The Danger of Living on Bread and Circuses

[GGT]

No big deal? The US has huge debt problems. It has huge deficit problems. It has huge over regulation problems. Those are a HUGE deal.

Jobs will come when the government stops killing them. Jobs will come when innovators are allowed to innovate. Jobs will come when business in America doesn't have to worry about being sued for not putting "HOT" on coffee cups!

The Government means our elected policymakers and their special interest donor groups. Sometimes what they don't do is just as damaging as what they do---like failing to rein in wild financial bubbles, or recognize a house of cards before it falls. That also applies to private business, in what they do or don't. With $2 Trillion of corporate cash sitting idle (and all-time high profits with fewer workers to pay) they could be investing in innovators, venture capital, creating jobs.

There has to be growth, from people with jobs making money and spending again, in order to pay down debt with tax revenue.

[Illusions]

Furthermore, all the incentives for corporate executives are to maximize short-term (and occasionally medium-term) profit. You're basically asking them to forego their personal interest and the interest of their corporation for some vague social goal.

If only we had some sort of term for this that also outlined why its inherently a flawed way of thought that ends poorly for everyone...

[Loki]

It doesn't end poorly for everyone. What is long-term gain if not a series of short-term and medium-term gains? Also, short-term gains are more certain than long-term ones. Even if someone was concerned about the future, it makes sense to discount the future.

[GGT]

....With that in mind, there's nothing unreasonable with blaming politicians for enacting stupid policies, while it's equally unreasonably to expect corporate executives to ignore every incentive they face and act for the good of anyone but themselves and their shareholders.

We see the results of that strategy playing out right now: efficiency and productivity by reducing workers, high profits kept internally with extreme executive salaries and bonii, dividends to shareholders.....while their own customer/consumer base and demand is dwindling. That self-feeding closed cycle will eventually fall apart.

Even the top 10% needs to give a shit about the remaining 90%, at least if they want their business to survive outside the stock exchanges and financial markets. They should also care about living in a functional society. Creating jobs doesn't mean building security walls around their gated homes, while others are in tent cities or squatting in foreclosed houses on the other side.

[Loki]

What's wrong with efficiency and productivity by reducing workers? This is how technological progress takes place. Technology makes entire classes of workers obsolete. Would you prefer companies retained workers who were no longer necessary or were not as productive as technology?

[Illusions]

It doesn't end poorly for everyone. What is long-term gain if not a series of short-term and medium-term gains? Also, short-term gains are more certain than long-term ones. Even if someone was concerned about the future, it makes sense to discount the future.

I'm hinting at a Tragedy of the Commons whereby laborers are the resource, and seeking the lowest wage possible to pay them is the method of exploitation.

[GGT]

I see no reason why business and community shouldn't co-exist in a win/win. Workers don't become obsolete in one day or one quarter, they could be trained and re-hired in the more skilled position, while growing the business. Workers don't have to be viewed as expendable or disposable "things", but should be seen as integral to the very core of its future. Every worker is also a valuable consumer and spender to many other businesses, expanding the machinery of an open-system.

[Loki]

I'm hinting at a Tragedy of the Commons whereby laborers are the resource, and seeking the lowest wage possible to pay them is the method of exploitation.

Where are you getting this crap from? Employers want the highest production per dollar spent. If worker A produces twice as much as worker B, a company will have no problem paying them nearly twice as much. If your logic worked, the West would have no non-service jobs, while the rest of the world wouldn't know what unemployment means.

And what's with the socialist "exploitation" BS? Companies pay as much as they have to and workers receive as much as they can. There's no coercion involved.

I see no reason why business and community shouldn't co-exist in a win/win. Workers don't become obsolete in one day or one quarter, they could be trained and re-hired in the more skilled position, while growing the business. Workers don't have to be viewed as expendable or disposable "things", but should be seen as integral to the very core of its future. Every worker is also a valuable consumer and spender to many other businesses, expanding the machinery of an open-system.

You're assuming there's room for the same amount of positions in the same company or at least industry. Computers destroyed millions of secretarial positions. Pray tell what the companies that used to employ three secretaries were to do once they only needed one? Get them to become a computer programmer?

[GGT]

You're assuming there's room for the same amount of positions in the same company or at least industry. Computers destroyed millions of secretarial positions. Pray tell what the companies that used to employ three secretaries were to do once they only needed one? Get them to become a computer programmer?

And you're full of hot air. Computers also opened up tons of positions in other ways, from internal IT to customer service. But I suppose you'll tell us a McDonald's franchise simply reduced staff to a couple of people once the soda machines and french friers were automated, or the drive-thru used intercoms and computer orders.

No, the faster and more efficient they were, the bigger they became, now often operating 24 hours. That means more hiring, training, efficiency, demand, growth. Rinse/Repeat. Their corporate philosophy is to take every entry worker and cross-train them, move them up to management, then regional managers, or eventually franchise owners. Walmart uses the same idea and calls their employees Associates. They both are constantly looking for feedback and innovation from their workers. Hiring and training itself has a cost, so it's better to retain and enrich employees, and keep them satisfied worker resources, than it is to toss them aside like used Kleenex.

[LittleFuzzy]

I'm hinting at a Tragedy of the Commons whereby laborers are the resource, and seeking the lowest wage possible to pay them is the method of exploitation.

Since the tragedy of the commons arises strictly because the commons have no agency, the analogy would seem to be flawed. Even in the most coercive of environments labor still manages to engage in agent-behavior.

[GGT]

He said laborers, as in workers. I didn't take that to mean labor, as in Labor Unions. What agency is representing the unemployed or underemployed?

If only we had some sort of term for this that also outlined why its inherently a flawed way of thought that ends poorly for everyone...

Unbridled Greed?

[Aimless]

In a given country, there is ultimately one government and many corporations. If a government doesn't implement policy X1, there are no immediate consequences. Usually, there aren't even electoral consequences as the government could have chosen related policy X2. Corporations compete against one another. A failure to maximize profits means giving an artificial advantage to adversaries, whether local or foreign, which means downsizing or bankruptcy in the future. That ends up hurting the very people you want corporations to help. Furthermore, all the incentives for corporate executives are to maximize short-term (and occasionally medium-term) profit. You're basically asking them to forego their personal interest and the interest of their corporation for some vague social goal. Meanwhile, politicians rarely have to adopt stupid policies. A given constituency is perfectly happy with numerous different policy proposals, and politicians can frequently rely on different constituencies to push their policies through (this is especially true at the national level). With that in mind, there's nothing unreasonable with blaming politicians for enacting stupid policies, while it's equally unreasonably to expect corporate executives to ignore every incentive they face and act for the good of anyone but themselves and their shareholders.

I was working under the assumption that Illusions's hypothetical laws weren't frivolous ones. I was also working under the assumption that companies frequently exaggerate the threat of their demise (while they downplay the beneficial impact of laws they've gotten passed through lobbying). Do they really think they'll perish or do they just mean that they'll make less obscene amounts of money, or have a less strong stranglehold on their market?

The objections you raise can be raised against every single law that has ever been made to moderate the behaviour of corporations (I imagine those objections WERE made each time a new law was proposed). And yet your corporations have survived. They've reduced their pollution. They take better care of their workers. They sell buttloads of music and movies. They don't create monopolies or form cartels or engage in other anticompetitive behaviour (much).

Sometimes they crash your economy but that's what happens when you listen to people who say regulation would cramp their style. As long as they all have to play by the same rules they can't really say that any of their competitors are getting an unfair advantage.

I think it would be easier for me if I had some real life examples to work with.



Now, this particular discussion arose from a comparison between responsibility in crime and responsibility in business. I'm not sure we're answering that question. In the Goldman Sachs thread, who were we generally holding responsible, the govt. or GS? Who do we blame for the outcomes of Wall Street "regulating" itself? Who do we blame for the actions of criminals?

Illusions's point seemed to be that, when we play the blame game, we blame those we dislike. In Lewk's case, the govt., the liberals, and criminals. Lewk doesn't really car about incentives or disincentives when it comes to assigning blame.



Btw, does anyone know of any good strategy for retraining investors to have slightly lower expectations of profit? Like, if they expect 15% a year, some way to make 12% socially acceptable? Kinda like with seatbelts?

[GGT]

...

Btw, does anyone know of any good strategy for retraining investors to have slightly lower expectations of profit? Like, if they expect 15% a year, some way to make 12% socially acceptable? Kinda like with seatbelts?

You'd have to retrain hedge fund managers first. The guys that thrive on outrageous risk and volatility. Would also have to re-condition fund managers that 1-2% in management fees is better in the long run, so their investors can be content with 5% gains. The only people who benefit from crashes and melt-downs are the speculators who happen to bet on the winning side. Other than that, everyone else loses.

The only people who think we should keep this circus going are the profiteer clowns that manage to grab the brass ring.

[Loki]

I was working under the assumption that Illusions's hypothetical laws weren't frivolous ones. I was also working under the assumption that companies frequently exaggerate the threat of their demise (while they downplay the beneficial impact of laws they've gotten passed through lobbying). Do they really think they'll perish or do they just mean that they'll make less obscene amounts of money, or have a less strong stranglehold on their market?

In some sectors, particularly ones sensitive to technological innovation, they would close down. In others, it means long-term stagnancy. You seem to be falling into the typical socialist line that corporations earn money for the sake of earning money. Profits are maximized in order to invest more in labor and capital. If there's less profit, there's less room to invest.

The objections you raise can be raised against every single law that has ever been made to moderate the behaviour of corporations (I imagine those objections WERE made each time a new law was proposed). And yet your corporations have survived. They've reduced their pollution. They take better care of their workers. They sell buttloads of music and movies. They don't create monopolies or form cartels or engage in other anticompetitive behaviour (much).

Just because "corporations" survive doesn't mean that specific corporations survive. Compare the Dow 30 today to the Dow 30 of 20 years ago. Corporations collapse on a regular basis. Only ones in a few industries do not, and those are generally industries cuddled by the government (i.e. aerospace and defense companies).

Sometimes they crash your economy but that's what happens when you listen to people who say regulation would cramp their style. As long as they all have to play by the same rules they can't really say that any of their competitors are getting an unfair advantage.

Corporations don't crash an economy; they are part of the economy, and are highly responsive to changes in it. I also note that while you blame corporations for crashing the economy, you don't seem to praise them for expanding it.

I think it would be easier for me if I had some real life examples to work with.

Look up the history of Kodak. Or compare the car industry (propped up by the government) to the software industry (which is not).

Now, this particular discussion arose from a comparison between responsibility in crime and responsibility in business. I'm not sure we're answering that question. In the Goldman Sachs thread, who were we generally holding responsible, the govt. or GS? Who do we blame for the outcomes of Wall Street "regulating" itself? Who do we blame for the actions of criminals?

If Goldman Sachs engaged in illegal activities, then it is to blame. On the other hand, creating regulations with the knowledge that the regulators do not have the capacity to actually enforce those regulations is the height of idiocy. It's like creating a law against wearing "pant-like clothes". The terms aren't clearly defined, and even if everyone knew what the term "pant-like" entailed, there's no way the government can enforce the law.

Illusions's point seemed to be that, when we play the blame game, we blame those we dislike. In Lewk's case, the govt., the liberals, and criminals. Lewk doesn't really car about incentives or disincentives when it comes to assigning blame.

The same is equally true for you and Illusions. What's your point?

Btw, does anyone know of any good strategy for retraining investors to have slightly lower expectations of profit? Like, if they expect 15% a year, some way to make 12% socially acceptable? Kinda like with seatbelts?

One company gets 12%, another gets 15%; the latter expands more and maybe even lowers prices, which gives it a far larger market share. The former is forced to downsize and potentially close down. So who was helped by that lower profit?

[LittleFuzzy]

He said laborers, as in workers. I didn't take that to mean labor, as in Labor Unions. What agency is representing the unemployed or underemployed?

I didn't take it to mean that either and that's not how I was using 'agency". Agency is a. . . metaphysic term used in the social sciences. It's about where decisions come from.

[Loki]

Everyone knows that workers are slaves to the machine, with no thought-process of their own.

[GGT]

I didn't take it to mean that either and that's not how I was using 'agency". Agency is a. . . metaphysic term used in the social sciences. It's about where decisions come from.

Since the tragedy of the commons arises strictly because the commons have no agency, the analogy would seem to be flawed. Even in the most coercive of environments labor still manages to engage in agent-behavior.

Ah, thanks for clearing that up. Ball goes back to Illusions.....and what he meant with the analogy.

[Nessus]

And what's with the socialist "exploitation" BS? Companies pay as much as they have to and workers receive as much as they can. There's no coercion involved.

Post nominated for most ironic use of "BS" in a statement in 2011

Although I guess the "free" in Free Markets (tm) means, by definition, that exploitation cannot take place. Handy how that works. I wonder if some parallels could be drawn to arguments made by Communist thinkers?

[Loki]

Post nominated for most ironic use of "BS" in a statement in 2011

Although I guess the "free" in Free Markets (tm) means, by definition, that exploitation cannot take place. Handy how that works. I wonder if some parallels could be drawn to arguments made by Communist thinkers?

Exploitation implies coercion. Is anyone forced to work for a specific employer?

[Nessus]

Exploitation implies coercion. Is anyone forced to work for a specific employer?

Oh boy, a semantic argument about the word "force". It's like freshman mechanics all over again!

[Loki]

Oh boy, a semantic argument about the word "force". It's like freshman mechanics all over again!

At any given time, is there only one position open for a specific type of applicant? Except in the smallest of towns, does any employer have monopoly power over hiring?

[Nessus]

At any given time, is there only one position open for a specific type of applicant? Except in the smallest of towns, does any employer have monopoly power over hiring?

How many days may a person live without food and shelter?

[Loki]

How many days may a person live without food and shelter?

How many days of unemployment benefits do Western countries have? And what prevents a person working in one job to be constantly on the look-out for better ones?

[Nessus]

How many days of unemployment benefits do Western countries have? And what prevents a person working in one job to be constantly on the look-out for better ones?

For the first one, you tell me, as you seem so anal about these perceived injustices and "hand-outs". For the second, nothing I suppose, but that is neither here or there, and I must confide in you that I had to mightily resist in myself the urge to ask "how many angels may dance on the head of a pin" in response to your previous post; this latest gem fares little better.

[GGT]

Exploitation implies coercion. Is anyone forced to work for a specific employer?

No, exploiting workers implies the employers have the upper hand in a faltering economy and crappy jobs market, and can call all the shots. Desperate workers are coerced into taking crappy jobs with crappy employers, because the alternative is no job at all. Some choice, huh.

[Aimless]

Admittedly I'm on my tablet but I detect a strong odour of double standards corps/individuals. Anyone else smell it? I could swear we're defending corps with the same "arguments" we say are invalid when speaking up for exploited workers or the unemployed.

[GGT]

In some sectors, particularly ones sensitive to technological innovation, they would close down. In others, it means long-term stagnancy. You seem to be falling into the typical socialist line that corporations earn money for the sake of earning money. Profits are maximized in order to invest more in labor and capital. If there's less profit, there's less room to invest.

Earlier you said corporations do, indeed, primarily look at their profit margins and earnings. Now you're saying that's SSSocialist? I'm the one who said corporate profits should lead to expansion, hiring and training, more market share, more profits, more innovation and expansion....etc.

Yet there's $2 Trillion of corporate cash/profit sitting idle, citing "uncertainty" as the reason. What's certain is this---the longer private corporations sit on their hands, waiting for teh gummint to give them candy, the more their profit margins will slide. Even Ford understood its workers needed to be able to buy their own product, to make the size of the pie bigger and "spread the wealth around".

Admittedly I'm on my tablet but I detect a strong odour of double standards corps/individuals. Anyone else smell it? I could swear we're defending corps with the same "arguments" we say are invalid when speaking up for exploited workers or the unemployed.

Who's this "we"?

[GGT]

Furthermore, all the incentives for corporate executives are to maximize short-term (and occasionally medium-term) profit. You're basically asking them to forego their personal interest and the interest of their corporation for some vague social goal.

If only we had some sort of term for this that also outlined why its inherently a flawed way of thought that ends poorly for everyone...

It doesn't end poorly for everyone. What is long-term gain if not a series of short-term and medium-term gains? Also, short-term gains are more certain than long-term ones. Even if someone was concerned about the future, it makes sense to discount the future.

I'm hinting at a Tragedy of the Commons whereby laborers are the resource, and seeking the lowest wage possible to pay them is the method of exploitation.

Since the tragedy of the commons arises strictly because the commons have no agency, the analogy would seem to be flawed. Even in the most coercive of environments labor still manages to engage in agent-behavior.

We should put these pieced replies together into a cohesive picture.

How could any corporation or business willfully ignore the health of an overall economy, including workers / laborers as future demand for their product or service? How is it a "vague social goal" (or SSSocialist) to have more gainfully employed people as active participants (resources) in a growing economy?

[Loki]

Collective action problem. There's also the fact that they're not competing just against other American corporations; they're competing against foreign corporations that are less interested in the well-being of the American economy.

[GGT]

Collective action problem. There's also the fact that they're not competing just against other American corporations; they're competing against foreign corporations that are less interested in the well-being of the American economy.

Ah, I see. Any problem-solving for the US "collective" translates to SSSocialism in your head. And any global competition where US corporations might have a Greater Good national well-being interest at heart, are better called Isolationists or Protectionists.

Seriously, if American corporations can't be bothered to care about the well-being of the American economy, and are happy to act as "foreign" corporations do....it's no wonder we're sinking while treading water.