites]
michaelh: "In a country with a working healthcare system, doing a startup would certainly be a less risky proposition.
In general, not really if you're referring to actual countries because of increased startup cost and complexity elsewhere, although Canada would probably be better than the USA that way."
What is the take home pay for someone earning the equivalent of $50kUSD in the UK or Canada? I'm wondering because right now I'm paying over $10,000 dollars per year to buy health insurance for myself and my wife. If I were to get coverage for my brand new son through work, I would pay nearly $15,000 per year. So instead I'm getting insurance for my son through CHIP which is basically government funded/subsidized healthcare. That's right, in the United States, someone making $50,000 a year still needs medical assistance from the state.
Sure, I could try my luck with major medical or an HSA. That's going to be a crapshoot with a new baby, though. To be fair, the only reason we went with the healthcare from work was that my wife was denied coverage, and that was back before the health reform law passed. So it's entirely possible we could get good, normal, coverage for less.
However, the truth is I've heard stories here of people here on MetaFilter paying waaay more than I do for health insurance, just for themselves, let alone their family.
Personally, I'd be more than willing to trade a little extra cost and regulation elsewhere for health security that doesn't carve away over a fifth of my salary.
posted by Deathalicious at 7:01 AM on October 18, 2011 [1 favorite]
In general, not really if you're referring to actual countries because of increased startup cost and complexity elsewhere, although Canada would probably be better than the USA that way."
What is the take home pay for someone earning the equivalent of $50kUSD in the UK or Canada? I'm wondering because right now I'm paying over $10,000 dollars per year to buy health insurance for myself and my wife. If I were to get coverage for my brand new son through work, I would pay nearly $15,000 per year. So instead I'm getting insurance for my son through CHIP which is basically government funded/subsidized healthcare. That's right, in the United States, someone making $50,000 a year still needs medical assistance from the state.
Sure, I could try my luck with major medical or an HSA. That's going to be a crapshoot with a new baby, though. To be fair, the only reason we went with the healthcare from work was that my wife was denied coverage, and that was back before the health reform law passed. So it's entirely possible we could get good, normal, coverage for less.
However, the truth is I've heard stories here of people here on MetaFilter paying waaay more than I do for health insurance, just for themselves, let alone their family.
Personally, I'd be more than willing to trade a little extra cost and regulation elsewhere for health security that doesn't carve away over a fifth of my salary.
posted by Deathalicious at 7:01 AM on October 18, 2011 [1 favorite]
"Any time that a liberal points out that the wealthy are disproportionately benefiting from Bush’s tax policies, Republicans shout, “class warfare!”
Umm... go down to Zuccotti park and you'll find that there are plenty of folks with signs about class warfare. I'm thinking they're not the Republican noise machine.
posted by Jahaza at 7:13 AM on October 18, 2011
Umm... go down to Zuccotti park and you'll find that there are plenty of folks with signs about class warfare. I'm thinking they're not the Republican noise machine.
posted by Jahaza at 7:13 AM on October 18, 2011
With the Citizens Untied ruling pretty much securing personhood for corporations we have just created the first immortal "individuals" in the U.S. The CEO of GE may change but GE will be there far longer than you or I will.
These entities with far greater access to resources, and now even more overt political access, can, under our current system, manipulate politicians at will and also write their own legislation for their purchased hack to vote on.
ALEC anyone?
We are witnessing the stratification of America at such a rapid pace most people don't even realize it's happening.
posted by Max Power at 7:19 AM on October 18, 2011
These entities with far greater access to resources, and now even more overt political access, can, under our current system, manipulate politicians at will and also write their own legislation for their purchased hack to vote on.
ALEC anyone?
We are witnessing the stratification of America at such a rapid pace most people don't even realize it's happening.
posted by Max Power at 7:19 AM on October 18, 2011
Slap*Happy
"90% tax on all executive compensation sounds about right, descending back to 35% if the executive's company has 1) added jobs in proportion to its profits, or declined to lay off workers in the face of a loss, and 2) total compensation is less than 30 times that of the lowest paid employee."
So this is why the OWS crowd is hard to take seriously. The prescribed actions demonstrate a clear lack of understanding of basic economics and fail to consider the inevitable unintended consequences, which will invariably worsen whatever situation that the actions were intended to fix.
Consider the first suggestion 1.) "Add jobs in proportion to profits..."
A company's ability to generate profits is far from static. While the company may be currently generating profits, its ability to do so in future periods is never assured so its decisions about what to do with today's profits is critical to the survival of the business. The only way a company will keep as many employees as it can employed for the longest period of time possible is by focusing solely on generating a profit and investing those profits in whatever will generate the highest return. In some cases, the highest return investments involve hiring more employees or paying existing employees more. Other uses for profits though are going to generate higher returns. These include capital investments, debt reductions, dividend payments, acquisitions, R&D, upgrades of anything, saving for when sales slow, saving for when sales pick up, and about a million other uses.
A corporation has a lot of stakeholders that it must acquiesce and employees or people who would like to be an employee are only one stakeholder. It has to pay creditors, vendors, taxing authorities, owners, provide the product or service to its customers, satisfy regulatory requirements, and consider what the market will demand when additional capital is required, which is the most important.
The idea that the OWS crowd can mandate which stakeholder should take precedence is ridiculous considering the myriad of potential uses for a cash flow stream that varies quarter to quarter and year to year. Only the company can make these decisions and of course, despite having inside and the most up to date information, still frequently make the wrong decision to their detriment.
Attempting to satisfy the demands of each stakeholder, or favoring one at the expense of the others, will quickly kill a company. When the sole focus is on maximizing profits, the stakeholders demands are met to the greatest degree possible for the longest period of time possible. The OWS crowd is ill-informed and delusional.
posted by otto42 at 7:21 AM on October 18, 2011 [3 favorites]
"90% tax on all executive compensation sounds about right, descending back to 35% if the executive's company has 1) added jobs in proportion to its profits, or declined to lay off workers in the face of a loss, and 2) total compensation is less than 30 times that of the lowest paid employee."
So this is why the OWS crowd is hard to take seriously. The prescribed actions demonstrate a clear lack of understanding of basic economics and fail to consider the inevitable unintended consequences, which will invariably worsen whatever situation that the actions were intended to fix.
Consider the first suggestion 1.) "Add jobs in proportion to profits..."
A company's ability to generate profits is far from static. While the company may be currently generating profits, its ability to do so in future periods is never assured so its decisions about what to do with today's profits is critical to the survival of the business. The only way a company will keep as many employees as it can employed for the longest period of time possible is by focusing solely on generating a profit and investing those profits in whatever will generate the highest return. In some cases, the highest return investments involve hiring more employees or paying existing employees more. Other uses for profits though are going to generate higher returns. These include capital investments, debt reductions, dividend payments, acquisitions, R&D, upgrades of anything, saving for when sales slow, saving for when sales pick up, and about a million other uses.
A corporation has a lot of stakeholders that it must acquiesce and employees or people who would like to be an employee are only one stakeholder. It has to pay creditors, vendors, taxing authorities, owners, provide the product or service to its customers, satisfy regulatory requirements, and consider what the market will demand when additional capital is required, which is the most important.
The idea that the OWS crowd can mandate which stakeholder should take precedence is ridiculous considering the myriad of potential uses for a cash flow stream that varies quarter to quarter and year to year. Only the company can make these decisions and of course, despite having inside and the most up to date information, still frequently make the wrong decision to their detriment.
Attempting to satisfy the demands of each stakeholder, or favoring one at the expense of the others, will quickly kill a company. When the sole focus is on maximizing profits, the stakeholders demands are met to the greatest degree possible for the longest period of time possible. The OWS crowd is ill-informed and delusional.
posted by otto42 at 7:21 AM on October 18, 2011 [3 favorites]
Deathalicious: according to http://www.uktaxcalculators.co.uk/ then the tax on $50K gross pay would be about $11K, assuming no deductions in the UK. You'd also possibly be eligible for the sprog tax credit.
posted by titus-g at 7:24 AM on October 18, 2011
posted by titus-g at 7:24 AM on October 18, 2011
I suppose the question is, why has worker pay stopped increasing in line with productivity? And how can it go back to the way it was in the 50s to the 80s? How do you make employers pass on the gains?
You really can't because many of the high-paying jobs at large companies have been automated away or just straight up eliminated (e.g. management tiers.) The best solution is for more people to own businesses, or work to increase market demand for things that require handcraft.
posted by michaelh at 11:03 PM on 10/17
[1 favorite +] [!]
Creating a demand for hand-crafted items is not on the face of it a bad idea, but a lot of people are still going to buy cheap shit from China, or prettier stuff that has hand crafting (by bonded child labor...urn..) or buy second hand. The best items of daily use to go hand-crafted with are shoes, especially shoes marketed to very wealthy people, jewelry made from precious materials, one of a kind clothing made from expensive fabrics. Starting a fashion for hand embroidery would also help. Hand embroidered items are expensive for a reason, it takes time to learn, good thread is expensive, and it takes patience to embroider. Hand crafted things do not sell quickly. I have a friend who makes and sells things she makes. People justifiably ooooh and sassan over her work, but they don't buy much because of the expense and the fact that most of it doesn't work with office-wear.
That would be a problem with going hand-crafted.
We are increasingly expected to be clones, to even get a job, let alone keep it, then we are not PAID enough to make all those small, incremental surrenders of ourselves
WORTH it. Then We get thrown on the scrap heap.
(Sorry, got a little Taney and off track...)
On what people are not making now, it takes real courage to step off the plank into self employment, especially when few people are mot sufficiently employed enough to buy and use what you make.
I feel sad about that. I did buy some jewelry from my friend who makes it, for myself, and as gifts.
I did so because those things are lovely. I had a hard time finding something my daughter could wear to her office job, this jewelry is very unique.
For myself, since, I don't work, I could get what I like. I would not be able to wear the necklace made from camel tack to an actual job.
posted by Katjusa Roquette at 7:36 AM on October 18, 2011 [2 favorites]
You really can't because many of the high-paying jobs at large companies have been automated away or just straight up eliminated (e.g. management tiers.) The best solution is for more people to own businesses, or work to increase market demand for things that require handcraft.
posted by michaelh at 11:03 PM on 10/17
[1 favorite +] [!]
Creating a demand for hand-crafted items is not on the face of it a bad idea, but a lot of people are still going to buy cheap shit from China, or prettier stuff that has hand crafting (by bonded child labor...urn..) or buy second hand. The best items of daily use to go hand-crafted with are shoes, especially shoes marketed to very wealthy people, jewelry made from precious materials, one of a kind clothing made from expensive fabrics. Starting a fashion for hand embroidery would also help. Hand embroidered items are expensive for a reason, it takes time to learn, good thread is expensive, and it takes patience to embroider. Hand crafted things do not sell quickly. I have a friend who makes and sells things she makes. People justifiably ooooh and sassan over her work, but they don't buy much because of the expense and the fact that most of it doesn't work with office-wear.
That would be a problem with going hand-crafted.
We are increasingly expected to be clones, to even get a job, let alone keep it, then we are not PAID enough to make all those small, incremental surrenders of ourselves
WORTH it. Then We get thrown on the scrap heap.
(Sorry, got a little Taney and off track...)
On what people are not making now, it takes real courage to step off the plank into self employment, especially when few people are mot sufficiently employed enough to buy and use what you make.
I feel sad about that. I did buy some jewelry from my friend who makes it, for myself, and as gifts.
I did so because those things are lovely. I had a hard time finding something my daughter could wear to her office job, this jewelry is very unique.
For myself, since, I don't work, I could get what I like. I would not be able to wear the necklace made from camel tack to an actual job.
posted by Katjusa Roquette at 7:36 AM on October 18, 2011 [2 favorites]
The prescribed actions demonstrate a clear lack of understanding of basic economics and fail to consider the inevitable unintended consequences, which will invariably worsen whatever situation that the actions were intended to fix.
The actions of corporations fail to take into account the downsides of trying to do business in a country with a lot of over-educated, under paid and underemployed young people.
They can either voluntarily start hiring people and paying better wages, or they can deal with the consequences of rising civil unrest -- or they can all agree to pay higher taxes and let the government deal with putting people to work.
posted by empath at 7:47 AM on October 18, 2011 [9 favorites]
The actions of corporations fail to take into account the downsides of trying to do business in a country with a lot of over-educated, under paid and underemployed young people.
They can either voluntarily start hiring people and paying better wages, or they can deal with the consequences of rising civil unrest -- or they can all agree to pay higher taxes and let the government deal with putting people to work.
posted by empath at 7:47 AM on October 18, 2011 [9 favorites]
I think that the message of the OWS people doesn't matter. People are angry, and that anger is going to get funneled into whichever 'movement' is available, and the mob will continue to get bigger and angrier until something changes.
posted by empath at 7:49 AM on October 18, 2011 [9 favorites]
posted by empath at 7:49 AM on October 18, 2011 [9 favorites]
But I'm unclear on the issue with CEO remuneration. Yes, CEOs in big companies get paid an obscene amount. But they (the companies) are private entities.
Actually, that's not strictly speaking correct. Publicly traded corporations are not purely private entities, they are something we used to call "public concerns": their behaviors have much greater potential to impact the public, and that's part of why we justify regulating them--in exchange for giving the owners some protection against personal financial liability.
I would argue this is a moot point. It's very reasonable to view ongoing public concerns as subject to regulation. We already do it every day. There's no reason we couldn't regulate better mechanisms into place to prevent socially parasitic levels of executive compensation. We could give shareholders a binding vote on compensation packages, for example. Or we could define some economically rational maximum ratio between the upper-limit of executive compensation and median/mean worker compensation to ensure wages grow proportionally across all levels of a public concern.
There are lots of things we could do, thanks to the commerce clause. Nobody has a right to engage in unregulated commerce, and no one ever has. That's just the revisionist/dishonest line the Kochs' of the world would like you to swallow. All powers not explicitly enumerated are deferred to the people: that means we get to say what our laws can and can't do, unless it's specifically ruled out. And for better or worse, there's no explicit guarantee of any right to compensation of any kind in the constitution. In fact, for much of US history, many workers weren't really compensated at all (unless you consider it earning a wage to be forced into debt servitude, as was the lot of many poor sharecroppers in the earlier part of last century).
posted by saulgoodman at 7:51 AM on October 18, 2011 [8 favorites]
Actually, that's not strictly speaking correct. Publicly traded corporations are not purely private entities, they are something we used to call "public concerns": their behaviors have much greater potential to impact the public, and that's part of why we justify regulating them--in exchange for giving the owners some protection against personal financial liability.
I would argue this is a moot point. It's very reasonable to view ongoing public concerns as subject to regulation. We already do it every day. There's no reason we couldn't regulate better mechanisms into place to prevent socially parasitic levels of executive compensation. We could give shareholders a binding vote on compensation packages, for example. Or we could define some economically rational maximum ratio between the upper-limit of executive compensation and median/mean worker compensation to ensure wages grow proportionally across all levels of a public concern.
There are lots of things we could do, thanks to the commerce clause. Nobody has a right to engage in unregulated commerce, and no one ever has. That's just the revisionist/dishonest line the Kochs' of the world would like you to swallow. All powers not explicitly enumerated are deferred to the people: that means we get to say what our laws can and can't do, unless it's specifically ruled out. And for better or worse, there's no explicit guarantee of any right to compensation of any kind in the constitution. In fact, for much of US history, many workers weren't really compensated at all (unless you consider it earning a wage to be forced into debt servitude, as was the lot of many poor sharecroppers in the earlier part of last century).
posted by saulgoodman at 7:51 AM on October 18, 2011 [8 favorites]
While CEOs are sitting on the boards giving each other raises, they're also getting compensated for that role. This report shows the average compensation package nets over $161,000.
posted by hoppytoad at 8:01 AM on October 18, 2011 [1 favorite]
posted by hoppytoad at 8:01 AM on October 18, 2011 [1 favorite]
The OWS supporters I've spoken with were all disgusted with the political power that money purchases. I think that campaign finance reform might be one of the core messages of the movement, but it's drowned out by all the anger at income inequality and unemployment.
posted by bzn at 8:28 AM on October 18, 2011 [3 favorites]
posted by bzn at 8:28 AM on October 18, 2011 [3 favorites]
Otto, you're funny.
So I take it your quote is what, from a person posting a board who sympathizes w/the movement? And you take one little bit of it and turn it into a denial of all their demands?
All the OWS folks are idiots, huh? What about sympathizers like Krugman, or Barry Ritholz, or Brad Delong or Mark Thoma or many other high profile econ type folks. They know the game is rigged and are willing to fight it AND side with the less informed in order to push for a change.
But no, lets mock them and say they're all stupid and the movement sucks and yay capitalism, any reform is just dumb, instead of saying - yeah, maybe there is some reform needed, let's look at ways to do it, instead I'll just laugh and point at some of the people in the movement who may not be as informed. And then you lose your chance at informing someone because you'd rather mock them (I guess I'm doing the same here, huh?) But seriously... You're just following the propaganda line -- they're all stupid lazy bum hippies who don't know shit about how economics works, leave it to the big boys.
posted by symbioid at 8:28 AM on October 18, 2011 [5 favorites]
So I take it your quote is what, from a person posting a board who sympathizes w/the movement? And you take one little bit of it and turn it into a denial of all their demands?
All the OWS folks are idiots, huh? What about sympathizers like Krugman, or Barry Ritholz, or Brad Delong or Mark Thoma or many other high profile econ type folks. They know the game is rigged and are willing to fight it AND side with the less informed in order to push for a change.
But no, lets mock them and say they're all stupid and the movement sucks and yay capitalism, any reform is just dumb, instead of saying - yeah, maybe there is some reform needed, let's look at ways to do it, instead I'll just laugh and point at some of the people in the movement who may not be as informed. And then you lose your chance at informing someone because you'd rather mock them (I guess I'm doing the same here, huh?) But seriously... You're just following the propaganda line -- they're all stupid lazy bum hippies who don't know shit about how economics works, leave it to the big boys.
posted by symbioid at 8:28 AM on October 18, 2011 [5 favorites]
The OWS supporters I've spoken with were all disgusted with the political power that money purchases.
I think that either 'money buying political power' and 'growing income inequality' by themselves aren't nearly as bad as the combination of the two.
posted by empath at 8:31 AM on October 18, 2011 [3 favorites]
I think that either 'money buying political power' and 'growing income inequality' by themselves aren't nearly as bad as the combination of the two.
posted by empath at 8:31 AM on October 18, 2011 [3 favorites]
We Are Not Moving
Btw, do they have anything planned for Nov 5th? Because they probably should, yeah?
posted by empath at 8:48 AM on October 18, 2011 [4 favorites]
Btw, do they have anything planned for Nov 5th? Because they probably should, yeah?
posted by empath at 8:48 AM on October 18, 2011 [4 favorites]
They can either voluntarily start hiring people and paying better wages, or they can deal with the consequences of rising civil unrest -- or they can all agree to pay higher taxes and let the government deal with putting people to work.
It sounds like a pretty hollow threat. Rising civil unrest won't do OWS any favors.
I think that the message of the OWS people doesn't matter. People are angry, and that anger is going to get funneled into whichever 'movement' is available, and the mob will continue to get bigger and angrier until something changes.
I think the message matters quite a bit. The lack of a central message is what keeps a lot of folks from jumping on board. The draw and the bane of OWS, like the Tea Party, is that it's still a kind of Rorschach test, where one can cherry pick or disregard any particular emphasis. The most unifying OWS theme is that it's not the Tea Party movement. The specifics that get bandied about range from serious to crackpot. The idea that the message doesn't matter, and the mob will get bigger and angrier only makes it look like an inverted Tea Party.
OWS has an advantage right now because everyone is concerned about the economy. But if it continues with nebulous concerns, or adopts goals that are unworkable, it's going to wear out its welcome even faster than the Tea Party, have less to show for the effort, and damage the credibility of progressive politics.
posted by 2N2222 at 8:50 AM on October 18, 2011
It sounds like a pretty hollow threat. Rising civil unrest won't do OWS any favors.
I think that the message of the OWS people doesn't matter. People are angry, and that anger is going to get funneled into whichever 'movement' is available, and the mob will continue to get bigger and angrier until something changes.
I think the message matters quite a bit. The lack of a central message is what keeps a lot of folks from jumping on board. The draw and the bane of OWS, like the Tea Party, is that it's still a kind of Rorschach test, where one can cherry pick or disregard any particular emphasis. The most unifying OWS theme is that it's not the Tea Party movement. The specifics that get bandied about range from serious to crackpot. The idea that the message doesn't matter, and the mob will get bigger and angrier only makes it look like an inverted Tea Party.
OWS has an advantage right now because everyone is concerned about the economy. But if it continues with nebulous concerns, or adopts goals that are unworkable, it's going to wear out its welcome even faster than the Tea Party, have less to show for the effort, and damage the credibility of progressive politics.
posted by 2N2222 at 8:50 AM on October 18, 2011
empath: anything planned for Nov 5th
Gunpowder, treason, and trying to replace the current government with a catholic monarch?
Not necessarily saying it would be worse (especially if they were also called the Winter Queen) , but...
posted by titus-g at 9:05 AM on October 18, 2011
Gunpowder, treason, and trying to replace the current government with a catholic monarch?
Not necessarily saying it would be worse (especially if they were also called the Winter Queen) , but...
posted by titus-g at 9:05 AM on October 18, 2011
Related: Danny Glover speaks at Occupy Oakland
Also in Oakland: Freed U.S. Hikers Speak at Occupy Oakland, Express Support for California Prisoners on Hunger Strike
posted by homunculus at 9:05 AM on October 18, 2011 [2 favorites]
Also in Oakland: Freed U.S. Hikers Speak at Occupy Oakland, Express Support for California Prisoners on Hunger Strike
posted by homunculus at 9:05 AM on October 18, 2011 [2 favorites]
Deathalicious: your average take home pay on 50K in Canada would be between 39K and 42K depending on which province you're in.
posted by smcniven at 9:08 AM on October 18, 2011
posted by smcniven at 9:08 AM on October 18, 2011
So this is why the OWS crowd is hard to take seriously. The prescribed actions demonstrate a clear lack of understanding of basic economics and fail to consider the inevitable unintended consequences, which will invariably worsen whatever situation that the actions were intended to fix.
The unintended consequences of a 90% tax bracket and policies that favored the expansion of the middle class were the 50's and 60's, the most prosperous period in our nation's history, which brought us a national highway system, the systems that would become the internet and space travel, none of which would be possible by private enterprise on its own, yet massively enriching, for both quality of life and for corporate bottom lines.
Attempting to satisfy the demands of each stakeholder, or favoring one at the expense of the others, will quickly kill a company. When the sole focus is on maximizing profits, the stakeholders demands are met to the greatest degree possible for the longest period of time possible. The OWS crowd is ill-informed and delusional.
Oh, baloney. Maximum profit is always shuttled aside for political maneuvers and powergrabs in the name of empire-building. Try reading some business case studies or biographies of famous executives. If businesses were interested in maximum profit ahead of all other concerns, they'd smuggle heroin.
Management is already favoring their own wallets and dreams of empire over the shareholders, government, employees and society in general. It's so completely out of wumpus, only massive taxation and tight regulation can reign it back in. It's an expense business will have to bear, but 1) they can afford it (see: record profits) and 2) it's an investment, one that will pay out in terms of prosperity - both in terms of profit for shareholders and in wealth creation of the middle class.
Trickle down economics has always been a hoax - the Regan Revolution was funded with massive deficit spending, and damn little in the way of infrastructure improvements to show for it.
Economics has been completely wedged up its own ass for too long.
posted by Slap*Happy at 9:09 AM on October 18, 2011 [9 favorites]
The unintended consequences of a 90% tax bracket and policies that favored the expansion of the middle class were the 50's and 60's, the most prosperous period in our nation's history, which brought us a national highway system, the systems that would become the internet and space travel, none of which would be possible by private enterprise on its own, yet massively enriching, for both quality of life and for corporate bottom lines.
Attempting to satisfy the demands of each stakeholder, or favoring one at the expense of the others, will quickly kill a company. When the sole focus is on maximizing profits, the stakeholders demands are met to the greatest degree possible for the longest period of time possible. The OWS crowd is ill-informed and delusional.
Oh, baloney. Maximum profit is always shuttled aside for political maneuvers and powergrabs in the name of empire-building. Try reading some business case studies or biographies of famous executives. If businesses were interested in maximum profit ahead of all other concerns, they'd smuggle heroin.
Management is already favoring their own wallets and dreams of empire over the shareholders, government, employees and society in general. It's so completely out of wumpus, only massive taxation and tight regulation can reign it back in. It's an expense business will have to bear, but 1) they can afford it (see: record profits) and 2) it's an investment, one that will pay out in terms of prosperity - both in terms of profit for shareholders and in wealth creation of the middle class.
Trickle down economics has always been a hoax - the Regan Revolution was funded with massive deficit spending, and damn little in the way of infrastructure improvements to show for it.
Economics has been completely wedged up its own ass for too long.
posted by Slap*Happy at 9:09 AM on October 18, 2011 [9 favorites]
It sounds like a pretty hollow threat. Rising civil unrest won't do OWS any favors.
I don't care about doing OWS any favors, and neither do the people that are out of work and suffering in the economy. The OWS people are basically a bunch of middle class college grads with too much spare time. You want to see what will scare the 1%? When the real 99% start giving a shit -- actual poor people who don't really give a shit about 'messages', and will just start smashing shop windows and looting.
The longer that there is a sense of chaos and that the police are not in control, the more likely it is that that will happen.
I think the message matters quite a bit. The lack of a central message is what keeps a lot of folks from jumping on board.
I think a lot of people are misunderstanding what is going on here. The only thing keeping people from jumping on board is that they have something to lose. That is getting to not be the case for more and more people.
posted by empath at 9:09 AM on October 18, 2011 [5 favorites]
I don't care about doing OWS any favors, and neither do the people that are out of work and suffering in the economy. The OWS people are basically a bunch of middle class college grads with too much spare time. You want to see what will scare the 1%? When the real 99% start giving a shit -- actual poor people who don't really give a shit about 'messages', and will just start smashing shop windows and looting.
The longer that there is a sense of chaos and that the police are not in control, the more likely it is that that will happen.
I think the message matters quite a bit. The lack of a central message is what keeps a lot of folks from jumping on board.
I think a lot of people are misunderstanding what is going on here. The only thing keeping people from jumping on board is that they have something to lose. That is getting to not be the case for more and more people.
posted by empath at 9:09 AM on October 18, 2011 [5 favorites]
2N2222 - empath isn't trying to make a "threat" (nor are the protesters).
He's, at least, as I'm understanding it (and I agree - if my reading is correct), merely stating that those who make peaceful change impossible make violent revolution inevitable.
All the things that helped keep the American worker afloat from the late-40s through the late 70s (generally) were brought about BECAUSE things got so bad, so bloody that things had to change.
You might need to grok the labor movement a little more to see how things were forced to change.
It wasn't because one specific group said "gimme or else", per se... It just means that things kept getting worse and worse and eventually society said "ok, we HAVE to start regulating shit or there will be an uprising to overthrow US Democracy" Both Roosevelts understood this, especially FDR.
The wealthy still sit in their thrones of privilege basking at the rest of us. This isn't a threat, it's an observation of historical tendencies.
That's all.
posted by symbioid at 9:11 AM on October 18, 2011 [4 favorites]
He's, at least, as I'm understanding it (and I agree - if my reading is correct), merely stating that those who make peaceful change impossible make violent revolution inevitable.
All the things that helped keep the American worker afloat from the late-40s through the late 70s (generally) were brought about BECAUSE things got so bad, so bloody that things had to change.
You might need to grok the labor movement a little more to see how things were forced to change.
It wasn't because one specific group said "gimme or else", per se... It just means that things kept getting worse and worse and eventually society said "ok, we HAVE to start regulating shit or there will be an uprising to overthrow US Democracy" Both Roosevelts understood this, especially FDR.
The wealthy still sit in their thrones of privilege basking at the rest of us. This isn't a threat, it's an observation of historical tendencies.
That's all.
posted by symbioid at 9:11 AM on October 18, 2011 [4 favorites]
I believe there are two main causes for most of the problems the OWS folks are upset about, and they're interrelated: The reduction in the marginal tax rates that began in the Reagan era, and the influence of money in politics and legislation. I also think the OWS folks and the Tea Party types have more in common than they realize.
posted by Daddy-O at 9:12 AM on October 18, 2011 [3 favorites]
posted by Daddy-O at 9:12 AM on October 18, 2011 [3 favorites]
Matt Taibbi: Why Occupy Wall Street Is Bigger Than Left vs. Right
posted by homunculus at 9:16 AM on October 18, 2011 [4 favorites]
posted by homunculus at 9:16 AM on October 18, 2011 [4 favorites]
The focus on CEO salaries is warranted in the U.S.
But look at Europe, they are in severe financial straits as well and their CEO salaries are not so bad in comparison.
To see what the root cause of today's global financial problems you need to look at more than just Wall Street.
Wall Street is a retail business. If you want a product, they will sell it to you (for a profit).
Throughout the last decade, there was a global real estate bubble. Millions of people thought that housing prices would keep rising forever. This delusional mindset corrupted *everyone*. Not just the bozos in the financial districts. It corrupted mortgage brokers, bankers, the governments who thought that economic growth would fill their coffers ad infinitum, and yes, the guy in the street who thought he'd put zero money down and cash out in a year for a guaranteed twenty percent profit.
Wall Street can only destroy what Main Street gives it. We can talk about how the removal of Glass-Steagall made things worse (and it did) but real estate bubbles were created right around the world even where financial regulations were tighter.
If John Kenneth Galbraith were alive today, he wouldn't be surprised at what's going on. The protests form the final stage of all financial bubbles: the search for scapegoats.
"The final and common feature of the speculative episode -- in stock markets, real estate art or junk bonds -- is what happens after the inevitable crash. This invariably will be a time of anger and recrimination and also of profoundly unsubtle introspection. The anger will fix upon the individuals who were previously most admired for their financial imagination and acuity. Some of them, having been persuaded of their own exemption from confining orthodoxy, will, as noted, have gone beyond the law, and their fall and, occasionally, their incarceration will now be viewed with righteous satisfaction. ...There will be talk of regulation and reform. What will not be discussed is the speculation itself or the aberrant optimism that lay behind it. Nothing is more remarkable than this: in the aftermath of speculation, the reality will be all but ignored."
-- A Short History of Financial Euphoria.
The tragic cycle of financial bubbles keeps repeating itself because we haven't figured out a way to defuse the cognitive processes that drive us into these speculative manias.
posted by storybored at 9:22 AM on October 18, 2011 [3 favorites]
But look at Europe, they are in severe financial straits as well and their CEO salaries are not so bad in comparison.
To see what the root cause of today's global financial problems you need to look at more than just Wall Street.
Wall Street is a retail business. If you want a product, they will sell it to you (for a profit).
Throughout the last decade, there was a global real estate bubble. Millions of people thought that housing prices would keep rising forever. This delusional mindset corrupted *everyone*. Not just the bozos in the financial districts. It corrupted mortgage brokers, bankers, the governments who thought that economic growth would fill their coffers ad infinitum, and yes, the guy in the street who thought he'd put zero money down and cash out in a year for a guaranteed twenty percent profit.
Wall Street can only destroy what Main Street gives it. We can talk about how the removal of Glass-Steagall made things worse (and it did) but real estate bubbles were created right around the world even where financial regulations were tighter.
If John Kenneth Galbraith were alive today, he wouldn't be surprised at what's going on. The protests form the final stage of all financial bubbles: the search for scapegoats.
"The final and common feature of the speculative episode -- in stock markets, real estate art or junk bonds -- is what happens after the inevitable crash. This invariably will be a time of anger and recrimination and also of profoundly unsubtle introspection. The anger will fix upon the individuals who were previously most admired for their financial imagination and acuity. Some of them, having been persuaded of their own exemption from confining orthodoxy, will, as noted, have gone beyond the law, and their fall and, occasionally, their incarceration will now be viewed with righteous satisfaction. ...There will be talk of regulation and reform. What will not be discussed is the speculation itself or the aberrant optimism that lay behind it. Nothing is more remarkable than this: in the aftermath of speculation, the reality will be all but ignored."
-- A Short History of Financial Euphoria.
The tragic cycle of financial bubbles keeps repeating itself because we haven't figured out a way to defuse the cognitive processes that drive us into these speculative manias.
posted by storybored at 9:22 AM on October 18, 2011 [3 favorites]
symbioid
I'm pretty sure I didn't call anyone a dirty hippy or anything else similarly derogatory. Maybe I should have said that they don't know what they don't know. The suggestions from Slap*Happy appear pretty indicative of the overall demands on the street from OWS participants and defenders here on Mefi. Some of those demands might be less radical than the Slap*Happy ideas but they are no less delusional in the belief that a system that distributes profits via laws, regulations and mandates would be more effective than allowing the market to do so. It is perplexing that OWS movement can rail against corrupt politicians and at the same time advocate for a system where those politicians have greater leeway to distribute profits more than already do.
posted by otto42 at 9:24 AM on October 18, 2011
I'm pretty sure I didn't call anyone a dirty hippy or anything else similarly derogatory. Maybe I should have said that they don't know what they don't know. The suggestions from Slap*Happy appear pretty indicative of the overall demands on the street from OWS participants and defenders here on Mefi. Some of those demands might be less radical than the Slap*Happy ideas but they are no less delusional in the belief that a system that distributes profits via laws, regulations and mandates would be more effective than allowing the market to do so. It is perplexing that OWS movement can rail against corrupt politicians and at the same time advocate for a system where those politicians have greater leeway to distribute profits more than already do.
posted by otto42 at 9:24 AM on October 18, 2011
It sounds like a pretty hollow threat. Rising civil unrest won't do OWS any favors.
It's continually a source of ironic amusement to me that so many of those of you who are quickest to dismiss the OWS as ignorant or misguided seem to have absolutely no knowledge of the history of your own damn country, because if you did, you'd know this is most certainly not necessarily a true statement. Eventually, when it persists long enough, people stop blaming civil unrest on the people on the street and start blaming it on the institutions of power. What was true in the early to mid 20th century and in other previous reform-centric eras in US history remains true today.
And besides, there's another point you're missing: increasingly people have no options left but to join such movements. The longer the destructive economic policies that got us to this point persist, the bigger and more common populist uprisings will get. In the depression, people didn't just set up tent cities in the streets as a form of protest--they just had no where else to go and nothing left to lose!
posted by saulgoodman at 9:34 AM on October 18, 2011 [9 favorites]
It's continually a source of ironic amusement to me that so many of those of you who are quickest to dismiss the OWS as ignorant or misguided seem to have absolutely no knowledge of the history of your own damn country, because if you did, you'd know this is most certainly not necessarily a true statement. Eventually, when it persists long enough, people stop blaming civil unrest on the people on the street and start blaming it on the institutions of power. What was true in the early to mid 20th century and in other previous reform-centric eras in US history remains true today.
And besides, there's another point you're missing: increasingly people have no options left but to join such movements. The longer the destructive economic policies that got us to this point persist, the bigger and more common populist uprisings will get. In the depression, people didn't just set up tent cities in the streets as a form of protest--they just had no where else to go and nothing left to lose!
posted by saulgoodman at 9:34 AM on October 18, 2011 [9 favorites]
no less delusional in the belief that a system that distributes profits via laws, regulations and mandates would be more effective than allowing the market to do so.
So contract law is delusional? The most effective move someone could make in a purely free market would be to hire mercenaries to take money and goods by force, or use the threat of violence to command a larger share of the profits than other stakeholders.
Oh, no, wait, you like property and contract law. Whew! Me, too.
So we've just established there can be no fair distribution of profits without laws, regulations and mandates. Capitalism couldn't really function without government interference.
What we need to do now is to fine tune those laws for maximum benefit for the most people.
posted by Slap*Happy at 9:34 AM on October 18, 2011 [3 favorites]
So contract law is delusional? The most effective move someone could make in a purely free market would be to hire mercenaries to take money and goods by force, or use the threat of violence to command a larger share of the profits than other stakeholders.
Oh, no, wait, you like property and contract law. Whew! Me, too.
So we've just established there can be no fair distribution of profits without laws, regulations and mandates. Capitalism couldn't really function without government interference.
What we need to do now is to fine tune those laws for maximum benefit for the most people.
posted by Slap*Happy at 9:34 AM on October 18, 2011 [3 favorites]
Some of those demands might be less radical than the Slap*Happy ideas but they are no less delusional in the belief that a system that distributes profits via laws, regulations and mandates would be more effective than allowing the market to do so.
More effective at what exactly?
posted by empath at 9:43 AM on October 18, 2011 [1 favorite]
More effective at what exactly?
posted by empath at 9:43 AM on October 18, 2011 [1 favorite]
Correct me if I'm wrong, but isn't the main problem with Wall Street is that they led us into a financial slump because they bet against the American economy?—PostIronyIsNotaMyth
That's wrong. Short answer: we're in a slump because a finance bubble burst.
That's nearly entirely wrong, and a constant Republican talking point. THE PROBLEM is that nearly all kinds of labor have been made fungible, and either sent offshore, or the constant threat thereof has undermined any leverage labor (organized or otherwise) ever had. Productivity has gone through the roof but the median wage has stagnated for three decades. Meanwhile, the growth I'm price of education and health care have accelerated. Why do we need to contantly be reminding everyone of this?
posted by newdaddy at 9:58 AM on October 18, 2011 [4 favorites]
That's wrong. Short answer: we're in a slump because a finance bubble burst.
That's nearly entirely wrong, and a constant Republican talking point. THE PROBLEM is that nearly all kinds of labor have been made fungible, and either sent offshore, or the constant threat thereof has undermined any leverage labor (organized or otherwise) ever had. Productivity has gone through the roof but the median wage has stagnated for three decades. Meanwhile, the growth I'm price of education and health care have accelerated. Why do we need to contantly be reminding everyone of this?
posted by newdaddy at 9:58 AM on October 18, 2011 [4 favorites]
THE PROBLEM is that nearly all kinds of labor have been made fungible, and either sent offshore, or the constant threat thereof has undermined any leverage labor (organized or otherwise) ever had. Productivity has gone through the roof but the median wage has stagnated for three decades. Meanwhile, the growth I'm price of education and health care have accelerated. Why do we need to contantly be reminding everyone of this?
Nearly right. The problem is that there is not a single problem and everyone keeps trying to distill down the debate to one single issue. And everyone seems to ignore that the current situation is a system akin to a system code base that has been built up over 50 years by successions of programmers that knew nothing about each other, without regard to the previous set of code or functionality or how their code would impact the set of spaggatti the whole mass had become. So pulling one string out while ignoring the rest can actually bring everything down until you figure out all the knock-on impacts.
On top of that, there is another system (the global system of economy, environment, politics, etc) that rest on top of this system that it needs to interact with, and any wholesale changes need to reflect what the impact will be on THAT global system, and how that global system will end up feeding back and impacting it.
posted by rich at 10:07 AM on October 18, 2011 [2 favorites]
Nearly right. The problem is that there is not a single problem and everyone keeps trying to distill down the debate to one single issue. And everyone seems to ignore that the current situation is a system akin to a system code base that has been built up over 50 years by successions of programmers that knew nothing about each other, without regard to the previous set of code or functionality or how their code would impact the set of spaggatti the whole mass had become. So pulling one string out while ignoring the rest can actually bring everything down until you figure out all the knock-on impacts.
On top of that, there is another system (the global system of economy, environment, politics, etc) that rest on top of this system that it needs to interact with, and any wholesale changes need to reflect what the impact will be on THAT global system, and how that global system will end up feeding back and impacting it.
posted by rich at 10:07 AM on October 18, 2011 [2 favorites]
The Daily Show: Investigative reporter Ellen Schultz talks about how corporations deliberately deceived their employees and Congress to profit from workers' pensions.
posted by homunculus at 10:12 AM on October 18, 2011 [3 favorites]
posted by homunculus at 10:12 AM on October 18, 2011 [3 favorites]
I am pretty sure than 99% of the business transactions that are conducted annually do not involve contract law coming into play. While I don't object to the government being the arbiter of contract disputes, it's pretty obvious that the government plays an infinitely minuscule part in enforcing contract terms. Consider all the contracts you signed over the past year to complete a transaction.
Moreover, transactions that actually involve contracts may contain the threat of a Judges decision if the terms are not met but the parties to the contracts have much more at stake for non-performance since their reputation will be damaged, and financial losses will be incurred.
Contract law, that's why we need the government? That's why businesses need closer monitoring? It's good the laws exist but don't pretend nothing would get done without them.
posted by otto42 at 10:12 AM on October 18, 2011
Moreover, transactions that actually involve contracts may contain the threat of a Judges decision if the terms are not met but the parties to the contracts have much more at stake for non-performance since their reputation will be damaged, and financial losses will be incurred.
Contract law, that's why we need the government? That's why businesses need closer monitoring? It's good the laws exist but don't pretend nothing would get done without them.
posted by otto42 at 10:12 AM on October 18, 2011
Everytime I see "charts" + "occupy wall street" I now think Business Insider. I didn't even look at these, but I'm sure they are cogent.
I don't know who the fuck they are (I've confused them with the very different and long-standing Business Week before), but they are owning this OWS data visualization space. (I'm not sure how much that is worth, but they are owning it.)
posted by mrgrimm at 10:13 AM on October 18, 2011 [1 favorite]
I don't know who the fuck they are (I've confused them with the very different and long-standing Business Week before), but they are owning this OWS data visualization space. (I'm not sure how much that is worth, but they are owning it.)
posted by mrgrimm at 10:13 AM on October 18, 2011 [1 favorite]
The financial bubble itself was basically a consequence of all the surplus wealth that didn't get fairly distributed into rational wage growth, new jobs, or social benefits for those at the the bottom of the economic heap. The demand for all those dodgy securitized investments that blew up in our faces wouldn't have been there if those at the very top hadn't suddenly found themselves with a massive glut of surplus wealth that was rapidly losing value to inflation and cost of living. It's all connected and interrelated. But the closest thing to a root cause is probably just too much surplus wealth at the top. But then again, from a certain way of looking at it, that's not a cause so much as an outcome of the tragically flawed supply-side economic nonsense we've been making the de facto national standard since the 80s. So yeah, more focus on labor interests is still on the mark.
posted by saulgoodman at 10:14 AM on October 18, 2011 [9 favorites]
posted by saulgoodman at 10:14 AM on October 18, 2011 [9 favorites]
I am pretty sure than 99% of the business transactions that are conducted annually
You're wrong. A retail transaction is implicitly a contract: in law, by making an offer for sale, you are agreeing to enter into an informal contract to deliver goods or services. A receipt is a record of your having fulfilled the contract. It's all contract law.
posted by saulgoodman at 10:15 AM on October 18, 2011 [5 favorites]
You're wrong. A retail transaction is implicitly a contract: in law, by making an offer for sale, you are agreeing to enter into an informal contract to deliver goods or services. A receipt is a record of your having fulfilled the contract. It's all contract law.
posted by saulgoodman at 10:15 AM on October 18, 2011 [5 favorites]
I want to agree with the OWS folks, but these points are pretty meaningless to me in that the points themselves suggest no fixes.
I don't care if CEOs make a TRILLION dollars for every hundred that the rank-and-file bring in. My problem is that CEOs can then spend that trillion to buy whatever they want from Washington, even while the economy burns.
I know some of the OWS crowd gets it -- it says so on their signs. It seems to me that the "easy" way for them to meet pretty much all their goals is to have a single message: Take the money out of Washington. Why isn't there a major push toward public financing of elections?
posted by coolguymichael at 10:16 AM on October 18, 2011 [2 favorites]
I don't care if CEOs make a TRILLION dollars for every hundred that the rank-and-file bring in. My problem is that CEOs can then spend that trillion to buy whatever they want from Washington, even while the economy burns.
I know some of the OWS crowd gets it -- it says so on their signs. It seems to me that the "easy" way for them to meet pretty much all their goals is to have a single message: Take the money out of Washington. Why isn't there a major push toward public financing of elections?
posted by coolguymichael at 10:16 AM on October 18, 2011 [2 favorites]
(Not to mention a corporate charter is a legal contract, and its the very basis for the existence of any formally incorporated company...)
posted by saulgoodman at 10:16 AM on October 18, 2011 [2 favorites]
posted by saulgoodman at 10:16 AM on October 18, 2011 [2 favorites]
I am pretty sure than 99% of the business transactions that are conducted annually do not involve contract law coming into play.
Wow. Ummm... no. All of them do. All. Of. Them. - except for, perhaps, retail purchases, which are covered under another set of laws.
posted by Slap*Happy at 10:17 AM on October 18, 2011
Wow. Ummm... no. All of them do. All. Of. Them. - except for, perhaps, retail purchases, which are covered under another set of laws.
posted by Slap*Happy at 10:17 AM on October 18, 2011
Actually, saulgoodman has it right.
posted by Slap*Happy at 10:18 AM on October 18, 2011 [2 favorites]
posted by Slap*Happy at 10:18 AM on October 18, 2011 [2 favorites]
except for, perhaps, retail purchases, which are covered under another set of laws.
Even retail law has its underpinnings in the notion of an implied contract, I'm pretty sure.
posted by saulgoodman at 10:19 AM on October 18, 2011 [1 favorite]
Even retail law has its underpinnings in the notion of an implied contract, I'm pretty sure.
posted by saulgoodman at 10:19 AM on October 18, 2011 [1 favorite]
ach--preview...
posted by saulgoodman at 10:20 AM on October 18, 2011
posted by saulgoodman at 10:20 AM on October 18, 2011
Every mutually agreed upon transaction in the history of the world is an implied contract. I don't think government's contract laws (the actual government statutes) are responsible for the trillions of successful performances over thousands of years.
Yes, we have contract laws.
Yes, contract laws are good.
Are contract laws (the actual government statutes) necessary to transact? No.
posted by otto42 at 10:30 AM on October 18, 2011
Yes, we have contract laws.
Yes, contract laws are good.
Are contract laws (the actual government statutes) necessary to transact? No.
posted by otto42 at 10:30 AM on October 18, 2011
Yes they are. That's why you can get arrested for retail fraud.
posted by saulgoodman at 10:31 AM on October 18, 2011 [1 favorite]
posted by saulgoodman at 10:31 AM on October 18, 2011 [1 favorite]
If you don't have a state to back you up, the only defense you have against fraud is superior fire power or a monopoly on some critical resource, which is how "the free market" worked before we had the modern state, and it was called feudalism. All other regulations are really just modern derivations of basic assurances against public fraud. There only so much more complicated because the kinds of transaction we engage in are now much more complicated.
posted by saulgoodman at 10:34 AM on October 18, 2011 [11 favorites]
posted by saulgoodman at 10:34 AM on October 18, 2011 [11 favorites]
oops--"they're." ah, screw it. i'm tired of going around this circle again anyway. cheers!
posted by saulgoodman at 10:38 AM on October 18, 2011
posted by saulgoodman at 10:38 AM on October 18, 2011
The comparison to the Great Depression is interesting, too.
I don't have data to support this, but I imagine that one difference relates to institutional structure then vs. now.
I would assume that more business leaders have MBAs and other business school training now than they did during the Depression. So now, during crisis, they revert back to the models they learned in Econ 101: "There's no demand, so we must cut supply!" Nevermind that this leads into a deflationary spiral since cutting supply means laying off redundant workers, who in turn cease to be active consumers and thereby cut demand further.
One of the biggest forces in the creation of the American Middle Class was Henry Ford's decision to pay his assembly-line workers enough so that they could afford to buy his cars. If there were one large company with the gusto to overpay redundant blue-collar workers and risk creating an oversupply that drove down prices? That would be terrible business from an Econ 101 standpoint, but might actually kickstart a recovery in an environment where no one is Keynesian enough to let the Government step in as the Demander of Last Resort.
posted by jefficator at 10:39 AM on October 18, 2011 [3 favorites]
I don't have data to support this, but I imagine that one difference relates to institutional structure then vs. now.
I would assume that more business leaders have MBAs and other business school training now than they did during the Depression. So now, during crisis, they revert back to the models they learned in Econ 101: "There's no demand, so we must cut supply!" Nevermind that this leads into a deflationary spiral since cutting supply means laying off redundant workers, who in turn cease to be active consumers and thereby cut demand further.
One of the biggest forces in the creation of the American Middle Class was Henry Ford's decision to pay his assembly-line workers enough so that they could afford to buy his cars. If there were one large company with the gusto to overpay redundant blue-collar workers and risk creating an oversupply that drove down prices? That would be terrible business from an Econ 101 standpoint, but might actually kickstart a recovery in an environment where no one is Keynesian enough to let the Government step in as the Demander of Last Resort.
posted by jefficator at 10:39 AM on October 18, 2011 [3 favorites]
That's nearly entirely wrong, and a constant Republican talking point.—newdaddyNo. This is the one thing the Republicans aren't saying. That you would assert that completely destroys your credibility.
The Republicans don't want to admit that there was either a housing or a finance bubble. So what they actually are constantly talking about is "regulatory uncertainty" and "increased government spending" and "high taxation" and "obamacare" and "structural unemployment". Those are the talking points they use to distract from the calamity and recession that occurred under a GOP President.
PostIronyIsNotaMyth asked what caused the recession. The factors you describe are all very long-term and exacerbate the situation but are not in any sense responsible for the recession. This recession is not the result of large-scale, long-term economic trends. To argue that is, ironically, to essentially buy into the business cycle theory of recessions, which is...a right-wing theory. It's right-wing because it would mean that a) there's not much that could be done to fix things, at least in the short-term; and b) it's arguable that it's just the economy working itself into a new equilibrium (and so nothing should be done about it).
There's nothing intrinsically wrong with labor being "fungible". Employees being replaceable is the same thing as employers being replaceable. Labor mobility (with regard to employers, but it's true with regard to geography) is good for labor, not bad. It's good for everyone.
What's bad for labor is the lack of collective bargaining power. That's why wages have stagnated even when productivity has soared.
The absurdly rising cost of education is a bad thing, but it's not (yet) a major factor in the state of the national economy.
The absurdly rising cost of health care is a very bad thing, and it's a very real drag on the national economy. It has little to do with this recession (other than making it more miserable for those without jobs), but a good portion of those productivity gains has been diverted to far too high health care costs and that probably accounts for a small portion of the lack of wage gains. But the health care reform was a good start to solving that problem and it will likely, sooner or later, evolve into either a single-payer system or something closer to it than what's proposed.
You, like many people, want to blame everything on trade in one form or another. The current trade regime is flawed, but the cheap manufacturing imports from China, for example, is not inherently to blame for our problems. That the Chinese are intentionally manipulating their currency to be undervalued so as to artificially inflate their trade surplus is...a small part. But "offshoring" manufacturing jobs is not the underlying cause of either the recession, nor the long-term problems with the US economy.
I'll repeat: the lack of wage increases to match the productivity and corporate profit increases has everything—everything—to do with the decline of organized labor in the US. Even where labor was never that strong, there's a network effect whereby the labor forces of those industries benefited from the strong unions in other industries. In the US today, there is no organized, large-scale force that acts in the interests of the worker in opposition to the organized, large-scale forces that act in the interests of the corporations. That is the problem. If that problem were solved, all the other things would follow suit.
posted by Ivan Fyodorovich at 10:41 AM on October 18, 2011 [10 favorites]
I'm pretty sure a corporate charter is not a contract since it is a charter. A charter is a grant of a right.
The Catholic Church and European monarchs used to grant charters (rights.) US states generally grant corporate charters so at least the process of handing out rights is more democratic than it used to be.
posted by otto42 at 10:44 AM on October 18, 2011
The Catholic Church and European monarchs used to grant charters (rights.) US states generally grant corporate charters so at least the process of handing out rights is more democratic than it used to be.
posted by otto42 at 10:44 AM on October 18, 2011
saulgoodman
Yes they are. That's why you can get arrested for retail fraud.
There are also laws against shop lifting and robbery, but those laws aren't the reason I don't do those things, and why most people don't.
posted by otto42 at 10:48 AM on October 18, 2011
Yes they are. That's why you can get arrested for retail fraud.
There are also laws against shop lifting and robbery, but those laws aren't the reason I don't do those things, and why most people don't.
posted by otto42 at 10:48 AM on October 18, 2011
I'm pretty sure a corporate charter is not a contract since it is a charter. A charter is a grant of a right.
Government guarantees your rights. Still laws and elected officials involved there.
posted by Slap*Happy at 10:50 AM on October 18, 2011
Government guarantees your rights. Still laws and elected officials involved there.
posted by Slap*Happy at 10:50 AM on October 18, 2011
In fact, the textbook definition of a charter defines it as both a contract (in one sense) and as a grant of right from a sovereign government. In both cases, the very authority most companies enjoy to exist is derived directly from law.
posted by saulgoodman at 10:53 AM on October 18, 2011 [1 favorite]
posted by saulgoodman at 10:53 AM on October 18, 2011 [1 favorite]
I would assume that more business leaders have MBAs and other business school training now than they did during the Depression. So now, during crisis, they revert back to the models they learned in Econ 101: "There's no demand, so we must cut supply!" Nevermind that this leads into a deflationary spiral since cutting supply means laying off redundant workers, who in turn cease to be active consumers and thereby cut demand further.—jefficatorOne of the most important things to understand about deflationary pressures in a liquidity trap is that under these conditions individually rational, self-interested decisions are collectively unhelpful and deflationary. That's part of why that's such a very bad place to be in—the other part is that once you're there, it becomes more and more entrenched because future expectations based upon current conditions just make those individually rational but collectively destructive decisions even more urgent and necessary.
I don't really think you can blame employers for not taking into account the best interests of the national economy, as opposed to their own. Ford's policies directly benefited his business because his workers were also directly his consumers. That kind of linkage is basically impossible in today's US economy. And, at any rate, business leaders suck at macroeconomics(*), partly or mostly because they have a vested interested in being confused between the distinction between what's good for the national economy and what's good for their business. Don't expect this to change anytime soon.
(*) Though they imagine themselves experts because they are important economic actors...this is not unlike thinking that you're an expert on nutrition because you eat.
posted by Ivan Fyodorovich at 10:57 AM on October 18, 2011 [1 favorite]
There are also laws against shop lifting and robbery, but those laws aren't the reason I don't do those things, and why most people don't.
You also don't do them because you're the kind of guy that can drop a few hundred thousand dollars on a new addition to his house, and you don't need to choose between your morals and food.
posted by empath at 10:59 AM on October 18, 2011 [4 favorites]
You also don't do them because you're the kind of guy that can drop a few hundred thousand dollars on a new addition to his house, and you don't need to choose between your morals and food.
posted by empath at 10:59 AM on October 18, 2011 [4 favorites]
Companies enjoy the right to exist irrespective of whether that right is granted by the King, the Church or the Secretary of State of New Jersey. The right has always existed. The stamp of approval grants recognition from the state, etc.
Similarly, the most pathetic North Korean peasant has a right to happiness, etc. The fact that the law in North Korea allows the police to throw him in jail for exercising that right does not mean the right does not exist.
posted by otto42 at 11:06 AM on October 18, 2011
Similarly, the most pathetic North Korean peasant has a right to happiness, etc. The fact that the law in North Korea allows the police to throw him in jail for exercising that right does not mean the right does not exist.
posted by otto42 at 11:06 AM on October 18, 2011
Companies enjoy the right to exist irrespective of whether that right is granted by the King, the Church or the Secretary of State of New Jersey. The right has always existed. The stamp of approval grants recognition from the state, etc.
There are plenty of historical examples where a company would not have had this right as a result of local law.
Similarly, the most pathetic North Korean peasant has a right to happiness, etc.
Says who? What gives someone a right to happiness?
posted by biffa at 11:12 AM on October 18, 2011
There are plenty of historical examples where a company would not have had this right as a result of local law.
Similarly, the most pathetic North Korean peasant has a right to happiness, etc.
Says who? What gives someone a right to happiness?
posted by biffa at 11:12 AM on October 18, 2011
Empath, is morality a function of income?
Are you saying that a sufficiently poor or hungry enough person will resort to stealing?
From a couple of the participants here, it appears that their is a view that the average person will do something immoral or unethical if their is no threat of getting caught and punished. Oh liberalism, you assume the best out of everybody.
posted by otto42 at 11:16 AM on October 18, 2011
Are you saying that a sufficiently poor or hungry enough person will resort to stealing?
From a couple of the participants here, it appears that their is a view that the average person will do something immoral or unethical if their is no threat of getting caught and punished. Oh liberalism, you assume the best out of everybody.
posted by otto42 at 11:16 AM on October 18, 2011
Companies enjoy the right to exist irrespective of whether that right is granted by the King, the Church or the Secretary of State of New Jersey. The right has always existed. The stamp of approval grants recognition from the state, etc.
This is loony-tunes. Corporations are artificial, state-created constructs and have no natural rights, and did not exist until very recently in human history.
posted by empath at 11:18 AM on October 18, 2011 [12 favorites]
This is loony-tunes. Corporations are artificial, state-created constructs and have no natural rights, and did not exist until very recently in human history.
posted by empath at 11:18 AM on October 18, 2011 [12 favorites]
In the absence of a state whose laws reflect the will of the people regulating commerce with the input of the governed, it will just be the landlord throwing peasants into jail, like it always was before.
Oppression is not a state sponsored monopoly and never has been. That libertarian myth might be helpful recruiting rhetoric, but its wrong and ignores most of recorded history. The old rule before the development of the modern state was: "Might Makes Right."
And in the absence of a government monopoly on violence, you don't necessarily get more "freedom"--just various exploitative private monopolies on violence and crucial natural resources instead.
What, do you think human nature has fundamentally changed since those bad old days? Then how do you explain the appalling abuses of the Mariana Islands?
It seems to me its you right wingers who have a naive view of the world.
posted by saulgoodman at 11:19 AM on October 18, 2011 [6 favorites]
Oppression is not a state sponsored monopoly and never has been. That libertarian myth might be helpful recruiting rhetoric, but its wrong and ignores most of recorded history. The old rule before the development of the modern state was: "Might Makes Right."
And in the absence of a government monopoly on violence, you don't necessarily get more "freedom"--just various exploitative private monopolies on violence and crucial natural resources instead.
What, do you think human nature has fundamentally changed since those bad old days? Then how do you explain the appalling abuses of the Mariana Islands?
It seems to me its you right wingers who have a naive view of the world.
posted by saulgoodman at 11:19 AM on October 18, 2011 [6 favorites]
Who says stealing food when you're hungry is immoral?
posted by symbioid at 11:22 AM on October 18, 2011 [4 favorites]
posted by symbioid at 11:22 AM on October 18, 2011 [4 favorites]
Says who? What gives someone a right to happiness?
They have a right to the pursuit of happiness, sure according to Locke's conception of Natural Rights. I believe in that. That doesn't mean we have an unqualified right to do anything we want--and especially not causing the misery of others through our actions.
posted by saulgoodman at 11:22 AM on October 18, 2011
They have a right to the pursuit of happiness, sure according to Locke's conception of Natural Rights. I believe in that. That doesn't mean we have an unqualified right to do anything we want--and especially not causing the misery of others through our actions.
posted by saulgoodman at 11:22 AM on October 18, 2011
Yeah, we're talking about stealing food to make someone hungry, so you can sell it back to them.
posted by Slap*Happy at 11:25 AM on October 18, 2011 [2 favorites]
posted by Slap*Happy at 11:25 AM on October 18, 2011 [2 favorites]
Who says stealing food when you're hungry is immoral?
Obviously all of the people not stealing food because they are hungry.
posted by otto42 at 11:29 AM on October 18, 2011
Obviously all of the people not stealing food because they are hungry.
posted by otto42 at 11:29 AM on October 18, 2011
You mean dead people, then?
posted by saulgoodman at 11:43 AM on October 18, 2011 [1 favorite]
posted by saulgoodman at 11:43 AM on October 18, 2011 [1 favorite]
Your argument boils down to "Better dead than socialistically fed."
posted by saulgoodman at 11:44 AM on October 18, 2011 [3 favorites]
posted by saulgoodman at 11:44 AM on October 18, 2011 [3 favorites]
Yes saulgoodman, the only poor and hungry people not stealing food because they believe it is immoral are dead people.
posted by otto42 at 11:46 AM on October 18, 2011
posted by otto42 at 11:46 AM on October 18, 2011
Wall Street can only destroy what Main Street gives it.
And funnily enough! Wall Street has been given a large, basically uncontrolled slice of everyone's retirement savings in the form of (401)ks and other retirement "vehicles". I have a mandatory contribution to various mutual funds in the form of over 12% of my salary which I have no control over. I can only hope the younger generation is also forced to pay in if I want to see any of that money again because the whole US stock market is a giant Ponzi scheme at this point.
And add me to the list of people who don't understand why small business isn't lobbying for independent health care. That's exactly why I shut down the business I started in college and why I don't work as a consultant for much more money. in case any of the Europeans are wondering in the US you pay "benefits" equivalent to the employees salary. For me to pay someone $100 I also have to pay $100 in taxes, health premiums etc. Then the employee has to turn around and pay approx 25% in federal tax and up to 10% in state taxes, depending on where they live (CA is that high, for example).
posted by fshgrl at 11:47 AM on October 18, 2011 [3 favorites]
And funnily enough! Wall Street has been given a large, basically uncontrolled slice of everyone's retirement savings in the form of (401)ks and other retirement "vehicles". I have a mandatory contribution to various mutual funds in the form of over 12% of my salary which I have no control over. I can only hope the younger generation is also forced to pay in if I want to see any of that money again because the whole US stock market is a giant Ponzi scheme at this point.
And add me to the list of people who don't understand why small business isn't lobbying for independent health care. That's exactly why I shut down the business I started in college and why I don't work as a consultant for much more money. in case any of the Europeans are wondering in the US you pay "benefits" equivalent to the employees salary. For me to pay someone $100 I also have to pay $100 in taxes, health premiums etc. Then the employee has to turn around and pay approx 25% in federal tax and up to 10% in state taxes, depending on where they live (CA is that high, for example).
posted by fshgrl at 11:47 AM on October 18, 2011 [3 favorites]
btw, that 25% is a rough estimate for a lower paid employee (I'm thinking start up here). Higher paid employees are going to pay a lot more. The highest tax burden will be on childless, high earners who don't own houses- basically.
posted by fshgrl at 11:48 AM on October 18, 2011
posted by fshgrl at 11:48 AM on October 18, 2011
I'm not arguing.
I have not said whether I think it is immoral to steal food if you are hungry.
symbioid said
'Who says stealing food when you're hungry is immoral?"
I said,
"Obviously all of the people not stealing food because they are hungry."
If hungry people didn't think stealing food was immoral, wouldn't more hungry people be stealing food?
posted by otto42 at 11:52 AM on October 18, 2011
I have not said whether I think it is immoral to steal food if you are hungry.
symbioid said
'Who says stealing food when you're hungry is immoral?"
I said,
"Obviously all of the people not stealing food because they are hungry."
If hungry people didn't think stealing food was immoral, wouldn't more hungry people be stealing food?
posted by otto42 at 11:52 AM on October 18, 2011
Yes saulgoodman, the only poor and hungry people not stealing food because they believe it is immoral are dead people.
Well, what then? Do their bodies eventually adapt to metabolize smug self-righteousness and just-world ideological fantasies, over time?
I've personally never met anyone who could go hungry indefinitely without dying, but then, I've never met anyone with the ability to defy gravity and pull themselves up by their own boot straps either, but there must be a lot of them out there since they've become such an article of conservative faith.
posted by saulgoodman at 11:53 AM on October 18, 2011 [4 favorites]
Well, what then? Do their bodies eventually adapt to metabolize smug self-righteousness and just-world ideological fantasies, over time?
I've personally never met anyone who could go hungry indefinitely without dying, but then, I've never met anyone with the ability to defy gravity and pull themselves up by their own boot straps either, but there must be a lot of them out there since they've become such an article of conservative faith.
posted by saulgoodman at 11:53 AM on October 18, 2011 [4 favorites]
ach--i see otto42. sorry for the confusion.
posted by saulgoodman at 11:54 AM on October 18, 2011
posted by saulgoodman at 11:54 AM on October 18, 2011
lalochezia wrote: Anyone that thinks that upper management compensation is market driven is deluded. It's a cartel. You are a 'compensation consultant' hired by the same people whose wages you are deciding, to provide 'independent advice' on how much of the trough is suitable for piggy to snarf. If you decide low, you don't get hired again. As pointed out above, the system is rigged.
That sounds suspiciously like the role of residential property appraisers during the middle part of the 2000s.
posted by wierdo at 12:07 PM on October 18, 2011 [2 favorites]
That sounds suspiciously like the role of residential property appraisers during the middle part of the 2000s.
posted by wierdo at 12:07 PM on October 18, 2011 [2 favorites]
'Who says stealing food when you're hungry is immoral?"
Restaurants.
If hungry people didn't think stealing food was immoral, wouldn't more hungry people be stealing food?
Wait until we cut the food stamp program to save "defense" spending.
posted by Max Power at 12:18 PM on October 18, 2011 [2 favorites]
Restaurants.
If hungry people didn't think stealing food was immoral, wouldn't more hungry people be stealing food?
Wait until we cut the food stamp program to save "defense" spending.
posted by Max Power at 12:18 PM on October 18, 2011 [2 favorites]
To these reasons I would add:
- Oligarchy instead of democracy. In the USA today, moneyed interests, rather than "the people", control our political system. The 99% have 1% of the influence in politics; the 1% have the other 99%.
- Inequality under the law. The USA justice system is a two-tiered system where the 1% are totally immune from any meaningful consequences for their illegal actions (think: torture, illegal war, massive mortgage and securities fraud, "look forward; not backward"), but the 99% are mercilessly prosecuted and sentence to draconian terms of imprisonment for the smallest crimes (including conduct that is not unlawful in most western societies).
Forktine: Yes, I want my cake and to eat it too -- I want access to French health care while keeping the US's current low barriers to starting a new business, and those two things may not really be separable, I don't know.
US expat here. I started a business in Austria last June. My brother started a business in Texas at around the same time.
I can tell you that the bureaucratic hurdles to starting a business here in Austria are not that big of a deal - even for me, where German isn't my native language. You have to visit the chamber of commerce, the courthouse, the organization that handles health insurance for the self-employed and your local county administrative office. The costs are very low if you start as a sole proprietorship.
My health insurance costs me around 150 Euros per month - full coverage, awesome system.
So I'm just saying, it's possible to have a system where everyone is insured AND the barriers to starting a new business are tolerable. I know from first-hand experience.
posted by syzygy at 12:38 PM on October 18, 2011 [10 favorites]
US expat here. I started a business in Austria last June. My brother started a business in Texas at around the same time.
I can tell you that the bureaucratic hurdles to starting a business here in Austria are not that big of a deal - even for me, where German isn't my native language. You have to visit the chamber of commerce, the courthouse, the organization that handles health insurance for the self-employed and your local county administrative office. The costs are very low if you start as a sole proprietorship.
My health insurance costs me around 150 Euros per month - full coverage, awesome system.
So I'm just saying, it's possible to have a system where everyone is insured AND the barriers to starting a new business are tolerable. I know from first-hand experience.
posted by syzygy at 12:38 PM on October 18, 2011 [10 favorites]
It's pretty easy to start a sole-proprietorship in the US, too. I operated a small record label at one time.
In fact, all you have to do is declare yourself one and start doing business, as long as you're in compliance with any local level business licensing laws. It's the cash-starved local levels of government--state and county--where it gets tricky. And of course, any specific rules regarding your industry.
But then, most serious business types don't organize as sole-proprietorships because then they miss out on the limited liability benefits of incorporation.
posted by saulgoodman at 12:46 PM on October 18, 2011
In fact, all you have to do is declare yourself one and start doing business, as long as you're in compliance with any local level business licensing laws. It's the cash-starved local levels of government--state and county--where it gets tricky. And of course, any specific rules regarding your industry.
But then, most serious business types don't organize as sole-proprietorships because then they miss out on the limited liability benefits of incorporation.
posted by saulgoodman at 12:46 PM on October 18, 2011
Weasels can kill even venomous snakes, but they're stumped by humanity.
posted by Ice Cream Socialist at 12:46 PM on October 18, 2011
posted by Ice Cream Socialist at 12:46 PM on October 18, 2011
Ordinary people are starting to realize on a larger scale that politicians for the most part are essentially paid legislation writers for these big financial corporations.
posted by telstar at 12:49 PM on October 18, 2011 [3 favorites]
posted by telstar at 12:49 PM on October 18, 2011 [3 favorites]
otto42: When the sole focus is on maximizing profits, the stakeholders demands are met to the greatest degree possible for the longest period of time possible. The OWS crowd is ill-informed and delusional.
You'd think so, but you'd be wrong. The problem is that our current system is simply too short-sighted. When all that matters is this quarter's numbers, nobody's thinking about the long term - neither in terms of what's microeconomically best for the company they're running, nor in terms of what's best for the macroeconomic environment the company operates in, nor in terms of the bigger picture costs to the actual, physical environment that we all inhabit.
If a CEO can walk away with some tens of millions of dollars of wealth by making decisions that only focus on short term profits, there's a heavy motivation to look no further than a few quarters, which attitude leads to all sorts of negative long-term repercussions.
We've tried it their way for the past 30 years, since Reagan, and they've proven that the unregulated market coupled with pure, unabashed greed, doesn't lead to the best long-term decisions. Not by a long shot.
posted by syzygy at 1:07 PM on October 18, 2011 [1 favorite]
You'd think so, but you'd be wrong. The problem is that our current system is simply too short-sighted. When all that matters is this quarter's numbers, nobody's thinking about the long term - neither in terms of what's microeconomically best for the company they're running, nor in terms of what's best for the macroeconomic environment the company operates in, nor in terms of the bigger picture costs to the actual, physical environment that we all inhabit.
If a CEO can walk away with some tens of millions of dollars of wealth by making decisions that only focus on short term profits, there's a heavy motivation to look no further than a few quarters, which attitude leads to all sorts of negative long-term repercussions.
We've tried it their way for the past 30 years, since Reagan, and they've proven that the unregulated market coupled with pure, unabashed greed, doesn't lead to the best long-term decisions. Not by a long shot.
posted by syzygy at 1:07 PM on October 18, 2011 [1 favorite]
Boy, just heard an internal talk from the CEO where I work, and the impression I walked away with is that America is on the verge of an employment crash. Basically everyone is pulling back, and sectors of the economy that have been living off the fat of the land (defense, intelligence) are planning on huge cuts in the next few years, and no visibility at all beyond that. Just sayin'.
posted by newdaddy at 1:10 PM on October 18, 2011 [1 favorite]
posted by newdaddy at 1:10 PM on October 18, 2011 [1 favorite]
Attempting to satisfy the demands of each stakeholder, or favoring one at the expense of the others, will quickly kill a company. When the sole focus is on maximizing profits, the stakeholders demands are met to the greatest degree possible for the longest period of time possible. The OWS crowd is ill-informed and delusional.
JP Morgan had $50B in profits over 10 years, paid out $3B in dividends to shareholders, and $46B in bonuses.
Doesn't seem like each stakeholder has equivalent demands.
posted by dglynn at 1:37 PM on October 18, 2011 [6 favorites]
JP Morgan had $50B in profits over 10 years, paid out $3B in dividends to shareholders, and $46B in bonuses.
Doesn't seem like each stakeholder has equivalent demands.
posted by dglynn at 1:37 PM on October 18, 2011 [6 favorites]
mrgrimm: I don't know who the fuck they are (I've confused them with the very different and long-standing Business Week before), but they are owning this OWS data visualization space. (I'm not sure how much that is worth, but they are owning it.)
They (Business Insider) are primarily Henry Blodget, whose name you may recall if you spent much time reading about the financial markets during the dot com bubble heydays.
posted by syzygy at 1:45 PM on October 18, 2011 [2 favorites]
They (Business Insider) are primarily Henry Blodget, whose name you may recall if you spent much time reading about the financial markets during the dot com bubble heydays.
posted by syzygy at 1:45 PM on October 18, 2011 [2 favorites]
coolguymichael: I know some of the OWS crowd gets it -- it says so on their signs. It seems to me that the "easy" way for them to meet pretty much all their goals is to have a single message: Take the money out of Washington. Why isn't there a major push toward public financing of elections?
Look no further - Get Money Out is a project affiliated with Lawrence Lessig, Dylan Ratigan and a number of other influential thinkers who are pressing for exactly this.
I don't think the OWS will be quite satisfied with their goals, but, in large part, what they're shooting for dovetails with an important subset of what OWS wants.
posted by syzygy at 1:53 PM on October 18, 2011 [2 favorites]
Look no further - Get Money Out is a project affiliated with Lawrence Lessig, Dylan Ratigan and a number of other influential thinkers who are pressing for exactly this.
I don't think the OWS will be quite satisfied with their goals, but, in large part, what they're shooting for dovetails with an important subset of what OWS wants.
posted by syzygy at 1:53 PM on October 18, 2011 [2 favorites]
I do think, though, that the ridiculous health care situation in the US is functioning as a huge drag on the economy, but in a mostly unseen way. I have at least three coworkers who would love to quit their jobs and start their own businesses, but who can't because of needing healthcare for themselves or a spouse.
I'd love to start a software company and put a 60-80 hrs/wk effort into it to make it as successful as it could be, but I need the health insurance I get through my employer, or I'll die. If COBRA is any hint, there is no way I could possibly afford to put money into a startup and pay for healthcare at the same time. It's just too risky and expensive to go it alone.
It's unfortunate that right-wingers won't support a public healthcare option that exists in so many other industrialized nations. It would do a lot to reduce the cost and risks of running a small business, making it easier to put people to work. Public healthcare would do a lot to improve the job market.
posted by Blazecock Pileon at 2:06 PM on October 18, 2011 [5 favorites]
I'd love to start a software company and put a 60-80 hrs/wk effort into it to make it as successful as it could be, but I need the health insurance I get through my employer, or I'll die. If COBRA is any hint, there is no way I could possibly afford to put money into a startup and pay for healthcare at the same time. It's just too risky and expensive to go it alone.
It's unfortunate that right-wingers won't support a public healthcare option that exists in so many other industrialized nations. It would do a lot to reduce the cost and risks of running a small business, making it easier to put people to work. Public healthcare would do a lot to improve the job market.
posted by Blazecock Pileon at 2:06 PM on October 18, 2011 [5 favorites]
Just a personal note on executive compensation from my only experience working for a massive and heartless US corporation; an experience that ended when I was laid off from Dana Corporation in 1996. I was a junior member of the engineering dept of one of their small divisions that wasn't profitable. The management's solution was to close factories, consolidate production, and lay off junior staff. One week it was the junior guy in sales, then next week purchasing, the next week it was me. I didn't get paid out jack-sh*t. That year the CEO earned a salary of $800,000 and a bonus of $1,000,000. At that time a guy working on the shop floor of our plant (union) would take home about $1,000,000 during a 30 year career.
I've always wanted someone to explain to me how this guy was worth $1.8M that year when all he did was ruin the lives of hundreds of working class schmucks like me and waste a ton of shareholder's money on a venture into a product line where Dana had no experience and ultimately failed. I still get angry thinking about it 15 years later. Actually, it was the best thing that ever happened to me as I got to see at a young age the utter worthlessness of these soul destroying corporations. I have never worked for one since and wouldn't again if it was the last job on earth.
As an observation on how things have changed, my dad worked for John Deere for 35 years and had a great career, great retirement, pension, lifelong health benefits. Those days are long gone for the American worker and it was a conscientious decision by political leaders from both parties to pursue policies allowing those jobs to go abroad driving down salaries, driving up profits, and destroying America's middle-class.
I support the Occupation!
posted by pandabearjohnson at 2:20 PM on October 18, 2011 [5 favorites]
I've always wanted someone to explain to me how this guy was worth $1.8M that year when all he did was ruin the lives of hundreds of working class schmucks like me and waste a ton of shareholder's money on a venture into a product line where Dana had no experience and ultimately failed. I still get angry thinking about it 15 years later. Actually, it was the best thing that ever happened to me as I got to see at a young age the utter worthlessness of these soul destroying corporations. I have never worked for one since and wouldn't again if it was the last job on earth.
As an observation on how things have changed, my dad worked for John Deere for 35 years and had a great career, great retirement, pension, lifelong health benefits. Those days are long gone for the American worker and it was a conscientious decision by political leaders from both parties to pursue policies allowing those jobs to go abroad driving down salaries, driving up profits, and destroying America's middle-class.
I support the Occupation!
posted by pandabearjohnson at 2:20 PM on October 18, 2011 [5 favorites]
syzygy
The current system is the only system. It is the most efficient and least corruptible compared to all other systems. It is a system that absorbed the 53 million labor market participants that were added in the past 30 years.
The shortsightedness comes from the OWS crowd. Bad companies and their ideas die. Bad governments and their ideas don't. All the stupidity, excess, greed, incompetence and criminal behavior of Enron, Lehman Brothers, Bear Stearns, has ended. While the effects of their actions are still being felt today, the destruction of value as a result of what they did has effectively ended. No more capital, resources or human talent is being expended to keep those companies afloat. Hundreds of other less criminally destructive or incompetent companies have also been destroyed. Circuit City is no longer providing crappy customer service, Wang never found there footing after the early 90s and RIM's new products are not what consumers want.
Would it be better if the life or death of these companies, both the criminal or just slow, were dependent on a regulator or bureaucrat or a politician dependent on donations from all of the corporate officers? Would it be better if under a jobs savings program Circuit City was taken over by state workers? I'm pretty sure we're are better off today without Circuit City or RIM or Lehman brothers because I can get crappy customer service on Amazon, but its cheaper, or an phone that plays movies or suspect financial advice from anywhere.
Whereas bad or corrupt or broken companies eventually stop wasting everybody's money, the government doesn't. There are plenty of alternatives to moving packages and bills and credit card solicitations compared to the US Post Service but the will to shut its value destroying operations does not exist because of government interference. They provide a service that most people don't want, or do not need and they would have been dead years ago if not for the political support. The Post Office is as big a money waster and value destroyer as any of the company's mentioned and it will always continue to be that way. Lehman Brothers is dead, they are done feeding at the pie. The Post Office and Amtrak and Fannie Mae are not.
The OWS crowd wants to dictate how company's use their profits and second guess how management runs their businesses. They would prop up crappy companies to satisfy their own ideas about what is fair to the disadvantage of companies that know how to adjust to ever changing customer needs and ability to pay.
posted by otto42 at 2:32 PM on October 18, 2011 [1 favorite]
The current system is the only system. It is the most efficient and least corruptible compared to all other systems. It is a system that absorbed the 53 million labor market participants that were added in the past 30 years.
The shortsightedness comes from the OWS crowd. Bad companies and their ideas die. Bad governments and their ideas don't. All the stupidity, excess, greed, incompetence and criminal behavior of Enron, Lehman Brothers, Bear Stearns, has ended. While the effects of their actions are still being felt today, the destruction of value as a result of what they did has effectively ended. No more capital, resources or human talent is being expended to keep those companies afloat. Hundreds of other less criminally destructive or incompetent companies have also been destroyed. Circuit City is no longer providing crappy customer service, Wang never found there footing after the early 90s and RIM's new products are not what consumers want.
Would it be better if the life or death of these companies, both the criminal or just slow, were dependent on a regulator or bureaucrat or a politician dependent on donations from all of the corporate officers? Would it be better if under a jobs savings program Circuit City was taken over by state workers? I'm pretty sure we're are better off today without Circuit City or RIM or Lehman brothers because I can get crappy customer service on Amazon, but its cheaper, or an phone that plays movies or suspect financial advice from anywhere.
Whereas bad or corrupt or broken companies eventually stop wasting everybody's money, the government doesn't. There are plenty of alternatives to moving packages and bills and credit card solicitations compared to the US Post Service but the will to shut its value destroying operations does not exist because of government interference. They provide a service that most people don't want, or do not need and they would have been dead years ago if not for the political support. The Post Office is as big a money waster and value destroyer as any of the company's mentioned and it will always continue to be that way. Lehman Brothers is dead, they are done feeding at the pie. The Post Office and Amtrak and Fannie Mae are not.
The OWS crowd wants to dictate how company's use their profits and second guess how management runs their businesses. They would prop up crappy companies to satisfy their own ideas about what is fair to the disadvantage of companies that know how to adjust to ever changing customer needs and ability to pay.
posted by otto42 at 2:32 PM on October 18, 2011 [1 favorite]
Everything you wrote flies in the face of reality, otto42. You're a stranger to the truth.
posted by Ice Cream Socialist at 2:56 PM on October 18, 2011 [7 favorites]
posted by Ice Cream Socialist at 2:56 PM on October 18, 2011 [7 favorites]
Exactly, otto42. Everybody hates Ticketmaster and dreads dealing with them, which is why Ticketmaster went out of business years ago. Oh... wait, that doesn't work....
Well okay, that doesn't negate everything you said, just the part about how the unfettered free market will root out bad businesses and destroy them.
Now regarding the U.S. Government supporting silly unprofitable enterprises that only exist to destroy value: Surely you'd agree that we should entirely elimate the United States Air Force, right? The operating cost is $170,000,000,000 per year and the profit is $0. Is that how this works?
Dang, I'm bad at this.
posted by weinbot at 2:57 PM on October 18, 2011 [6 favorites]
Well okay, that doesn't negate everything you said, just the part about how the unfettered free market will root out bad businesses and destroy them.
Now regarding the U.S. Government supporting silly unprofitable enterprises that only exist to destroy value: Surely you'd agree that we should entirely elimate the United States Air Force, right? The operating cost is $170,000,000,000 per year and the profit is $0. Is that how this works?
Dang, I'm bad at this.
posted by weinbot at 2:57 PM on October 18, 2011 [6 favorites]
otto42 says Bad companies and their ideas die... All the stupidity, excess, greed, incompetence and criminal behavior of Enron, Lehman Brothers, Bear Stearns, has ended.
While it is true the individual companies are gone (along with shareholder value) it is difficult to argue that other stupid, greedy, and incompetent companies will not rise in their place considering NOTHING has been done to prevent the rise of such corporations. As pointed out above the too-big-to-fail banks are even bigger today and no serious regulations have been placed on their crazy attempts to wring money out of this economy.
Yes, creative destruction is important but capitalism cannot be left unchecked. I would think that is a fairly obvious lesson from the past few years.
You may be right in the assertion that the post and rail industries shouldn't be run by the state, but its a big ship to turn around. In France both rail and postal services are gov't run and both can be exceedingly inefficient (although the French rail system is world class it probably costs the state a fortune, but I don't know that for a fact).
posted by pandabearjohnson at 3:02 PM on October 18, 2011 [1 favorite]
While it is true the individual companies are gone (along with shareholder value) it is difficult to argue that other stupid, greedy, and incompetent companies will not rise in their place considering NOTHING has been done to prevent the rise of such corporations. As pointed out above the too-big-to-fail banks are even bigger today and no serious regulations have been placed on their crazy attempts to wring money out of this economy.
Yes, creative destruction is important but capitalism cannot be left unchecked. I would think that is a fairly obvious lesson from the past few years.
You may be right in the assertion that the post and rail industries shouldn't be run by the state, but its a big ship to turn around. In France both rail and postal services are gov't run and both can be exceedingly inefficient (although the French rail system is world class it probably costs the state a fortune, but I don't know that for a fact).
posted by pandabearjohnson at 3:02 PM on October 18, 2011 [1 favorite]
So anyway, libertrollarians aside.
Why Guy Fawkes?
I mean seriously, this bugs me more than it should. (but not enough to ever pretend to suggest that corporate corruption ended for all time with Enron, I am not a tellytubby).
More serious than that.
Why a Catholic Monarchist as the ersatz archetype of modern anarchy?
I mean if you have to have an Alan Moore related node, why not Alan Moore himself? He is an actual anarchist, and has a fucking awesome beard to boot. How much more awesome would Anonymous be with awesome beards and wild hair? THIS FUCKING MUCH |--------------------------------------------------------------------------------------------------------------------|!
But limit your field to English social radicals even if you must, then how about Lodowick Muggleton or Gerard Winstanly? Or Tom Paine?
Or even any of the many other backwards donkey riding sons of the prolaterian gun?
posted by titus-g at 3:05 PM on October 18, 2011 [3 favorites]
Why Guy Fawkes?
I mean seriously, this bugs me more than it should. (but not enough to ever pretend to suggest that corporate corruption ended for all time with Enron, I am not a tellytubby).
More serious than that.
Why a Catholic Monarchist as the ersatz archetype of modern anarchy?
I mean if you have to have an Alan Moore related node, why not Alan Moore himself? He is an actual anarchist, and has a fucking awesome beard to boot. How much more awesome would Anonymous be with awesome beards and wild hair? THIS FUCKING MUCH |--------------------------------------------------------------------------------------------------------------------|!
But limit your field to English social radicals even if you must, then how about Lodowick Muggleton or Gerard Winstanly? Or Tom Paine?
Or even any of the many other backwards donkey riding sons of the prolaterian gun?
posted by titus-g at 3:05 PM on October 18, 2011 [3 favorites]
AIG is also not dead.
Markets, Capitalism, etc, has been an amazing engine of growth and prosperity, the advances of the 20th century has alleviated an unprecedented amount of human poverty and suffering.
Bernard E. Harcourt's recent op-ed (NY Times) discussing the occupy movement and describing it as "Political" as opposed to "Civil" disobedience" is interesting, but most so his contention about the nature of late-market economies:
It is amazingly naive for market proponents to argue about the effectiveness of markets and yet fail to acknowledge their failures, nor seemingly believe that markets can be improved, and (worse of all) acknowledge government successes.
We live inside in incredibly complex system and simple statements, one-size-fits-all plans, and other quips cannot solve our problems. We need clearly defined goals and the willingness to try many solutions.
posted by Shit Parade at 3:10 PM on October 18, 2011 [3 favorites]
Markets, Capitalism, etc, has been an amazing engine of growth and prosperity, the advances of the 20th century has alleviated an unprecedented amount of human poverty and suffering.
Bernard E. Harcourt's recent op-ed (NY Times) discussing the occupy movement and describing it as "Political" as opposed to "Civil" disobedience" is interesting, but most so his contention about the nature of late-market economies:
On this account, the fundamental choice is no longer the ideological one we were indoctrinated to believe — between free markets and controlled economies — but rather a continuous choice between kinds of regulation and how they distribute wealth in society. There is, in the end, no “realistic alternative,” nor any “utopian project” that can avoid the pervasive regulatory mechanisms that are necessary to organize a complex late-modern economy — and that’s the point. The vast and distributive regulatory framework will neither disappear with deregulation, nor with the withering of a socialist state. What is required is constant vigilance of all the micro and macro rules that permeate our markets, our contracts, our tax codes, our banking regulations, our property laws — in sum, all the ordinary, often mundane, but frequently invisible forms of laws and regulations that are required to organize and maintain a colossal economy in the 21st-century and that constantly distribute wealth and resources.Libertarians have, so far, failed to provide a compelling narrative of how a society controlled by markets and without governments could function without becoming an oppressive regime similar in effect to the USSR or Mao's China because Communism (the philosophy and ideology) was all about human freedom without government interference.
It is amazingly naive for market proponents to argue about the effectiveness of markets and yet fail to acknowledge their failures, nor seemingly believe that markets can be improved, and (worse of all) acknowledge government successes.
We live inside in incredibly complex system and simple statements, one-size-fits-all plans, and other quips cannot solve our problems. We need clearly defined goals and the willingness to try many solutions.
posted by Shit Parade at 3:10 PM on October 18, 2011 [3 favorites]
Markets, Capitalism, etc, has been an amazing engine of growth and prosperity, the advances of the 20th century has alleviated an unprecedented amount of human poverty and suffering.The innate propensity for individual human greed has presumably remained much a constant (evolution being a slow thing (or static, if you're a tory)).
The bulk of human knowledge, and the inter-related ways in which it can be used has grown exponentially though.
Yet people have the audacity to suggest that capitalism is the engine of growth? The religion of Mammon and self-interest?
Growth has been born of the soical engine of intellectual sharing. Some of which may be down to growth and profit seeking. I remember this story about Einstein, and how all all he ever wanted was to make enough to buy a Porsche 911
posted by titus-g at 3:21 PM on October 18, 2011 [1 favorite]
The US Air Force is the only enterprise available to drop a bomb from 30,000 feet, therefore for the time being, taxpayers have to fund their operations and capital expenditures. The US Post office is not the only game in town. UPS can deliver important documents across the country, bicycle messengers can do the same across town, bills are delivered to my free gmail account and checks are sent for a small fee from my bank. Ballard Designs and LL Bean might have a problem finding someone to deliver their bi-weekly catalogs as cheaply as the Post Office, but that is their problem. The interwebs has pictures now too.
Ticketmaster has been protected by anti-scalping laws for years. Luckily stub-hub and craigslist provide an alternative in New York with the easing of those laws.
posted by otto42 at 3:23 PM on October 18, 2011
Ticketmaster has been protected by anti-scalping laws for years. Luckily stub-hub and craigslist provide an alternative in New York with the easing of those laws.
posted by otto42 at 3:23 PM on October 18, 2011
AIG is a great example. If we lived in this much ballyhooed free-market AIG would be dead, dead, dead. I remember reading at the time AIG had something like 300,000,000 insurance contracts in America alone so we can't let it go under. Who gives a shit? If this is a free-market other insurance companies will arrive and write new contracts.
Also, maybe someone can explain to me how it is free-market when banks are given money at 0% and then turn around and lend the same money out at substantially more than 0% That isn't a free market that is corporate socialism. And then we are supposed to be impressed that they turned a record profit that quarter? Who the fuck couldn't?
posted by pandabearjohnson at 3:26 PM on October 18, 2011 [1 favorite]
Also, maybe someone can explain to me how it is free-market when banks are given money at 0% and then turn around and lend the same money out at substantially more than 0% That isn't a free market that is corporate socialism. And then we are supposed to be impressed that they turned a record profit that quarter? Who the fuck couldn't?
posted by pandabearjohnson at 3:26 PM on October 18, 2011 [1 favorite]
"Libertarians have, so far, failed to provide a compelling narrative of how a society controlled by markets and without governments could function without becoming an oppressive regime similar in effect to the USSR or Mao's China because Communism (the philosophy and ideology) was all about human freedom without government interference. "
Here is a compelling narrative (though I wouldn't call myself a libertarian.)
Once upon a time, or now, there were societies whose allocation of resources (capital, labor, natural resources, etc.) was controlled by markets and with limited government interference. Those societies are not oppressive regimes in anyway similar to Mao's China or the USSR. They don't employ slave labor, send political dissidents to the Arctic or shoot their citizens when they try to leave the country. Despite years of limited government interference and and economy's controlled by the market, none of the oppression you mentioned has ever happened.
posted by otto42 at 3:36 PM on October 18, 2011
Here is a compelling narrative (though I wouldn't call myself a libertarian.)
Once upon a time, or now, there were societies whose allocation of resources (capital, labor, natural resources, etc.) was controlled by markets and with limited government interference. Those societies are not oppressive regimes in anyway similar to Mao's China or the USSR. They don't employ slave labor, send political dissidents to the Arctic or shoot their citizens when they try to leave the country. Despite years of limited government interference and and economy's controlled by the market, none of the oppression you mentioned has ever happened.
posted by otto42 at 3:36 PM on October 18, 2011
LiB : Occupy Sydney/Melbourne/Brisbane are just the local protest mob out in solidarity. In Australia with 5% unemployment, universal health care and greater income mobility what's driven the Tea Party and Occupy folks just doesn't apply here.
I made that point this weekend. And I wasn't even an asshole about it.
posted by Lovecraft In Brooklyn at 3:40 PM on October 18, 2011
Otto - you've obviously never worked at a Wal-Mart. OK, its not slave labor, but its hardly a job you can live on.
posted by pandabearjohnson at 3:42 PM on October 18, 2011
posted by pandabearjohnson at 3:42 PM on October 18, 2011
USAF and USN are great examples, too. Costs a fortune, but, damn, they sure are good at protecting our vital interests. And by vital interests I don't mean those silly abstract things like "pursuit of freedom" or "freedom of religion" I mean the really important things; keeping shipping lanes open and keeping the oil flowing. It sure helps if you can paint the people who live where the oil is as enemies of our "freedoms" however. But you can pretty much use any enemy to justify there existence...communists, check. Jihadists, check, scary Chinese with their escalating war machine, check. You could probably even work the war on drugs in there, too.
So to recap, USAF...costs a fortune, paid for by taxpayers but mostly benefits enormous corporations with interests in international trade and resource extraction. Perhaps we could call this a hidden cost of the free market?
posted by pandabearjohnson at 3:46 PM on October 18, 2011
So to recap, USAF...costs a fortune, paid for by taxpayers but mostly benefits enormous corporations with interests in international trade and resource extraction. Perhaps we could call this a hidden cost of the free market?
posted by pandabearjohnson at 3:46 PM on October 18, 2011
Shit Parade wrote: It is amazingly naive for market proponents to argue about the effectiveness of markets and yet fail to acknowledge their failures, nor seemingly believe that markets can be improved, and (worse of all) acknowledge government successes.
Free markets are great, when they're actually free, but regulated. Capitalism, not so much. For those that don't get it, these are two separate and distinct things. One can have a free market with state ownership, or one can have a capitalist centrally planned economy.
otto42, when exactly was this golden age of free and unfettered free market capitalism?
posted by wierdo at 3:54 PM on October 18, 2011 [1 favorite]
Free markets are great, when they're actually free, but regulated. Capitalism, not so much. For those that don't get it, these are two separate and distinct things. One can have a free market with state ownership, or one can have a capitalist centrally planned economy.
otto42, when exactly was this golden age of free and unfettered free market capitalism?
posted by wierdo at 3:54 PM on October 18, 2011 [1 favorite]
Once upon a time, or now, there were societies whose allocation of resources (capital, labor, natural resources, etc.) was controlled by markets and with limited government interference. Those societies are not oppressive regimes in anyway similar to Mao's China or the USSR. They don't employ slave labor, send political dissidents to the Arctic or shoot their citizens when they try to leave the country. Despite years of limited government interference and and economy's controlled by the market, none of the oppression you mentioned has ever happened.
Care to name these places? Or was it just "way back when in the golden ages."
posted by Max Power at 3:56 PM on October 18, 2011
Care to name these places? Or was it just "way back when in the golden ages."
posted by Max Power at 3:56 PM on October 18, 2011
bills are delivered to my free gmail account
In this utopia, who exactly is paying for your network connection? (Oh boy, would it be ironic if you said a public library.)
And who is wiring up rural areas with broadband? Certainly not for-profit telecoms.
posted by Blazecock Pileon at 4:00 PM on October 18, 2011
In this utopia, who exactly is paying for your network connection? (Oh boy, would it be ironic if you said a public library.)
And who is wiring up rural areas with broadband? Certainly not for-profit telecoms.
posted by Blazecock Pileon at 4:00 PM on October 18, 2011
And who is wiring up rural areas with broadband? Certainly not for-profit telecoms.
Hah. Whether or not the government should be doing this is a huge debate here now. Currently it looks like it is happening
posted by Lovecraft In Brooklyn at 4:02 PM on October 18, 2011
Hah. Whether or not the government should be doing this is a huge debate here now. Currently it looks like it is happening
posted by Lovecraft In Brooklyn at 4:02 PM on October 18, 2011
Here's another couple of striking charts that should be added to the list:
US incarceration timeline, 1920-2006
US incarceration rates, 1925 onwards
Two more (can't find a good historical chart of national homeless statistics):
New York City: Census of Homeless People in the Municipal Shelter System, 1983-2011
Number of Homeless Families in the New York Shelter System, 1983-2011
(both via)
Another interesting one:
US Obesity Rates, 1960-2004
Amazing how (sometimes rocketing upwards) trajectories start around 1980 in all of these graphs. Let's see, who was president in 1980? Wasn't it some guy who was fond of deregulation, cutting taxes on the rich and sold a couple of ideas called "supply side economics" and "trickle-down economics"?
Since 1980, inequality, the prison population, homelessness and even obesity rates have exploded.
otto42: Your system is fucked.
posted by syzygy at 4:31 PM on October 18, 2011 [6 favorites]
US incarceration timeline, 1920-2006
US incarceration rates, 1925 onwards
Two more (can't find a good historical chart of national homeless statistics):
New York City: Census of Homeless People in the Municipal Shelter System, 1983-2011
Number of Homeless Families in the New York Shelter System, 1983-2011
(both via)
Another interesting one:
US Obesity Rates, 1960-2004
Amazing how (sometimes rocketing upwards) trajectories start around 1980 in all of these graphs. Let's see, who was president in 1980? Wasn't it some guy who was fond of deregulation, cutting taxes on the rich and sold a couple of ideas called "supply side economics" and "trickle-down economics"?
Since 1980, inequality, the prison population, homelessness and even obesity rates have exploded.
otto42: Your system is fucked.
posted by syzygy at 4:31 PM on October 18, 2011 [6 favorites]
Notice, friends, how everything started going to shit precisely when the right started its holy war on the government? Notice how, in all of these graphs, the trends have continued to worsen as their war on government has continued and grown even more fanatical than it was 30 years ago?
But yeah, government is bad.
Unregulated market capitalism is good. It's the only system.
posted by syzygy at 4:38 PM on October 18, 2011 [3 favorites]
But yeah, government is bad.
Unregulated market capitalism is good. It's the only system.
posted by syzygy at 4:38 PM on October 18, 2011 [3 favorites]
Folks, otto42 is arguing that we should defund NPR and Amtrak (could he have chosen two bigger Fox News bugbears?) while continuing to shovel six hundred and eighty billion dollars a year into the war furnaces.
Maybe it's best not to waste any more time on him.
posted by weinbot at 4:39 PM on October 18, 2011 [1 favorite]
Maybe it's best not to waste any more time on him.
posted by weinbot at 4:39 PM on October 18, 2011 [1 favorite]
Despite years of limited government interference and and economy's controlled by the market, none of the oppression you mentioned has ever happened.
Where was this magical land?
posted by empath at 4:45 PM on October 18, 2011 [1 favorite]
Where was this magical land?
posted by empath at 4:45 PM on October 18, 2011 [1 favorite]
"Libertarians have, so far, failed to provide a compelling narrative of how a society controlled by markets and without governments could function without becoming an oppressive regime similar in effect to the USSR or Mao's China because Communism (the philosophy and ideology) was all about human freedom without government interference. "
Here is a compelling narrative (though I wouldn't call myself a libertarian.)
Once upon a time, or now, there were societies whose allocation of resources (capital, labor, natural resources, etc.) was controlled by markets and with limited government interference. Those societies are not oppressive regimes in anyway similar to Mao's China or the USSR. They don't employ slave labor, send political dissidents to the Arctic or shoot their citizens when they try to leave the country. Despite years of limited government interference and and economy's controlled by the market, none of the oppression you mentioned has ever happened.
posted by otto42 at 4:48 PM on October 18, 2011
Here is a compelling narrative (though I wouldn't call myself a libertarian.)
Once upon a time, or now, there were societies whose allocation of resources (capital, labor, natural resources, etc.) was controlled by markets and with limited government interference. Those societies are not oppressive regimes in anyway similar to Mao's China or the USSR. They don't employ slave labor, send political dissidents to the Arctic or shoot their citizens when they try to leave the country. Despite years of limited government interference and and economy's controlled by the market, none of the oppression you mentioned has ever happened.
posted by otto42 at 4:48 PM on October 18, 2011
empath: Where was this magical land?
I'd like to know, too. Surely he's not referring to the land where the incarceration rate has more than quadrupled in the last 30 years.
posted by syzygy at 4:51 PM on October 18, 2011 [1 favorite]
I'd like to know, too. Surely he's not referring to the land where the incarceration rate has more than quadrupled in the last 30 years.
posted by syzygy at 4:51 PM on October 18, 2011 [1 favorite]
This is what Shit Parade said,
"Libertarians have, so far, failed to provide a compelling narrative of how a society controlled by markets and without governments could function without becoming an oppressive regime similar in effect to the USSR or Mao's China because Communism (the philosophy and ideology) was all about human freedom without government interference. "
This what I said,
Here is a compelling narrative (though I wouldn't call myself a libertarian.)
Once upon a time, or now, there were societies whose allocation of resources (capital, labor, natural resources, etc.) was controlled by markets and with limited government interference. Those societies are not oppressive regimes in anyway similar to Mao's China or the USSR. They don't employ slave labor, send political dissidents to the Arctic or shoot their citizens when they try to leave the country. Despite years of limited government interference and and economy's controlled by the market, none of the oppression you mentioned has ever happened.
___________________________________________________________________
I submit that our current system is meaningfully freer than the Soviet and Mao systems and that none of the ill effects that shit parade said would arise have occurred. We live in a pretty free system where most decisions are made by the market and their is no evidence we are headed for the gulag. Additionally, economies now, or in the past, that have less government interefernce than we have currently don't seem to have turned into Mao style regimes.
posted by otto42 at 4:57 PM on October 18, 2011
"Libertarians have, so far, failed to provide a compelling narrative of how a society controlled by markets and without governments could function without becoming an oppressive regime similar in effect to the USSR or Mao's China because Communism (the philosophy and ideology) was all about human freedom without government interference. "
This what I said,
Here is a compelling narrative (though I wouldn't call myself a libertarian.)
Once upon a time, or now, there were societies whose allocation of resources (capital, labor, natural resources, etc.) was controlled by markets and with limited government interference. Those societies are not oppressive regimes in anyway similar to Mao's China or the USSR. They don't employ slave labor, send political dissidents to the Arctic or shoot their citizens when they try to leave the country. Despite years of limited government interference and and economy's controlled by the market, none of the oppression you mentioned has ever happened.
___________________________________________________________________
I submit that our current system is meaningfully freer than the Soviet and Mao systems and that none of the ill effects that shit parade said would arise have occurred. We live in a pretty free system where most decisions are made by the market and their is no evidence we are headed for the gulag. Additionally, economies now, or in the past, that have less government interefernce than we have currently don't seem to have turned into Mao style regimes.
posted by otto42 at 4:57 PM on October 18, 2011
otto42: their [sic] is no evidence we are headed for the gulag
Really? You might want to tell that to the ~2,300,000 people who were incarcerated in US state and federal prisons in 2009. Around 0.5% of the population. 30 years ago, the number was closer to 0.13% of the population.
In Canada, the incarceration rate today is STILL close to 0.13% of the population.
The United States of America has an incarceration rate of 743 per 100,000 of national population (as of 2009), the highest in the world.
United States is the World's Leading Jailer
posted by syzygy at 5:12 PM on October 18, 2011 [2 favorites]
Really? You might want to tell that to the ~2,300,000 people who were incarcerated in US state and federal prisons in 2009. Around 0.5% of the population. 30 years ago, the number was closer to 0.13% of the population.
In Canada, the incarceration rate today is STILL close to 0.13% of the population.
The United States of America has an incarceration rate of 743 per 100,000 of national population (as of 2009), the highest in the world.
United States is the World's Leading Jailer
posted by syzygy at 5:12 PM on October 18, 2011 [2 favorites]
A libertarian is simply an anarchist who doesn't understand how the Bolsheviks' piss ant "revolution", along with Hitler and Franco, defrauded their philosophy of its connection to Karl Marx.
posted by jeffburdges at 5:20 PM on October 18, 2011
posted by jeffburdges at 5:20 PM on October 18, 2011
Sorry, my math was off - 0.743% of the US population was imprisoned in 2009. Around 2,300,000 of those were in federal and state prisons.
Gulag much?
posted by syzygy at 5:22 PM on October 18, 2011
Gulag much?
posted by syzygy at 5:22 PM on October 18, 2011
Oh, I was wrong. You are right, our system is very similar to the Soviets, what with the gulags and barbed wire and mined border with Canada. Just yesterday I waited 6 hours for a loaf of bread. Well, I will be in the salt mine for the next few hours so I might not get to post much.
posted by otto42 at 5:40 PM on October 18, 2011
posted by otto42 at 5:40 PM on October 18, 2011
otto42 still hasn't actually named any of these paradises.
posted by weinbot at 5:50 PM on October 18, 2011 [4 favorites]
posted by weinbot at 5:50 PM on October 18, 2011 [4 favorites]
The innate propensity for individual human greed has presumably remained much a constant (evolution being a slow thing (or static, if you're a tory)).
Actually, I have a conjecture that the fact that capitalism incentivises greed has had a cultural influence, leading us to accept greed more than in the past.
posted by eviemath at 5:56 PM on October 18, 2011 [4 favorites]
Actually, I have a conjecture that the fact that capitalism incentivises greed has had a cultural influence, leading us to accept greed more than in the past.
posted by eviemath at 5:56 PM on October 18, 2011 [4 favorites]
What's that word when you're so blind with rage? Apoplectic? I think yeah - I think I'm quite apoplectic every time I come back here, and I can't even fucking respond because, as much as I usually disagree with someone there's... *something* I can usually grok and we can argue or whatever, but this? This is just... fuck me. It hurts my head is what it is.
posted by symbioid at 6:04 PM on October 18, 2011
posted by symbioid at 6:04 PM on October 18, 2011
Once upon a time, or now, there were societies whose allocation of resources (capital, labor, natural resources, etc.) was controlled by markets and with limited government interference. Those societies are not oppressive regimes in anyway similar to Mao's China or the USSR. They don't employ slave labor, send political dissidents to the Arctic or shoot their citizens when they try to leave the country. Despite years of limited government interference and and economy's controlled by the market, none of the oppression you mentioned has ever happened.
I submit, for your consideration: Chile, Argentina, Brazil, Columbia, Nicaragua, Guatemala, El Salvador, Philippines, Democratic Republic of Congo, Rwanda, Somalia, Sudan, Ethiopia and Eritrea, South Africa, Yemen, Syria, Lebanon, Bahrain, Egypt, ....
And those are just the ones with capitalist markets. China has markets, Cuba has markets. On the unambiguously positive human rights side, the anarchist-influenced occupied factories in Argentina in the aftermath of their financial crisis sold their products via markets. Equating markets with capitalism is either extremely uninformed or trolling.
posted by eviemath at 6:04 PM on October 18, 2011 [4 favorites]
I submit, for your consideration: Chile, Argentina, Brazil, Columbia, Nicaragua, Guatemala, El Salvador, Philippines, Democratic Republic of Congo, Rwanda, Somalia, Sudan, Ethiopia and Eritrea, South Africa, Yemen, Syria, Lebanon, Bahrain, Egypt, ....
And those are just the ones with capitalist markets. China has markets, Cuba has markets. On the unambiguously positive human rights side, the anarchist-influenced occupied factories in Argentina in the aftermath of their financial crisis sold their products via markets. Equating markets with capitalism is either extremely uninformed or trolling.
posted by eviemath at 6:04 PM on October 18, 2011 [4 favorites]
otto42: I will be in the salt mine for the next few hours
Reductio ad absurdum. You're a mental midget if you think we have to choose between exactly two choices - either the USSR are present-day US of A.
Take a close look at the graphs again. The USA of 30 years ago was better off than the USSR AND better off than the USA of today.
For that matter, Sweden, Denmark, Norway, Iceland, Luxembourg, Austria, Germany, Belgium, Finland, Australis, The Netherlands, The EU (as a whole), South Korea, Canada, France, Switzerland, United Kingdon, New Zealand or a number of the other 90 out of 134 countries with lower GINI indexes than the US are better off than the USSR AND better off than the USA of today. All those I listed have MASSIVELY lower incarceration rates than the USA, lower per capita health care costs and universal health care coverage.
But feel free to head back down to the salt mine. Maybe a little hard work'll teach you some character.
posted by syzygy at 6:08 PM on October 18, 2011 [10 favorites]
Reductio ad absurdum. You're a mental midget if you think we have to choose between exactly two choices - either the USSR are present-day US of A.
Take a close look at the graphs again. The USA of 30 years ago was better off than the USSR AND better off than the USA of today.
For that matter, Sweden, Denmark, Norway, Iceland, Luxembourg, Austria, Germany, Belgium, Finland, Australis, The Netherlands, The EU (as a whole), South Korea, Canada, France, Switzerland, United Kingdon, New Zealand or a number of the other 90 out of 134 countries with lower GINI indexes than the US are better off than the USSR AND better off than the USA of today. All those I listed have MASSIVELY lower incarceration rates than the USA, lower per capita health care costs and universal health care coverage.
But feel free to head back down to the salt mine. Maybe a little hard work'll teach you some character.
posted by syzygy at 6:08 PM on October 18, 2011 [10 favorites]
Here is a compelling narrative (though I wouldn't call myself a libertarian.)
Once upon a time, or now, there were societies whose allocation of resources (capital, labor, natural resources, etc.) was controlled by markets and with limited government interference. Those societies are not oppressive regimes in anyway similar to Mao's China or the USSR. They don't employ slave labor, send political dissidents to the Arctic or shoot their citizens when they try to leave the country. Despite years of limited government interference and and economy's controlled by the market, none of the oppression you mentioned has ever happened.
Man, this is not even close to a 'compelling narrative'. A 'compelling narrative' in this context would not be a complete work of fiction. Care to back up any of this fairytale nonsense? Or are you just going to keep yelling "because I say so", like a five year old?
posted by His thoughts were red thoughts at 6:09 PM on October 18, 2011 [3 favorites]
Once upon a time, or now, there were societies whose allocation of resources (capital, labor, natural resources, etc.) was controlled by markets and with limited government interference. Those societies are not oppressive regimes in anyway similar to Mao's China or the USSR. They don't employ slave labor, send political dissidents to the Arctic or shoot their citizens when they try to leave the country. Despite years of limited government interference and and economy's controlled by the market, none of the oppression you mentioned has ever happened.
Man, this is not even close to a 'compelling narrative'. A 'compelling narrative' in this context would not be a complete work of fiction. Care to back up any of this fairytale nonsense? Or are you just going to keep yelling "because I say so", like a five year old?
posted by His thoughts were red thoughts at 6:09 PM on October 18, 2011 [3 favorites]
Libertarian thinking is orthogonal to the issues pressing us today. It does not address them in any way. It is a fantasy, and otto42 even points that out by beginning his fairy tale "once upon a time."
posted by telstar at 6:25 PM on October 18, 2011 [5 favorites]
posted by telstar at 6:25 PM on October 18, 2011 [5 favorites]
Well, I will be in the salt mine for the next few hours so I might not get to post much.
At least the salt mines have Gmail access, so you can pay your bills on time!
posted by Blazecock Pileon at 6:43 PM on October 18, 2011
At least the salt mines have Gmail access, so you can pay your bills on time!
posted by Blazecock Pileon at 6:43 PM on October 18, 2011
You are right, our system is very similar to the Soviets, what with the gulags
Well, let's see.
gu·lag [goo-lahg] Show IPA
noun (sometimes initial capital letter)
1. the system of forced-labor camps in the Soviet Union.
2. a Soviet forced-labor camp.
3. any prison or detention camp, especially for political prisoners.
Hmmm. The 13th Amendment to the US Constitution says something about forced labour, I think?
Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.
Well, that's a relic from a former time, it's not like the US has a system of forced labour camps, right? Right? Oh. Oh.
I'm sure that the possibility of using prison populations for cheap labour has no effect on incarceration rates. None whatsoever. And imprisoning people for profit is totally not as bad is imprisoning them for political ideals.
...and barbed wire and mined border
You mean like this border fence with Mexico that presidential candidates are pledging to extend?
posted by His thoughts were red thoughts at 6:58 PM on October 18, 2011 [4 favorites]
Well, let's see.
gu·lag [goo-lahg] Show IPA
noun (sometimes initial capital letter)
1. the system of forced-labor camps in the Soviet Union.
2. a Soviet forced-labor camp.
3. any prison or detention camp, especially for political prisoners.
Hmmm. The 13th Amendment to the US Constitution says something about forced labour, I think?
Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.
Well, that's a relic from a former time, it's not like the US has a system of forced labour camps, right? Right? Oh. Oh.
I'm sure that the possibility of using prison populations for cheap labour has no effect on incarceration rates. None whatsoever. And imprisoning people for profit is totally not as bad is imprisoning them for political ideals.
...and barbed wire and mined border
You mean like this border fence with Mexico that presidential candidates are pledging to extend?
posted by His thoughts were red thoughts at 6:58 PM on October 18, 2011 [4 favorites]
I am back from the salt mines. I don't understand the confusion.
This is what Shit Parade said,
"Libertarians have, so far, failed to provide a compelling narrative of how a society controlled by markets and without governments could function without becoming an oppressive regime similar in effect to the USSR or Mao's China because Communism (the philosophy and ideology) was all about human freedom without government interference. "
We live in a society controlled by markets and with minimal government interference. Do we not?
We have not become an oppresive regime similar in effect to the USSR or Mao's China? Or have we?
Is our high incarceration rate relative to other western nations indicative of an oppresive regime similar to the USSR or Mao's China?
If the answer is yes to the last question, then fine. I would argue that Mao's and the USSR's populace suffered a little more than the average American is suffering now, or even the average poor American or even a poor American prisoner. I'm sure our corporate overlords can seem pretty oppresive at times but I have a hard time believing their level of exploitation and oppression rises to that of Stalin or Mao.
posted by otto42 at 7:08 PM on October 18, 2011
This is what Shit Parade said,
"Libertarians have, so far, failed to provide a compelling narrative of how a society controlled by markets and without governments could function without becoming an oppressive regime similar in effect to the USSR or Mao's China because Communism (the philosophy and ideology) was all about human freedom without government interference. "
We live in a society controlled by markets and with minimal government interference. Do we not?
We have not become an oppresive regime similar in effect to the USSR or Mao's China? Or have we?
Is our high incarceration rate relative to other western nations indicative of an oppresive regime similar to the USSR or Mao's China?
If the answer is yes to the last question, then fine. I would argue that Mao's and the USSR's populace suffered a little more than the average American is suffering now, or even the average poor American or even a poor American prisoner. I'm sure our corporate overlords can seem pretty oppresive at times but I have a hard time believing their level of exploitation and oppression rises to that of Stalin or Mao.
posted by otto42 at 7:08 PM on October 18, 2011
mmmhmmm I love me some cherry picking, oh yes I do.
posted by Shit Parade at 7:26 PM on October 18, 2011 [2 favorites]
posted by Shit Parade at 7:26 PM on October 18, 2011 [2 favorites]
We live in a society controlled by markets and with minimal government interference. Do we not?
Round and round it goes...where it stops, [is depressingly predictable].
It's been fun y'all. Catch you on the flip side.
posted by His thoughts were red thoughts at 8:02 PM on October 18, 2011
Round and round it goes...where it stops, [is depressingly predictable].
It's been fun y'all. Catch you on the flip side.
posted by His thoughts were red thoughts at 8:02 PM on October 18, 2011
In a country with a working healthcare system, doing a startup would certainly be a less risky proposition.
In other news, Forbes ranks Canada #1 for business, with the U.S. all the way down at #10.
posted by one more dead town's last parade at 8:04 PM on October 18, 2011 [3 favorites]
In other news, Forbes ranks Canada #1 for business, with the U.S. all the way down at #10.
posted by one more dead town's last parade at 8:04 PM on October 18, 2011 [3 favorites]
value destroyer
Use of this phrase is essentially conclusive evidence that you do not know the first thing about economics.
Use of this phrase to describe the USPS is essentially conclusive evidence that you do not know the first thing about the United States.
posted by one more dead town's last parade at 8:20 PM on October 18, 2011 [3 favorites]
Use of this phrase is essentially conclusive evidence that you do not know the first thing about economics.
Use of this phrase to describe the USPS is essentially conclusive evidence that you do not know the first thing about the United States.
posted by one more dead town's last parade at 8:20 PM on October 18, 2011 [3 favorites]
We live in a society controlled by markets and with minimal government interference. Do we not?
I would say not exactly. For example, we have all sorts of government regulations covering listing ingredients on food, or not selling food that won't poison you. I think of these as good things, and they were enacted in response to things that actually happened.
Out of curiosity, otto42, what do you believe to be the proper role of government? What forms of regulation do you believe in?
posted by Comrade_robot at 8:32 PM on October 18, 2011
I would say not exactly. For example, we have all sorts of government regulations covering listing ingredients on food, or not selling food that won't poison you. I think of these as good things, and they were enacted in response to things that actually happened.
Out of curiosity, otto42, what do you believe to be the proper role of government? What forms of regulation do you believe in?
posted by Comrade_robot at 8:32 PM on October 18, 2011
The interwebs has pictures now too.
Which it delivers for free through the Internet connection you get for free to the computer you got for free.
There are 70 million Americans without Internet access. Axing a constitutionally prescribed entity that reaches them when your alternative doesn't seems a bit short-sighted to me. It's probably even more short-sighted from the perspective of businesses that need to communicate with two Californias worth of people.
An inexpensive, reliable, efficient postal service, which is the envy of the rest of the world in those respects, helped build the United States and helps keep Americans connected to each other for minimal cost and significantly increased economic output. But it has to be bad because government can't ever do anything useful, right?
posted by one more dead town's last parade at 8:34 PM on October 18, 2011 [5 favorites]
Which it delivers for free through the Internet connection you get for free to the computer you got for free.
There are 70 million Americans without Internet access. Axing a constitutionally prescribed entity that reaches them when your alternative doesn't seems a bit short-sighted to me. It's probably even more short-sighted from the perspective of businesses that need to communicate with two Californias worth of people.
An inexpensive, reliable, efficient postal service, which is the envy of the rest of the world in those respects, helped build the United States and helps keep Americans connected to each other for minimal cost and significantly increased economic output. But it has to be bad because government can't ever do anything useful, right?
posted by one more dead town's last parade at 8:34 PM on October 18, 2011 [5 favorites]
There are 70 million Americans without Internet access.
There is, for all practical purposes, no real oversight of telecom companies in the United States. With the current laissez faire approach to regulating broadband, rural communities have little hope of getting connected. That doesn't address the low-quality networking that restricts end users, a direct result of decades of consolidation and local monopolization by companies that are allowed to operate with disdain for anti-trust law.
The form of capitalism practiced by the United States has resulted in the worst network connectivity among nearly all industrialized nations. Relinquishing the more critical roles of the postal service to the Internet would be a disaster for everyday Americans.
posted by Blazecock Pileon at 9:26 PM on October 18, 2011 [2 favorites]
There is, for all practical purposes, no real oversight of telecom companies in the United States. With the current laissez faire approach to regulating broadband, rural communities have little hope of getting connected. That doesn't address the low-quality networking that restricts end users, a direct result of decades of consolidation and local monopolization by companies that are allowed to operate with disdain for anti-trust law.
The form of capitalism practiced by the United States has resulted in the worst network connectivity among nearly all industrialized nations. Relinquishing the more critical roles of the postal service to the Internet would be a disaster for everyday Americans.
posted by Blazecock Pileon at 9:26 PM on October 18, 2011 [2 favorites]
Once upon a time, or now, there were societies whose allocation of resources (capital, labor, natural resources, etc.) was controlled by markets and with limited government interference. Those societies are not oppressive regimes in anyway similar to Mao's China or the USSR. They don't employ slave labor, send political dissidents to the Arctic or shoot their citizens when they try to leave the country. Despite years of limited government interference and and economy's controlled by the market, none of the oppression you mentioned has ever happened.
posted by otto42 at 4:48 PM on October 18 [+] [!]
Surely this is the best of all possible worlds.
If the great Dr. Pangloss were here, he might say something of the sort.
posted by Hello, I'm David McGahan at 10:20 PM on October 18, 2011
posted by otto42 at 4:48 PM on October 18 [+] [!]
Surely this is the best of all possible worlds.
If the great Dr. Pangloss were here, he might say something of the sort.
posted by Hello, I'm David McGahan at 10:20 PM on October 18, 2011
http://rabble.ca/news/2011/10/occupy-future-eight-steps-being-99-cent
posted by symbioid at 10:29 PM on October 18, 2011
posted by symbioid at 10:29 PM on October 18, 2011
More charts, this time on wealth inequality and political polarization:
How inequality feeds into [political] polarization and how polarization, in turn, sets the stage for policies that further increase inequality.
The graph below tracks the Gini index, a widely used measure of economic inequality, and polarization. The correlation is staggeringly high.
Patterns in polarization also move in tandem with the percentage of the American population that is foreign born. Immigrants tend to be disproportionally poor and less likely to (be able to) vote.
Finally, polarization seems to move with trends in education and wages in the financial services relative to other industries
Your elected representatives know which side their bread is buttered on.
posted by Jakey at 5:56 AM on October 19, 2011 [2 favorites]
How inequality feeds into [political] polarization and how polarization, in turn, sets the stage for policies that further increase inequality.
The graph below tracks the Gini index, a widely used measure of economic inequality, and polarization. The correlation is staggeringly high.
Patterns in polarization also move in tandem with the percentage of the American population that is foreign born. Immigrants tend to be disproportionally poor and less likely to (be able to) vote.
Finally, polarization seems to move with trends in education and wages in the financial services relative to other industries
Your elected representatives know which side their bread is buttered on.
posted by Jakey at 5:56 AM on October 19, 2011 [2 favorites]
Out of curiosity, otto42, what do you believe to be the proper role of government? What forms of regulation do you believe in?
At the very least, the kind that regulates architects.
posted by empath at 6:13 AM on October 19, 2011 [4 favorites]
At the very least, the kind that regulates architects.
posted by empath at 6:13 AM on October 19, 2011 [4 favorites]
I submit, for your consideration: Chile, Argentina, Brazil, Columbia, Nicaragua, Guatemala, El Salvador, Philippines, Democratic Republic of Congo, Rwanda, Somalia, Sudan, Ethiopia and Eritrea, South Africa, Yemen, Syria, Lebanon, Bahrain, Egypt, ....
I imagine he was thinking more of the US when it was an apartheid state.
posted by empath at 6:14 AM on October 19, 2011
I imagine he was thinking more of the US when it was an apartheid state.
posted by empath at 6:14 AM on October 19, 2011
Jakey: More charts, this time on wealth inequality and political polarization
Thanks for the charts - I'd just like to emphasize that, on all of the charts contained in that article, undeniable, 3-decade-long upward trends begin at or around 1980, coinciding with start of the right's jihad on government spending, regulation and the middle class.
Anyone see a pattern here?
posted by syzygy at 6:19 AM on October 19, 2011 [1 favorite]
Thanks for the charts - I'd just like to emphasize that, on all of the charts contained in that article, undeniable, 3-decade-long upward trends begin at or around 1980, coinciding with start of the right's jihad on government spending, regulation and the middle class.
Anyone see a pattern here?
posted by syzygy at 6:19 AM on October 19, 2011 [1 favorite]
We live in a society controlled by markets and with minimal government interference. Do we not?
Oh, I see, this is where the confusion is. I mean, I suppose "minimal" is a vague enough word that you can define it however you like. But regardless, it seems pretty obvious that even our limited governmental protections in the U.S. are a world away from the "without government" society that Shit Parade was talking about being oppressive, isn't it? Or do you not see that? I mean, just off the top of my head, there's minimum wage laws, worker health and safety laws, child labor laws, consumer safety laws, truth in advertising laws, etc... all of which seem pretty clearly to provide key protections to people in our society by restraining companies from doing what they would otherwise tend to do without those restrictions.
We don't have slave labor here in the U.S. because there are laws enforced by the government against slave labor here, not because corporations are kind, moral entities who believe it would be wrong to force people to work for them for little or no pay, and hence choose to avoid it despite the clear benefits to the company. That's why they take advantage of it in other countries when they can (and sometimes in this country, too, when they can get away with it due to insufficient government enforcement.) It's already more oppressive here than in other countries where there is more government interference to protect the interests and well-being of ordinary people against corporations. If there was less government interference, it would almost certainly get worse. And many of us believe that if there was a combination of strong corporate power and no government interference on behalf of ordinary people, it would likely become extremely oppressive. I think that's what Shit Parade's talking about.
(Incidentally, your point about individual morality rather than laws being the reason why human beings tend to do the right thing totally ignores the fact that corporations are designed not to be responsive to individual people's perception of morality, but instead to operate to maximize the profit of the company. Individual human beings within the company may have moral values... but both the laws and charters which put profit as the required single goal of the organization, and the various internal pressures and dynamics within them, make it extremely difficult for any kind of human morality to influence the decision-making of these organizations as a whole. That's why some of us find them very dangerous and believe so strongly in the importance of external accountability and regulation, to protect us from what these huge, powerful, greedy, amoral entities tend to do when given unrestrained freedom.)
posted by EmilyClimbs at 8:46 AM on October 19, 2011 [1 favorite]
Oh, I see, this is where the confusion is. I mean, I suppose "minimal" is a vague enough word that you can define it however you like. But regardless, it seems pretty obvious that even our limited governmental protections in the U.S. are a world away from the "without government" society that Shit Parade was talking about being oppressive, isn't it? Or do you not see that? I mean, just off the top of my head, there's minimum wage laws, worker health and safety laws, child labor laws, consumer safety laws, truth in advertising laws, etc... all of which seem pretty clearly to provide key protections to people in our society by restraining companies from doing what they would otherwise tend to do without those restrictions.
We don't have slave labor here in the U.S. because there are laws enforced by the government against slave labor here, not because corporations are kind, moral entities who believe it would be wrong to force people to work for them for little or no pay, and hence choose to avoid it despite the clear benefits to the company. That's why they take advantage of it in other countries when they can (and sometimes in this country, too, when they can get away with it due to insufficient government enforcement.) It's already more oppressive here than in other countries where there is more government interference to protect the interests and well-being of ordinary people against corporations. If there was less government interference, it would almost certainly get worse. And many of us believe that if there was a combination of strong corporate power and no government interference on behalf of ordinary people, it would likely become extremely oppressive. I think that's what Shit Parade's talking about.
(Incidentally, your point about individual morality rather than laws being the reason why human beings tend to do the right thing totally ignores the fact that corporations are designed not to be responsive to individual people's perception of morality, but instead to operate to maximize the profit of the company. Individual human beings within the company may have moral values... but both the laws and charters which put profit as the required single goal of the organization, and the various internal pressures and dynamics within them, make it extremely difficult for any kind of human morality to influence the decision-making of these organizations as a whole. That's why some of us find them very dangerous and believe so strongly in the importance of external accountability and regulation, to protect us from what these huge, powerful, greedy, amoral entities tend to do when given unrestrained freedom.)
posted by EmilyClimbs at 8:46 AM on October 19, 2011 [1 favorite]
We don't have slave labor here in the U.S. because there are laws enforced by the government against slave labor here
We do have slave labor in the US.
posted by empath at 8:52 AM on October 19, 2011 [5 favorites]
We do have slave labor in the US.
posted by empath at 8:52 AM on October 19, 2011 [5 favorites]
-Empath
"Out of curiosity, otto42, what do you believe to be the proper role of government? What forms of regulation do you believe in?
At the very least, the kind that regulates architects."
In the end I decided that the state regulators would be ineffective in achieving my goals. So I handled our dispute without their assistance and without the threat of bringing them into the matter.
My goal was to get back some of my money, without necessarily punishing the architect to extent allowed by the regulations. In short, I didn't want to see him loose his license and the regulators had little authority to get my money back. Both potential outcomes allowed by the regulations were undesirable. I could loose, and not get any money, or I could win, and not get any money, and his license could be revoked.
If he is a good architect, then my stamp of disapproval will have little effect on his business amid all of his positive references.
If he is a bad architect, then my stamp of disapproval will help drive him out of the business along with all the other disapproving customers.
posted by otto42 at 9:39 AM on October 19, 2011
"Out of curiosity, otto42, what do you believe to be the proper role of government? What forms of regulation do you believe in?
At the very least, the kind that regulates architects."
In the end I decided that the state regulators would be ineffective in achieving my goals. So I handled our dispute without their assistance and without the threat of bringing them into the matter.
My goal was to get back some of my money, without necessarily punishing the architect to extent allowed by the regulations. In short, I didn't want to see him loose his license and the regulators had little authority to get my money back. Both potential outcomes allowed by the regulations were undesirable. I could loose, and not get any money, or I could win, and not get any money, and his license could be revoked.
If he is a good architect, then my stamp of disapproval will have little effect on his business amid all of his positive references.
If he is a bad architect, then my stamp of disapproval will help drive him out of the business along with all the other disapproving customers.
posted by otto42 at 9:39 AM on October 19, 2011
"(Incidentally, your point about individual morality rather than laws being the reason why human beings tend to do the right thing totally ignores the fact that corporations are designed not to be responsive to individual people's perception of morality, but instead to operate to maximize the profit of the company. Individual human beings within the company may have moral values... but both the laws and charters which put profit as the required single goal of the organization, and the various internal pressures and dynamics within them, make it extremely difficult for any kind of human morality to influence the decision-making of these organizations as a whole. That's why some of us find them very dangerous and believe so strongly in the importance of external accountability and regulation, to protect us from what these huge, powerful, greedy, amoral entities tend to do when given unrestrained freedom.)"
Corporations are amoral, which is the best you can hope for. When the singular goal is to maximize profits an amoral decision by the human is the most moral choice that can be made for all of the corporations stakeholders (owners, vendors, creditors, employees, customers) he or she is capable of making at the time. A seemingly moral choice for one group of stakeholders can be an immoral choice from the other stakeholder's position.
Keeping redundant employees may seem like the moral choice, but if a vendor decides they run the risk of not getting paid, and decide not to ship crucial supplies, the company may have made an immoral decision with regards to the other stakeholders, including those employees that were not let go. The decision not to maximize profits by letting people go puts the stakes of all of the other holders at risk.
Alternatively, a decision to keep redundant employees may seem like the immoral choice from the view of the other stakeholders, but may be the most moral of choices if the company believes, at that moment, that retraining replacements at some point in the future will be more costly.
The decisions that a corporation must make are way too numerous and conflicting with each other to satisfy all stakeholder demands to the greatest extent possible. Running the company for maximum profits results in all the demands of the stakeholders being considered and all of the resources of the company being allocated based on the decision of what is best for all stakeholders.
In hindsight, the decisions usually appear to be wrong, or not just appear to be wrong, but are wrong. If the process is amoral though, the outcome will be too, which as I said in the beginning is the best that can be hoped for.
posted by otto42 at 11:14 AM on October 19, 2011
Corporations are amoral, which is the best you can hope for. When the singular goal is to maximize profits an amoral decision by the human is the most moral choice that can be made for all of the corporations stakeholders (owners, vendors, creditors, employees, customers) he or she is capable of making at the time. A seemingly moral choice for one group of stakeholders can be an immoral choice from the other stakeholder's position.
Keeping redundant employees may seem like the moral choice, but if a vendor decides they run the risk of not getting paid, and decide not to ship crucial supplies, the company may have made an immoral decision with regards to the other stakeholders, including those employees that were not let go. The decision not to maximize profits by letting people go puts the stakes of all of the other holders at risk.
Alternatively, a decision to keep redundant employees may seem like the immoral choice from the view of the other stakeholders, but may be the most moral of choices if the company believes, at that moment, that retraining replacements at some point in the future will be more costly.
The decisions that a corporation must make are way too numerous and conflicting with each other to satisfy all stakeholder demands to the greatest extent possible. Running the company for maximum profits results in all the demands of the stakeholders being considered and all of the resources of the company being allocated based on the decision of what is best for all stakeholders.
In hindsight, the decisions usually appear to be wrong, or not just appear to be wrong, but are wrong. If the process is amoral though, the outcome will be too, which as I said in the beginning is the best that can be hoped for.
posted by otto42 at 11:14 AM on October 19, 2011
Running the company for maximum profits results in all the demands of the stakeholders being considered and all of the resources of the company being allocated based on the decision of what is best for all stakeholders.
Wait, are you serious, or are you just trolling? This just seems too illogical for you to actually believe it. Running the company for maximum profits results in all the resources of the company being allocated based on the decision of what is best for the owners/stockholders who get those profits. The best interests of other stakeholders aren't considered except when doing well by them happens to coincidentally also be good for profits/for the owners.
Harming employees by paying them less and endangering their health and safety is bad for them, but good for profits. Harming your customers by giving them dangerous and/or addictive products, deceiving them into believing your products are more valuable than they are, and setting up a monopoly situation so you can exorbitantly overcharge them is bad for them, but good for profits. Defrauding your vendors when you can get away with it is bad for them, but good for profits. That's why corporations do these things and more unless there's governments to restrain them and protect the interests of other people.
posted by EmilyClimbs at 12:51 PM on October 19, 2011 [2 favorites]
Wait, are you serious, or are you just trolling? This just seems too illogical for you to actually believe it. Running the company for maximum profits results in all the resources of the company being allocated based on the decision of what is best for the owners/stockholders who get those profits. The best interests of other stakeholders aren't considered except when doing well by them happens to coincidentally also be good for profits/for the owners.
Harming employees by paying them less and endangering their health and safety is bad for them, but good for profits. Harming your customers by giving them dangerous and/or addictive products, deceiving them into believing your products are more valuable than they are, and setting up a monopoly situation so you can exorbitantly overcharge them is bad for them, but good for profits. Defrauding your vendors when you can get away with it is bad for them, but good for profits. That's why corporations do these things and more unless there's governments to restrain them and protect the interests of other people.
posted by EmilyClimbs at 12:51 PM on October 19, 2011 [2 favorites]
We do have slave labor in the US.
Yeah, I know, that's why I said "(and sometimes in this country, too, when they can get away with it due to insufficient government enforcement.)" I almost actually linked that story and others I know of. Sorry for oversimplifying the beginning of the paragraph to make my point.
posted by EmilyClimbs at 1:06 PM on October 19, 2011
Yeah, I know, that's why I said "(and sometimes in this country, too, when they can get away with it due to insufficient government enforcement.)" I almost actually linked that story and others I know of. Sorry for oversimplifying the beginning of the paragraph to make my point.
posted by EmilyClimbs at 1:06 PM on October 19, 2011
"Running the company for maximum profits results in all the resources of the company being allocated based on the decision of what is best for the owners/stockholders who get those profits. "
You are confusing resources (labor, capital, cash, operating cash, R&D, advertising, brand value, standings with creditors, vendor financing, etc.) with profits.
The corporation has to decide how each of these resources, and many more, has to be allocated.
They can do it your way and pay more for labor when they should be investing in R&D, or pay more dividends out of operating cash, which might be the stockholders preference, when they should be reducing debt. They could be making faster vendor payments, because that's what vendors would prefer instead of spending more on advertising, which is what the sales department wants. The employees want a raise, the stockholders want a dividend, the sales department wants a bigger advertising budget. The term loan lender wants the cash on the first day its due and not the last, the IRS is hovering, the customers are looking at the same product made by a competitor, and its cheaper, and on and on and on.
Is paying labor more now at the expense of R&D moral if the company has no new widget to sell next year?
Is paying a dividend to shareholders from operating cash moral if the term loan is due in six months?
Are you going to make these decisions? Is the government?
When we do it your preferred way, or the vendors preferred way, or the stockholders preferred way, the corporate resources are allocated based on wants and not needs.
When the corporation's only goal is to maximize profits, all the stakeholders needs are met to the degree the needs are known and understood and predicted. The decisions are made amorally and every stakeholder benefits or suffers from those decisions. The outcome might not be the one desired or wildly successful, but the process is not immoral. Your process is.
posted by otto42 at 2:12 PM on October 19, 2011
You are confusing resources (labor, capital, cash, operating cash, R&D, advertising, brand value, standings with creditors, vendor financing, etc.) with profits.
The corporation has to decide how each of these resources, and many more, has to be allocated.
They can do it your way and pay more for labor when they should be investing in R&D, or pay more dividends out of operating cash, which might be the stockholders preference, when they should be reducing debt. They could be making faster vendor payments, because that's what vendors would prefer instead of spending more on advertising, which is what the sales department wants. The employees want a raise, the stockholders want a dividend, the sales department wants a bigger advertising budget. The term loan lender wants the cash on the first day its due and not the last, the IRS is hovering, the customers are looking at the same product made by a competitor, and its cheaper, and on and on and on.
Is paying labor more now at the expense of R&D moral if the company has no new widget to sell next year?
Is paying a dividend to shareholders from operating cash moral if the term loan is due in six months?
Are you going to make these decisions? Is the government?
When we do it your preferred way, or the vendors preferred way, or the stockholders preferred way, the corporate resources are allocated based on wants and not needs.
When the corporation's only goal is to maximize profits, all the stakeholders needs are met to the degree the needs are known and understood and predicted. The decisions are made amorally and every stakeholder benefits or suffers from those decisions. The outcome might not be the one desired or wildly successful, but the process is not immoral. Your process is.
posted by otto42 at 2:12 PM on October 19, 2011
If he is a good architect, then my stamp of disapproval will have little effect on his business amid all of his positive references.
If he is a bad architect, then my stamp of disapproval will help drive him out of the business along with all the other disapproving customers.
What about another scenario?
Let's say 123 people have been sickened and twenty five people have died from poisoning across the United States. The CDC identifies the culprit as being listeria, the FDA identifies the source as cantaloupe from Jensen Farms in Colorado, and forces a recall.
Is this a vast overreach of government regulation?
posted by Comrade_robot at 4:30 PM on October 19, 2011
If he is a bad architect, then my stamp of disapproval will help drive him out of the business along with all the other disapproving customers.
What about another scenario?
Let's say 123 people have been sickened and twenty five people have died from poisoning across the United States. The CDC identifies the culprit as being listeria, the FDA identifies the source as cantaloupe from Jensen Farms in Colorado, and forces a recall.
Is this a vast overreach of government regulation?
posted by Comrade_robot at 4:30 PM on October 19, 2011
why the market will punish Jensen Farms by denying them all those customers they killed.
posted by Shit Parade at 5:18 PM on October 19, 2011
posted by Shit Parade at 5:18 PM on October 19, 2011
I don't think the CDC response would be overreach.
As long as we are discussing the governments role in the economy, for how many years should the government fund Amtrak's losses? 5 years, 10 years, because we are up to 40 years this year. Since Amtrak has been in business, or whatever you call it they do, they have never been in the black.
posted by otto42 at 5:41 PM on October 19, 2011
As long as we are discussing the governments role in the economy, for how many years should the government fund Amtrak's losses? 5 years, 10 years, because we are up to 40 years this year. Since Amtrak has been in business, or whatever you call it they do, they have never been in the black.
posted by otto42 at 5:41 PM on October 19, 2011
..and not to quibble about the details, and I understand your point, but Jensen's recall was voluntary, not forced.
posted by otto42 at 5:50 PM on October 19, 2011
posted by otto42 at 5:50 PM on October 19, 2011
Yes, technically it was a voluntary recall, but saying that it was a completely voluntary recall after the CDC's found contamination and the FDA's swung by your place and noticed extremely unsanitary conditions doesn't exactly cover all of it. It's kind of like, yes, technically that politician resigned voluntarily and not because he was caught cheating on his wife with some dude ... but you know, one's not happening without the other. It's not a big point, I guess.
As for Amtrak; now I personally don't use Amtrak, so I don't really have super-strong feelings on it. Most people don't, and that's why Amtrak's kind of an easy question. On a broader scale, I guess the question is:
Should the Federal Government be funding interstate transportation?
Because the interstate highway system (started under Eisenhower) was a massive public works project. The United States has been giving government money to build airports since 1934. Should the government be stepping in to make interstate highways?
I mean, if no, I disagree, but that's what you believe, and maybe you could explain that to me, because I sincerely doubt private companies could build an interstate highway system. If yes, then why highways and airports and not railroads?
posted by Comrade_robot at 6:20 PM on October 19, 2011 [1 favorite]
As for Amtrak; now I personally don't use Amtrak, so I don't really have super-strong feelings on it. Most people don't, and that's why Amtrak's kind of an easy question. On a broader scale, I guess the question is:
Should the Federal Government be funding interstate transportation?
Because the interstate highway system (started under Eisenhower) was a massive public works project. The United States has been giving government money to build airports since 1934. Should the government be stepping in to make interstate highways?
I mean, if no, I disagree, but that's what you believe, and maybe you could explain that to me, because I sincerely doubt private companies could build an interstate highway system. If yes, then why highways and airports and not railroads?
posted by Comrade_robot at 6:20 PM on October 19, 2011 [1 favorite]
Again, not to quibble, and I'm not familiar with the process, but I'm guessing that the CDC and the FDA were the repository's for the data that indicated widely distributed listeria outbreaks were occurring and that the outbreaks could be traced back to Jensen. While maybe the FDA went to inspect Jensen's processes, I would guess that it only took a phone call for Jensen from the FDA to start the recall. The Hollywood/lefty version might be more dramatic with inspectors busting down melon factory doors, putting up crime scene tape and walking around in bio-hazard suits, I doubt the Jensen executives put up much of a fight when the FDA described what they were seeing. If you are still convinced that corporate executives are amoral greedy bastards who will stop at nothing in the pursuit of profits, then you can make the assumption that Jensen's reason for the voluntary recall is because they know that dead customers don't buy melons, rather than for any concern of doing the right thing.
As for the insterstate highway system. In hindsight, it looks like a good idea because that is the only transportation system I know. I live in NJ though, and where I live now used to be served by a train line, up until the late 40s. The single branch that exists now once had 3 sub branches with daily service to NYC, and smaller sub-sub-branches fed those. In short, the IS highway system, specifically the Garden State Parkway, put a number of train lines in NJ out of business. Maybe the IS system was worth the cost, but in its absence (prior to the 50s), private railroads were still able to get people to NYC each day.
posted by otto42 at 7:06 PM on October 19, 2011
As for the insterstate highway system. In hindsight, it looks like a good idea because that is the only transportation system I know. I live in NJ though, and where I live now used to be served by a train line, up until the late 40s. The single branch that exists now once had 3 sub branches with daily service to NYC, and smaller sub-sub-branches fed those. In short, the IS highway system, specifically the Garden State Parkway, put a number of train lines in NJ out of business. Maybe the IS system was worth the cost, but in its absence (prior to the 50s), private railroads were still able to get people to NYC each day.
posted by otto42 at 7:06 PM on October 19, 2011
"The Hollywood/lefty version might be more dramatic with inspectors busting down melon factory doors, putting up crime scene tape and walking around in bio-hazard suits,"
No that's the right-wing paranoid "government's coming after us" version - only with "jack boot thugs" instead of "biohazard suit thugs"
posted by symbioid at 7:46 PM on October 19, 2011
No that's the right-wing paranoid "government's coming after us" version - only with "jack boot thugs" instead of "biohazard suit thugs"
posted by symbioid at 7:46 PM on October 19, 2011
As long as we are discussing the governments role in the economy, for how many years should the government fund Amtrak's losses? 5 years, 10 years, because we are up to 40 years this year. Since Amtrak has been in business, or whatever you call it they do, they have never been in the black.
You're assuming that there is no value in keeping the country connected (false) and that opportunities for economic development enabled by Amtrak service or federally funded highways don't show up elsewhere in the government's balance, mostly as increased tax revenue (also false).
posted by one more dead town's last parade at 8:30 PM on October 19, 2011 [2 favorites]
You're assuming that there is no value in keeping the country connected (false) and that opportunities for economic development enabled by Amtrak service or federally funded highways don't show up elsewhere in the government's balance, mostly as increased tax revenue (also false).
posted by one more dead town's last parade at 8:30 PM on October 19, 2011 [2 favorites]
If you are still convinced that corporate executives are amoral greedy bastards who will stop at nothing in the pursuit of profits, then you can make the assumption that Jensen's reason for the voluntary recall is because they know that dead customers don't buy melons, rather than for any concern of doing the right thing.
I've never said that all corporate executives are amoral greedy bastards. There are plenty of companies that I do trust. If you're saying that I'm harshly judging a company which was found to have widespread contamination, well, you know, maybe a little bit. In this specific case, FDA investigators did visit the facility, took samples from the product, and did swabs for contamination. They found that bacterial contamination was widespread throughout the facility, and sent a warning letter which did not preclude action by DoJ. Is it that you believe that Jensen Farms would have taken action to correct its unsanitary conditions without a FDA warning? Somebody made those decisions which resulted in a lot of contaminated cantaloupe. It's the same with the salmonella contaminated peanut butter from a year or two ago.
Now I know you've agreed that this isn't government overreach, but there is a historical reason that we have a FDA and USDA and CDC. It turns out that without oversight, it's really hard to figure out what poisoned you -- if it was the 'miscellaneous' meat in that sausage, or the bad tomatoes in the ketchup. I mean if a company is using some preservative that gives everybody cancer in twenty years, that's kind of too late, isn't it?
As for the insterstate highway system. In hindsight, it looks like a good idea because that is the only transportation system I know. I live in NJ though, and where I live now used to be served by a train line, up until the late 40s. The single branch that exists now once had 3 sub branches with daily service to NYC, and smaller sub-sub-branches fed those. In short, the IS highway system, specifically the Garden State Parkway, put a number of train lines in NJ out of business. Maybe the IS system was worth the cost, but in its absence (prior to the 50s), private railroads were still able to get people to NYC each day.
I believe the 'Northeast Corridor' is the one part of Amtrak that actually makes money, probably due to the higher population density. What is workable for NYC and its environs is probably not workable for a lot of the rest of the country, which, to be fair, was designed around the automobile. I would also say that other than the national defense (one of the reasons Eisenhower was so gung-ho about the highway system), the interstate highway system enables a great deal of commerce and tourism is a net benefit to the citizens of the United States.
What I'm really trying to figure out is where you think government regulation should start and where it should stop. It doesn't seem like you're in favor of no government. So how much should there be?
posted by Comrade_robot at 9:37 PM on October 19, 2011 [2 favorites]
I've never said that all corporate executives are amoral greedy bastards. There are plenty of companies that I do trust. If you're saying that I'm harshly judging a company which was found to have widespread contamination, well, you know, maybe a little bit. In this specific case, FDA investigators did visit the facility, took samples from the product, and did swabs for contamination. They found that bacterial contamination was widespread throughout the facility, and sent a warning letter which did not preclude action by DoJ. Is it that you believe that Jensen Farms would have taken action to correct its unsanitary conditions without a FDA warning? Somebody made those decisions which resulted in a lot of contaminated cantaloupe. It's the same with the salmonella contaminated peanut butter from a year or two ago.
Now I know you've agreed that this isn't government overreach, but there is a historical reason that we have a FDA and USDA and CDC. It turns out that without oversight, it's really hard to figure out what poisoned you -- if it was the 'miscellaneous' meat in that sausage, or the bad tomatoes in the ketchup. I mean if a company is using some preservative that gives everybody cancer in twenty years, that's kind of too late, isn't it?
As for the insterstate highway system. In hindsight, it looks like a good idea because that is the only transportation system I know. I live in NJ though, and where I live now used to be served by a train line, up until the late 40s. The single branch that exists now once had 3 sub branches with daily service to NYC, and smaller sub-sub-branches fed those. In short, the IS highway system, specifically the Garden State Parkway, put a number of train lines in NJ out of business. Maybe the IS system was worth the cost, but in its absence (prior to the 50s), private railroads were still able to get people to NYC each day.
I believe the 'Northeast Corridor' is the one part of Amtrak that actually makes money, probably due to the higher population density. What is workable for NYC and its environs is probably not workable for a lot of the rest of the country, which, to be fair, was designed around the automobile. I would also say that other than the national defense (one of the reasons Eisenhower was so gung-ho about the highway system), the interstate highway system enables a great deal of commerce and tourism is a net benefit to the citizens of the United States.
What I'm really trying to figure out is where you think government regulation should start and where it should stop. It doesn't seem like you're in favor of no government. So how much should there be?
posted by Comrade_robot at 9:37 PM on October 19, 2011 [2 favorites]
otto42:
In an earlier comment on this thread, I mentioned three areas in which I think actors in your version of capitalism tend to be short-sighted. You responded to the easiest of the three (not to my satisfaction, but you did respond) while ignoring the other two, which are arguably more difficult to address under the system you prefer (at least, as I understand that system, since you haven't really explicitly said what your preferred system looks like). I hear a few Randian terms poking through, so I assume you're a proponent of theories similar to hers (although I bet you'd be quick to distance yourself from the author of the ideas, since she's not really en vogue here).
I'd sincerely like to hear how the system you propose will handle the following scenarios:
1. An infant formula company, whose primary market consists of the poor, decides to boost its profits by adding melamine to its product. Melamine is cheaper to produce than actual, nutritious formula. The company calculates that it will realize an increase of 2% in annual profits by adding the right amount of melamine to its product. The company knows that approximately 10% of its infant customers will develop long term kidney malfunctions from the ingested melamine, but has determined that, because its target market consists of poorly educated consumers who, by and large, do not individually have the financial resources required to have the formula tested by a private lab, and because the effects of ingesting the proposed amount of melamine take a longer period of time to manifest, the number of adversely affected customers is below the threshold that is likely to be detected. To be safe, the company initiates a PR campaign that touts its commitment to healthy infants, including educational materials for poor parents.
2. A chemical processing company is building a new plant. Management knows that disposing of hazardous waste byproducts 'responsibly' will reduce the plant's annual profits by 5%. The company decides to build the plant in a rural area, far from major population centers, in order to facilitate dumping hazardous waste byproducts directly into standard drainage. Management knows that these hazardous byproducts will reach the main source of drinking water for a poorer community several hundred miles downstream, and that members of the public in that community are likely to suffer long-term increased rates of cancer, among other adverse medical affects. The company has determined that these adverse effects will be mitigated by the following facts:
a. the distance between the plant and the community offers some degree of plausible deniability
b. the community consists mostly of poorly-educated residents who do not individually have the resources required to trace the hazardous byproducts back to the new plant
c. the expected increase in cancer rates won't manifest itself for some years, and then only in a quantity that's likely to remain undetected
d. the wealthier members of the community, by and large, have sophisticated water-purification systems that will shield them from the hazardous byproducts
e. the company plans to build a call center in the community, thereby becoming a major employer and building a sense of goodwill in the community
Now, my scenarios may be imperfect, so I'd like to invite you, in the spirit of an honest exchange of ideas, to resist the temptation to split hairs. Please address the spirit of the scenarios, rather than the letter. In other words, please don't start any of your replies with 'not to quibble about the details.'
Furthermore, if you can point me to some resources that outline how your preferred system will handle similar scenarios, I'd appreciate some links.
And lastly, Comrade_robot asked: "Out of curiosity, otto42, what do you believe to be the proper role of government? What forms of regulation do you believe in?"
You haven't answered that question yet (or else I've overlooked it). Again, in the spirit of an honest exchange of ideas, I'd like to re-ask that question - what is the proper role of government, in your preferred system?
posted by syzygy at 3:29 AM on October 20, 2011
In an earlier comment on this thread, I mentioned three areas in which I think actors in your version of capitalism tend to be short-sighted. You responded to the easiest of the three (not to my satisfaction, but you did respond) while ignoring the other two, which are arguably more difficult to address under the system you prefer (at least, as I understand that system, since you haven't really explicitly said what your preferred system looks like). I hear a few Randian terms poking through, so I assume you're a proponent of theories similar to hers (although I bet you'd be quick to distance yourself from the author of the ideas, since she's not really en vogue here).
I'd sincerely like to hear how the system you propose will handle the following scenarios:
1. An infant formula company, whose primary market consists of the poor, decides to boost its profits by adding melamine to its product. Melamine is cheaper to produce than actual, nutritious formula. The company calculates that it will realize an increase of 2% in annual profits by adding the right amount of melamine to its product. The company knows that approximately 10% of its infant customers will develop long term kidney malfunctions from the ingested melamine, but has determined that, because its target market consists of poorly educated consumers who, by and large, do not individually have the financial resources required to have the formula tested by a private lab, and because the effects of ingesting the proposed amount of melamine take a longer period of time to manifest, the number of adversely affected customers is below the threshold that is likely to be detected. To be safe, the company initiates a PR campaign that touts its commitment to healthy infants, including educational materials for poor parents.
2. A chemical processing company is building a new plant. Management knows that disposing of hazardous waste byproducts 'responsibly' will reduce the plant's annual profits by 5%. The company decides to build the plant in a rural area, far from major population centers, in order to facilitate dumping hazardous waste byproducts directly into standard drainage. Management knows that these hazardous byproducts will reach the main source of drinking water for a poorer community several hundred miles downstream, and that members of the public in that community are likely to suffer long-term increased rates of cancer, among other adverse medical affects. The company has determined that these adverse effects will be mitigated by the following facts:
a. the distance between the plant and the community offers some degree of plausible deniability
b. the community consists mostly of poorly-educated residents who do not individually have the resources required to trace the hazardous byproducts back to the new plant
c. the expected increase in cancer rates won't manifest itself for some years, and then only in a quantity that's likely to remain undetected
d. the wealthier members of the community, by and large, have sophisticated water-purification systems that will shield them from the hazardous byproducts
e. the company plans to build a call center in the community, thereby becoming a major employer and building a sense of goodwill in the community
Now, my scenarios may be imperfect, so I'd like to invite you, in the spirit of an honest exchange of ideas, to resist the temptation to split hairs. Please address the spirit of the scenarios, rather than the letter. In other words, please don't start any of your replies with 'not to quibble about the details.'
Furthermore, if you can point me to some resources that outline how your preferred system will handle similar scenarios, I'd appreciate some links.
And lastly, Comrade_robot asked: "Out of curiosity, otto42, what do you believe to be the proper role of government? What forms of regulation do you believe in?"
You haven't answered that question yet (or else I've overlooked it). Again, in the spirit of an honest exchange of ideas, I'd like to re-ask that question - what is the proper role of government, in your preferred system?
posted by syzygy at 3:29 AM on October 20, 2011
I think that government interference in the economy can be broken into different components some of which are more tolerable than others.
At the top is when the government tries to provide a service that is already being provided by private industry,and loosing money in the process. Amtrak and the Post Office are the worst offenders. If Amtrak were to shut down in a month, I doubt there is a single stop in the country that a person couldn't get to using other means. Amtrak says it needs $170 billion over the next 20 years to maintain its equipment and to expand. That $170 billion is enough to buy enough buses to carry 40 million people every day. In 2011, Amtrak carried 30.2 passengers. That is spread out over an entire year.
The next most least tolerable is when the government passes laws to protect certain industries. Farm studies would fall in this category. There is no reason why the price of milk should be set by a formula based on the distance from Eua Claire Wisconsin. Furthermore, ADM and other large industrial farms should not be eligible for subsidies.
Not tolerable. Government picking companies for investment. Google Solyndra. You won't find anything on mefi though since it shows Obama's apparent corruption.
These are just a few of the least tolerable examples. Regulations that protect the public safety seem mostly reasonable. Similarly, regulations that protect the public from financial ruin might be ok, but the average citizen probably places too much faith in the ability of the regulators to protect them and therefore take outsized risks. Businesses do this to. Lehman Brothers thought the Feds would throw them a life jacket. If Lehman understood they were swimming alone the whole time, they would have not have taken on so much risk.
To the extent the government funds science for science sake, I don't have a problem with that. I think of it as a benefit of living in a wealthy country.
I could go on but I'm on my way to work.
posted by otto42 at 3:43 AM on October 20, 2011
At the top is when the government tries to provide a service that is already being provided by private industry,and loosing money in the process. Amtrak and the Post Office are the worst offenders. If Amtrak were to shut down in a month, I doubt there is a single stop in the country that a person couldn't get to using other means. Amtrak says it needs $170 billion over the next 20 years to maintain its equipment and to expand. That $170 billion is enough to buy enough buses to carry 40 million people every day. In 2011, Amtrak carried 30.2 passengers. That is spread out over an entire year.
The next most least tolerable is when the government passes laws to protect certain industries. Farm studies would fall in this category. There is no reason why the price of milk should be set by a formula based on the distance from Eua Claire Wisconsin. Furthermore, ADM and other large industrial farms should not be eligible for subsidies.
Not tolerable. Government picking companies for investment. Google Solyndra. You won't find anything on mefi though since it shows Obama's apparent corruption.
These are just a few of the least tolerable examples. Regulations that protect the public safety seem mostly reasonable. Similarly, regulations that protect the public from financial ruin might be ok, but the average citizen probably places too much faith in the ability of the regulators to protect them and therefore take outsized risks. Businesses do this to. Lehman Brothers thought the Feds would throw them a life jacket. If Lehman understood they were swimming alone the whole time, they would have not have taken on so much risk.
To the extent the government funds science for science sake, I don't have a problem with that. I think of it as a benefit of living in a wealthy country.
I could go on but I'm on my way to work.
posted by otto42 at 3:43 AM on October 20, 2011
Just saw your immediately previous post to my last. Will try to get to later
posted by otto42 at 3:52 AM on October 20, 2011
posted by otto42 at 3:52 AM on October 20, 2011
otto42: Regulations that protect the public safety seem mostly reasonable.
The above is an interesting statement, especially since you've also said that: Corporations are amoral, which is the best you can hope for. When the singular goal is to maximize profits an amoral decision by the human is the most moral choice that can be made for all of the corporations stakeholders (owners, vendors, creditors, employees, customers) he or she is capable of making at the time. A seemingly moral choice for one group of stakeholders can be an immoral choice from the other stakeholder's position.
As a follow-up to my other questions, I'd like to ask how you can reconcile these two statements.
If the pure profit motive (unencumbered by regulation) doesn't tend to lead actors into making short-sighted actions and is, at the same time, the only source of 'the most moral choice that can be made,' why would you make an exception in the area of public safety?
You're claiming, on the one hand, that the profit motive is the only pure source of moral choices while, on the other hand, admitting that the profit motive alone may not lead to the best choices in regards to public safety.
So the question, then: why is public safety exceptional, and why should anyone who hears that you tolerate government regulations in the interest of public safety believe the other half of your story, that the profit motive, alone, is the best and only source of 'the most moral choice'?
posted by syzygy at 4:13 AM on October 20, 2011
The above is an interesting statement, especially since you've also said that: Corporations are amoral, which is the best you can hope for. When the singular goal is to maximize profits an amoral decision by the human is the most moral choice that can be made for all of the corporations stakeholders (owners, vendors, creditors, employees, customers) he or she is capable of making at the time. A seemingly moral choice for one group of stakeholders can be an immoral choice from the other stakeholder's position.
As a follow-up to my other questions, I'd like to ask how you can reconcile these two statements.
If the pure profit motive (unencumbered by regulation) doesn't tend to lead actors into making short-sighted actions and is, at the same time, the only source of 'the most moral choice that can be made,' why would you make an exception in the area of public safety?
You're claiming, on the one hand, that the profit motive is the only pure source of moral choices while, on the other hand, admitting that the profit motive alone may not lead to the best choices in regards to public safety.
So the question, then: why is public safety exceptional, and why should anyone who hears that you tolerate government regulations in the interest of public safety believe the other half of your story, that the profit motive, alone, is the best and only source of 'the most moral choice'?
posted by syzygy at 4:13 AM on October 20, 2011
otto42:
I don't want to overwhelm you here, but I have another scenario that I'd like to ask your opinion on. I hope you don't mind the opportunity to explain to the skeptics how your system will produce the best outcomes in all situations. Assuming your system is the best, pardon me, the only, system, it shouldn't be hard for you to explain to us how it will result in the best outcomes when presented with various scenarios.
Scenario:
A young man inherits a 50-year-old private lumber business that was built by his grandfather. Included in the company's assets are a 1,000 acre stand of old growth Redwoods, a number of which are more than a thousand years old.
The young man's grandfather built and ran the business sustainably - he was not fabulously wealthy, but the lumber operations generated a reliable and comfortable income which could, theoretically, last into perpetuity with proper management.
The lumber company, located in a rural area, is the main employer for a small community of lower middle class workers.
The inheritor has no interest in trees or in running a lumber company. His primary goal is to realize a windfall profit that will allow him to build a beach house in Belize, buy a modest boat and live off of investment income.
With this in mind, he hires an accounting firm to study the various liquidation options, in the hopes of finding the most profitable one.
Due to a housing boom, the price for hardwood lumber is at an all-time high. After exploring all options, the accounting firm reports back that the short-term liquidation option that will generate the most income is to clear-cut the entire 1,000 acres, converting the wood to cash, immediately.
Six months later, the protagonist is sitting on his balcony overlooking the crystal blue water in front of his beach house, drinking a margarita and smiling at his Fidelity account statement, balance: $10,000,000.
Meanwhile, an entire community has been put out of work, and an entire stand of old growth hardwoods that will take more than a millennium to replace, have been turned into lumber used to build houses that will last 75 years, if the buyers are lucky.
How does your political and economical philosophy view such a series of events?
I'd like to point out to you that these are not purely hypothetical scenarios - they all have a basis on fact, and there are plenty more where they came from.
posted by syzygy at 5:18 AM on October 20, 2011 [1 favorite]
I don't want to overwhelm you here, but I have another scenario that I'd like to ask your opinion on. I hope you don't mind the opportunity to explain to the skeptics how your system will produce the best outcomes in all situations. Assuming your system is the best, pardon me, the only, system, it shouldn't be hard for you to explain to us how it will result in the best outcomes when presented with various scenarios.
Scenario:
A young man inherits a 50-year-old private lumber business that was built by his grandfather. Included in the company's assets are a 1,000 acre stand of old growth Redwoods, a number of which are more than a thousand years old.
The young man's grandfather built and ran the business sustainably - he was not fabulously wealthy, but the lumber operations generated a reliable and comfortable income which could, theoretically, last into perpetuity with proper management.
The lumber company, located in a rural area, is the main employer for a small community of lower middle class workers.
The inheritor has no interest in trees or in running a lumber company. His primary goal is to realize a windfall profit that will allow him to build a beach house in Belize, buy a modest boat and live off of investment income.
With this in mind, he hires an accounting firm to study the various liquidation options, in the hopes of finding the most profitable one.
Due to a housing boom, the price for hardwood lumber is at an all-time high. After exploring all options, the accounting firm reports back that the short-term liquidation option that will generate the most income is to clear-cut the entire 1,000 acres, converting the wood to cash, immediately.
Six months later, the protagonist is sitting on his balcony overlooking the crystal blue water in front of his beach house, drinking a margarita and smiling at his Fidelity account statement, balance: $10,000,000.
Meanwhile, an entire community has been put out of work, and an entire stand of old growth hardwoods that will take more than a millennium to replace, have been turned into lumber used to build houses that will last 75 years, if the buyers are lucky.
How does your political and economical philosophy view such a series of events?
I'd like to point out to you that these are not purely hypothetical scenarios - they all have a basis on fact, and there are plenty more where they came from.
posted by syzygy at 5:18 AM on October 20, 2011 [1 favorite]
otto42 wrote: Maybe the IS system was worth the cost, but in its absence (prior to the 50s), private railroads were still able to get people to NYC each day.
You might want to do a little reading on why exactly private passenger rail failed. Just a suggestion.
posted by wierdo at 7:30 AM on October 20, 2011 [1 favorite]
You might want to do a little reading on why exactly private passenger rail failed. Just a suggestion.
posted by wierdo at 7:30 AM on October 20, 2011 [1 favorite]
You have a lot of questions so I'll answer in spurts through the day.
"If the pure profit motive (unencumbered by regulation) doesn't tend to lead actors into making short-sighted actions and is, at the same time, the only source of 'the most moral choice that can be made,' why would you make an exception in the area of public safety?"
I am not making an exception for public safety, but certainly accidents happen. The market controls for conscience immoral decisions such as gross negligence. It will also control for innocent incompetence. Occasionally though, despite a company's sincerest motives and most competent actions, something bad will happen. To the extent the regulator can help identify an unknown issue, then they may have a role to play. Jensen probably didn't know it was selling tainted mellons until they were told they were doing so.
Now I know that my next point is going to seem pretty controversial, but the regulators may have had a role in the tainted melon case. This is because the regulators might have absolved the melon industry from self policing. Jensen's gross negligence, unintended negligence or plain old bad luck, has damaged all of the industry participants both good and bad. The good melon producers now must regain the trust of the public or risk loosing their franchises. Hypothetically, they will form a Mellon Board, and only the producers that meet the standards of the Board get to put a Mellon Board sticker of approval on their mellons. The Mellon Board standards will be stricter than the government standards (or else what would be the point) and they will use the dues paid to the board to advertise the stricter standards. Soon, the public will only buy Board inspected mellons, and any producer that can not comply will be out of business.
I realize this might seem fanciful to you, but it happens all the time. The International Packaged Ice Association inspects ice making machines and tests for contaminants in its member's facilities and products. Companies that pass the tests get to put a sticker on their ice bags claiming compliance. So don't buy packaged ice unless it has an IPIA sticker, it might be unsafe.
While these policing efforts involve the safety of the public, the two professional organizations I belong to have considerably more stringent ethical requirements than those allowed by the law. In short, if I violate those standards, I can not work in my industry.
The broader point is that companies that seemingly would have a reason to act criminally or unethically to boost the bottom line have huge incentives not to act that way. The suggestion that a world without regulators would result in a plethora of illegal and unethical behavior is not supported by the fact that self policing is prevalent and effective. Food inspectors never had and never will have the resources necessary to monitor all of the various ways food is handled from the fields to the restaurants freezer, which suggests the owners and laborers who handle the food do a pretty decent job of ensuring the public's safety.
posted by otto42 at 7:59 AM on October 20, 2011
"If the pure profit motive (unencumbered by regulation) doesn't tend to lead actors into making short-sighted actions and is, at the same time, the only source of 'the most moral choice that can be made,' why would you make an exception in the area of public safety?"
I am not making an exception for public safety, but certainly accidents happen. The market controls for conscience immoral decisions such as gross negligence. It will also control for innocent incompetence. Occasionally though, despite a company's sincerest motives and most competent actions, something bad will happen. To the extent the regulator can help identify an unknown issue, then they may have a role to play. Jensen probably didn't know it was selling tainted mellons until they were told they were doing so.
Now I know that my next point is going to seem pretty controversial, but the regulators may have had a role in the tainted melon case. This is because the regulators might have absolved the melon industry from self policing. Jensen's gross negligence, unintended negligence or plain old bad luck, has damaged all of the industry participants both good and bad. The good melon producers now must regain the trust of the public or risk loosing their franchises. Hypothetically, they will form a Mellon Board, and only the producers that meet the standards of the Board get to put a Mellon Board sticker of approval on their mellons. The Mellon Board standards will be stricter than the government standards (or else what would be the point) and they will use the dues paid to the board to advertise the stricter standards. Soon, the public will only buy Board inspected mellons, and any producer that can not comply will be out of business.
I realize this might seem fanciful to you, but it happens all the time. The International Packaged Ice Association inspects ice making machines and tests for contaminants in its member's facilities and products. Companies that pass the tests get to put a sticker on their ice bags claiming compliance. So don't buy packaged ice unless it has an IPIA sticker, it might be unsafe.
While these policing efforts involve the safety of the public, the two professional organizations I belong to have considerably more stringent ethical requirements than those allowed by the law. In short, if I violate those standards, I can not work in my industry.
The broader point is that companies that seemingly would have a reason to act criminally or unethically to boost the bottom line have huge incentives not to act that way. The suggestion that a world without regulators would result in a plethora of illegal and unethical behavior is not supported by the fact that self policing is prevalent and effective. Food inspectors never had and never will have the resources necessary to monitor all of the various ways food is handled from the fields to the restaurants freezer, which suggests the owners and laborers who handle the food do a pretty decent job of ensuring the public's safety.
posted by otto42 at 7:59 AM on October 20, 2011
otto42: Soon, the public will only buy Board inspected mellons, and any producer that can not comply will be out of business.
This sounds suspiciously like a cartel to me. What's to stop the Melon Board members from colluding on prices and denying entry to market newcomers or unloved / innovative competitors? What if the board decides that it's more profitable to spend members' dues on advertising and public relations, rather than on maintaining a mutually-agreed-upon set of health and safety standards?
Now I'll give you a real-life example of an industry self-policing board that's gone wrong. I'll remain vague, since one of my customers works in this industry, but I will tell you honestly how it works.
This industry is in the repair business, and it repairs items for end consumers in an unregulated market (anyone can open up shop and offer this service, no certification required). The repairs are quite expensive, 4 to 5 figures. There exist several methods of repair:
- one is quite old and effective, but also very expensive and disruptive
- the second is also rather old, and has largely proven to be ineffective - people who choose this method often end up in court with the companies who sell it, and often end up having to do a second repair, using a more sound method. Unfortunately, it's not yet well known by the general public that this method doesn't work.
- the third method is something of an innovative newcomer, and it has proven to be very effective. It falls in between the first two in regards to cost - it is much cheaper than, but at least as effective as the tried-and-true method #1
The repairs are technical enough in nature that most consumers have no idea how to compare them. If cost is an issue, they'll generally go with method #2 - the cheaper but ineffective method.
Now, most companies in this industry use method #2 - it's simply the cheapest way to turn a profit in this business. With the advent of method three, a bunch of these companies banded together to form an "X Repair Board". Together, they promote their ineffective method as the only valid one, and they deny entrance to any companies who use other methods. Each of the member companies on this board advertises its membership on the board, as if it were an official certification or seal of approval, and all of the companies, in their marketing materials and on their websites, recommend to prospective customers that they only deal with 'certified' companies. In addition, the board has come to an agreement on the wording of any warranties offered by member companies. These warranties are worded in such a way as to absolve the member companies of most responsibility, should something go wrong.
Since most companies in the industry use this cheaper, ineffective method, and since they have put together an official-sounding board that 'certifies' their method and their companies, they're able to multiply the message that their method is the best (in direct contradiction to the facts). They've even hired a few ex-engineers (they did get in trouble for using registered engineers to back up their claims - the state board of engineers put an end to that) to back their claims up. The board advertises for the company members, and each company member advertises, in turn, for the board.
This situation has been going on for several years now, with this 'cartel' of companies doing everything they can to put non-member competitors out of business. Their tactics have been fruitful, if at the very least causing some customers who would have chosen the best method to choose the worst one, instead.
I fully believe that their tactic will only delay the inevitable, but while it's delaying the inevitable, untold thousands of customers will be defrauded, and innovative capitalists will be held back. The owners of the companies on the board probably don't care - if they can delay the inevitable for 5 or 10 years, they'll make several million dollars apiece - enough to retire or start another business, maybe another business that makes its profits by defrauding consumers.
The fact that self policing is prevalent and effective.
I agree that self-policing can be a good thing, but even when it's not used to keep out unwanted competitors and stifle innovation, as in the above, real-world example, I think it's often used as a preventative measure - that is, honest industry leaders will band together and set rules for their industry in order to 'head the government regulators off at the pass.' The point here is that the threat of government regulation gives impetus to industry-self-regulation. An industry that does a good job of regulating itself is less likely to be a target of government regulations and interference. However, once the threat of government regulation is removed, I think a large part of the impetus for tough and honest self-regulation goes away with it.
In an environment where an industry has no threat of government regulation, the private regulators are only beholden to the members that pay them. That is, there is a direct conflict of interest - the person paying your salary is also the person who you're supposed to keep in line. I'm not convinced that there's necessarily a lower chance of corruption in this system than there is in a system where government regulators, whose salaries are paid by the citizens, and who are therefore not biased toward the industries they regulate, are responsible for keeping the regulated in line. No matter whether the regulator is public or private, you can try to bribe him, or you can try to get your friends 'elected' to the regulation board. And with a private regulator, his salary is already coming out of your dues, and you can threaten to try to have him removed from his position if he reports a failure on your part.
posted by syzygy at 9:12 AM on October 20, 2011
This sounds suspiciously like a cartel to me. What's to stop the Melon Board members from colluding on prices and denying entry to market newcomers or unloved / innovative competitors? What if the board decides that it's more profitable to spend members' dues on advertising and public relations, rather than on maintaining a mutually-agreed-upon set of health and safety standards?
Now I'll give you a real-life example of an industry self-policing board that's gone wrong. I'll remain vague, since one of my customers works in this industry, but I will tell you honestly how it works.
This industry is in the repair business, and it repairs items for end consumers in an unregulated market (anyone can open up shop and offer this service, no certification required). The repairs are quite expensive, 4 to 5 figures. There exist several methods of repair:
- one is quite old and effective, but also very expensive and disruptive
- the second is also rather old, and has largely proven to be ineffective - people who choose this method often end up in court with the companies who sell it, and often end up having to do a second repair, using a more sound method. Unfortunately, it's not yet well known by the general public that this method doesn't work.
- the third method is something of an innovative newcomer, and it has proven to be very effective. It falls in between the first two in regards to cost - it is much cheaper than, but at least as effective as the tried-and-true method #1
The repairs are technical enough in nature that most consumers have no idea how to compare them. If cost is an issue, they'll generally go with method #2 - the cheaper but ineffective method.
Now, most companies in this industry use method #2 - it's simply the cheapest way to turn a profit in this business. With the advent of method three, a bunch of these companies banded together to form an "X Repair Board". Together, they promote their ineffective method as the only valid one, and they deny entrance to any companies who use other methods. Each of the member companies on this board advertises its membership on the board, as if it were an official certification or seal of approval, and all of the companies, in their marketing materials and on their websites, recommend to prospective customers that they only deal with 'certified' companies. In addition, the board has come to an agreement on the wording of any warranties offered by member companies. These warranties are worded in such a way as to absolve the member companies of most responsibility, should something go wrong.
Since most companies in the industry use this cheaper, ineffective method, and since they have put together an official-sounding board that 'certifies' their method and their companies, they're able to multiply the message that their method is the best (in direct contradiction to the facts). They've even hired a few ex-engineers (they did get in trouble for using registered engineers to back up their claims - the state board of engineers put an end to that) to back their claims up. The board advertises for the company members, and each company member advertises, in turn, for the board.
This situation has been going on for several years now, with this 'cartel' of companies doing everything they can to put non-member competitors out of business. Their tactics have been fruitful, if at the very least causing some customers who would have chosen the best method to choose the worst one, instead.
I fully believe that their tactic will only delay the inevitable, but while it's delaying the inevitable, untold thousands of customers will be defrauded, and innovative capitalists will be held back. The owners of the companies on the board probably don't care - if they can delay the inevitable for 5 or 10 years, they'll make several million dollars apiece - enough to retire or start another business, maybe another business that makes its profits by defrauding consumers.
The fact that self policing is prevalent and effective.
I agree that self-policing can be a good thing, but even when it's not used to keep out unwanted competitors and stifle innovation, as in the above, real-world example, I think it's often used as a preventative measure - that is, honest industry leaders will band together and set rules for their industry in order to 'head the government regulators off at the pass.' The point here is that the threat of government regulation gives impetus to industry-self-regulation. An industry that does a good job of regulating itself is less likely to be a target of government regulations and interference. However, once the threat of government regulation is removed, I think a large part of the impetus for tough and honest self-regulation goes away with it.
In an environment where an industry has no threat of government regulation, the private regulators are only beholden to the members that pay them. That is, there is a direct conflict of interest - the person paying your salary is also the person who you're supposed to keep in line. I'm not convinced that there's necessarily a lower chance of corruption in this system than there is in a system where government regulators, whose salaries are paid by the citizens, and who are therefore not biased toward the industries they regulate, are responsible for keeping the regulated in line. No matter whether the regulator is public or private, you can try to bribe him, or you can try to get your friends 'elected' to the regulation board. And with a private regulator, his salary is already coming out of your dues, and you can threaten to try to have him removed from his position if he reports a failure on your part.
posted by syzygy at 9:12 AM on October 20, 2011
In the Redwood clear cutting scenario you describe there is apparently only one option and that is too cut down the forest and collect $10 million. This outcome is of course undesirable because it is biased by the after the fact description of what he did with the money. If he was spending the cash on his daughters cancer treatments his actions might be viewed more sympathetically.
But we will stick with the facts as presented. I will call him Spaulding, the ne'er-do-well grandson of Judge Smails.
There is no getting around the fact that Spaulding has a right to cut and collect and spend the cash the way he wants to. You can attempt to change that right but it is pretty fundamental and would impinge on the actions of other less nefarious commercial transactions. I don't think you would also claim some right to instruct where he should spend his money.
I'll ask you a question now, what would you do to prevent Spaulding from taking the course of action described without obstructing his rights?
Lets consider what could have been done before the actual sale and cutting commenced.
Obviously, the trees and town are considerably less important to Spaulding than they are to other stakeholders, which appear to actually have few stakes. Moreover, Spaulding is not budging on the price.
Since the only way to save the forest and jobs is to pay the $10 million, the stakeholders are going to have to come up with the cash, which means they are going to have to give something up. I would start with taxes. Presumably Spaulding is paying taxes on his profits. This means that he was paid more than $10 million so that his after tax return would be equal to $10 million. Maybe eliminating Spaudling's tax liability gets the total sales price down to a level that makes in profitable to continue under grandpa's method rather than clear cutting. Reducing the buyers tax on his future profits will also positively effect the economics. Finally, the tree people should be willing to fork over some cash if the cause is so important to them. Another million or so from the tree people might make for a worthwhile investment for the alternate buyer.
Maybe there is no way to stop the clear cutting and maybe Spaulding is just an asshole, but there is nothing we can do about it.
posted by otto42 at 9:15 AM on October 20, 2011
But we will stick with the facts as presented. I will call him Spaulding, the ne'er-do-well grandson of Judge Smails.
There is no getting around the fact that Spaulding has a right to cut and collect and spend the cash the way he wants to. You can attempt to change that right but it is pretty fundamental and would impinge on the actions of other less nefarious commercial transactions. I don't think you would also claim some right to instruct where he should spend his money.
I'll ask you a question now, what would you do to prevent Spaulding from taking the course of action described without obstructing his rights?
Lets consider what could have been done before the actual sale and cutting commenced.
Obviously, the trees and town are considerably less important to Spaulding than they are to other stakeholders, which appear to actually have few stakes. Moreover, Spaulding is not budging on the price.
Since the only way to save the forest and jobs is to pay the $10 million, the stakeholders are going to have to come up with the cash, which means they are going to have to give something up. I would start with taxes. Presumably Spaulding is paying taxes on his profits. This means that he was paid more than $10 million so that his after tax return would be equal to $10 million. Maybe eliminating Spaudling's tax liability gets the total sales price down to a level that makes in profitable to continue under grandpa's method rather than clear cutting. Reducing the buyers tax on his future profits will also positively effect the economics. Finally, the tree people should be willing to fork over some cash if the cause is so important to them. Another million or so from the tree people might make for a worthwhile investment for the alternate buyer.
Maybe there is no way to stop the clear cutting and maybe Spaulding is just an asshole, but there is nothing we can do about it.
posted by otto42 at 9:15 AM on October 20, 2011
If you are still convinced that corporate executives are amoral greedy bastards who will stop at nothing in the pursuit of profits, then you can make the assumption that Jensen's reason for the voluntary recall is because they know that dead customers don't buy melons, rather than for any concern of doing the right thing.
He chose to cut corners on safety before the recall to maximize profits, which is exactly what you suggest corporations should do.
posted by empath at 9:20 AM on October 20, 2011
He chose to cut corners on safety before the recall to maximize profits, which is exactly what you suggest corporations should do.
posted by empath at 9:20 AM on October 20, 2011
otto42: I'll ask you a question now, what would you do to prevent Spaulding from taking the course of action described without obstructing his rights?
I would be comfortable with having the state restrict his rights in the interest of the greater good. I know a little about forestry - I will eventually inherit part of a, sustainably-managed forest in a state where clear-cutting is allowed.
I have seen neighboring forests that were inherited and clear-cut, soon thereafter. These people generally lose their land not long after clear-cutting. The windfall is often spent on ill-conceived plans, new houses or disposable consumer items, and the heirs, no longer able to cover the property taxes from the regular income, are forced to sell at fire-sale prices.
I am also somewhat familiar with forestry techniques here in Austria. In Austria, forest-owners are required to manage their forests in a sustainable manner. This does impinge on the rights of the property owner, but there is a sense that the ownership is shared between the 'owner' and the citizens. This concept of a shared resource ends up preserving the forests while also turning the 'owners' a profit (some of the wealthiest Austrians count their riches in forested acres). Wood is more expensive here than in the States, but I'm willing to pay a premium price for it in order to be able to continue to enjoy the beautiful Alpine forests.
I would say, in this case, that the long-term value of the forest may make it worth more to the public over the long-term than it is to Spaulding today. Furthermore, there's nothing to stop Spaulding from demanding an even higher price for his acreage from concerned parties than he could get by clear-cutting. If he's a real bastard, he could set the price at $15 million, or else.
By the way, if the US had a reasonable health insurance system, Spaulding wouldn't need to clear-cut his property to pay for his daughter's cancer treatment.
posted by syzygy at 9:36 AM on October 20, 2011 [1 favorite]
I would be comfortable with having the state restrict his rights in the interest of the greater good. I know a little about forestry - I will eventually inherit part of a, sustainably-managed forest in a state where clear-cutting is allowed.
I have seen neighboring forests that were inherited and clear-cut, soon thereafter. These people generally lose their land not long after clear-cutting. The windfall is often spent on ill-conceived plans, new houses or disposable consumer items, and the heirs, no longer able to cover the property taxes from the regular income, are forced to sell at fire-sale prices.
I am also somewhat familiar with forestry techniques here in Austria. In Austria, forest-owners are required to manage their forests in a sustainable manner. This does impinge on the rights of the property owner, but there is a sense that the ownership is shared between the 'owner' and the citizens. This concept of a shared resource ends up preserving the forests while also turning the 'owners' a profit (some of the wealthiest Austrians count their riches in forested acres). Wood is more expensive here than in the States, but I'm willing to pay a premium price for it in order to be able to continue to enjoy the beautiful Alpine forests.
I would say, in this case, that the long-term value of the forest may make it worth more to the public over the long-term than it is to Spaulding today. Furthermore, there's nothing to stop Spaulding from demanding an even higher price for his acreage from concerned parties than he could get by clear-cutting. If he's a real bastard, he could set the price at $15 million, or else.
By the way, if the US had a reasonable health insurance system, Spaulding wouldn't need to clear-cut his property to pay for his daughter's cancer treatment.
posted by syzygy at 9:36 AM on October 20, 2011 [1 favorite]
To add to the Austrian forest example - forests here are also an important defense against avalanches, which is another reason that forest-owners' rights are restricted, and clear-cutting is generally disallowed.
What would you say if Spaulding's 1,000 acres of old-growth forest were the main bulwark against catastrophic avalanches for a small town? Should he still have the right to clear-cut?
posted by syzygy at 9:38 AM on October 20, 2011
What would you say if Spaulding's 1,000 acres of old-growth forest were the main bulwark against catastrophic avalanches for a small town? Should he still have the right to clear-cut?
posted by syzygy at 9:38 AM on October 20, 2011
Also, please keep in mind that these scenarios are running in your preferred system, which I assume will include a much lower tax burden for 'capitalists' like our delightful little Spaulding .
posted by syzygy at 10:18 AM on October 20, 2011
posted by syzygy at 10:18 AM on October 20, 2011
Not for anything, I asked what would you do without obstructing his rights?
The answer is easy if you allow for obstruction.
I would declare the forest a unicorn preserve as long as we are changing the parameters.
Similarly, as long as we are adding other factors, the courts might allow for the rights of other property owners to be considered if his actions are going to result in the destruction of the town by an avalanche.
To use a more simplistic example, if I chop down a tree in my front yard and it lands on my neighbors porch, I still owe my neighbor a new porch.
posted by otto42 at 10:59 AM on October 20, 2011
The answer is easy if you allow for obstruction.
I would declare the forest a unicorn preserve as long as we are changing the parameters.
Similarly, as long as we are adding other factors, the courts might allow for the rights of other property owners to be considered if his actions are going to result in the destruction of the town by an avalanche.
To use a more simplistic example, if I chop down a tree in my front yard and it lands on my neighbors porch, I still owe my neighbor a new porch.
posted by otto42 at 10:59 AM on October 20, 2011
But you can justify any regulation that way, including seat belt regulations, drug laws, etc.
posted by empath at 11:00 AM on October 20, 2011
posted by empath at 11:00 AM on October 20, 2011
otto42: Not for anything, I asked what would you do without obstructing his rights?
I parsed your sentence correctly, and I skipped ahead a step. I am comfortable with obstructing his rights, and I'm also comfortable with the concept of shared rights, which state that the property owner in some ways shares his rights to his property with society, aka the concept of a common good.
I would declare the forest a unicorn preserve as long as we are changing the parameters.
The difference between a unicorn preserve and an old-growth forest stand that protects a town from potential avalanches is that the first one doesn't exist, while the second one does. I see no reason why I shouldn't be allowed to change the parameters within the bounds of reality. Either your philosophy has an answer for realistic scenarios, or it doesn't.
Similarly, as long as we are adding other factors, the courts might allow for the rights of other property owners to be considered if his actions are going to result in the destruction of the town by an avalanche.
Generally, the courts don't make laws. They interpret the laws that are written by the legislative body, but maybe that's not how it works in your system. Either way, the question is whether your philosophy jibes with the courts recognizing the other property owners' rights and deciding that their rights justify obstructing the rights of Spaulding, who owns the trees. Or, another way to put it, recognizing that there's such a thing as a common good and using it as a basis, in some cases, for obstructing (aka regulating) the rights of a property owner to do as he wishes with his property.
To use a more simplistic example, if I chop down a tree in my front yard and it lands on my neighbors porch, I still owe my neighbor a new porch.
The example is too simplistic - there is no impending avalanche that will be immediately released by clear-cutting the property, and there's not even a guarantee that an avalanche will ever occur if the trees are cut. There is past knowledge of avalanche conditions in the area, and the realization that the old-growth stand is a bulwark against such potential / likely avalanches.
Here's the point - either your philosophy is consistent and well thought out, and really has answers for all realistic scenarios, or it is consistent but doesn't have answers to all realistic scenarios, or it is inconsistent has has answers to all realistic scenarios, or, in the very worst case, it's both inconsistent and, despite that, doesn't have answers to all realistic scenarios.
Which of these categories would you say it falls into?
I'd also still like to hear your take on the infant formula company and the chemicals company both of which scenarios are realistic and based to some extent on real events. If a company knows that it can increase profits by harming individuals, and is relatively certain that it can keep this harm from being undetected (or, is relatively certain that harming these individuals is likely to cost it less than the profits it's gained), it seems, according to your previous statements, that the only correct decision for the company to make would be to harm the individuals with the goal of increasing its profits.
I'd also like to hear your response to my comments on the idea of industry self-policing.
posted by syzygy at 2:06 PM on October 20, 2011 [1 favorite]
I parsed your sentence correctly, and I skipped ahead a step. I am comfortable with obstructing his rights, and I'm also comfortable with the concept of shared rights, which state that the property owner in some ways shares his rights to his property with society, aka the concept of a common good.
I would declare the forest a unicorn preserve as long as we are changing the parameters.
The difference between a unicorn preserve and an old-growth forest stand that protects a town from potential avalanches is that the first one doesn't exist, while the second one does. I see no reason why I shouldn't be allowed to change the parameters within the bounds of reality. Either your philosophy has an answer for realistic scenarios, or it doesn't.
Similarly, as long as we are adding other factors, the courts might allow for the rights of other property owners to be considered if his actions are going to result in the destruction of the town by an avalanche.
Generally, the courts don't make laws. They interpret the laws that are written by the legislative body, but maybe that's not how it works in your system. Either way, the question is whether your philosophy jibes with the courts recognizing the other property owners' rights and deciding that their rights justify obstructing the rights of Spaulding, who owns the trees. Or, another way to put it, recognizing that there's such a thing as a common good and using it as a basis, in some cases, for obstructing (aka regulating) the rights of a property owner to do as he wishes with his property.
To use a more simplistic example, if I chop down a tree in my front yard and it lands on my neighbors porch, I still owe my neighbor a new porch.
The example is too simplistic - there is no impending avalanche that will be immediately released by clear-cutting the property, and there's not even a guarantee that an avalanche will ever occur if the trees are cut. There is past knowledge of avalanche conditions in the area, and the realization that the old-growth stand is a bulwark against such potential / likely avalanches.
Here's the point - either your philosophy is consistent and well thought out, and really has answers for all realistic scenarios, or it is consistent but doesn't have answers to all realistic scenarios, or it is inconsistent has has answers to all realistic scenarios, or, in the very worst case, it's both inconsistent and, despite that, doesn't have answers to all realistic scenarios.
Which of these categories would you say it falls into?
I'd also still like to hear your take on the infant formula company and the chemicals company both of which scenarios are realistic and based to some extent on real events. If a company knows that it can increase profits by harming individuals, and is relatively certain that it can keep this harm from being undetected (or, is relatively certain that harming these individuals is likely to cost it less than the profits it's gained), it seems, according to your previous statements, that the only correct decision for the company to make would be to harm the individuals with the goal of increasing its profits.
I'd also like to hear your response to my comments on the idea of industry self-policing.
posted by syzygy at 2:06 PM on October 20, 2011 [1 favorite]
Hypothetically, they will form a Mellon Board, and only the producers that meet the standards of the Board get to put a Mellon Board sticker of approval on their mellons. The Mellon Board standards will be stricter than the government standards (or else what would be the point) and they will use the dues paid to the board to advertise the stricter standards. Soon, the public will only buy Board inspected mellons, and any producer that can not comply will be out of business. I realize this might seem fanciful to you, but it happens all the time.
OK, that seems logical, however, I would argue that history shows us that doesn't happen.
Was food contamination/adulteration a problem prior to the advent of regulation? If so, why did 'self policing' fail then?
Do you believe that asymmetric information affects markets?
posted by Comrade_robot at 2:14 PM on October 20, 2011
OK, that seems logical, however, I would argue that history shows us that doesn't happen.
Was food contamination/adulteration a problem prior to the advent of regulation? If so, why did 'self policing' fail then?
Do you believe that asymmetric information affects markets?
posted by Comrade_robot at 2:14 PM on October 20, 2011
Ok, I am starting to warm up to your idea of shared rights, however, I'm still a little confused so maybe you can help me out. Let's use the Spaulding case as a framework.
How are these rights divided?
Who does the dividing?
Is there even dividing at all?
Who are the people or entities that will be sharing these rights?
What is the numerator?
How is the numerator decided?
Is the numerator a monetary value?
How is the monetary value decided?
If its not a monetary value, what is the unit of measure?
Are personal circumstances considered?
Are expected personal circumstances considered?
Are past personal circumstances considered?
Are the rights transferable or assignable?
Can someone or something lay claim to more than one share of the total claim?
I might have a few more questions, but answers to these questions should set me in the right direction.
posted by otto42 at 3:42 PM on October 20, 2011
How are these rights divided?
Who does the dividing?
Is there even dividing at all?
Who are the people or entities that will be sharing these rights?
What is the numerator?
How is the numerator decided?
Is the numerator a monetary value?
How is the monetary value decided?
If its not a monetary value, what is the unit of measure?
Are personal circumstances considered?
Are expected personal circumstances considered?
Are past personal circumstances considered?
Are the rights transferable or assignable?
Can someone or something lay claim to more than one share of the total claim?
I might have a few more questions, but answers to these questions should set me in the right direction.
posted by otto42 at 3:42 PM on October 20, 2011
I don't doubt that self policing by industry can lead to abuses. There is certainly the potential, motivation and means to restrict competition. I don't know if the efforts by industry groups to restrict competition would be any more effective than taking a legislative or regulatory route to restrict competition though.
The payday lending industry was pretty effective at passing a bill in Texas last June that will drive mom & pop payday lenders out of the industry. Complying with the bill will be too expensive for your average mom & pop lender. I'm sure the legislators and governor meant well though.
State licenses for barbers though are something I don't understand. That is a requirement that can only have been devised by incumbent barbers trying to protect their franchise.
posted by otto42 at 4:03 PM on October 20, 2011
The payday lending industry was pretty effective at passing a bill in Texas last June that will drive mom & pop payday lenders out of the industry. Complying with the bill will be too expensive for your average mom & pop lender. I'm sure the legislators and governor meant well though.
State licenses for barbers though are something I don't understand. That is a requirement that can only have been devised by incumbent barbers trying to protect their franchise.
posted by otto42 at 4:03 PM on October 20, 2011
otto42: I don't doubt that self policing by industry can lead to abuses. There is certainly the potential, motivation and means to restrict competition. I don't know if the efforts by industry groups to restrict competition would be any more effective than taking a legislative or regulatory route to restrict competition though.
I don't think the state has a natural, inherent interest in restricting competition, in most cases. I think the state becomes interested in restricting competition in an industry when the industry players who have sufficient resources are allowed to donate to political campaigns and offer jobs to legislators in trade for restricting competition in their industry. In other words, it's the private corporations, motivated by the desire to increase or protect profits, who wish to restrict competition in their industries, and they transfer this 'desire' to restrict competition over to the state in the form of campaign donations and other perks for lawmakers.
Notice - it's the corporations with the interest to restrict competition in both examples - in my real life example of the rogue private 'industry certification board', and in your example where 'the payday lending industry was pretty effective at passing a bill'.
Of course it makes sense for a company to want to restrict competition in its industry, since less competition generally translates into higher profits for the company. Since you support the profit motive as the one true motivation that leads to the most moral decisions, do you support the efforts of a company or group of companies to restrict competition in order to boost their profits?
Again, I want to ask you about the infant formula and chemical company scenarios - if you don't have time to respond to each of those scenarios, specifically, than I'd ask that you at least consider the following, generalized question:
If a company can be reasonably certain that the harm it knows will be visited on some members of the public by its profit-boosting decisions will never be traced back to the company - that is, the company has performed a cost-benefit analysis, and has determined that a course of action that is guaranteed to harm some external actors is likely to result in a net increase in profit for the company, should the company take the profitable course of action?
It would seem from some of your earlier statements that your answer to the question would be 'yes, the company should take the course of action it calculates to be the most profitable one, even if a known side-effect of that action will be to harm third parties.'
posted by syzygy at 12:16 AM on October 21, 2011
I don't think the state has a natural, inherent interest in restricting competition, in most cases. I think the state becomes interested in restricting competition in an industry when the industry players who have sufficient resources are allowed to donate to political campaigns and offer jobs to legislators in trade for restricting competition in their industry. In other words, it's the private corporations, motivated by the desire to increase or protect profits, who wish to restrict competition in their industries, and they transfer this 'desire' to restrict competition over to the state in the form of campaign donations and other perks for lawmakers.
Notice - it's the corporations with the interest to restrict competition in both examples - in my real life example of the rogue private 'industry certification board', and in your example where 'the payday lending industry was pretty effective at passing a bill'.
Of course it makes sense for a company to want to restrict competition in its industry, since less competition generally translates into higher profits for the company. Since you support the profit motive as the one true motivation that leads to the most moral decisions, do you support the efforts of a company or group of companies to restrict competition in order to boost their profits?
Again, I want to ask you about the infant formula and chemical company scenarios - if you don't have time to respond to each of those scenarios, specifically, than I'd ask that you at least consider the following, generalized question:
If a company can be reasonably certain that the harm it knows will be visited on some members of the public by its profit-boosting decisions will never be traced back to the company - that is, the company has performed a cost-benefit analysis, and has determined that a course of action that is guaranteed to harm some external actors is likely to result in a net increase in profit for the company, should the company take the profitable course of action?
It would seem from some of your earlier statements that your answer to the question would be 'yes, the company should take the course of action it calculates to be the most profitable one, even if a known side-effect of that action will be to harm third parties.'
posted by syzygy at 12:16 AM on October 21, 2011
otto42: Ok, I am starting to warm up to your idea of shared rights, however, I'm still a little confused so maybe you can help me out. Let's use the Spaulding case as a framework.
I think it's important to start out by stating that the concept of private property is a social construct. It is society that decides whether and to what extent to grant the right of private ownership of property. Notice, in this case I'm focusing on real property, as opposed to personal property.
In a civil society, ownership rights are granted and restricted by law. It's important to realize that this fact confers a mix of benefits and drawbacks on the property owner. The major benefit conferred to the property owner is that he mustn't fear that his property will be taken from him by extra legal force. That is, no one can, extra legally, show up to your house with a gun, throw you and your family out and declare himself the new owner of your house. You do not need to engage in an arms race with envious neighbors who would like to appropriate your real property via force.
In an uncivil society, this is not the case. Might makes right and the man with the most guns (money?) can and will appropriate as much property as he's capable of.
In return for this benefit, society can and usually does place some restrictions on your rights to do as you please with your property.
We already have, to some extent, the idea of common rights encoded in our property ownership laws. For instance, in time of drought, your state government can forbid you from having an open fire on your property.
Many or most states have restrictions on what a private property owner can do with the water on his property. Take, for example, a farmer whose land has a stream flowing through it. The stream allows him to irrigate his crops. Without it, he'd be out of business. I can't just come in, buy the parcel of land upstream from the farmer, and threaten to divert the stream to his neighbor's property if he doesn't agree to pay me a monthly fee. Which, why not in your system? I mean, I own the land, and the stream is on my land. Is that water not mine when it's on my property? If it's mine when it's on my property, why can't I do whatever I want with it, including diverting it? What if I am a corporation, and the farmer's neighbor has offered to pay me a monthly fee to divert the stream? In this case, the profit motive would clearly suggest that I have to either divert the stream or demand the fee from the farmer through whose land the stream is currently running. On the other hand, what's to stop my competitor from buying the next parcel upstream and threatening to divert the stream off of my land if I don't start paying him?
There are plenty of other examples - if Spaulding is an amateur chemist rather than a surfer, he may take his windfall, buy the house next door to yours and throw up a prefab metal building that he can use as a laboratory test out some ideas he has for working with fluorine. Except he most likely can't, because, unless you're way out in a rural area, Spaulding will need to get a permit to build the building and yet other permits to work with hazardous chemicals - or zoning laws may completely forbid him from both activities.
Now you could argue that these restrictions reduce the value of your private property in some ways, and you'd be right, but they also increase the value of the surrounding properties, and, by extension, they increase the value of your property by restricting the activities of your neighbors that might otherwise negatively affect your property's value.
You could also argue that someone looking to buy a piece of property might think twice due to the fact that the government might decide some time down the road to implement a new restriction on his rights to that property. You might say that these issues could be decided privately, and maybe that would be just as or more effective than deciding them publicly, but I'd like to point you to the beloved institution of the Homeowner's Association as a clear example that leaving regulation up to private groups is also not a panacea. And furthermore, there's no guarantee that a private association won't vote to restrict your property rights in some novel way down the road. So, again, unless you want to get into an arms race situation, private regulation is not a guarantee of more just regulation than public regulation with strong guards against corruption is.
You asked for monetary values, numerators, circumstances - I hope you don't mind if I sidestep the issue of the calculus and simply say that I think we need rough guidelines and an impartial justice system to make those decisions on a case-by-case basis. Or maybe you can tell me what it's worth to you to know that Spaulding won't be able to move in next door and start playing with hazardous chemicals in his makeshift laboratory.
And we haven't even touched on the issue of absentee landowners - or just barely, in Spaulding's example.
T ocontinue that thread, you mentioned that we don't have slave labor. While it may be debatable whether or not we have slave labor in the USA today, it's beyond debate that US corporations make use of slave labor in other countries where public regulation of employment is lax. The same is true for dumping hazardous waste - that used to happen often in the US, before hazardous waste disposal was regulated by the state. Now, that doesn't mean that no US companies dump hazardous waste, any more. In many cases, it just means they've moved those operations to jurisdictions (poorer or corrupt countries) where hazardous waste disposal is not yet heavily regulated. The same holds for workplace safety regulations.
So, to argue that the pure profit motive is what has led us to the current state of affairs in the US, where companies generally watch out for employees' safety, generally don't dump hazardous waste, and generally don't take advantage of slave labor is simply mistaken, because the same companies do all of those things, they just do them where the regulatory framework allows them - and by your reasoning, that's to be commended, and exactly what those amoral companies should be doing, assuming those activities contribute positively to the bottom line.
I submit to you that a purely capitalist company following the profit motivator alone would lace infant formula with melamine and would dump hazardous waste into normal drainage in the US, if they thought it would increase their profits, and they thought they could get away with it. Why not? They're amoral with profit as their only motivator.
posted by syzygy at 4:33 AM on October 21, 2011 [3 favorites]
I think it's important to start out by stating that the concept of private property is a social construct. It is society that decides whether and to what extent to grant the right of private ownership of property. Notice, in this case I'm focusing on real property, as opposed to personal property.
In a civil society, ownership rights are granted and restricted by law. It's important to realize that this fact confers a mix of benefits and drawbacks on the property owner. The major benefit conferred to the property owner is that he mustn't fear that his property will be taken from him by extra legal force. That is, no one can, extra legally, show up to your house with a gun, throw you and your family out and declare himself the new owner of your house. You do not need to engage in an arms race with envious neighbors who would like to appropriate your real property via force.
In an uncivil society, this is not the case. Might makes right and the man with the most guns (money?) can and will appropriate as much property as he's capable of.
In return for this benefit, society can and usually does place some restrictions on your rights to do as you please with your property.
We already have, to some extent, the idea of common rights encoded in our property ownership laws. For instance, in time of drought, your state government can forbid you from having an open fire on your property.
Many or most states have restrictions on what a private property owner can do with the water on his property. Take, for example, a farmer whose land has a stream flowing through it. The stream allows him to irrigate his crops. Without it, he'd be out of business. I can't just come in, buy the parcel of land upstream from the farmer, and threaten to divert the stream to his neighbor's property if he doesn't agree to pay me a monthly fee. Which, why not in your system? I mean, I own the land, and the stream is on my land. Is that water not mine when it's on my property? If it's mine when it's on my property, why can't I do whatever I want with it, including diverting it? What if I am a corporation, and the farmer's neighbor has offered to pay me a monthly fee to divert the stream? In this case, the profit motive would clearly suggest that I have to either divert the stream or demand the fee from the farmer through whose land the stream is currently running. On the other hand, what's to stop my competitor from buying the next parcel upstream and threatening to divert the stream off of my land if I don't start paying him?
There are plenty of other examples - if Spaulding is an amateur chemist rather than a surfer, he may take his windfall, buy the house next door to yours and throw up a prefab metal building that he can use as a laboratory test out some ideas he has for working with fluorine. Except he most likely can't, because, unless you're way out in a rural area, Spaulding will need to get a permit to build the building and yet other permits to work with hazardous chemicals - or zoning laws may completely forbid him from both activities.
Now you could argue that these restrictions reduce the value of your private property in some ways, and you'd be right, but they also increase the value of the surrounding properties, and, by extension, they increase the value of your property by restricting the activities of your neighbors that might otherwise negatively affect your property's value.
You could also argue that someone looking to buy a piece of property might think twice due to the fact that the government might decide some time down the road to implement a new restriction on his rights to that property. You might say that these issues could be decided privately, and maybe that would be just as or more effective than deciding them publicly, but I'd like to point you to the beloved institution of the Homeowner's Association as a clear example that leaving regulation up to private groups is also not a panacea. And furthermore, there's no guarantee that a private association won't vote to restrict your property rights in some novel way down the road. So, again, unless you want to get into an arms race situation, private regulation is not a guarantee of more just regulation than public regulation with strong guards against corruption is.
You asked for monetary values, numerators, circumstances - I hope you don't mind if I sidestep the issue of the calculus and simply say that I think we need rough guidelines and an impartial justice system to make those decisions on a case-by-case basis. Or maybe you can tell me what it's worth to you to know that Spaulding won't be able to move in next door and start playing with hazardous chemicals in his makeshift laboratory.
And we haven't even touched on the issue of absentee landowners - or just barely, in Spaulding's example.
T ocontinue that thread, you mentioned that we don't have slave labor. While it may be debatable whether or not we have slave labor in the USA today, it's beyond debate that US corporations make use of slave labor in other countries where public regulation of employment is lax. The same is true for dumping hazardous waste - that used to happen often in the US, before hazardous waste disposal was regulated by the state. Now, that doesn't mean that no US companies dump hazardous waste, any more. In many cases, it just means they've moved those operations to jurisdictions (poorer or corrupt countries) where hazardous waste disposal is not yet heavily regulated. The same holds for workplace safety regulations.
So, to argue that the pure profit motive is what has led us to the current state of affairs in the US, where companies generally watch out for employees' safety, generally don't dump hazardous waste, and generally don't take advantage of slave labor is simply mistaken, because the same companies do all of those things, they just do them where the regulatory framework allows them - and by your reasoning, that's to be commended, and exactly what those amoral companies should be doing, assuming those activities contribute positively to the bottom line.
I submit to you that a purely capitalist company following the profit motivator alone would lace infant formula with melamine and would dump hazardous waste into normal drainage in the US, if they thought it would increase their profits, and they thought they could get away with it. Why not? They're amoral with profit as their only motivator.
posted by syzygy at 4:33 AM on October 21, 2011 [3 favorites]
"Of course it makes sense for a company to want to restrict competition in its industry, since less competition generally translates into higher profits for the company. Since you support the profit motive as the one true motivation that leads to the most moral decisions, do you support the efforts of a company or group of companies to restrict competition in order to boost their profits?"
I support a company's efforts to reduce competition. (The key word being "efforts.")
This is part of their duty to protect their stakeholders, and it would be immoral if they did not try. They are of course not allowed to restrict competition through criminal means (sabotage, murder, collusion and price fixing, making false claims, etc.) but they can certainly advocate for laws or rule changes that they believe would be beneficial to them. They may even advocate for changes in criminal laws.
I do not support reduced competition.
The moral decision to restrict or not restrict competition lies with the state. The state is supposed to protect all of our rights, not just the demands of the corporation and its stake holders. If the state places a tariff on imported widgets at the request of a domestic widget manufacturer because the domestic manufacturer fears more competition, (and domestic widget consumers are harmed by paying higher prices had there been no tariff) then the state has made the immoral decision, not the corporation. The state has an ethical obligation to make the right decision no matter how much the corporation lobbies for their preferred outcome.
"Ah ha!", you might say, "the state, despite the occasional immoral decision, mostly protects the ideal of free competition and therefore has a place in the economy."
No.
If the economy is truly free, then the market will correct for attempts to reduce competition. The state still punishes for criminal behavior on the part of corporations just as it would for individuals (the economy is free but we are all still bound by our abhorrence of murder, mayhem, theft, and sabotage, etc.)
If the Mellon Board has nefarious plans to create an oligopoly by reducing competition by restricting who gets a seal of approval, the out sized profits earned by the oligopoly will attract new entrants into the Mellon Market. Some of the early new entrants will even invest in processes that result in higher quality and safety standards than the Mellon Board's, and can ethically make the claim.
I've got to go, so I'm going to be brief.
In a free market:
Lacing infant formula with melamine to increase profits will not increase profits. Other infant formula makers will wonder why the formula lacing company is so profitable. They will buy a case of formula and test it, and find melamine. They will then advertise that their formulas are melamine free and the lacing company will be out of business in a month. (The capital markets will also want to know why this particular formula maker is so profitable and is it sustainable.)
No actual infants were harmed because the company that considered doing the lacing calculated that the extra profits earned would be entirely offset by being driven out of business. As you know, in real life, actual infants were harmed because China does not have a free market.
In a free market:
Dumping Toxic Waste in the Sewer does not increase profits. Same reason why lacing infant formulas does not increase profits. Out sized profits attract interest. Competitors and capital market participants start asking questions. The potential investor asks the CFO of the sewer dumping company why they are able to earn 15% returns when everyone else in the industry earns 12%. The CFO gives an unsatisfactory answer. The potential investor asks the CFO of another company in the industry how the dumping company can earn a better return than everyone else. That CFO's says he does not know, even though they both sell the same thing and have the same processes. Not convinced the 15% return is sustainable, the investor does not invest. In fact, he decides to short the stock. His short interest attracts other short interest. Ten different hedge funds are now asking questions. They talk to suppliers, customers, former employees, current management, and industry consultants. Each piece of information offers additional insight. The shorts begin to circle the company like wolves.
The competitor hires away the Chief Engineer from the dumping company with a semi- lucrative offer (hooray free market!) His stock options in the dumping company are now worthless, so just about any reasonable offer would have prompted him to move to a competitor. He is able to explain everything. The dumping company's criminal activity is finally exposed and the CEO, CFO, and COO are all arrested.
No actual dumping occurred though. The potential dumper knows that the short term gains from dumping would not offset the longer-term losses from having the company go belly up.
posted by otto42 at 7:45 AM on October 21, 2011
I support a company's efforts to reduce competition. (The key word being "efforts.")
This is part of their duty to protect their stakeholders, and it would be immoral if they did not try. They are of course not allowed to restrict competition through criminal means (sabotage, murder, collusion and price fixing, making false claims, etc.) but they can certainly advocate for laws or rule changes that they believe would be beneficial to them. They may even advocate for changes in criminal laws.
I do not support reduced competition.
The moral decision to restrict or not restrict competition lies with the state. The state is supposed to protect all of our rights, not just the demands of the corporation and its stake holders. If the state places a tariff on imported widgets at the request of a domestic widget manufacturer because the domestic manufacturer fears more competition, (and domestic widget consumers are harmed by paying higher prices had there been no tariff) then the state has made the immoral decision, not the corporation. The state has an ethical obligation to make the right decision no matter how much the corporation lobbies for their preferred outcome.
"Ah ha!", you might say, "the state, despite the occasional immoral decision, mostly protects the ideal of free competition and therefore has a place in the economy."
No.
If the economy is truly free, then the market will correct for attempts to reduce competition. The state still punishes for criminal behavior on the part of corporations just as it would for individuals (the economy is free but we are all still bound by our abhorrence of murder, mayhem, theft, and sabotage, etc.)
If the Mellon Board has nefarious plans to create an oligopoly by reducing competition by restricting who gets a seal of approval, the out sized profits earned by the oligopoly will attract new entrants into the Mellon Market. Some of the early new entrants will even invest in processes that result in higher quality and safety standards than the Mellon Board's, and can ethically make the claim.
I've got to go, so I'm going to be brief.
In a free market:
Lacing infant formula with melamine to increase profits will not increase profits. Other infant formula makers will wonder why the formula lacing company is so profitable. They will buy a case of formula and test it, and find melamine. They will then advertise that their formulas are melamine free and the lacing company will be out of business in a month. (The capital markets will also want to know why this particular formula maker is so profitable and is it sustainable.)
No actual infants were harmed because the company that considered doing the lacing calculated that the extra profits earned would be entirely offset by being driven out of business. As you know, in real life, actual infants were harmed because China does not have a free market.
In a free market:
Dumping Toxic Waste in the Sewer does not increase profits. Same reason why lacing infant formulas does not increase profits. Out sized profits attract interest. Competitors and capital market participants start asking questions. The potential investor asks the CFO of the sewer dumping company why they are able to earn 15% returns when everyone else in the industry earns 12%. The CFO gives an unsatisfactory answer. The potential investor asks the CFO of another company in the industry how the dumping company can earn a better return than everyone else. That CFO's says he does not know, even though they both sell the same thing and have the same processes. Not convinced the 15% return is sustainable, the investor does not invest. In fact, he decides to short the stock. His short interest attracts other short interest. Ten different hedge funds are now asking questions. They talk to suppliers, customers, former employees, current management, and industry consultants. Each piece of information offers additional insight. The shorts begin to circle the company like wolves.
The competitor hires away the Chief Engineer from the dumping company with a semi- lucrative offer (hooray free market!) His stock options in the dumping company are now worthless, so just about any reasonable offer would have prompted him to move to a competitor. He is able to explain everything. The dumping company's criminal activity is finally exposed and the CEO, CFO, and COO are all arrested.
No actual dumping occurred though. The potential dumper knows that the short term gains from dumping would not offset the longer-term losses from having the company go belly up.
posted by otto42 at 7:45 AM on October 21, 2011
That is completely implausible and flies in the face of human nature.
posted by one more dead town's last parade at 5:44 PM on October 21, 2011 [2 favorites]
posted by one more dead town's last parade at 5:44 PM on October 21, 2011 [2 favorites]
No actual dumping occurred though. The potential dumper knows that the short term gains from dumping would not offset the longer-term losses from having the company go belly up.
Once more I emphasize that this is not the sort of behavior we see when we examine historical (pre-regulation) companies. There are companies which are reasonable and interested in maintaining good long term relationships with their employees and customers. And there are those who don't. Is there any reason to believe that all companies will behave in the same way?
Do you know anybody who makes decisions which result in short term gain in exchange for long term losses? Is there any reason to believe that people running companies will not behave in the same manner?
In fact, can you think of any companies which made decisions which were very profitable in the short term but ended up harming them in the long term?
posted by Comrade_robot at 9:18 AM on October 22, 2011 [1 favorite]
Once more I emphasize that this is not the sort of behavior we see when we examine historical (pre-regulation) companies. There are companies which are reasonable and interested in maintaining good long term relationships with their employees and customers. And there are those who don't. Is there any reason to believe that all companies will behave in the same way?
Do you know anybody who makes decisions which result in short term gain in exchange for long term losses? Is there any reason to believe that people running companies will not behave in the same manner?
In fact, can you think of any companies which made decisions which were very profitable in the short term but ended up harming them in the long term?
posted by Comrade_robot at 9:18 AM on October 22, 2011 [1 favorite]
otto42 wrote: No actual dumping occurred though. The potential dumper knows that the short term gains from dumping would not offset the longer-term losses from having the company go belly up.
If only that was the way things actually worked. It's a great philosophy in the abstract, but completely fails here in the real world. If that's how the world actually worked, we wouldn't have Superfund.
posted by wierdo at 9:26 AM on October 22, 2011 [1 favorite]
If only that was the way things actually worked. It's a great philosophy in the abstract, but completely fails here in the real world. If that's how the world actually worked, we wouldn't have Superfund.
posted by wierdo at 9:26 AM on October 22, 2011 [1 favorite]
Companies routinely make the wrong short term decision to the detriment of long term profits. The decision makers are fallible and the future is unpredictable.
A portfolio manager who is able to pick the right stock 55% of the time is considered excellent, and to establish whether the success rate was due to skill or luck requires year's of data (85 years worth is the number I have heard thrown around.)
That's not the point though, the point is that only he or she can make the most informed decision. Neither you nor the government have access to the CEO's motivations and requirements. The CEO who has to fire 20% of the workforce is not the evil greedy capitalist you might assume he is. His decision is based on the facts of the time and his prediction of the future. You do not know what he has to consider and never can know.
posted by otto42 at 12:07 PM on October 22, 2011
A portfolio manager who is able to pick the right stock 55% of the time is considered excellent, and to establish whether the success rate was due to skill or luck requires year's of data (85 years worth is the number I have heard thrown around.)
That's not the point though, the point is that only he or she can make the most informed decision. Neither you nor the government have access to the CEO's motivations and requirements. The CEO who has to fire 20% of the workforce is not the evil greedy capitalist you might assume he is. His decision is based on the facts of the time and his prediction of the future. You do not know what he has to consider and never can know.
posted by otto42 at 12:07 PM on October 22, 2011
Companies routinely make the wrong short term decision to the detriment of long term profits. The decision makers are fallible and the future is unpredictable.
So in the dumping case, sometimes companies can/will make the wrong decision and dumping will occur, yes?
posted by Comrade_robot at 1:11 PM on October 22, 2011 [1 favorite]
So in the dumping case, sometimes companies can/will make the wrong decision and dumping will occur, yes?
posted by Comrade_robot at 1:11 PM on October 22, 2011 [1 favorite]
I guess I should also ask: Do you believe in negative externalities?
posted by Comrade_robot at 1:30 PM on October 22, 2011
posted by Comrade_robot at 1:30 PM on October 22, 2011
America’s corporate tax obscenity: A new report about companies' finances won't just enrage you -- it'll make you run to the nearest protest
posted by homunculus at 10:06 AM on November 3, 2011 [1 favorite]
posted by homunculus at 10:06 AM on November 3, 2011 [1 favorite]
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