If people earn what they deserve

[RGacky3]

Under Capitalism, if what people earn, is what they ought to be earning, in other words what their work is actually worth. That would figure then, that if put to a popular vote, 1 person one vote, the pay scales would be exactly the same.

Do you capitalists, who believe that what a worker makes and what a CEO makes is what they ought to make and is fair and just, believe that if put to a popular vote, in a workplace, or industry, or whatever, that the saleries and wages of everyone would be the same? (as they should be if people were being paid what their worth was worth)

[trivas7]

Under Capitalism, if what people earn, is what they ought to be earning, in other words what their work is actually worth. That would figure then, that if put to a popular vote, 1 person one vote, the pay scales would be exactly the same.

Under capitalism what people earn is more or less determined by consumers. You clearly haven't a clue how an economy actually works.

[RGacky3]

Under capitalism what people earn is more or less determined by consumers. You clearly haven't a clue how an economy actually works.

Ok, well answer the question, if put to a popular vote would the outcome be the same?

[Misanthrope]

Under capitalism what people earn is more or less determined by consumers. You clearly haven't a clue how an economy actually works.

This doesn't include the workers. The employers struggle to keep wages as low as possible while the employees struggle to keep wages as high as possible. If a factory worker on minimum wage makes a twenty dollar pair of shoes and then a thirty dollar pair of shoes they are still paid minimum wage, regardless of the value of the product they produce. Exploitation.

[Bilan]

Under capitalism what people earn is more or less determined by consumers. You clearly haven't a clue how an economy actually works.

Ah, no, it's not. The market plays an important role in the determination of value, sure. But what people earn - in this case, wages - is a combination of the market, the costs of production (production of the materials for such and such commodity) and the "bottom line" - i.e. the ability to realize the largest amount of surplus-value, and therefore profit, possible. The objective of capitalism is the realization of this surplus value.

Capitalism is not just a circle jerk of consumption.

[Bilan]

As for earning what one deserves, that's impossible and the question is riddled with subjectivity. What one 'deserves' is determined by oneself and/or by others - it is a social construction which is by no means universal, or material, but is simply an ideal. When someone "gets what they deserve", this is synonymous with "What I think they deserved". It is not fact, or objective, but subjective.
The question can't be answered.

[Invariance]

Under capitalism what people earn is more or less determined by consumers. You clearly haven't a clue how an economy actually works. No, as usual, you don’t have a clue what you’re talking about. The following is a summary of a critique by Steve Keen.

Economic theory argues that commodities are produced by ‘factors of production’ typically reduced to just labour on the one hand, and capital on the other. The argument goes that a profit-maximising firm will hire capital up to the point at which its marginal contribution to output just equals the cost of hiring it.

If we notionally divide all people into either workers or capitalists, then the total income will be the sum of wages and profits. No problem there. Profits in turn are the product of the rate of profit, times the amount of capital hired. Applying this at the level of an individual firm, gives us the relationship that:

Income equals:
(a) the wage rate
multiplied by the number of employees plus
(b)the rate of profit
multiplied by the stock of capital.

To derive the marginal product of capital, we need to consider changes in output. A basic calculus rule lets us decompose the change in profits into two bits: the rate of profit times the change in capital, and capital times the change in the rate of profit. This yields the relationship that:

Change in income equals:
(a) change in the wages bill (which we will leave aggregated), plus
(b) change in profit (which we will disaggregate)

Disaggregating changes in profit leads to the statement that:

Change in income equals
(a)change in the wage bill, plus
(b)the rate of profit
multiplied by the change in capital, plus
(c)the amount of capital
multiplied by the change in the rate of profit

At the level of the individual firm, economists assume that (a) and (c) are zero: a change in the firm’s level of output caused solely by hiring more capital has no impact on either the real wage or the rate of profit. Thus the relationship can be reduced to:

Change in income equals
(a) change in wages [zero], plus
(b) the rate of profit
multiplied by the change in capital [one], plus
(c) capital
multiplied by the change in the rate of profit [zero]

Canceling out the terms we know are zero or one yields the desired economic relationship:

Change in output due to a change in capital (marginal product) equals the rate of profit.

However, whilst this is a reasonable approximation at the level of the individual firm, it is not true at the level of the overall economy. There, any change in capital will definitely have implications for the wage rate, and for the rate of profit. Therefore the aggregate relationship is:

Change in output due to a change in capital (marginal product) equals
(a) change in wages due to change in capital [non-zero], plus
(b)the rate of profit, plus
(c)the amount of capital
multiplied by the change in the rate of profit due to the change in capital [non-zero]

The rate of profit will therefore not equal the marginal product of capital unless (a) and (c) exactly cancel each other out, as Amit Bhaduri pointed out in 'On the significance of recent controversies in capital theory: a Marxian view', Economic Journal, 79: 532-539 . This will apply only when the capital to labour ratio is the same in all industries – which is effectively the same as saying there is only one industry. Thus at the aggregate level, the desired relationship – the rate of profit equals the marginal product of capital – will not hold true. Sraffa’s assertion holds true, that, when a broadly defined industry is considered, changes in its conditions of supply and demand will affect the distribution of income. A change in the capital input will change output, but it also changes the wage, and the rate of profit. These changes alter the distribution of income between workers and capitalists, and will therefore alter the pattern of demand. The same argument applies to wages, so that in general a person’s income will not be equal to their marginal contribution to output. As a result, the distribution of income is neither meritocratic nor determined by the market.

The distribution of income is to some significant degree determined independently of marginal productivity and supply and demand.

To be able to work out prices, it is first necessary to know the distribution of income; and there will be a different pattern of prices for every different division of the economic cake between workers and capitalists. There is therefore nothing special about the prices that apply in the economy, and equally nothing sacrosanct about the distribution of income. It reflects the relative power of different groups in society – though it is also constrained by limits set by the productive system. This contradicts economic theory, which says that the distribution of income is uniquely determined by the market and therefore there’s nothing that policy-makers can or should do to alter it. Instead, rather than prices determining the distribution of income, the distribution of income determines prices. Within limits, the distribution of income is something which is determined, not by market mechanisms but by relative political power.

Bhaduri’s critique still accepts the assumption that it is possible to define a factor of production called capital. However, the machinery part of capital covers too great a multitude of things to just be reduced to one homogeneous substance. It includes machines and the buildings that house them, trucks, steel works, power stations. Each of these items consists of numerous other sub-assemblies, which are themselves commodities. The only thing that such disparate commodities obviously have in common is a price, and this is how economists would prefer to aggregate capital.
But the price of a piece of capital should depend on the rate of profit, and the rate of profit will vary as price changes; there is an impossible circularity in this method of aggregation.

Piero Sraffa presented a much more radical critique which showed that the measured amount of capital depended on the rate of profit - contrary to economic theory. However, Bhaduri's critique pointed out the internal inconsistency in the neoclassical/Samuelson theory of capital.

[trivas7]

[...] The market plays an important role in the determination of value, sure.

Indeed, it play the overwhelming predominant role in determining wages.

[...] The following is a summary of a critique by Steve Keen.

*Blah, blah, blah, blah and blah...*

[Invariance]

*Blah, blah, blah, blah and blah...*In other words you're either a coward because you won't defend the garbage you regurgitate, or you're stupid because you can't defend it. Thanks for demonstrating to everyone how pathetic you are. :thumbup1:

[Misanthrope]

*Blah, blah, blah, blah and blah...*

Do you happen to be a Misean? You cappies come here looking for a debate and then post this.:laugh:

[trivas7]

In other words you're either a coward because you won't defend the garbage you regurgitate, or you're stupid because you can't defend it. Thanks for demonstrating to everyone how pathetic you are. :thumbup1:
If you think Steve Keen refutes my contention that wages are determined more or less by consumers you're the idiot.

[Bilan]

Indeed, it play the overwhelming predominant role in determining wages.


I'm afraid that I must enlighten you to the fact that you are terrible at arguing.

[Invariance]

If you think Stephen Keen refutes my contention that wages are determined more or less by consumers you're the idiot.Firstly, its Steve Keen. Secondly, you have no argument - all you have said is that 'wages are determined more or less by consumers', yet you have given no proof or reasoning leading support for such a contention, and have then ignored an argument which showed that wages are not 'determined by consumers.' Please try again.

[Patchd]

Under capitalism what people earn is more or less determined by consumers. You clearly haven't a clue how an economy actually works.

Are these consumers leeches on the state or something, or perhaps some deity gives them money to be able to buy produce with? Or perhaps, the vast majority of these consumers are actually workers and thus what they earn is very relevant to them :confused: ...

[Qwerty Dvorak]

Under Capitalism, if what people earn, is what they ought to be earning, in other words what their work is actually worth. That would figure then, that if put to a popular vote, 1 person one vote, the pay scales would be exactly the same.

Do you capitalists, who believe that what a worker makes and what a CEO makes is what they ought to make and is fair and just, believe that if put to a popular vote, in a workplace, or industry, or whatever, that the saleries and wages of everyone would be the same? (as they should be if people were being paid what their worth was worth)
Where exactly do you get that?

[Robert]

I'm an idiot for saying this, but you guys calling each other idiots sound like a bunch of 4-year-olds.

As to the OP, I know very, very few people who support the obscene salaries some CEO's make. And everyone recommends taxing them heavily. You can't do more than that without outlawing corporations or capping salaries, which is a project I realize you think you are working on.

But I notice you raise no complaint about the salaries of my favorite wage slaves: Kobe Bryant, LeBron James, Tim Duncan, and Shaquille O'Neal.

http://hoopshype.com/salaries.htm

Play ball!

[Lynx]

I suppose if prices dropped to zero then wages would fall to zero too.

[#FF0000]

I'm an idiot for saying this, but you guys calling each other idiots sound like a bunch of 4-year-olds.

shut up dumbutt


But I notice you raise no complaint about the salaries of my favorite wage slaves: Kobe Bryant, LeBron James, Tim Duncan, and Shaquille O'Neal.

http://hoopshype.com/salaries.htm

Play ball!

The same thing applies here though -- lots of people don't like the salaries of athletes and would like to see them capped, for a few different reasons.

[Robert]

Fair enough.

But how would you handle the natural competitiveness and obvious skill superiority of a Kobe Bryant in the Brave New World? He wants to play basketball, not harvest tomatoes, and everyone would rather see him and Shaq than you and me on the court playing in the NBA Finals.

Is that his compensation? The right to play on the team instead of picking fruit and all the accolades that go with it? Or will he demand more, like a bigger house and fancier car and more prime beef? (You know, Kobe Beef? Can I get a rim shot?) And will you agree to pay him more to keep him happy? Will the fans be satisfied with your decision? Will you care what they think?

I think these are reasonable questions considering his current popularity.

[MarxSchmarx]

Is that his compensation? The right to play on the team instead of picking fruit and all the accolades that go with it?

"All the accolades that go with" what? Picking tomotatoes? Yes.


Or will he demand more, like a bigger house and fancier car and more prime beef?

Not if he has been educated to be a good communist from an early age.


And will you agree to pay him more to keep him happy?

Not unless he works harder than me at whatever it is he does.



Will the fans be satisfied with your decision?

Yes, of course, because they too have been educated as communists.


Will you care what they think?
Of course. that is the definition of a democratization of the economy.

[RGacky3]

The point of this thread was that people think that the market places the free market pays people their true value, everyone who talks about bosses earning a lot says "well they worked for it, they own the company and so on."

So a good test for if the market place really pays their true value would be putting the pay scale to a vote 1 person 1 vote, obviously its hypothetical, but no ones answered the question.

Do you think the pay scale would be the same?

(Trivas7, please shut the hell up, don't hijack my thread).

[Invariance]

Obviously it wouldn't be; workers outnumber capitalists substantially, any vote would likely result in workers claiming a higher wage at the expense of the capitalist's profit, just like a capitalist will aim at reducing wages to the bare minimum required in order to increase their profits, where workers fight back by uniting and demanding an appropriate wage by refusing their labour. But I'm reminded of that '68 slogan that 'its painful to submit to bosses; its even more stupider to choose them.'

[Robert]

"All the accolades that go with" what? Picking tomotatoes? Yes.


i should have known someone would misunderstand that.

Just wondering: have any of you guys actually done manual labor on a ranch or a farm? I mean out in the sun, not inside an air conditioned office or warehouse.

[Bilan]

Just wondering: have any of you guys actually done manual labor on a ranch or a farm? I mean out in the sun, not inside an air conditioned office or warehouse.

Yes, I used to live in the country. We worked on farms there (not a whole lot, though - it was usually when we were visiting the farms for a week or so, so we'd work while we were there).
The worst was when we were trying to raise money for a skatepark (hard fucking work in the country), and we went chestnut picking to raise money for it.
Awful.

[MarxSchmarx]

Just wondering: have any of you guys actually done manual labor on a ranch or a farm? I mean out in the sun, not inside an air conditioned office or warehouse.

Hell yeah you bet - have you? And believe me, every little luxury after a shitty day in the sun well suffice it to say me and my team we enjoyed every crumb of luxury (like firewood and a roof over our heads at night) we got out of it. Frankly it's the very least the bosses could have done and it's a pity we weren't compensated more.