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**r-carpenter** · 01-27-2021, 10:47 AM

Ohh, dwigle, thank you for correction. That's what I get then I type without my glasses on and the phone auto-corrects.
You misunderstand Zero Sum concept. It simply means that whatever economic entity creates X, it's divided between the members in to Y and Z and in the end the X remains the same. How the entity arrived to the X is redundant in this case. It could be technical progress or discovery of gold or crude oil.
The difference is only in values of Y and Z. It's the same for any socioeconomic systems, be that capitalism, socialism or fascism.
If the corporation makes X number of dollars it divides it between executives and drones. However the division is made, the amount of $ corporation made is already there. The problem arises is then drones are allocated so little resources that they become a burden on the rest of the society. Make sense?
Your examples are of micro economics not macro. Of course your employees gained something. You paid wages. The extreme counter argument to your statement would be slavery. After all, slaves are rewarded with food and shelter. But this is really something else. The argument I was making is that minimum wage is deceptive concept and purchasing power of the wage is what is important.
Also, before you comment on Marxism, it would help to actually read Marx. None of what you said about Marxism is true. Sorry in this respect you sound like dumb ass.To understand Marx I would also suggest reading Adam Smith and David Ricardo. I'll be happy to answer any of your questions related to Marxism.

"Smart people long ago correctly observed that when the majority in a society figures out that it can vote for itself, access to the national treasury, democracy is doomed."
So, you want democracy to be available only for minority of the population? Could you clarify?

**a4eaudio** · 01-27-2021, 12:58 PM

Originally posted by fpitas View Post

I agree with what you said. I'll point out that minimum wage workers often draw various tax or welfare benefits etc. that their employers do not directly contribute to. Effectively, the rest of us are subsidizing their cheap labor.

Originally posted by LIDAR View Post

While I agree that our economy is not a zero sum game, I think you missed most of r-carpenter's point. If big corporations (most of whom have figured out how to game the system such that they pay very little taxes - much less proportionately than you or me) pay workers so little that the workers need to depend on taxpayer funded social programs, then these big corporations are effectively being subsidized by taxpayers. IMHO this is wrong on many levels. If someone has a cogent argument to make that this is OK, I'd like to hear it.

Originally posted by dwigle View Post

Lidar, I appreciate your perspective and openness to hear an alternative opinion. One example of corporations operating efficiently in open capital markets. BMW, MB, Volvo, Honda, Gestamp all operate in South Carolina and Alabama (right to work states). All without unions and providing great wages and benefits.

dwigle, this is a good example of what fpitas and Lidar brought up. There is a fixed amount of revenue to be generated by these automotive sales, so the zero-sum game concerns how to allocate that. The manufacturer is a price taker with respect to non-labor inputs so it has to decide how to allocate the residual across workers. By operating in a low-wage state like Alabama this allows more residual to go to managers, executives and/or stockholders. (Whether that is a good thing or not is a question of fairness and not economics. I know many people who think this outcome is great, but then again they are the managers and executives.)

BUT...Alabama is the 46th poorest state by median income and 49th by per capita income; 46th most college educated (24.5%); 45th most high school diploma or greater; 34th most uninsured (medical insurance); 50th (dead last) in Medicaid coverage (or first place in most Medicaid coverage if you want to look at the glass half full, but I guess this case would be an empty glass of water is completely full of air). Alabama is ranked 44th in net federal funding receipts per capital, i.e., not only does it receive more in federal funds than it raises in revenue, but it receives more per capita than all but 6 other states. THUS...the automotive company has decided to allocate more revenue to managers, executives and stockholders, not only at the expense of its workers but is having taxpayers of Alabama and other states subsidize its choice. Thus, one variant of the term "corporate welfare". As you have stated, this doesn't mean the people who made this decision are bad, they are just responding to economic incentives and if a majority of people in America believe this is a bad outcome then policymakers need to come up with economic policies that change the incentives and outcomes.

**dlr** · 01-27-2021, 01:28 PM

Originally posted by a4eaudio View Post

...if a majority of people in America believe this is a bad outcome then policymakers need to come up with economic policies that change the incentives and outcomes.

The problem I see with this is that it advocates for equality of outcome, not equality of opportunity.

dlr

**LIDAR** · 01-27-2021, 02:03 PM

I've got to say that this is the most civil discussion of this kind of topic - one that really goes to the heart of what we aspire to be as a country - that I have seen in a long time. I think we all deserve a pat on the back for that!

**fpitas** · 01-27-2021, 02:13 PM

Originally posted by LIDAR View Post

I've got to say that this is the most civil discussion of this kind of topic - one that really goes to the heart of what we aspire to be as a country - that I have seen in a long time. I think we all deserve a pat on the back for that!

Agreed. It's almost eerie to see a civilized discourse anymore.

**dwigle** · 01-27-2021, 02:38 PM

Originally posted by a4eaudio View Post

By operating in a low-wage state like Alabama this allows more residual to go to managers, executives and/or stockholders. (Whether that is a good thing or not is a question of fairness and not economics. I know many people who think this outcome is great, but then again they are the managers and executives.)

It is a question of economics. In my experience, management doesn't think in terms of "residuals" going to workers - labor is almost always the largest expense. That's an egalitarian response. Nor do they move to Alabama so that execs can earn more money - it's simpler than that, they make choices to make their business more competitive. They model their business to account for all expenses, including labor. All labor - management and staff.

They often pick the southeast and texas because it's a more favorable business environment - qualified labor, good transportation, less restrictive construction/development rules, lower land costs. They pay unusually high wages for the market to keep labor happy and not invite unions. And it's working, labor is happy.

**dwigle** · 01-27-2021, 04:01 PM

Originally posted by r-carpenter View Post

Ohh, dwigle, thank you for correction. That's what I get then I type without my glasses on and the phone auto-corrects.
You misunderstand Zero Sum concept. It simply means that whatever economic entity creates X, it's divided between the members in to Y and Z and in the end the X remains the same. How the entity arrived to the X is redundant in this case. It could be technical progress or discovery of gold or crude oil.
The difference is only in values of Y and Z. It's the same for any socioeconomic systems, be that capitalism, socialism or fascism.
If the corporation makes X number of dollars it divides it between executives and drones. However the division is made, the amount of $ corporation made is already there. The problem arises is then drones are allocated so little resources that they become a burden on the rest of the society. Make sense?
Your examples are of micro economics not macro. Of course your employees gained something. You paid wages. The extreme counter argument to your statement would be slavery. After all, slaves are rewarded with food and shelter. But this is really something else. The argument I was making is that minimum wage is deceptive concept and purchasing power of the wage is what is important.
Also, before you comment on Marxism, it would help to actually read Marx. None of what you said about Marxism is true. Sorry in this respect you sound like dumb ***.To understand Marx I would also suggest reading Adam Smith and David Ricardo. I'll be happy to answer any of your questions related to Marxism.

"Smart people long ago correctly observed that when the majority in a society figures out that it can vote for itself, access to the national treasury, democracy is doomed."
So, you want democracy to be available only for minority of the population? Could you clarify?

My point is not who should benefit from democracy, it's just agreeing with (and lamenting) the scholars who warned of the inevitable cause of a democracy's downfall. It's when the have nots gain enough votes to confiscate from the haves. I acknowledge that the progressive tax system already confiscates disproportionally from the rich, but it's going to get worse. The fear is that the rich quit or leave.

I read CM and Capital 40 years ago, excruciating. Marxists are effectively the opposite of free market capitalists. Are there differences between how you define the economics and the governance resulting in those economics, sure. I'll stand by my point.

Your version of ZSG above IS a micro version making the assumption that the drones have no choice but to accept the residual left over after paying the execs. They have a choice, they can move to Greenville, SC and get a better deal at the new BMW plant. This is why Detroit is failing and Greenville is flourishing.

As to your name calling, it's #13 in Alinsky's Rules for Radicals. Paraphrased as, if you can't win on the issue, insult the messenger.

13. "Pick the target, freeze it, personalize it, and polarize it."

**r-carpenter** · 01-27-2021, 05:12 PM

The disagreement is how the "haves" and "have nots" acquired their positioning in manufacturing chain. I don't share your fear that if the "haves" leave, the sky will fall and the world will end. If Elon Musk will leg it (hypothetically because he never will) Tesla can technically become a worker owned cooperative. The Y and Z would equalize a great deal. Same thing with Bezos.
The tax system is only a part of equation. Value is created on the work floor. Workers, engineers, programmers give value to the produced commodities. Even upper management is creating value. Simple fact of ownership doesn't mean much. But you know who never paid taxes? (This is a Jim Jefferies moment) Slaves! What a bunch of parasites!

Sorry I am going in to extremes but it's just a good example of resource allocation. The slave owners paid ALL taxes!
You probably read Karl Marx not Carl Marx all tho I wouldn't be surprised. Marx saw capitalism as a more progressive form of manufacturing in comparison to feudalism. He also criticized capitalism as an increasingly outdated economic system which created a lot of class antagonisms monopolization and so on. I mean, if you read Marx, you'd know all this.
BTW, I didn't call You a dumb a.ss. I said you sounded like one, speaking about Marxism. And I stand by my opinion.
Majority of the manufacturing migrated from US to China. This happened for purely capitalist reasons. I hate to send you back to Ricardo but hey, labor is expensive and manufacturers purchased it on the global labor market. Yay! Thumbs up for free market right? By your logic, most American laborers should also relocate to China? I mean, why stop at Greenville? Tesla, GM and many other manufacturers are building manufacturing facilities far east.

Going back to the topic starter, IMO increasing federal minimum wage to $15 will have 0 effect either way in continually deteriorating economy. It's like doing 90mph with no steering towards a cliff and going, hey may be I should have emptied that ashtray.

**dwigle** · 01-27-2021, 06:19 PM

"Simple fact of ownership doesn't mean much. If Elon Musk will leg it (hypothetically because he never will) Tesla can technically become a worker owned cooperative. "

This is disturbing. So the person that created the company, planned, toiled, took personal and financial risk, left the comfort of a job and jumped into a new enterprise, providing jobs, revenue, taxes and forgive me, profit, is not relevant in your world? Why should Musk share ownership with anyone who is not a shareholder? Truly a socialist, communist, marxist, bassackward concept.

Capitalism will make companies that outsource labor to china pay for their sins. This is a macro view, I know. I don't by Chinese goods or shop at Walmart if I help it.

**Steve Lee** · 01-27-2021, 06:24 PM

Lots of studious thought in this thread.

If voting mattered it would be illegal.

We can take comfort in our civil back patting/political debates while we get on the cattle cars . . .

**r-carpenter** · 01-28-2021, 10:35 AM

Originally posted by dwigle View Post

"Simple fact of ownership doesn't mean much. If Elon Musk will leg it (hypothetically because he never will) Tesla can technically become a worker owned cooperative. "

This is disturbing. So the person that created the company, planned, toiled, took personal and financial risk, left the comfort of a job and jumped into a new enterprise, providing jobs, revenue, taxes and forgive me, profit, is not relevant in your world? Why should Musk share ownership with anyone who is not a shareholder? Truly a socialist, communist, marxist, bassackward concept.

Let me clarify that. Within the framework of manufacturing the product, Elon's ownership means very little. Tesla is been made on the work floor, not with the waving of magic wand. Elon's main objective is to make profit, not to provide jobs. Labor is the expensive necessity. There for, automation.. which increases productivity as well as unemployment (in the capitalist economic system).
How do you mean Elon left the comfort of a job? Musk came out of a very wealthy family. Are you comparing small entrepreneur like myself to someone with multi-million $ back up?
In any event, your point was, what if the rich people will leave. (Atlas shrugged? ). The response to this is, Y and Z will drastically change but production of commodity can remain in tact. So, bon voyage.

Originally posted by dwigle View Post

Capitalism will make companies that outsource labor to china pay for their sins. This is a macro view, I know. I don't by Chinese goods or shop at Walmart if I help it.

You, not buying Chinese made products is anecdotal evidence. Your are hanging on the forum which is financed and maintained by the company making it's profit from selling majority of it's merchandise, manufactured in China, or Malaysia or another inexpensive labor country. It's not even a macro view but rather self delusion. Are you typing the response on the keyboard, made in China, looking at the monitor or phone, made in China? Seating on the chair, made in China?
This isn't personal attack at all. Many people try to relate small changes in personal behavior to global socioeconomic trends.
I remember then the rush to outsource labor to China started, the argument was: We are bringing less expensive goods to American consumer. It's too bad that consumer is becoming broke an unemployed because... the labor was outsourced. Going back to post #3.
Regardless, US is only a part of global market and capitalism not only will never make the companies pay for their "sins" but will reward them. Less labor costs, more profit, more funds for innovation, advertisement and so on. Companies grow bigger, compete and monopolize. It's actually kinda funny that recently the most powerful man in the world was hushed by a bunch of privately owned companies. There are fundamental issues with wealth concentration and monopolization of political influences. Don't think for a second that then corporations and 1% will get tiered of this annoying democracy, they will use the constitution for a windshield wipe. I mean, it's sort of been done already. Patriot Act and so on.
I am genuinely curious as to how you see things develop in the future.

**kevintomb** · 01-28-2021, 07:15 PM

One of the best comments I ever read was........

"If $15.00 hour is better, why not make it $25.00 hour?

Meant sarcastically, but it kinda explains WHY $15.00 is not really feasible nor will it help most people. Most companies really do not have extra money to do this, and EVERYTHING else will adjust to this new pay.

They will cut jobs and or hours, quit giving raises to everyone or get rid of people, or raise prices of products or a huge combination of all of this.

And what about the guy making $15.00 now, that took 5-10 years to get there? He gets nothing, but his job then becomes a crap job.

**dwigle** · 01-29-2021, 08:29 AM

"I am genuinely curious as to how you see things develop in the future."
I like to hear your version.

**dlr** · 01-29-2021, 06:29 PM

Not taking a stance, but this seems rather apropos given the topic. This is, of course, part of its competition with Amazon.

Walmart robots

dlr

**r-carpenter** · 01-30-2021, 09:23 AM

Originally posted by dwigle View Post

"I am genuinely curious as to how you see things develop in the future."
I like to hear your version.

I don't see anything cheerful and happy in the near future. We have snowballing process of monopolization in the economic sphere. You brought up car manufacturers and a good example of monopolization would be Volkswagen Group. Similar processes are going on in ISP, News service providers, Electronic equipment and software manufacturers. As I mentioned before, economic monopolization results in the monopolization of political influences. We use to have many companies pulling the economic blanket different ways. The tendency now is for much smaller number of people to pull the blanket in similar direction. The direction is of course to create favorable legal and economic framework for themselves. This simply means even more accelerated wealth migration to a decreasing number of financial elites, impoverishment of general population (middle class is almost gone already), less funds on social programs, infrastructure, schooling and so on. We are basically heading for Neo-fudalism or some sort of soft fascism where private entities are only represented by the State in the idealistic minds but really pull the string near direct in reality. If the resent example of American President just been muted over night by private companies isn't good enough, then I don't know what is. The times of free market capitalism, freedom of speech, political freedom, these are all going if not gone. The only factors that can possibly slow down or revers these processes is working class organizing and fighting for it's own interests regardless of race and culture. In theory it can save capitalism.

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OT anyone have any idea if the $15/hour minimum wage will impact our DIY hobby?

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