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Capitalism is Opposed to Human Happiness Debate, Volume 2
Posts #086-#090
Post #86 Hello, Lucky, lucky wrote: With Google, yes, there is that particular difficulty. But an increase in labor, naturally accompanies with an increase in productivity -- or, at least, a certain amount of labor is necessary to an optimum rate of productivity. The workers at their own firm would either have the desire and economic incentive to add new collective members, or not. After all, would you expect them on the long term to avoid hiring altogether, slowly shrinking their workforce, until they cannot command as high profits? Besides, such workers would not have a right to possess capital for the purposes of not using. Also, larger economic changes ought to be taken into consideration. Since every worker has an equal share to their productivity, they'll naturally guarantee themselves a fair wage. Many Capitalists today, from Walmart to Apple, use forced labor in underdeveloped nations, whether Burma, Indonesia, Chile, or China. The excessive wealth they have been able to accumulate was not made by investing in people, but by investing in dictators who would enslave people. It is not likely that Capitalists would reach such an extravagant amount of wealth so quickly where each worker has a right to the fruits of their labors. To quote Kropotkin... Peter Kropotkin wrote: ... CNT-FAI Radical wrote: lucky wrote: Yes, with every industry owned by the workers, there are no longer wage-workers, since people do not pay themselves wages -- they reap the profits of their labors. Stock market CEOs, for instance, do not talk about the amount of wages the company earned -- they talk about the amount of profits earned, because they are owners, not hired labor. Where workers own their own means of production, they are not living off of wages, but the profits of their industry. Hello, Arie, Arie wrote: Exactly, "in lieu of working." And why should anyone have something that they did not labor to create? When speaking of the tiny shareholder, likewise, these pale in comparison to the isolated wealth of a very few. For example, 1% of Britain owns 70% of the land. (http://www.progress.org/revwob.htm) Yes, small businesses outnumber big businesses -- but big businesses command the vast majority of the market. Speaking strictly in terms of who controls the land and its productive forces, it has always been a very few. Dividing up territory in small plots and giving each individual person a piece of land will not solve it; this has been tried, and it was easily eroded by the developing power of a new form of Capitalism. (Such as land redistribution programs during the French Revolution, or even those of Lenin's Revolution.) There have been hundreds of socialist Communes, by the Fouriers and the Owens and all those "utopian Socialists." But they have, likewise, a universal failure, each being abandoned in typically only a few years. Even Individualist-Anarchist utopians have produced the same failure. These should show that it is not simply enough to divide up the land into small parcels, and to give each an equal share. If we are going to achieve economic democracy, it is going to be by giving each person an equal voice in the collective, decision-making process of their direct environment. Workers who have a right to the machinery and the farms by the fact that they are workers, and for no other reason. It is an inherent right to the means of production that will create economic democracy, and no form of distributivism will last very long. Post #87
CNT-FAI Radical wrote: It's not just Google, the difficulty would come up in every company that has any significant capital, which is the whole point. Your whole idea is about the usage of capital and it doesn't work. Your model can't reasonably work because you basically want labor to get all the income and capital none of the income, while really both capital and labor contribute. In other words, marginal utility of labor is typically lower than productivity per laborer, since capital contributes too. There is no point investing in capital if you don't get the returns that the capital generates. Suppose 2 people work for 5 years to build up some capital (perhaps a computer system). Assume for simplicity that they work for free, they generate no income. In reality they would probably sell a share of the business to an outside investor to generate some income in between, but outside capital investors are a no-no in your system. Therefore assume that those 2 guys are investing their own time. They expect the investment to pay off in the following years. Namely, they expect the computer system to provide an online service that will generate an income of $2 million per year, with minor maintenance costs after it has been developed - the 2 guys can handle it. There is also an option of doubling the scope of the business, to generate an income of $4 million per year, but this requires more sophisticated hardware to handle the traffic and requires having 10 people doing the maintenance work. Normally what they would do is this: they would be willing to expand scope and to hire the extra 8 people as long as their compensation plus taxes is less than $2 million / 8 = $250K. In your system, there is no point expanding the scope. Instead of $2million/2 = $1 million per person, they would be getting $4 millon / 10 = $400K. Each new hire would also have to get $400K. The problem is that you assume that marginal utility of labor is equal to the productivity per laborer. But it's not true. There is a reason salaries and dividends are separate - one represents income from work, the other from capital. The marginal utility of labor is $250K in the above example. The labor of each of the 10 people is worth that much, including the original founders' (assuming everybody is equally skilled). But total productivity is $4 million > 10 * $250 K. The difference comes from capital. In the normal capitalist system, if they are reasonable, the founders would be paying themselves a $250K salary and the rest in dividends (it doesn't matter as long as they keep shares and stay on the job, but it starts to matter if they want to move jobs or sell capital). They would be paying up to the same salary to new hires, if they are equally skilled. The founders would also be free to switch jobs, if there is something else they are better at and makes them more than $250K, while keeping the investment. In your system, they would lose the investment they made while switching jobs, which would cause them to stay on the less productive job despite other more productive employment opportunities. Your incentives are twisted. You let a group of people use capital for personal gain as long as they don't cooperate with others. As soon as they start to cooperate, you want to force them to share their capital. This means cooperation is penalized. Also you want them to forfeit the benefits of the capital as soon as they move to another job. This means switching jobs from a more capital-intensive one to a less capital-intensive one is penalized. There are some jobs where it's mostly labor, and there are are some jobs where there is a lot of expensive capital per laborer. The two jobs might require similar skills and have similar marginal utility. But in your system, the latter job would have to be compensated significantly higher, which doesn't make sense. In general, it seems like you don't understand the concept of investment in capital. Capital doesn't exist without investment. You want the investment returns to go to employees rather than investors. Without investment returns, there is no investment, and there is no capital. You talk as if employees and investors could be the same people. Employees are not the same people as investors. It's clear in the above example. It's impossible to force the employee=investor equality, unless you ban employment altogether. And there is no reason to try, it works much better when the two activities can be separate and I'm allowed to work with other people's capital without them having to give it to me. Your strange system is akin to my car cleaner getting my car for working on it. It might sound fun to you if you're a car cleaner, until you realize that it will cause me to avoid car cleaners. State socialism at least has one investor (the state), yours has none. Post #088
CNT-FAI Radical wrote: CEOs are hired labor. They are sometimes (often) also owners, then they have a double role: a CEO and an investor. A newly hired CEO isn't typically immediately a shareholder, he might get stock options that vest over time in lieu of cash compensation. They talk mostly about company profits in board meetings or public statements because that's their job. They also talk about wages, but not ones that the company "earned", but the ones that the company paid (including the salary paid to him). If by "wages the company earned" you mean the company revenue, they also talk about that. Post #089
CNT-FAI Radical wrote: I didn't labor to create myself, I didn't labor to create the air, I didn't labor to create the land I stand on. I didn't labor to create the sea, the beach, the forest, the animals, the trees, their fruit. These are gifts of God the creator, or nature. Of course I understand that labor was invested to improve the land, to plant seeds and tend to their growth, etc: To manipulate these gifts to great advantage, when necessary and possible. Human labor didn't "create" the tree, it took care of it. Our ancient role is stewardship, not creation. To believe that human creation, the products of human labor are the only things of value, being more valuable than God's creations, is the epitome of human arrogance. The ideal was known even in ancient times: Man did not work in the Garden of Eden. If you are familiar with that allegory, it explains the need to work as a curse, not as a commandment or a moral imperative. Furthermore, aren't we always trying to find ways to reduce our work load? to increase efficiency and produce more with less work? You yourself mentioned the move to reduce work hours: It is our goal to reduce the amount of labor that we need to invest, with the ultimate culmination being no need to work at all! In effect, returning to the "Garden of Eden". CNT-FAI Radical wrote: I don't support such discrepancy in the distribution of wealth, so this is not a response to anything I said. I don't have a problem with the "tiny shareholder", but I think you do. The implied question was why? and you answered it in your first line, before bringing up these huge owners: you believe these tiny shareholders should not own something that they did not create. I don't see a problem with that, as I explained above. The problem is with skewed distributions. CNT-FAI Radical wrote: That's precisely why shares of ownership, as in a corporation, are much more practical: They are more flexible and portable, and they permit the corporation/cooperative/business to operate as it normally does, in a manner found to be most effective, but re-define for whose benefit it operates. CNT-FAI Radical wrote: Probably true; that's why it is better to let the land be managed by whatever means is most effective (and unlike the failed cooperative you mentioned, modern corporations are a great success with regard to function and longevity), but redefine the beneficiaries to achieve more democracy -- without affecting the smooth functioning and management of the land. CNT-FAI Radical wrote: The distributed decision making that takes place in a free market is not subject to majority ruling over minority in collective decision making, and can be very democratic provided the agents have equal bargaining power. Collectives are not the only configuration supporting equal bargaining power: If the agents have equal wealth, then they have as much equal bargaining power as in forming a collective. CNT-FAI Radical wrote: The workers who made the machinery are not the same workers who use them. If I accept your earlier premise that people should own what they create, the workers who made the machinery own them. The workers who need to use the machines did not create them and therefore do not have a right to this machinery "by the fact that they are workers, and for no other reason". It would be proper for them to negotiate for the machines with the machines' creators -- i.e. buy capital. It is not at all a given that the creators of the tools have an advantage, a greater bargaining power than the workers who need to use them, just because they own the "capital". It all depends on the specifics and measures involved. Post #90
If I understand that correctly, a company will give every employee an equal amount of shares, so each one will recieve the same dividends. In practice this will likely mean that wages are adapted accordingly, meaning that low-income workers will recieve less regular salary to offset the incomes of dividends. Two problem I see with this system: Employees are the only shareholders and decide what happens to the company. But do they really have a long-term interest in the company? When they leave, shares will be taken back by company (I guess). Employees loose nothing even if their company goes bankrupt (except their job, which for skilled employees isnt that much of a problem). Also like lucky said its not exactly clear what role investors play in your system. Don't know if investors like the idea of only giving credit and not being able to influence the companys decisions.
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