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  1. #1
    spoonitnow's Avatar
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    Default Right-to-work Laws

    Would someone please give me an argument against right-to-work laws? It seems stupid to me to force people to be fired for not paying to be a part of a club that they don't want to be in.
  2. #2
    "Right-to-work" laws are the ones that mean you can't exclude non-union workers right?

    Is this a personal question or for a debate of some kind? The obvious argument against them would be to go for the broader social benefit of having these unions; by making people join unions to get a job, you strengthen the union by increasing it's numbers and therefore it's power. The union can then bargain from a stronger position (making up somewhat for the company being in the naturally stronger position given it is the employer) and gain concessions from the company which it would not have been able to do without the same strength of numbers
  3. #3
    spoonitnow's Avatar
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    Okay, then my question would be that since the unions aren't the one doing the hiring, so why should they be able to get people fired for not being a part of the union? If someone doesn't want to be a part of a union, why is it fair for the union to get them fired for it?
  4. #4
    Because people will not join, despite the social benefits being larger than the individual cost of membership. People won't realise this as they are inherently selfish so regulation is required.
  5. #5
  6. #6
    reddit informs me MLK said right-to-work is bad, soooo if you think it's good yous a racist
  7. #7
    Quote Originally Posted by Pascal View Post
    I'm interested in learning more I really am but can you not come up with a prettier website. it's 2012 man.
  8. #8
    Quote Originally Posted by spoonitnow View Post
    Okay, then my question would be that since the unions aren't the one doing the hiring, so why should they be able to get people fired for not being a part of the union? If someone doesn't want to be a part of a union, why is it fair for the union to get them fired for it?
    can they actually get people fired? from the three seconds I've spent reading on it it sounded like the most a union can require is that you pay something towards the collective bargaining (which isn't allowed to be more than the union dues of a member), the rewards of which you are of course reaping.

    Are employers allowed to pay non-union-member employees less than union-member employees working alongside them?
  9. #9
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    I'm not really getting the question. Is there something you can link that says someone has been fired for not joining a union?

    The only way I can see this happening is if a non union contractor turns union which would require their employees to join, but this is almost always more beneficial to the worker so I don't think to many people are turning that down. Honestly I don't know why anyone would want to work non union given the choice.
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  10. #10
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    Quote Originally Posted by kiwiMark View Post

    Are employers allowed to pay non-union-member employees less than union-member employees working alongside them?
    Yes. Unions are implementing this as a strategy to be able to compete with non union contractors. Union wages are much higher than non union in most areas of the US so it's easier for non union contractors "under cut" the unions by bidding jobs at a lower cost. Which sounds like it's not a bad thing, bringing costs down, but one of the things that gets lost is higher skill level that comes with union apprenticeships. I mean, who do you want building your house? A skilled tradesman that went through 5 years of schooling or unskilled labor?

    *edit* I should also say I was organized into a union via this same strategy and think it's one of the best choices I've made in my life.
    Last edited by supa; 12-11-2012 at 08:13 PM.
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  11. #11
    spoonitnow's Avatar
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    Quote Originally Posted by Pascal View Post
    Because people will not join, despite the social benefits being larger than the individual cost of membership. People won't realise this as they are inherently selfish so regulation is required.
    And the point is that it's wrong to force them to give up that money or lose their job without their consent. It's theft regardless.

    As to the other:

    Before the Taft-Hartley amendments, an employee who ceased being a member of the union for whatever reason, from failure to pay dues to expulsion from the union as an internal disciplinary punishment, could also be fired even if the employee did not violate any of the employer's rules.
  12. #12
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    Quote Originally Posted by Pascal View Post
    Also, did you seriously just reference the most pro-union website ever?

    I don't dislike you nearly as much as I've joked about before, but come on.

    "Better Wages Not Lower Wages!"

    But what if the wages are higher than they need to be for a company to be profitable? GG HOSTESS
  13. #13
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    Unions, IMO, are fine as long as they emerge voluntarily and aren't backed by any government. Basically every government intervention on employment has not only been destructive to the economy, but ultimately has worsened the problems they have meant to alleviate.

    Governments being the concentrated knowledge of relatively few people, they do not have the nearly infinite expertise that millions in the market have in determining the value of labor. There's no such thing as a "fair" wage or a "living" wage. The price of labor is (or should be) determined in the same way as the price of silver, bananas, coal, or any other inanimate object.

    That said, again, I see no problem with people voluntarily coalescing into unions to argue for their own self interest and apply social pressure to employers. They should have the freedom to do that, and employers should have the freedom to make their own choices as well.
  14. #14
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    Artificially setting minimum wages, as in union wage minimums or national laws, has an effect of helping the few seen at the expense of the many unseen.

    Say Hostess is trying to sell pastries in a free market. Bakers elsewhere in the country are being paid around 10 dollars an hour and there's a moderate supply of that type of labor so they offer 10 dollars and hire 15 bakers at that wage. So $150/hour in labor cost and 15 people are employed. Hostess further spends $50/hour in basic capital for production (machinery factories etc). $200 an hour and that produces $225 worth of twinkles, creating $25 profit for Hostess. Keep in mind that the $25 figure is constantly driven down by competing companies like Little Debbie, who will try selling an identical Twinkie clone for a lower price.

    Now say a bakers' union or minimum wage law forces Hostess to pay $15/hour instead of $10. Hostess has two ways of responding to this:

    1) Hostess can resist lowering its prices by pumping capital into higher productivity bakers. Instead of $50/hour on machinery, it spends $100. Then instead of hiring 15 bakers, it hires seven. These new $15/hour bakers are able to produce more than 2x as many Twinkies as the previous. $105/hour labor, $100/hour capital, half as many people with gainful employment, and the cost of Twinkies just went up a couple points.

    2). It can simply raise the price of Twinkies dramatically. This obviously will only work in a game-theoretical sense if other pastry companies don't choose option 1 (not likely).

    So the displaced bakers are the victims, as is the overall economy. But you are likely to only see stories about the awesome fair pay that those 7 bakers are getting.
  15. #15
    Quote Originally Posted by spoonitnow View Post
    Also, did you seriously just reference the most pro-union website ever?

    I don't dislike you nearly as much as I've joked about before, but come on.

    "Better Wages Not Lower Wages!"

    But what if the wages are higher than they need to be for a company to be profitable? GG HOSTESS
    I figured you wanted someone/something to argue against so was just trying to help. I had no idea before I even opened this thread what Right-to-Work laws are
  16. #16
    Unions are overrated.

    This supposed "social benefit" that Pascal keeps referring to is hardly something that is true in every scenario. I'd argue that unions more often than not result in inefficiencies and inflated wages (i.e. given the responsibilities and duties of the position, and compared to other similar positions in other markets) that are hard to justify and difficult to sustain.

    Anyway, we can't always (or, ever) count on employers acting in a more or less benevolent fashion, so it's of course important to keep them in check in some way. Unions do fill that role, but it seems to me they have a tendency to overstep their bounds, ask for too much, and ultimately result in lowered productivity due to lost work days and even possibly lower overall employment levels (see: Hostess).

    So to get back to what you were saying, spoon, I'm in agreement that one should be able to choose not to join a union and not face any repercussions. I've not really studied the dynamics of these types of situations however; I'm sort of defaulting to this due to my stance on unions in general.
  17. #17
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    I agree with everything Renton and Penneywize have said on this in the few posts above, and thank you Pascal for helping me to stir the shit on this forum you manage.
  18. #18
    Unions were created because of unfair wages and unsafe conditions. With the government watching over those things now, unions are no longer necessary-most industries that are union can no longer compete with non union shops because of the unreal wages and forever benefits.

    when 2000 people show up for one post office, general motors, or government opening, you are paying too much. Unrealistic retirement and medical benefits are crippling union companies.
  19. #19
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    Without collective bargaining the Gov't will eventually get rid of all the rights unions fought to get us in the first place. If you don't believe that you are seriously fucking delusional.
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  20. #20
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    THERE ARE NO UNFAIR WAGES. If a job is paying 2 dollars an hour, that is a reflection of the fact that way too many people are vying for that job. Raising the minimum wage to 8 dollars an hour just causes employers to hire 1/4 (or much less than 1/4) as many of those people and they usually pick them in discriminatory ways (see the black unemployment rate in America). Employers should pay employees the least possible amount they can to keep costs down and minimize the prices of goods and services in the economy, and employees should actively seek better options. It is the combined vigilance of the employee and employer that correctly determines the price of labor, there is no "fair."

    Unsafe working conditions is a more nuanced problem because who is to say what an unsafe condition is? I think most of us can agree that a factory with over 110 degree fahrenheit temperature is unsafe for workers but what should it be? 90? 80? Room temperature? Even child labor laws are very debatable. If third world countries made it illegal for underage 16 to work, starvation and poverty would skyrocket in those countries. Laws decreeing what conditions the workers should have tend to create better conditions at the expense of insane amounts of building codes and red tape that make starting or running a business in America one of the riskiest and most expensive endeavors in the world. I'm not saying there shouldn't be laws, but find some middle ground.
    Last edited by Renton; 12-13-2012 at 01:05 AM.
  21. #21
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    Ah economics. Where assumptions go unvetted and conclusions need to be screamed.
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  22. #22
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    Quote Originally Posted by Renton View Post
    THERE ARE NO UNFAIR WAGES. If a job is paying 2 dollars an hour, that is a reflection of the fact that way too many people are vying for that job. Raising the minimum wage to 8 dollars an hour just causes employers to hire 1/4 (or much less than 1/4) as many of those people and they usually pick them in discriminatory ways (see the black unemployment rate in America). Employers should pay employees the least possible amount they can to keep costs down and minimize the prices of goods and services in the economy, and employees should actively seek better options. It is the combined vigilance of the employee and employer that correctly determines the price of labor, there is no "fair."
    Aren't you saying that any wage is a fair wage? If that wage is the resultant of two largely opposing forces on the same plane, seems fair to me.

    Besides, all's fair in business.
    Last edited by a500lbgorilla; 12-13-2012 at 06:56 AM.
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  23. #23
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    So what can unions do to compete for membership now that dues-paying is not compulsory?
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  24. #24
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    Quote Originally Posted by a500lbgorilla View Post
    Aren't you saying that any wage is a fair wage? If that wage is the resultant of two largely opposing forces on the same plane, seems fair to me.

    Besides, all's fair in business.
    Yes, any time two people agree to trade goods and/or services, not only is it a fair trade, but theoretically both parties gain because they each value what they are getting back more than that which they are trading.
  25. #25
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    Quote Originally Posted by Renton View Post
    Yes, any time two people agree to trade goods and/or services, not only is it a fair trade, but theoretically both parties gain because they each value what they are getting back more than that which they are trading.
    Assuming everyone is well and fully informed.

    I doubt that's always true. But what do I know?

    Hell, it may even require perfect knowledge.

    Like when buying a house instead of renting requires a good sense of markets and years-on plans. Any trade of a home for capital prior to the crash without an expectation of it is probably not a trade which enriches all sides.
    Last edited by a500lbgorilla; 12-13-2012 at 02:00 PM.
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  26. #26
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    Quote Originally Posted by a500lbgorilla View Post
    Assuming everyone is well and fully informed.

    I doubt that's always true. But what do I know?

    Hell, it may even require perfect knowledge.

    Like when buying a house instead of renting requires a good sense of markets and years-on plans. Any trade of a home for capital prior to the crash without an expectation of it is probably not a trade which enriches all sides.
    Someone looking to find a job should have a decent idea of what others are being paid for the same work. I think it hardly requires perfect knowlege. Failing that, employers will want to outbid each other for labor once supply meets demand, a naturally occurring thing in a free market as people unwilling to work for the going rate move on to other fields.

    Your real estate example doesn't quite apply to this because the housing crash was mainly caused by government meddling into interest rates and hugely incentivizing home-buying with policy. Also the banks which lent the subprime loans did so knowing full well that they would be insured against such risks by the fed and bailouts. Without those government interventions, the loans wouldn't have been lent in the first place and there would have been far less incentives to create such a housing bubble.

    That said, your problem of ignorance among traders is a real one, but that's one of the costs of liberty. The simple fact is that there's not absolute intrinsic value in anything; value is in the always in the eye of the beholder. Any attempt by the government or a union to estimate the value of something is gonna be far less accurate than a price coordinated economy would be. The same object can even be more valuable depending on who has it. The same LCD TV is worth more in the hands of Best Buy than it is in the hands of Sony, because Best Buy has a store to sell it from and Sony only has warehouses.
  27. #27
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    Quote Originally Posted by Renton View Post
    Yes, any time two people agree to trade goods and/or services, not only is it a fair trade, but theoretically both parties gain because they each value what they are getting back more than that which they are trading.
    Renton, most of your posts I've read of yours are brilliant, poker related or not.

    But this statement is an assload of cumdump.

    Millions of people go to work everyday knowing they aren't making what they're are worth. Some of them might be wrong but that doesn't change the wrongness of this statement. If someone takes a job at a rate lower than they feel like they are worth it doesn't necessarily make it a fair trade. In many situations it's purely the employers' taking advantage of a situation at the expense of the employee.

    In 2009 I broke my leg in a motorcycle accident which put me out of work for a year. I had disability to fall back on but when I was released back to work I had to take the first thing I could find just to keep food on the table.

    I 'agreed' to work at a wage that was about 50% less than what I was used to making. For that matter it was less than I was making in 2000. We both knew I was worth more than he was paying me and we both also knew he could take advantage of the situation I was in. I made him a bunch of money and saved him even more.

    My point is you can't call something fair when one party has an advantage over the other. When the school bully beats up the scrawny little kid do you think that's fair?

    How many millions of people go to work everyday with this disadvantage? They have no muscle to fight the bully.
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  28. #28
    I'm prepared to go all out econ-tard up in this thread but I figured I'd spare you guys and just say that Renton is pretty much right.

    Gains from trade theory largely supports what he's saying, then again this 'theory' is based on assumptions that help abstract from the real-world - assumptions like the existence of complete markets, rational consumers, strictly increasing utility functions and whatnot.

    Regarding wages, I'd say that enough distortions exist that people do get "underpaid" in many situations. Sticky wages (i.e. wages not adjusting to external factors quickly enough due to contracting and regulations), irrational consumer / worker expectations (like Supa said, some people "believe" they're worth more than they're being paid, and so might "hold out" for better offers even though none are forthcoming), trade tariffs and market imperfections, to only name a few, could have impacts on wages, in addition to the traditional effects of supply and demand... And probably a bunch of other shit I'm failing to mention too.

    Is a given wage "fair" or not? Sometimes yes and sometimes no, but mostly yes. Consider that most people can leave their job to search for a better opportunity if they feel they're underpaid. If they find a higher-paying job, you could make the argument that they were underpaid in the first place. If they don't, then isn't it correct to say that their sentiment was unfounded in the first place?

    Oops, I went all econ-tard up in this thread after all. Fuck.
  29. #29
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    Quote Originally Posted by supa View Post
    Renton, most of your posts I've read of yours are brilliant, poker related or not.

    But this statement is an assload of cumdump.

    Millions of people go to work everyday knowing they aren't making what they're are worth. Some of them might be wrong but that doesn't change the wrongness of this statement. If someone takes a job at a rate lower than they feel like they are worth it doesn't necessarily make it a fair trade. In many situations it's purely the employers' taking advantage of a situation at the expense of the employee.

    In 2009 I broke my leg in a motorcycle accident which put me out of work for a year. I had disability to fall back on but when I was released back to work I had to take the first thing I could find just to keep food on the table.

    I 'agreed' to work at a wage that was about 50% less than what I was used to making. For that matter it was less than I was making in 2000. We both knew I was worth more than he was paying me and we both also knew he could take advantage of the situation I was in. I made him a bunch of money and saved him even more.

    My point is you can't call something fair when one party has an advantage over the other. When the school bully beats up the scrawny little kid do you think that's fair?

    How many millions of people go to work everyday with this disadvantage? They have no muscle to fight the bully.
    The bully analogy is curious because 1) it doesn't really apply since direct coercion isn't involved in the employee-employer relationship and 2) forcing an employer to pay unskilled surplus labor a minimum wage is bullying on a grand scale.

    Yes, there are situations where people are desperate for employment and they are effectively forced by circumstance to take a poorly paying job. But the circumstances are to blame, not the employer. These unfortunate people are far better off to have the job at the shitty wage than the alternatives.

    Let me depart from your personal example to third world countries, where this exists on a much grander scale. I'm in Cambodia right now, and generally the salary for unskilled labor here is 80-100 dollars a month. That's 80 dollars a month for working 8-10 hours a day, six days a week. Now, that sounds pretty bad, but its actually worse than it sounds because goods aren't particularly cheap here like in other S.E. Asian countries. But, its a reflection of the fact that there's no middle class and 90% of the labor force is uneducated, unskilled, and surplus. If the Cambodian government proposed a minimum wage of 250 dollars a month in order to try to build a stronger middle class, over half the country would be fired immediately and resort to even more desperate means of earning money, like prostitution or petty crime.

    Your specific circumstances devalued your labor substantially, if temporarily. The value of your labor is the amount of money you can bargain it for, no less. Your employer might have been making a lot of money with your labor at that precise point in time but he might previously have run his business at a loss during a non-peak time, or he might be carrying a large debt that he used to start the business. Employer profits and employee wages are silly to compare because they involve vastly differing amounts of risk.
    Last edited by Renton; 12-13-2012 at 11:04 PM.
  30. #30
    Quote Originally Posted by supa View Post
    Without collective bargaining the Gov't will eventually get rid of all the rights unions fought to get us in the first place. If you don't believe that you are seriously fucking delusional.
    While collective bargaining is still necessary to protect certain interests and economic standards for individuals, this is a pretty heavy-handed statement. Unions were far more necessary in the absence of a fully mature and accessible legal system. That machine is now too well oiled and Americans far too litigious to allow reversion back to when employers were able to employ toddlers and kill their employees without recourse.
  31. #31
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    Quote Originally Posted by BennyLaRue View Post
    While collective bargaining is still necessary to protect certain interests and economic standards for individuals, this is a pretty heavy-handed statement. Unions were far more necessary in the absence of a fully mature and accessible legal system. That machine is now too well oiled and Americans far too litigious to allow reversion back to when employers were able to employ toddlers and kill their employees without recourse.
    Standard argument and I disagree. Mitt Romney said he wanted to make the US the most appealing place in the world to do business. In order to do that you'd have to drive down wages to below poverty level for just about everyone. His first action towards doing this would be to repeal the davis bacon act. What would make him stop there. The snowball effect could be devastating to workers.

    Obv arguments against the davis bacon act are obv.
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  32. #32
    Mitt Romney isn't President, wouldn't have been able to auto-repeal the Davis-Bacon act if he were and the obvious next step after that if he was President and was able to have the Davis-Bacon act repealed wouldn't be a path to be able to employ toddlers and kill employees without recourse. Your argument is unrealistically extreme and assumptive. Let me follow. It's like saying Michelle Bachman is going to kick all the immigrants out and then, ldo, kill Mexicans next. She can't, isn't, and would never be able to.

    If anything, the right to collective bargaining makes the most sense with Public workers. I don't disagree with that - the Government needs to be kept in check even despite my earlier points so legislation isn't abused. My point is that the legal environment we're in today, where individuals can freely sue employers with frequent success, is going to protect some of the basic human rights that have been established. These were established partly with the help of unions but now the lawyers are like, hey, we got this.
  33. #33
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    I'm not trying to espouse the conservative point of view that poor people are worthless parasites, even if that's how it sounds. Wage controls don't counteract poverty in any way, it simply distributes the scarce resources in a more concentrated way which SEEMS to prevent poverty. Prices of labor in a price coordinated economy are reflective of that underlying scarcity which exists regardless of policy, the policies only seek to distribute the resources in a less equitable way; that is, to the few lucky folks who are able to score the fewer jobs which will exist under wage control than the alternative.

    Almost every price control gives concentrated benefits in exchange for dispersed costs. That is, they help a few people tremendously at a smaller cost to many others. While those few people are in a much better financial position thereafter to lobby for their causes, there is more at stake for them individually as well. The costs may be distributed so subtly to everyone else that they do not even notice them, but the costs always exceed the benefits to the overall economy, usually by a large margin.
  34. #34
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    Renton and Benny are 100% correct. Supa, i know you said you are in a union, and your bias is clouding a pretty 1 sided argument.
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  35. #35
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    Quote Originally Posted by supa View Post
    I 'agreed' to work at a wage that was about 50% less than what I was used to making.
    Your quotes around agreed are hilarious. Either you agreed or you didn't. You're acting like it wasn't your choice.

    Quote Originally Posted by supa View Post
    My point is you can't call something fair when one party has an advantage over the other.
    So it's unfair that people who study poker have an advantage over people who do not? Everyone's a snowflake!
    Last edited by spoonitnow; 12-14-2012 at 12:00 PM.
  36. #36
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    Quote Originally Posted by bode View Post
    Renton and Benny are 100% correct. Supa, i know you said you are in a union, and your bias is clouding a pretty 1 sided argument.
    Untrue. I worked non union for 17 years before joining. I felt the same way then as I do now.
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  37. #37
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    Quote Originally Posted by bode View Post
    Renton and Benny are 100% correct. Supa, i know you said you are in a union, and your bias is clouding a pretty 1 sided argument.
    Well, we should also be clear. Renton seems very faithful to free markets.

    Though there's a best answer, it's very unlikely anyone has the right answer. Penney said it, these are conclusions drawn from models which are abstractions of reality. The differences between their method and the scientific method is the experimental method.

    You can't mock up a model economy and run trial. We only have all of the real economies running today which are each buffeted by outside forces.

    So whilst I agree one side seems very sensibly positioned in their opinions, let's no go so far as to say they're 100% correct.
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    Quote Originally Posted by a500lbgorilla View Post
    So what can unions do to compete for membership now that dues-paying is not compulsory?
    And this still seems like the most pertinent question, to me. If your state goes right-to-work, how do you move forward? Other than trying to undue it legally, what do you do to position yourself to grow? Union You.

    That's all I'm interested in. I have no real opinion about right-to-work because I only heard about it when the 24th state turned over and I've never been bothered with any of it.
    Last edited by a500lbgorilla; 12-14-2012 at 05:23 PM.
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  39. #39
    Don't lump me in with Renton, you big lumpers. I'm not all for the free market. I'm also not anti-union.

    I'm anti-absurdity-disguised-as-a-reasonable-position.
  40. #40
    Reton, etc:

    Do free markets lead to a concentration of wealth?

    If you were an operator in a powerful industry which employed physical coercion, but no longer was capable of doing so, how would you adapt?

    "Comparing employer profits and employee wages is unfair, because the employers took on risk to secure those profits." Correct me if I am wrong, but this seems to be a position taken by the right-to-workers. If this is the case, am I wrong to infer that you think there is a fair amount of profit for the employer?
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    Quote Originally Posted by spoonitnow View Post
    Your quotes around agreed are hilarious. Either you agreed or you didn't. You're acting like it wasn't your choice.
    Yes, I had a choice. Wait around a couple of weeks (or months) and try to dig up something better or take the job and not be homeless. I don't blame the guy cuz he's a douchebag and did what douchebags do. When I told him I was leaving he offered me what I asked for in the first place. I told him to go fuck himself.

    Quote Originally Posted by spoonitnow View Post
    So it's unfair that people who study poker have an advantage over people who do not? Everyone's a snowflake!
    I have a hard time finding the correlation between choosing to play poker and choosing to work. Beyond that I never really think it's unfair to anyone that doesn't get off their asses and do work.

    More story of me:
    Early in my trade I decided if this was what I was going to do I was going to do it well. So I studied. Read code books and studied motor controls and shit which gave me a huge edge over people I worked with. Now, if I go to work for a new company I'm usually promoted fairly quickly, which tends to make people who have been there for a while think it's unfair. These people are usually pretty lazy and not only don't have the knowledge I have but usually don't have the production at the end of the day I do either. Is it unfair that they don't get the promotion and the raise that comes with it when really all they do is open up pokerstars and sit at a table without studying any form of strategy?
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  42. #42
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    Quote Originally Posted by boost View Post
    Reton, etc:

    Do free markets lead to a concentration of wealth?

    If you were an operator in a powerful industry which employed physical coercion, but no longer was capable of doing so, how would you adapt?

    "Comparing employer profits and employee wages is unfair, because the employers took on risk to secure those profits." Correct me if I am wrong, but this seems to be a position taken by the right-to-workers. If this is the case, am I wrong to infer that you think there is a fair amount of profit for the employer?
    1) Probably, but anytime anyone makes a shitload of money in a free market, he got that money as a result of providing something that many people wanted or needed, often making a lot of money for a lot of people in the process, and often elevating the standard of living for a lot of people in the process. There is a real issue of limiting the power of these people AFTER they've made the money to lobby the government for their own benefits, but the answer is limiting government's ability to intervene in markets and limiting money's ability to influence politics. The answer is not making it more difficult for people to make money.

    All that said, the wealth gap argument is not super strong, many studies show that the rich get richer and the poor get richer even faster in the freer markets that exist in the world.

    2) I don't understand the question. I guess I'd close the business if coercion was a key part of the business model?

    3) I don't see why it would help labor rights arguments to take that position. I didn't say it was unfair, I said it was absurd. Wages and profits are completely incomparable.

    Yes you are wrong to infer that. There is no fair amount of profit just like there is no fair wage. Profit is a signal to start a business, and an incentive to run a business, nothing more. Wherever the potential for great profits exist, entrepreneurs, investors, and speculators will saturate that market until the profit potential is so low that there are better places to invest. Since profit is such a variable figure, and there is the constant threat of competition, there is a tremendous amount of risk in free markets. Capitalism isn't pro-business at all, its pro an environment where businesses constantly compete for innovation, quality, and lower prices.
    Last edited by Renton; 12-15-2012 at 12:06 AM.
  43. #43
    meh, the argument just seemed terribly one sided, so I figured I'd ask some questions. Maybe they weren't the greatest. I am of no authority to really offer a solid argument either way.

    You do make a good argument for wealth disparity not being the real issue, but instead the policy influence that wealth is capable of buying being the problem. It definitely sounds good, but if left unchecked I worry that the concentrated wealth would still find it's way into the political realm. I would have less of a worry if inheritance tax was very steep.
  44. #44
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    Anti-capitalist arguments tend to revolve around a few basic fallacies:

    1) That economics is a zero sum game where every trade results in one's loss to another's gain. We've covered this in this thread already the fact that new wealth is often created in a trade.

    2) That capitalism revolves around exploiting the poor. This can be easily debunked by studying India and China, which are rapidly being pulled out of poverty as their governments embrace free markets. India in particular is interesting because some areas of India still cling to the same protectionist policies of the past and are in desperate poverty compared to the provinces that are allowing foreign investment and entrepreneurship.

    3) That people who earn income from capital gains and investments are not producing anything of value, and only skimming from the proceeds of hard manual labor. This is easily debunked but takes more time than I feel like devoting. Suffice to say that investors and speculators are extremely important to modern capitalism and countries with poorly developed financial sectors are having a much harder time growing their economies.
  45. #45
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    I really enjoyed reading Renton's posts in this thread. +1 To just about everything he's said.
  46. #46
    my uncle was a trade union boss, that was a good job, you do nothing, and get aid for that, better than poker. But I don't mean to say there's no point in being a member for an employee, dude, everybody is, why do u wanna be different?
  47. #47
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  48. #48
    Quote Originally Posted by supa View Post
    More story of me:
    Early in my trade I decided if this was what I was going to do I was going to do it well. So I studied. Read code books and studied motor controls and shit which gave me a huge edge over people I worked with. Now, if I go to work for a new company I'm usually promoted fairly quickly, which tends to make people who have been there for a while think it's unfair. These people are usually pretty lazy and not only don't have the knowledge I have but usually don't have the production at the end of the day I do either. Is it unfair that they don't get the promotion and the raise that comes with it when really all they do is open up pokerstars and sit at a table without studying any form of strategy?
    You're advocating pay-for-performance here. Maybe you're not the unionist you think you are.
  49. #49
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    Yeah the thing about wage controls is that they only really help those who are lower than average productivity. If you are a high productivity worker in a free market, companies will pay you more than the average productivity worker because they don't want to lose you to competitors who will outbid them. Only when they are forced to pay an inflated wage to those of mediocre productivity can they not afford to do that.
  50. #50
    Quote Originally Posted by BankItDrew View Post
    I really enjoyed reading Renton's posts in this thread. +1 To just about everything he's said.
    I'd also add I've probably learned more from FTR than anyone besides the few people closest to me. So thanks FTR!


    One more common anticapitalist argument for you guys: the free market undervalues natural capital in the distant future (I'm referring to discount rate). I assume most companies would rationally chose probable profits in the short-medium term for potential profits 50-100 years in the future. This makes me want to see governments more involved in the consumption of raw materials by businesses for the sake of future generations.

    I realize this is only a problem if you assume most resources aren't easily substitutable for one another, and that there is an absolute scarcity of low-entropy natural capital.

    I'm hoping you have a solid free market response to this problem so I don't have to worry as much about the future
    Last edited by Vi-Zer0Skill; 12-18-2012 at 03:49 PM.
    Quote Originally Posted by Carroters
    Ambition is fucking great, but you're trying to dig up gold with a rocket launcher and are going to blow the whole lot to shit unless you refine your tools
  51. #51
    I realize the government would be relying on imperfect information about the exact quantities of the resource that is economical to extract in order to decide how much of each specific resource to allow to be used in production in a given year. But so is the market!

    What I've been taught about free markets leads me to believe they'd be the entity more likely to 'overshoot' and use an unsustainable amount of a resource, whereas the government would be more likely to under allocate -- thus being more likely than free markets to sustainably consume that resource.

    just had to add that
    Quote Originally Posted by Carroters
    Ambition is fucking great, but you're trying to dig up gold with a rocket launcher and are going to blow the whole lot to shit unless you refine your tools
  52. #52
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    Quote Originally Posted by Vi-Zer0Skill View Post
    I'd also add I've probably learned more from FTR than anyone besides the few people closest to me. So thanks FTR!


    One more common anticapitalist argument for you guys: the free market undervalues natural capital in the distant future (I'm referring to discount rate). I assume most companies would rationally chose probable profits in the short-medium term for potential profits 50-100 years in the future.

    The market undervalues it because it has less value. It is well established that X amount of dollars now is worth MUCH more than X amount of dollars 50-100 years from now, not counting inflation. And the market is remarkably better at foresight than governments are. If there is a potential to win big on a long term investment, plenty of savvy investors are gonna jump on that.

    This makes me want to see governments more involved in the consumption of raw materials by businesses for the sake of future generations.

    I realize this is only a problem if you assume most resources aren't easily substitutable for one another, and that there is an absolute scarcity of low-entropy natural capital.

    There are different types of scarcity in natural resources. The planet is extremely abundant with oil, coal, iron, aluminum, etc. The scarcity lies in the cost of finding and extracting these resources, not in the absolute amounts of them. People on the left confuse these two things. As an example, if oil is selling for 50 dollars a barrel, the only oil which we are going to drill for is the stuff that can be found and extracted for <50 dollars a barrel. Anything that is more difficult and costly to extract might as well not exist. That is, until the price of oil goes up to 51 dollars. The prices will distribute the scarce resources to their most valued uses, and as these prices increase, conservation and substitution will happen.

    I'm hoping you have a solid free market response to this problem so I don't have to worry as much about the future
    .
  53. #53
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    Quote Originally Posted by Vi-Zer0Skill View Post
    I realize the government would be relying on imperfect information about the exact quantities of the resource that is economical to extract in order to decide how much of each specific resource to allow to be used in production in a given year. But so is the market!

    The government would be, in effect, a small group of fairly knowledgeable people deciding how to distribute resources to millions of businesses. The market conversely would be the resource extraction industry, which knows more about extraction than the government, the refinery, which knows more about refining, then distributor, which knows more about distributing, you get the idea.
    When everyone's financial ass is on the line, the resource gets distributed to the people who want it most, with very little waste or misallocation, in a non discriminatory system. Governments are more likely to misallocate, sell for the incorrect price, and distribute in a non equitable way to cronies.



    What I've been taught about free markets leads me to believe they'd be the entity more likely to 'overshoot' and use an unsustainable amount of a resource, whereas the government would be more likely to under allocate -- thus being more likely than free markets to sustainably consume that resource.

    I sort of already covered this, but the price of a resource not necessarily the price of extracting it. Everything has whats called present value which is basically taking into account the future in the value of something. For example, if a lot in a nice neighborhood gets zoned for a sewer treatment center, the prices of houses all plummet before the ground is even broken for the project. The present value of the houses decreased. If enough experts publish enough reports suggesting that we are approaching the finite limits of oil extraction worldwide, the oil that is currently sitting in barrels will skyrocket in price, even if it was relatively cheap to extract.

    just had to add that
    .
  54. #54
    Thanks Renton. I've wanted to have a thorough, intelligent dialogue about this subject with someone who holds different opinions than mine for quite some time.

    I think I did a poor job explaining myself in the first paragraph. What I was getting at is that the market will rationally chose profit optimization even if it comes at the expense of society as a whole. The social costs of capitalist economies operating under this paradigm haven't outweighed the social benefits for most of the past 200+ years, because the externalized pollution and resource depletion costs were minimal relative to the global ecosystem. I think at this point in history that is no longer the case (again, this is informed by my Environmental Studies curriculum and outside reading by academic scholars in the field). Unless all (or nearly all) externalized environmental costs were absorbed by the market, the market won't get the signal to change its behavior until the social costs are exceeding the social benefits. At which point society at large loses.

    I am aware that the first scarcity we would run into with fossil fuels is when the price of extraction becomes greater than the market value of the resource. I think you made a strong argument that individual firms are forward thinking in protection of their own self interest, and as far as I know there remain lots of oil, coal, and natural gas deposits available for exploitation so economic growth doesn't have to slow down considerably because of a diminishing supply of those resources. Of course there are likely to be environmental repercussions (and therefore social costs) to continuing business as usual -- if these costs were being accounted for by the market I think we'd have a lot less to worry about!

    Definitely debatable whether the government, with a much smaller pool of knowledgeable individuals, could make a better decision about the scale and distribution of resources in the broader economy. And the cronyism aspect of leaving decisions about how much natural capital to consume and to whom it will be allocated is possibly an irreconcilable problem. I'd like to know what you think of cap and trade as a market based approach to dealing with pollution costs and resource use.

    I think somewhere earlier you wrote that what we need most isn't to hand greater power to either the market or the government, but a greater separation of their power. And I totally agree with that
    Last edited by Vi-Zer0Skill; 12-19-2012 at 02:21 PM.
    Quote Originally Posted by Carroters
    Ambition is fucking great, but you're trying to dig up gold with a rocket launcher and are going to blow the whole lot to shit unless you refine your tools
  55. #55
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    Quote Originally Posted by wufwugy
    Those aren't the only two options. By far the best model we've ever seen for boosting an economy is one that pays employees enough to purchase what they produce. But this has never been a popular idea among those who fancy themselves modern day royalty, so it gets pushed under the rug as much as possible, and we end up believing false ideas about how we need extremely cheap labor and executives need enormous vaults of profits. This globalized trade model you're describing is actually extremely inefficient and is really just slave wages for producers and purchases on credit for consumers, all of which is meant for maximum profits for the "owners".
    People with your mentality only see the massively successful and profitable businesses that are on the top side of variance at a given moment. Business is an extremely risky endeavor, and just as profits are the incentive to start and run businesses, losses are an ever present threat. It's very easy to get the people on your side when you mention the huge salaries and bonuses that executives get, but the truth is that is a drop in the bucket when placed next to the other costs these businesses have, the largest of which is always the cost of labor.

    The "owners" of these businesses deserve the profits they make because investing in a business, like speculating with a small pocket pair in Texas Hold'em, is a bet which requires implied odds. Most upstart business fail, and only a small percentage are successful enough to make up for the lost speculative bets made prior.


    By far the best model we've ever seen for boosting an economy is one that pays employees enough to purchase what they produce.
    Please explain this sentence, because I feel like I'm completely missing the point of it. It seems laughably absurd to me but I don't want to condescend.
  56. #56
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    Quote Originally Posted by kiwiMark View Post
    Conversations about sweatshops should include the fact that oftentimes these people are forced into the city in search of jobs because their traditional rural way of life gets fucked in the ass by more developed countries coming in and destroying, poisoning and whatnot land in an effort to get at natural resources.
    I can tell you from multiple anecdotes that at least in Cambodia, this is not the case. Outside of a couple major cities, Cambodia is vast countryside, and people are flocking to Phnom Penh to make as little as 50-100 dollars a month. The agricultural way of life sucks a massive dick. These people don't have the basics, electricity, running water, medicine, etc.

    There are also strong arguments that while some economies were able to move through the "sweatshop phase" if you want to call it that and use industrialisation to pull up their economies, they were only able to do so by in turn fucking over more periphery countries - ie that this kind of "solution" only works if you're able to exploit even more disadvantaged countries and therefore it's not possible to use it as a way to pull everybody out of poverty, but rather just furthers the core/semi-periphery/periphery system.
    So yeah, after the capitalists get through "fucking over" India into making it the 3rd biggest economy in the world, they'll fuck over Burma into being massively successful compared to the hell on earth shithole it is now. I hope they fuck over Chad and Somalia after that.

    If you're accusing leftists of being too negative, you're being in turn far too positive. Sexual abuse and other such fun stuff has been shown to be rampant in many sweatshops,
    Again, the countries should enforce laws against rape, but leftists want them to go ten steps farther and pay these people more than they are worth.

    and it's common that people are paid below a living wage - ie. that the wage isn't just low in terms of dumb "wow that's not many of my dollars, they couldn't even get a cheeseburger from my local McDonalds here in America for that!" thinking, but also it's too low for them to survive off. This leads to people working ridiculous hours to half-survive, which in turn takes employment out of the hands of other people since those hours are no longer available. inb4 you again come back with "well they're being forced to choose between sucking a big fat dick or taking it up the ass until it bleeds or dying and they choose sucking dick, so sucking dick must be alright for them".
    It's just reality dude. Wages are what they are and nothing can change that. If governments impose wage controls, unemployment, poverty, and crime will skyrocket, as will the prices of goods and services. The purchasing power of money will in turn plummet, and then these people are far more fucked than if they were hired at price-coordinated wages in a free market.

    Are all sweatshops like that and is the concept of a sweatshop inherently bad? Absolutely not, but that doesn't mean you can make a sweeping statement that all sweatshops are helping and that leftists just don't get it.
    Sweatshops, in general, are helping and the leftists just don't get it. I bought a toothbrush in a Thai gas station a few weeks ago for 9 baht, which is about 30 cents. Colgate made and packaged a toothbrush in a factory, shipped it hundreds of miles to a 7/11, where it sat in inventory for probably weeks before being sold for 9 baht. This was enough to cover the wage of the workers producing it, the boss supervising them, the director supervising him, and contributed in small part to the dividends to Colgate shareholders and bonuses to the executives. It was also enough to cover 7/11's markup.

    The more important factor here though is that the poorest people in Thailand can afford a toothbrush thanks to this system, which keeps the prices of life supporting goods at an ever decreasing level for the poorest among us, while employing the maximum amount of people at a wage determined simply by supply and demand.
  57. #57
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    Quote Originally Posted by !Luck View Post
    Your arguments about labor revolve around the fact that Wuf believes human life is precious, while other value it less. You will never agree.

    No way. If I could wave a magic wand and pay everyone on the planet a living wage without the economic ramifications of that (a massive decrease in the purchasing power of money which would effectively be the same as runaway inflation) but I can't. Wage controls have been proven time and time again to be massive economic failures that worsen the problems they intend to mitigate. People who support wage controls are making a decision that "some life is precious and most life is worth absolutely nothing." People who support price-coordinated wages think that everyone of the same productivity level is worth the same amount.
  58. #58
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    Quote Originally Posted by MadMojoMonkey View Post
    "Suffering, starvation, and scarcity is the default state of humanity."

    I strongly disagree on the use of the word humanity. I've been taught that it is not humanity, but civilization which is the root of these deprivations.

    Before the rise of cities, humans had longer life expectancy (longer than most civilized societies today, even), better nutrition, less disease, more egalitarian social roles, etc.

    The hunter/gatherer cultures that still exist today are a stunning counter-example to the civilized way of life.

    Hunter/gatherers spend only about 2 - 3 hours per day "working". Most of their time is spend relaxing with each other.
    This is all so wrong. There may have been a temporary dip in life expectancy during the beginning of the industrial revolution, but the technological advances that came in its wake quickly drove the figure off the charts.

    Hunter gatherer cultures spent far more than 2-3 hours per day working. Also, these communities spent nearly 100% of their productivity on gathering food. They had little or no man-hours to devote to philosophy, scientific study and experimentation, or innovation. The people who were not physically able to procure food for themselves were left behind and died off.

    In fact, there is a great case made for why the Europeans, Middle Easterners, and Chinese of ancient times had such a massive advantage over other societies which led to their dominance over these societies. The temperate climates of Europe, China, and the Fertile Crescent were some of the only places in the world with high-yield crops that weren't labor intensive, and also the only places that had beasts of burden to aid in agriculture. As a result, unlike hunter gatherer cultures, one man was able to produce enough food for more than himself, and this enabled innovation to occur.
  59. #59
    Quote Originally Posted by Renton View Post
    People with your mentality only see the massively successful and profitable businesses that are on the top side of variance at a given moment. Business is an extremely risky endeavor, and just as profits are the incentive to start and run businesses, losses are an ever present threat. It's very easy to get the people on your side when you mention the huge salaries and bonuses that executives get, but the truth is that is a drop in the bucket when placed next to the other costs these businesses have, the largest of which is always the cost of labor.

    The "owners" of these businesses deserve the profits they make because investing in a business, like speculating with a small pocket pair in Texas Hold'em, is a bet which requires implied odds. Most upstart business fail, and only a small percentage are successful enough to make up for the lost speculative bets made prior.
    As most people do, you're confusing business with economics. It's extremely common because most people involved in making economic decisions are also businessmen, but they are two starkly different things that don't have as much crossover as people think. It's a very difficult subject to tackle, especially for somebody like me to who isn't academically trained, and I don't want to do it, but just keep in mind that macroeconomics disagrees with business logic in many, many ways. Even then we live in a world where the business logic wins out and we all suffer because of it




    Please explain this sentence, because I feel like I'm completely missing the point of it. It seems laughably absurd to me but I don't want to condescend.
    It's the Basic Bargain. It's pretty standard macroeconomics, but because it doesn't make sense on business logic, nobody confronts it. The first step is to understand that an economy only has as much activity and wealth to it as how much cyclical consumption it has, and one of the completely necessary aspects of having that cyclical consumption is wages with purchasing power for the products produced. Companies that make lots of stuff that people buy cannot exist in an environment where an economy's laborers are not paid high enough wages to consume them. On the myopic business logic side, high wages are a scourge, but on the macroeconomic side, high wages are not only completely necessary, but one of the best ways to grow the economy.

    It is not because of low wages in factories in China that their economies are growing, but despite them. Those factories exist because of a demand by those with enough wages (which is sadly becoming enough credit) to purchase the products of those factories. This means that without wage suppression (which happens as much in the US as anywhere else) then the demand for the products would be even higher. Without wage suppression, there would be so much fucking demand that even more foreign factories could be built and they wouldn't even be sweatshops. It is not because of the US sweatshops that we grew the middle class, but because we defeated the sweatshops and began raising wages

    When discussing this stuff, macroeconomics is key, not what businesses have to say about what's good for business. Theory and history have shown that businesses are mostly wrong about macroeconomics. You definitely don't want to pay your employees more, but if you live in an economy that fosters rising wages, that is the only time when you actually end up benefiting more (unless you're able to do something like a productivity squeeze, which itself should be considered theft, but whatever).
  60. #60
    In the other thread, you talked about how morals aren't absolute, and you listed these precious few things (3, to be exact) as being worth legislating:

    "The only morality that should be legislated are the basic stuff like no murdering or stealing from or enslaving people. When governments get into specifics like social justice for wage-oppressed demographics, I just don't think much good can come of it."

    I find it interesting that theft should make this profoundly narrow list, seeing as how possession is one of the most philosophically dubious and legally opaque topics of morality. If someone is forced to make a list of the top 3 most morally unambiguous pieces of legislation, then I can't imagine that enforcement of "possession" should be anywhere near that list.
  61. #61
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    Quote Originally Posted by surviva316 View Post
    In the other thread, you talked about how morals aren't absolute, and you listed these precious few things (3, to be exact) as being worth legislating:

    "The only morality that should be legislated are the basic stuff like no murdering or stealing from or enslaving people. When governments get into specifics like social justice for wage-oppressed demographics, I just don't think much good can come of it."

    I find it interesting that theft should make this profoundly narrow list, seeing as how possession is one of the most philosophically dubious and legally opaque topics of morality. If someone is forced to make a list of the top 3 most morally unambiguous pieces of legislation, then I can't imagine that enforcement of "possession" should be anywhere near that list.
    I think that property rights would make a close third on almost everyone's list of inalienable rights, after the right to not be killed or hurt by someone else.
  62. #62
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    Wufwugy, it seems like you are basically saying that the profit and loss model as an incentive/disincentive for creating business is incompatible with an ideal society and economy. Am I accurate in saying this?

    If so, uh, idk that's just wrong on a lot of levels. It also ends the discussion because I've already spent all day talking about the ways in which profit and losses are greatly beneficial to the economy, and there's just nothing else I can say on that subject. The alternative is central planning, which has been a tragic failure again and again and again at every single point it's been attempted.
  63. #63
    Quote Originally Posted by Renton View Post
    Wufwugy, it seems like you are basically saying that the profit and loss model as an incentive/disincentive for creating business is incompatible with an ideal society and economy. Am I accurate in saying this?

    If so, uh, idk that's just wrong on a lot of levels. It also ends the discussion because I've already spent all day talking about the ways in which profit and losses are greatly beneficial to the economy, and there's just nothing else I can say on that subject. The alternative is central planning, which has been a tragic failure again and again and again at every single point it's been attempted.
    I'm not. My criticisms are that in many ways the business view is incompatible with the macroeconomic view. An example is how the business view is that lowering wages is beneficial but the macroeconomic view is pretty much the opposite. We have found over history that businessmen have fared better under less "business-friendly" practices that promote healthier economics yet they still don't like those practices because they falsely conflate their micro-business logic with macroeconomics

    However, in a lot of ways they are compatible. It's just that we currently live in world that conflates them and falsely believes that what is good for business is good for economics, yet that is very not true in many ways
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    Quote Originally Posted by wufwugy View Post
    We have found over history that businessmen have fared better under less "business-friendly" practices that promote healthier economics yet they still don't like those practices because they falsely conflate their micro-business logic with macroeconomics
    Please post examples of this.
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    The best example is how businesses do better under Democratic administrations yet they still support GOP administrations more for reasons of business-friendliness

    As to more specific examples: our previous healthcare system is considered more business-friendly, yet it is near double the cost to the economy than it would be if it mimicked smarter universal systems

    The problem arises because what is good for a business ends up being bad for an economy when every business employs it. It's like how saving is good for a family, but if every family saves at the same time, the economy will pretty much collapse
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    Quote Originally Posted by wufwugy View Post
    The best example is how businesses do better under Democratic administrations yet they still support GOP administrations more for reasons of business-friendliness
    I think there's entirely too small of a sample size and too much economic complexity to say this with confidence. Also, GOPs are not champions of free-market principles, they are just crony-capitalists of a different feather.


    As to more specific examples: our previous healthcare system is considered more business-friendly, yet it is near double the cost to the economy than it would be if it mimicked smarter universal systems
    There are a lot of non-capitalist movers in the healthcare industry (the AMA for example) that cause the costs to be twice as much. I believe unfettered capitalism would solve the healthcare costs problem really fast. If there's a market for a more affordable brand of healthcare, and there is, there will be affordable healthcare to meet the demand, because that's how capitalism works. The problems are not the market, but the restrictions placed on human resources, the lack of affordable medical schools, the artificial and arbitrary cap on doctor certification, and the cronyism that has run rampant in the pharmaceutical industry.
  68. #68
    Quote Originally Posted by Renton View Post
    I think there's entirely too small of a sample size and too much economic complexity to say this with confidence. Also, GOPs are not champions of free-market principles, they are just crony-capitalists of a different feather.




    There are a lot of non-capitalist movers in the healthcare industry (the AMA for example) that cause the costs to be twice as much. I believe unfettered capitalism would solve the healthcare costs problem really fast. If there's a market for a more affordable brand of healthcare, and there is, there will be affordable healthcare to meet the demand, because that's how capitalism works. The problems are not the market, but the restrictions placed on human resources, the lack of affordable medical schools, the artificial and arbitrary cap on doctor certification, and the cronyism that has run rampant in the pharmaceutical industry.
    The issue with the "pure capitalism" or "pure free market" view is that it assumes an inseparable attribute of a society (government and regulation) is separable. The irony is that in order to ensure real free markets, they must be strictly regulated for in order to keep corruption at bay. Otherwise we end up with the natural progression of what turns to crony capitalism. The problems in our healthcare system are not due to some fundamental disagreement with capitalism, but have been purposefully constructed by too much freedom to manipulate the system by those who would do so.
  69. #69
    I do agree that the free market is an extremely good thing, but we have also been told to believe that the "special market" that overly supports things like oligopolies is a free market
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    Quote Originally Posted by wufwugy View Post
    I do agree that the free market is an extremely good thing, but we have also been told to believe that the "special market" that overly supports things like oligopolies is a free market
    Oligopolies are fine so long as they aren't cartels. Certain industries must be oligopolies. For example, in order to be cost competitive, an automobile assembly line must make hundreds of thousands of units. Anything with large economies of scale benefiting the cost will be an industry with only a few major players.

    Even monopolies are usually OK in free markets because only the threat of competition (or subsitution) is often enough to keep prices down and quality up. I'd guess that 99% of the true monopolies in history where state-based.
  71. #71
    Quote Originally Posted by Renton View Post
    Oligopolies are fine so long as they aren't cartels. Certain industries must be oligopolies. For example, in order to be cost competitive, an automobile assembly line must make hundreds of thousands of units. Anything with large economies of scale benefiting the cost will be an industry with only a few major players.
    Only in some cases, but often we end up getting the kinds of problems we now have due to broadband oligopolies, for one example

    Even monopolies are usually OK in free markets because only the threat of competition (or subsitution) is often enough to keep prices down and quality up.
    This actually contradicts your previous point because if there was a monopoly on the scale you described, it couldn't ever have much threat of competition.

    We have seen oligopolies stifle innovation in many ways

    I'd guess that 99% of the true monopolies in history where state-based.
    De Beers would probably be the best example of a monopoly we've ever had, and because of this monopoly they have astronomically distorted the price of diamonds to such an insane degree that it doesn't play by any rules whatsoever other than what is the absolute maximum amount of money they can extract from consumers. The effects of their monopoly are literally off the charts. What De Beers has done to diamond's is such a threat to economies that we need to make sure that we don't allow others to replicate, and the only reason other companies haven't been able to replicate De Beers is because they haven't had enough control of supply to do so.

    There are plenty of examples of price gouging and poor quality goods and other destructive economics due to companies having too much power: Iphones are significantly more expensive than they need to be, Walmart has reduced employment and purchasing power within the economy, Comcast and Time Warner provide shit yet charge huge for it, even Amazon has been killing retail due to being so huge that they can cut costs so much that they aren't even making profits yet are kicking all the potential competition out of business.
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    Quote Originally Posted by wufwugy View Post
    This actually contradicts your previous point because if there was a monopoly on the scale you described, it couldn't ever have much threat of competition.
    I think we can basically agree that Wal-Mart has the monopoly on the big box supermarket/department store in most parts of the country. And yes they are of such a scale that it is difficult for them to face real competition. However, as soon as they begin to gouge prices, the incentive for a Wal-Mart competitor to emerge would be so large that billions would pour in from investors. People argue that their service is declining, but as we see there is also a market for big box retail that doesn't have such shitty service, which is why Target and Best Buy exist.

    Anyway the threat of present and future competition, along with the value of Wal-Mart's reputation, keeps Wal-Mart basically in check from doing anything crazy along the lines of what anti-monopolists believe.


    Iphones are significantly more expensive than they need to be,

    I don't have time to respond to the rest of your post, but this sentence is silly. If iPhones were too expensive then there'd be less demand for them and Apple would lower the price. Sellers look to get the maximum price for their products and buyers look to pay the minimum price or find alternatives.

    The proposal of every new iPhone model is a gamble for Apple, and they risk facing losses if their sales fall flat in favor of Samsung's phones. It is essential to Apple's survival that they charge the optimal price for an iPhone that will extract the maximum EV. If they charge somewhere else along the price/volume bell-curve, then they cede an advantage to Samsung right then and there.
  73. #73
    Quote Originally Posted by Renton View Post
    I think we can basically agree that Wal-Mart has the monopoly on the big box supermarket/department store in most parts of the country. And yes they are of such a scale that it is difficult for them to face real competition. However, as soon as they begin to gouge prices, the incentive for a Wal-Mart competitor to emerge would be so large that billions would pour in from investors. People argue that their service is declining, but as we see there is also a market for big box retail that doesn't have such shitty service, which is why Target and Best Buy exist.

    Anyway the threat of present and future competition, along with the value of Wal-Mart's reputation, keeps Wal-Mart basically in check from doing anything crazy along the lines of what anti-monopolists believe.
    I wasn't using Walmart as an example of price gouging. And yes, as long as Target is what it is, Walmart's monopolistic attributes won't get worse than they already are, but that is entirely irrelevant


    You are expressing irrelevant platitudes. Apple holds enough of the market that they have a larger profit margin than a comparable, normal company due to charging more due to their monopolistic attributes. They're basically a really mini De Beers in this regard. I'll try to not follow more along this line because I can't find my source that discusses this with Apple specifically

    Your arguments assume rationality and fairness by all players in the economy, assume rather simplistic behaviors of economic dynamics, and are often red herrings. I'll make a couple quick points to try to exemplify that.

    If iPhones were too expensive then there'd be less demand for them and Apple would lower the price.
    Not necessarily. There are a very wide variety of factors, several of which are at play, that have allowed iphone prices to be higher than they should and still have just as many people buying them

    Sellers look to get the maximum price for their products and buyers look to pay the minimum price or find alternatives.
    Yes, they "look to", but it never actually works that way. I gave two examples with De Beers and Amazon that do the exact opposite. De Beers charges magnitudes greater than any sort of supply and demand imperative while Amazon charges so little that they'll eventually go out of business if they keep doing it for much longer. Each of these companies do them for many different reasons, and they have nothing to do with the rationality you wish existed in the economy and everything to do with exploiting monopolistic attributes

    It is essential to Apple's survival that they charge the optimal price for an iPhone that will extract the maximum EV.
    But they're not, therefore it isn't essential to their survival. You are again conflating business with economics. Apple's "maximum EV" is not the same as optimal pricing economically

    If they charge somewhere else along the price/volume bell-curve, then they cede an advantage to Samsung right then and there.
    Which is a business issue, not an economics one
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    Doesn't excess capacity effectively remove the threat of competition in any monopoly with large barriers to entry? Unless doing so is against the rules it becomes in effect a cartel.
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  75. #75
    Quote Originally Posted by wufwugy View Post
    There are plenty of examples of price gouging and poor quality goods and other destructive economics due to companies having too much power: Iphones are significantly more expensive than they need to be.
    Wow seriously? How many companies right now are competing to be better than the Iphone? What is their power, hypnotism? Samsung practically gave away Galaxy S3's this winter yet people are still flocking to the iphone. Why? Because they make the best fucking phone in the world. I gladly dished out a few hundred bucks for my iphone rather than paying $50 for a Galaxy S3. And if we forced Iphones to sell for the same price as Samsungs, they a) wouldn't be as good quality and b) definitely would still be made in sweatshops in southeast asia which I know you're very much against.

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