Unemployment

[Gustaf]

Also, talking about the capitalist economy's goal makes no sense. What happens in a free market is the result of agents in that market trying to satisfy their preferences. Apparently, peoples' preferences seem to be for a 40-hour work week, given the various constraints that exist.

What utter nonsense.  The goal of the capitalist economic or 'free market' is to serve a small upper class which has power (that power is expressed as capital).

The preferences of people who do not have capital are completely irrelevant in a capitalist society, Gustaf.  You might as well talk about the preferences of the pigs and cattle being slaughtered.

The capitalist economy that you so despise has led to people being more satisfied now than they have ever been anywhere in human history.

Talk about a baseless unproven assertion!  Gustaf, surely you realize that 'satisfaction' is not only subjective, but in point of fact not even knowable by the 'individual himself.  The system brainwashes the slave into accepting his role (or his evolved social instinct makes him adapt in order to survive, it comes to the same thing).

PS: I'd also like to note for the record that I think Opebo overdid it this time. No one can be so stupid as to believe what he posted...

Yes, yes, I find you to be an idiot, you find me to be 'stupid'.. where does that get us, Gustaf?  Your posting is pathetically lazy nowadays.  You might as well not bother.  Instead perhaps you could post something of interest - such as policy recommendations of your own.

I didn't really bother to read this, but I assume it's your usual tirades. I'm afraid I don't find them sufficiently interesting to mock at the moment, so there is little point in directing them at me.

[Filuwaúrdjan]

I always disliked the attitude of people who enjoy the vast freedoms and benefits that our societies today deliver but claim that others are better off being poor and oppressed. It's a bit of a silly point to tell someone they should go try North Korea and see how they like it, but then again it's even sillier to suggest that things like freedom and food on the table are useless or overrated.

Oh, sure. But Republicanism certainly did not argue in that general direction (unless you're now arguing that to critique Westerndemocapitsocietywhateversky is automatically to love Stalin or something; which would be out of character), even if at least two other people in this thread... sigh.

[Gustaf]

I always disliked the attitude of people who enjoy the vast freedoms and benefits that our societies today deliver but claim that others are better off being poor and oppressed. It's a bit of a silly point to tell someone they should go try North Korea and see how they like it, but then again it's even sillier to suggest that things like freedom and food on the table are useless or overrated.

Oh, sure. But Republicanism certainly did not argue in that general direction (unless you're now arguing that to critique Westerndemocapitsocietywhateversky is automatically to love Stalin or something; which would be out of character), even if at least two other people in this thread... sigh.

No, he wasn't going that far, so that last post wasn't really directed at him.

Of course, one is free to critique "Westerndemocapitsocietywhateversky" - that's one of the good things about it. I'm just very skeptical of what is going to come in its place. And if one argues that it is bad because people aren't getting what they want or because there are poor street bums, I honestly think that's so naive as to border on being stupid. Precisely because, as I said in my reply, the system being attacked has dealt more efficiently with precisely those things than anything before it. Therefore I suspect one is focusing on the wrong thing if one thinks we could eradicate poverty or bring about happiness if we only got rid of capitalism.

I should note that capitalism here obviously does not necessarily mean unconstrained capitalism. There's plenty of scope for social democracy within the kind of society that I'm talking about.

[TheDeadFlagBlues]

Time to go off topic:I'd say that the existence of humanity in prehistoric times led to more contentment among the average person than this post-industrial lifestyle. The average prehistoric man actually ate a very healthy and balanced diet, was very tall, had many more hours of leisure time (obviously these were spent differently) and most important he/she had a major purpose. This primordial existence is ideal for humanity and is how it spent the majority of its time on Earth.

Please tell me that this post isn't entirely serious.

No, that was mostly a random tangent fueled by something I read in a book/lack of sleep and the fact that I grow tired of arguments claiming that free market liberal democracies must be the peak of society.

I don't buy into primitivism. I do think that the equilibrium of existence in prehistoric times produced far less nasty, brutish and short lifestyles than the life of a farmer in Sumeria though  

[TheDeadFlagBlues]

Also the idea that our economy should be modeled after what makes us happiest is ridiculous

Interesting statement.

What do you think should it be modeled after instead?

It should be modeled after what makes us progress as a society. Defining that is incredibly difficult but I'm sure you know what I'm getting at.

[Beet]

It's a book on the history of food that posits this strange hypothesis is that people were better off before the agricultural revolution than immediately after, for essentially Malthusian reasons. Although I don't remember it saying that people were actually better off or less "nasty, brutish and short" -- mostly that people were taller because there is more nutrients in red meat. Of course, that relies on the fallacy that some people "replaced" other people.

More realistically, what happened is that agriculturalists and hunter gatherers existed side by side, and the latter never really went extinct, they were simply outbreeded by the agriculturalists. Hence it was not so much that one lifestyle replaced another as a whole new lifestyle was created and turned out to be much more successful at fostering reproduction.

[Filuwaúrdjan]

Sounds like pseudohistory.

[Torie]

Sounds like pseudohistory.

It may be pseudo-history, but it ain't pseudo. Malthusianism was the equilbriating mechanism down to subsistence levels - always. If the rulers pillaged more, or less, the population went down or up respectively. If germs killed, the standard of living went up (e.g. the late Middle Ages), and the population then went back up until we were back to subsistence.

Ironically, it was just shortly after this insight, that Malthus was "proven" wrong - not as to the past but for the future. Finally, finally, around 1820 we began to climb out of the box in which humanity was trapped. The standard of living began to rise faster than the population due to technology (most particularly the train),  and that caused a chain of other societal changes, and Malthus at last could be consigned the the ash heap of "history." And that is a good thing!

[Linus Van Pelt]

There is pretty strong evidence from skeletal archaeology that early farmers were less well-fed than hunter-gatherers, suggesting that although agriculture supported population expansion by allowing a larger total number of people to be fed, it didn't always produce more food per person.

This is one of those claims, though, that because it is a bit counterintuitive, gets transformed into all kinds of weird unrelated claims on the internet. (Including in this thread.)

[Filuwaúrdjan]

There is pretty strong evidence from skeletal archaeology that early farmers were less well-fed than hunter-gatherers, suggesting that although agriculture supported population expansion by allowing a larger total number of people to be fed, it didn't always produce more food per person.

That doesn't sound so surprising, it's more the... er... extensions from that mentioned here that are a little on the strange side (as you say, of course) and which prompted the remark.

Although, just to randomly make things stranger perhaps, there are farmers and there are farmers. Major differences between pastoralists and people that grow crops and so on.

[TheDeadFlagBlues]

Okay, obviously the happiness part of my argument was a bit of a leap as quantifying happiness is only a recent developed obtained through psychological data. I'd still contend that if early farmers had shorter lifespans due to poor nutrition and a quicker spread of disease and also worked longer hours to grow these meager crops in the first place, it makes some sense to make the leap towards saying that they were less happy. There was also less independence for the average farmer compared to the average hunter-gatherer as early farming communities became stratified.

Like I said, that first post of mine is a really warped argument that I mostly posted for fun (it succeeded in starting an interesting discussion so the post worked!). Do you really think that I'd honestly believe that hunter-gatherers lived more fufilling and happier lives than the modern day person?

[republicanism]

First off, people who are unemployed can't easily replace the people who work. The 35-year old high school dropout with an alcohol problem can't just jump in and share the workload of the investment banker working 80 hours per week. In the West many of the people who are unemployed are so because they lack skills demanded in the market.

Secondly, even to the extent that people do have the right skills work isn't an infinitely divisible mass. If I invest 20 hours in reading up on the election of 1976 I'll be the only one able to invest another 20 hours in writing a summary of it. I can't share that job with someone else. Nor could I easily have shared the reading. A lot of jobs in the modern economy has these properties.

Thirdly, there are many fixed costs involved in an employee, such as commuter time, having an office, etc. These costs make it inefficient to share jobs between a lot of people.

These are good points. Of course I thought about that myself. I have some ideas on it, but I can't put that in words now. Not in English, and not this morning. But you will get an answer on this part, I promise

Now, I'm not so arrogant as to think that everyone else in the world has failed at rationally organizing work whereas I alone have found the golden path to paradise. If it actually were more efficient to divide work between more people I suspect some of the many companies struggling to get ahead in the market would be doing it.

It is not that this ideas are mine (they are about 150 years old), nor did I claim to have found the golden path.

And your second sentence is just wrong: What is efficient for a company has not to be efficient for society as a whole. Producing handguns or crystal meth is an extremely inefficient thing for society, but it is nice cash for the market player who produces it.
So, if market players don't do certain things does not mean that those things wouldn't be great from a society perspective.
This is a common mistake of market liberals / libertarians.

As regards how a market works, you seem to be mixing up different things. An agent in the market doesn't think "how much can I sell." He or she thinks "how can I best satisfy my preferences" Most people have preferences such as having a house or food and to obtain that they must have money. To have money they must work (thus, sell their labour services). Thus, they work. They don't sell as much as possible, because most people also value leisure time.

Sure. But they have to take part in the system to satisfy their preferences, and the system functions under certain rules.

For example, of course you do not work 40h a day to satisfy your preferences in a concrete sense. The value of your work is much higher than that. But you don't get all the value of your work paid, the employer keeps some of it.

This very fact makes pretty clear that capitalism is not just a simple interchange of preferences, but that other dynamics are involved.

It is true of course that the agents typically don't consider how to satisfy the needs of everyone else. They might not aim to satisfy the preferences of the bum on the street. That might be a moral failure of human beings, but it's hardly the system failing to satisfy preferences.

 

No! It is not a moral failure of humans, it is the system. Even if it breaks the bakers' heart every single morning to see the bum hungry on the street in front of his bakery, he can't give away his goods to him for free (he could do it once or twice, but not on a regular basis) because that would hurt his market position. And that is the cruelty of the system.

The capitalist system does not really have a goal. People have goals and these goals tend to involve satisfying their preferences by selling something in the market. If people preferred not doing that there is nothing inherent in capitalism forcing it upon them.

 

The goal is to produce (abstract) wealth by any means. Doesn't matter if you produce hand grenades or baby toys, porn movies or cancer pills. It has to grow.
Example: If a societies' abstract wealth does not grow anymore, it is called "crisis".
This is not a crisis in producing goods and services, like a bad harvest in earlier times. There are the same machines, the same skilled workers, the same natural ressources, the same infrastructure to produce everything people need as they were before the crisis.
It is just a crisis in making money of the goods and services produced. Sales crisis, overproduction crisis are a joke in its self, if you come to think of it.

Of course, not everyone gets everything they want. Then again, I think more people are getting what they want to a larger extent now than ever before. And in my book, that is a good thing.

Oh, no disagreement here. The capitalist society is a great improvement compared with any pre-capitalist society, as I already mentioned I think. But that does not mean that the evolution of human societies should end here.

[Beet]

Okay, obviously the happiness part of my argument was a bit of a leap as quantifying happiness is only a recent developed obtained through psychological data. I'd still contend that if early farmers had shorter lifespans due to poor nutrition and a quicker spread of disease and also worked longer hours to grow these meager crops in the first place, it makes some sense to make the leap towards saying that they were less happy. There was also less independence for the average farmer compared to the average hunter-gatherer as early farming communities became stratified.

Of course it could be argued that the Sumerians had more independence due to the existence of granaries ensuring a steady food supply, albeit lower in nutritional quality. Since humans are naturally risk-averse, you might guess that most of us would prefer the relatively more steady guarantee of agricultural food than the riskier business a nomadic hunter-gatherer lifestyle, (and be willing to sacrifice nutrition for that purpose). But yes, "happiness" is a poor criteria because it is hardly knowable.

[Gustaf]

First off, people who are unemployed can't easily replace the people who work. The 35-year old high school dropout with an alcohol problem can't just jump in and share the workload of the investment banker working 80 hours per week. In the West many of the people who are unemployed are so because they lack skills demanded in the market.

Secondly, even to the extent that people do have the right skills work isn't an infinitely divisible mass. If I invest 20 hours in reading up on the election of 1976 I'll be the only one able to invest another 20 hours in writing a summary of it. I can't share that job with someone else. Nor could I easily have shared the reading. A lot of jobs in the modern economy has these properties.

Thirdly, there are many fixed costs involved in an employee, such as commuter time, having an office, etc. These costs make it inefficient to share jobs between a lot of people.

These are good points. Of course I thought about that myself. I have some ideas on it, but I can't put that in words now. Not in English, and not this morning. But you will get an answer on this part, I promise

Now, I'm not so arrogant as to think that everyone else in the world has failed at rationally organizing work whereas I alone have found the golden path to paradise. If it actually were more efficient to divide work between more people I suspect some of the many companies struggling to get ahead in the market would be doing it.

It is not that this ideas are mine (they are about 150 years old), nor did I claim to have found the golden path.

And your second sentence is just wrong: What is efficient for a company has not to be efficient for society as a whole. Producing handguns or crystal meth is an extremely inefficient thing for society, but it is nice cash for the market player who produces it.
So, if market players don't do certain things does not mean that those things wouldn't be great from a society perspective.
This is a common mistake of market liberals / libertarians.

As regards how a market works, you seem to be mixing up different things. An agent in the market doesn't think "how much can I sell." He or she thinks "how can I best satisfy my preferences" Most people have preferences such as having a house or food and to obtain that they must have money. To have money they must work (thus, sell their labour services). Thus, they work. They don't sell as much as possible, because most people also value leisure time.

Sure. But they have to take part in the system to satisfy their preferences, and the system functions under certain rules.

For example, of course you do not work 40h a day to satisfy your preferences in a concrete sense. The value of your work is much higher than that. But you don't get all the value of your work paid, the employer keeps some of it.

This very fact makes pretty clear that capitalism is not just a simple interchange of preferences, but that other dynamics are involved.

It is true of course that the agents typically don't consider how to satisfy the needs of everyone else. They might not aim to satisfy the preferences of the bum on the street. That might be a moral failure of human beings, but it's hardly the system failing to satisfy preferences.

 

No! It is not a moral failure of humans, it is the system. Even if it breaks the bakers' heart every single morning to see the bum hungry on the street in front of his bakery, he can't give away his goods to him for free (he could do it once or twice, but not on a regular basis) because that would hurt his market position. And that is the cruelty of the system.

The capitalist system does not really have a goal. People have goals and these goals tend to involve satisfying their preferences by selling something in the market. If people preferred not doing that there is nothing inherent in capitalism forcing it upon them.

 

The goal is to produce (abstract) wealth by any means. Doesn't matter if you produce hand grenades or baby toys, porn movies or cancer pills. It has to grow.
Example: If a societies' abstract wealth does not grow anymore, it is called "crisis".
This is not a crisis in producing goods and services, like a bad harvest in earlier times. There are the same machines, the same skilled workers, the same natural ressources, the same infrastructure to produce everything people need as they were before the crisis.
It is just a crisis in making money of the goods and services produced. Sales crisis, overproduction crisis are a joke in its self, if you come to think of it.

Of course, not everyone gets everything they want. Then again, I think more people are getting what they want to a larger extent now than ever before. And in my book, that is a good thing.

Oh, no disagreement here. The capitalist society is a great improvement compared with any pre-capitalist society, as I already mentioned I think. But that does not mean that the evolution of human societies should end here.

It's true that what is efficient for a company need not be efficient for the economy as a whole. There are plenty of externalities. But if it was more efficient to organize work differently the company would make money out of it, wouldn't it? You have to prove that there is a social gain that the market actor cannot capture in order for that point to apply to this case.

And I'd like to see proof that employees don't receive the full value of their work. See, the work isn't the only thing giving value. The capital employed in production also adds to the value, which is why capital providers (stock holders) receive part of the value in the form of profits. It's a common mistake by socialists to think that profits is stealing from the workers. If the worker is operating a machine the person who paid for the machine has a reasonable claim to part of the proceeds.

Now, your claim of the market position getting hurt isn't entirely true either. It's true that if the baker gave away bread to everyone who said they couldn't pay he would go bankrupt. But it's also true that he could easily take the day's profit, buy a bread at any bakery, including his own, and give that bread to the bum. This wouldn't hurt his market position at all. It would, of course, hurt himself - he could have eaten that bread. And if his preferences are such that he cares more for himself than for the bum he won't do it.

If you want to be a bit less libertarian you could also say that there is nothing stopping the baker from voting to elect a government that promises to take care of the bum by taxing all the bakers equally. That, again, would not hurt his position.

Your last point I don't follow entirely. There is nothing inherent telling people to amass wealth. It's just what a lot of people do. Some people give away a lot to philanthropy. Some people do decades of volunteer work.

And I'm not sure what this abstract wealth is. If there is no capital to borrow to fund new investments the economy comes to a halt. And if people are worried about the future they consume less, which also means the economy doing worse. I guess one can consider capital markets abstract but there is nothing unreal or magical about them.

Now, I get the point that we might not be done - I don't think so either. But I think progress is about building on what we have, rather than abolishing it.

[opebo]

Sounds like pseudohistory.

No more so than the idea that people (whoever that means in particular) were 'better off' or 'more satisfied' after the advent of agriculture.

[Politico]

I'm afraid that's just laughably wrong. You can't redistribute work like that.

If it is technically possible is arguably.
But you will agree with me that the way work is distributed today is anything but rational, and that, if possible, we should organize it in another way. Not?

Also, talking about the capitalist economy's goal makes no sense. What happens in a free market is the result of agents in that market trying to satisfy their preferences.

The fact that we produce for a market is just the substantiation of what I said: A player in a market economy doesn't think "What / How much do people need?" but "What / How much can I sell?"

The bum down the street is the living example.
While it is absolutely no problem to produce enough food for all of us (in fact, we produce a lot more than we need, and through away tons and tons of it), he is hungry.
Because he can't pay. So his needs are not satisfied. He is economically nonexistent.

Commodification is the only thing that matters, and not satisfaction of needs, and that's my point.

Apparently, peoples' preferences seem to be for a 40-hour work week, given the various constraints that exist.

Sure. Everyone is a player in the game.
You won't here stupid moralist stuff like "Uh, the bad capitalists force people to do xyz..." from me.

The capitalist economy that you so despise has led to people being more satisfied now than they have ever been anywhere in human history.

Capitalism has indeed produced more wealth and a higher standard of living than every pre-capitalist economy. Only a fool would deny that (some self declared "socialists" actually do...).

But that doesn't change the fact that the satisfaction of needs is in no way the goal of capitalism, but a fall-out in it's process of productivity increase.

First off, people who are unemployed can't easily replace the people who work. The 35-year old high school dropout with an alcohol problem can't just jump in and share the workload of the investment banker working 80 hours per week. In the West many of the people who are unemployed are so because they lack skills demanded in the market.

Secondly, even to the extent that people do have the right skills work isn't an infinitely divisible mass. If I invest 20 hours in reading up on the election of 1976 I'll be the only one able to invest another 20 hours in writing a summary of it. I can't share that job with someone else. Nor could I easily have shared the reading. A lot of jobs in the modern economy has these properties.

Thirdly, there are many fixed costs involved in an employee, such as commuter time, having an office, etc. These costs make it inefficient to share jobs between a lot of people.

Now, I'm not so arrogant as to think that everyone else in the world has failed at rationally organizing work whereas I alone have found the golden path to paradise. If it actually were more efficient to divide work between more people I suspect some of the many companies struggling to get ahead in the market would be doing it.

As regards how a market works, you seem to be mixing up different things. An agent in the market doesn't think "how much can I sell." He or she thinks "how can I best satisfy my preferences" Most people have preferences such as having a house or food and to obtain that they must have money. To have money they must work (thus, sell their labour services). Thus, they work. They don't sell as much as possible, because most people also value leisure time.

It is true of course that the agents typically don't consider how to satisfy the needs of everyone else. They might not aim to satisfy the preferences of the bum on the street. That might be a moral failure of human beings, but it's hardly the system failing to satisfy preferences.

The capitalist system does not really have a goal. People have goals and these goals tend to involve satisfying their preferences by selling something in the market. If people preferred not doing that there is nothing inherent in capitalism forcing it upon them.

Of course, not everyone gets everything they want. Then again, I think more people are getting what they want to a larger extent now than ever before. And in my book, that is a good thing.

This is an excellent post of the highest caliber.

[opebo]

H**k complimenting h**k.  Regurgitation is not really worthy of applause, Policot, but it is funny enough I suppose.

[phk]

The other thing that happened though, this goes to the point you were just making, is there are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers - Obama

[opebo]

The other thing that happened though, this goes to the point you were just making, is there are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers - Obama

This just means we have to create 'inefficiency' - large-scale 'state industries' or direct government employment in the form of sinecures (little work, absolute security, good pay and benefits).

You see, this worship of 'efficiency' is what has doomed us.

[Politico]

The other thing that happened though, this goes to the point you were just making, is there are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers - Obama

This just means we have to create 'inefficiency' - large-scale 'state industries' or direct government employment in the form of sinecures (little work, absolute security, good pay and benefits).

You see, this worship of 'efficiency' is what has doomed us.

There is no such thing as a free lunch, buddy. I am beginning to suspect you are the ultimate troll of the economics sub-forum.

[Politico]

30- hour work week on unskilled/low-skilled jobs might be a start. Federal minimum wage of $10 and mincome that's about $800 a month(10k a year) to all taxpayers would also help out a lot.

With all due respect, if no firm is willing to hire particular unskilled workers for just one-hour per week at $6.XX per hour, what in the world makes you think any firm is going to hire one of those unskilled workers for thirty-hours per week at $10 per hour?

One of the golden rules of economics: We cannot legislate away the laws of supply and demand.

As for the idea of a minimum living income for all Americans, the problem with that idea is that it eventually must be paid for by taxpayers and/or via inflation. If we are talking about $10,000 per year for every adult in America, we are talking about over two trillion (trillion, not billion) dollars in government expenditure on an annual basis. Do you see the problem there?

[republicanism]

One of the golden rules of economics: We cannot legislate away the laws of supply and demand.

Of course we can.
And we do in several areas of society. For example, firehouses and schools are not built and kept on the base of supply and demand.
And although you Americans seem to be afraid of that idea, in many countries the same is true for railway lines and hospitals.

It is just a political decision. The market is man-made, it is not a supernatural power.

[phk]

One of the golden rules of economics: We cannot legislate away the laws of supply and demand.

Of course we can.
And we do in several areas of society. For example, firehouses and schools are not built and kept on the base of supply and demand.
And although you Americans seem to be afraid of that idea, in many countries the same is true for railway lines and hospitals.

It is just a political decision. The market is man-made, it is not a supernatural power.

How are they not built on supply-and-demand?

[opebo]

One of the golden rules of economics: We cannot legislate away the laws of supply and demand.

Of course we can.
And we do in several areas of society. For example, firehouses and schools are not built and kept on the base of supply and demand.
And although you Americans seem to be afraid of that idea, in many countries the same is true for railway lines and hospitals.

It is just a political decision. The market is man-made, it is not a supernatural power.

How are they not built on supply-and-demand?

Obviously a generous dole reduced supply of labor.  Duh.

[Gustaf]

One of the golden rules of economics: We cannot legislate away the laws of supply and demand.

Of course we can.
And we do in several areas of society. For example, firehouses and schools are not built and kept on the base of supply and demand.
And although you Americans seem to be afraid of that idea, in many countries the same is true for railway lines and hospitals.

It is just a political decision. The market is man-made, it is not a supernatural power.

That is not really relevant to the issue here. It is not as if we have done away with supply and demand merely because we have some public financing of certain services.