How to deal with the economically redundant? Tax the rich

[Diarmuid]

Re: How to deal with the economically redundant? Tax the rich

Get ready for it, folks. Whether you like it or not, whether you treat your employees like crap or give them hand jobs everyday as they leave the office, whatever you post in these forums is irrelevant: higher taxes are coming to a tax bracket near you.

I believe, as many here do, that they are long overdue.

I have no moral objection to the notion of taxation if as presumed they are used and spent for the public good - however when 11p in every tax pound (as in the UK) is spent on interest payments to service the national debt, when large sums of tax payers money are paid to pay for political and bureaucratic largesse, when money is used to pay for the Industrial Military Corporate Complex to wage war in private corporate interests, when tax pounds / euros / dollars are handed over in vast sums to a corrupt banking oligarchy etc, etc...- then I have major moral objections - there can be no taxation without representation, and there must be value for money otherwise it is just theft at gun point.

[thousandmilemargin]

Re: How to deal with the economically redundant? Tax the rich

I've felt this was inevitable for a long time. You only oppose socialism until your skills become economically redundant. Some day, in about 30 years, that will be everyone.

See Player Piano by Kurt Vonnegut. Also Robot Nation by Marshall Brain.

Objections relating to the impossibilty of strong AI ignore that fact that 90% of jobs could be done by robots with relatively simple software provided those robots had sufficient manual dexterity, and the environment they worked in was set up to cater for the robots.
The robots and the workplace are designed together, as two parts of a machine. Google "field robotics".

The end result is that corporations need engineers and designers - and lots of robots. The economy ends up consisting of a small number of people who design the automation, and some subject matter experts, then robotic production lines to build and repair the robots that do the work.
Mining robots to dig the ore, robotic trucks to carry it to the smelter, robotic production lines to roll the steel, through to robot forklifts positioning parts for robotic welders to make more robotic trucks, etc etc.

Either you put most of your population on welfare, funded by taxes on corporations, or you create a lot of busywork jobs in goverment.

I don't see any need to go to a different political model. Social democracy on the european model will work fine as long as corporate tax is set at a level that funds people on the dole + busywork government jobs + entertainers supported by goverment grants.

[Raz]

Re: How to deal with the economically redundant? Tax the rich

... I try to create a fair workplace and not exploit anybody, but I'm not paying above market wages, benefits, or profit sharing or I'm eventually going out of business. This is what happened to GM. They have reached the point where their cost of labor is far above fair market rates as there are PLENTY of laborers in Japan, China, and elsewhere that are more than willing to perform the same work as a GM employee for far, far less compensation. GM has become uncompetitive as a result of their high wages, so now let me ask you...those Ford laborers that you feel should get 50% of the Ford profits, do you also now feel that GM laborers should be responsible for 50% of GM's losses? You're not arguing that laborers should share in the profits, but then have no responsibility for the losses...? If a laborer does want to accept that risk then they should work for a publicly traded company and should load-up on the company stock, but to believe that any non-owner is entitled to a share of profits is just wrong.

Anyone who argues against this proposition is driven by political idealogy, not economic reality.
They also have a Neomarxist view of "fairness".

To continue arguing with them is hopeless. They are willfully blind.

[Raz]

Re: How to deal with the economically redundant? Tax the rich

See Player Piano by Kurt Vonnegut. Also Robot Nation by Marshall Brain.

Objections relating to the impossibilty of strong AI ignore that fact that 90% of jobs could be done by robots with relatively simple software provided those robots had sufficient manual dexterity, and the environment they worked in was set up to cater for the robots.
The robots and the workplace are designed together, as two parts of a machine. Google "field robotics".

The end result is that corporations need engineers and designers - and lots of robots. The economy ends up consisting of a small number of people who design the automation, and some subject matter experts, then robotic production lines to build and repair the robots that do the work.
Mining robots to dig the ore, robotic trucks to carry it to the smelter, robotic production lines to roll the steel, through to robot forklifts positioning parts for robotic welders to make more robotic trucks, etc etc.

Either you put most of your population on welfare, funded by taxes on corporations, or you create a lot of busywork jobs in goverment.

I don't see any need to go to a different political model. Social democracy on the european model will work fine as long as corporate tax is set at a level that funds people on the dole + busywork government jobs + entertainers supported by goverment grants.

I'm glad that I won't be here to share in your egalitarian paradise.

[ThePythonicCow]

Re: How to deal with the economically redundant? Tax the rich

I'm glad that I won't be here to share in your egalitarian paradise.

So am I.

However this discussion raises a moral question worthy of more thoughtful consideration.

Over the last few decades, human civilization has raised more people to a higher standard of wealth than ever before. We have done so depending on the actual productive labor of a decreasing proportion of those benefiting. We have relied on rather corrupt financial excess to spread the wealth.

When I was a child in a small farming community with centuries of history, the wealth of an individual was significantly dependent on how hard they worked. That work was essential to the continued well being of the community, such as farming the fields, milking the cows, building the houses, cooking the food, operating the paper mills on the river, minding the stores and teaching at the school in town, and so forth. Were it not for mandatory education laws, most children past the age of eight or ten would have been working the farms, and even at that, school vacations were timed to allow children to work the fields in the summer. There was always plenty of work to be done, by anyone with a strong back and a willing temperment.

The remote wealthy and powerful notwithstanding, wealth went to those who worked.

The total wealth of the community was essentially constrained by the total work performed by those in the community.

That basic "work ethic" has been a backbone of healthy economic societies for thousands of years. Total work was certainly not the only factor controlling wealth, but it was one critical factor. "To each according to the productivity of their work" has been an important principle of capitalism, even as families and local charities, churches and individuals watched out for the young, the old and the weak.

But now human civilization has excess production capacity. Neither communism nor capitalism provide a proper moral basis for motivating work and distributing wealth in such a world.

Robotics and such will further compound this problem.

If five working adults can produce all the material wealth than ten such adults and their families reasonably require for a comfortable life, then how do we determine who gets what?

[unlucky]

Re: How to deal with the economically redundant? Tax the rich

Two questions:

(1) A dull kid is born into a world where half-witted robots handle all manual labor for free at the behest of the already wealthy/productive members of society. His parents have no property. The abundance of free infinite labor has created an abundance of all physical necessities and luxuries. Yet how is that kid going to earn a living to get that food into his mouth?

(2) A brilliant kid is born into a world where Google 2044 zeta (TM) is smarter than all humans that ever lived combined. How is that kid going to earn a living?

Perhaps the questions can be answered by adding a third:

(3) A deaf kid is born into the world of the 1940s. He is smart enough to gain qualifications in electronics design, but is unable to get a skilled job due to his communications problems, and spends his life in low-paying unskilled positions. (That kid was my uncle). If the same kid were born in 2000, how would he earn a living at a rate that reflects his potential?

Answer - he would get a cochlear implant - an electronic device implanted under the skull that transforms sound directly into auditory nerve impulses. These implants were invented in the 60s/70s and have now improved to the point where they allow a deaf person to pass himself off as hearing in 90% of environments.

Cochlear implants have enabled a whole class of previously "economically redundant" persons to now earn their own living. I think techology will continue to enable humans in ways that are not obvious to us today. E.g. the kids mentioned in your questions may have instant in-the-head access to all that Google zeta knows or is capable off.

[lb]

Re: How to deal with the economically redundant? Tax the rich

How can we get to page 5 without someone welcoming our new robotic overlords? Jokes aside:

Both sides of these arguments about life in 50 years are no different than the world being flat. That was followed this with everything revolving around the Earth. Now, we are hopelessly stuck in a contained system on this Earth.

Space, The Final Frontier.

Too corny, or is it just a paradigm shift we can't see coming and can't see past?

[ricket]

Re: How to deal with the economically redundant? Tax the rich

If five working adults can produce all the material wealth than ten such adults and their families reasonably require for a comfortable life, then how do we determine who gets what?

Exactly!

As Ive said earlier, is not the point of innovation to save time in doing a specific task (i.e. growing food)?? At what point do you sit back and say "Well, now Ive worked enough so I can sit here and do nothing"?

I think human civilization has advanced enough to begin understanding and answering that question, but there are those who have a hard time letting go of the past and seem to think we still live in a medieval world where you have to work 100% of the time or starve to death. I detest the notion that if you are not "working" then somehow you are "unproductive". Do we not all have the right to benefit from those who came before us and innovated new ways to raise our standards of living? If not, then I think you should not be using a car, electricity, even the internet because youre not making it and producing it yourself and are thus dependent on someone else's ingenuity and labor to give it to you so cheaply using technology you didn't invent or think of (you freeloader! ).

[fliped42]

Re: How to deal with the economically redundant? Tax the rich

Exactly!

As Ive said earlier, is not the point of innovation to save time in doing a specific task (i.e. growing food)?? At what point do you sit back and say "Well, now Ive worked enough so I can sit here and do nothing"?

I think human civilization has advanced enough to begin understanding and answering that question, but there are those who have a hard time letting go of the past and seem to think we still live in a medieval world where you have to work 100% of the time or starve to death. I detest the notion that if you are not "working" then somehow you are "unproductive". Do we not all have the right to benefit from those who came before us and innovated new ways to raise our standards of living? If not, then I think you should not be using a car, electricity, even the internet because youre not making it and producing it yourself and are thus dependent on someone else's ingenuity and labor to give it to you so cheaply using technology you didn't invent or think of (you freeloader! ).

So long as you are not taking the fruits of someone elses current labor in the form of a redistribution so you can be unproductive and you enjoy that life then no problem. But if you want free healthcare, free rent, free food and free ipods at the expense of some currently productive person then that is freeloading. Enjoy the benefits of being unproductive but do not begrudge the guy in a bmw with the mansion and summerhouse who works 80 weeks to enjoy his productive life.

[c1ue]

Re: How to deal with the economically redundant? Tax the rich

Here's how it works...Henry Ford creates a product and forms a company and needs laborers. He tries to pay $1/hr but he doesn't get enough workers. He raises his starting rate to $2/hr and he fills all of his available positions. After a year, 10 laborers come to him and demand 10% of profits for their labor. Henry fires them and hires 10 replcements at $2/hr and he fills the openings with no problem. A year later, Henry loses 25 of his laborers to US Steel because they need laborers and have found that they have to pay $2.50/hr to attract enough workers. Henry recognizes that the market has changed, he doesn't want to lose any more laborers, so he raises everyone's wage to $2.50/hr. His turnover problem stabilizes and all is good until the next market influence. It's that simple.

How about the case when Henry Ford breaks the union then pays off a bunch of Congress-critters to pass laws that allow him to continue various unsavory (and incompetitive) practices?

http://encarta.msn.com/encyclopedia_...ord_henry.html

In the period from 1937 to 1941, the Ford company became the only major manufacturer of automobiles in the Detroit area that had not recognized any labor union as the collective bargaining representative of employees. At hearings before the National Labor Relations Board Ford was found guilty of repeated violations of the National Labor Relations Act. The findings against him were upheld on appeal to the federal courts. Ford was constrained to negotiate a standard labor contract after a successful strike by the workers at his main plant at River Rouge, Michigan, in April 1941.

As for your mythical 'one worker = another worker model' - as Toyota and the other Japanese companies have shown, clearly stability and motivation in the worker force has some impact on product quality as Japanese plants in the US consistently lag their hometown counterparts.

The end result is that corporations need engineers and designers - and lots of robots. The economy ends up consisting of a small number of people who design the automation, and some subject matter experts, then robotic production lines to build and repair the robots that do the work.

There are robots in industry, but by and large robots so far are an uneconomic proposition. Because while robots don't have to be paid, don't take breaks, don't strike, don't need health care, etc etc, robots also need maintenance, are extremely difficult (if not impossible) to retrain, and cost a whole lot more up front than a human worker. Robot ongoing costs are also fairly high and will go higher should commodity prices rise.

This equation may change but will not until some type of truly cheap power is available (fusion et al).

Quote:

Originally Posted by rjwjr ... I try to create a fair workplace and not exploit anybody, but I'm not paying above market wages, benefits, or profit sharing or I'm eventually going out of business. This is what happened to GM. They have reached the point where their cost of labor is far above fair market rates as there are PLENTY of laborers in Japan, China, and elsewhere that are more than willing to perform the same work as a GM employee for far, far less compensation. GM has become uncompetitive as a result of their high wages, so now let me ask you...those Ford laborers that you feel should get 50% of the Ford profits, do you also now feel that GM laborers should be responsible for 50% of GM's losses? You're not arguing that laborers should share in the profits, but then have no responsibility for the losses...? If a laborer does want to accept that risk then they should work for a publicly traded company and should load-up on the company stock, but to believe that any non-owner is entitled to a share of profits is just wrong.

Anyone who argues against this proposition is driven by political idealogy, not economic reality.
They also have a Neomarxist view of "fairness".

To continue arguing with them is hopeless. They are willfully blind.

Uh, sorry, but laborers DO share in the losses. They in fact share more - loss of a job for a laborer is a far more destructive impact than loss of capital for an 'entrepreneur'.

As for sharing in profits - again you (rjwjr & Raz) both have Capital blinkers on your eyes. The net gains after cost of production, cost of capital and taxes are the net pool by which Management and Labor BOTH obtain their payment: options and salary in the former and hourly wages in the latter.

To say that profits are all the former and obligations are all the latter is exactly why labor unions arose.

It is easy for Management to say that their contribution is greater, but again management itself is worthless without labor. Labor also is worthless without management.

Or are you fine gentlemen trying to say that the CEO pay vs. worker pay ratio today is justified?

The point is that in an ideal situation, Management and labor would both have a clear situation on the true size of the pool and agree upon a fair distribution. Otherwise in a dog eat dog competition, both sides just fight for anything and everything that can be gotten which is how you end up with GM, with outsize government pensions, etc etc.

[unlucky]

Re: How to deal with the economically redundant? Tax the rich

Uh, sorry, but laborers DO share in the losses. They in fact share more - loss of a job for a laborer is a far more destructive impact than loss of capital for an 'entrepreneur'.
.

Well, entrepreneurs provide something that is far more important than either labor or capital - willpower. Getting any great and novel project off the ground in the face of a world that won't listen and doesn't care, requires a huge input of willpower. (This is not unique to business projects).

And if your business fails - you lose your dream. Far worse than losing your job. Man cannot live on bread alone.

It's well known among investors that entrepreneurs can be made to pay "founder's premium", i.e. they can be made to give up a certain amount of economic return in order to keep their business alive. Because they don't want to give up their dream. No analogous phenomenon exists for labor.

[c1ue]

Re: How to deal with the economically redundant? Tax the rich

It's well known among investors that entrepreneurs can be made to pay "founder's premium", i.e. they can be made to give up a certain amount of economic return in order to keep their business alive. Because they don't want to give up their dream. No analogous phenomenon exists for labor.

Your argument is unclear as to what it supports.

If entrepreneurs are truly motivated by non-economic factors, then the need for them to monopolize proceeds is even less.

I've never said management nor entrepreneurs do not need to be paid well.

But there is a wide space between monopoly on proceeds over costs and being paid well.

[rjwjr]

Re: How to deal with the economically redundant? Tax the rich

Absolutely I am. You have even already admitted yourself that the laborers are and will be responsible for absorbing some of the losses. If a laborer is responsible for making a craptastic product, it breaks, no one buys it, and/or it is completely unsafe, then of course I am all for them being held accountable. The worst thing that can happen in such situations is that they lose all of the investment capital (at least before the FIRE economy). Which means they wont get paid any more in the future because demand for their products will evaporate overnight. They can't "lose" money they don't have.

I did not admit nor state that laborers should be responsible for losses at a company in which they have no ownership. I do not feel that laborers should be held accountable for losses of their employers. They certainly may be affected by them, but they have no responsibility for securing financing or ponying up additional capital if needed to cover these losses like owners must.

I think your attitude shows a disdain and arrogance for the people that work for you. And I would argue that underneath they show a similar hidden disdain for you.

You are wrong, I have no disdain for my employees, nor anyone that is a productive member of society. We were voted the Best Manufacturing Company in the County in 2001 so I don't believe my employees have a general disdain for me either. You have no experience with me or my company. Ironically, your comment, without any basis of fact or evidence, actually reflects a disdain that you seem to harbor for employers and business owners.

Ive heard many stories about white collar vs. blue collar. Just realize that youre all a team, and while they may be replaceable, there is a limit to that simply due to the overhead costs of hiring and training new employees. You will also go out of business if you *dont* pay market rates because you won't be able to hire people who will be worth a damn which will lead to a ridiculously high turnover rate. You'll spend 3x the amount of time (relative to pay) re-training new hires every 2 weeks. Why not pass these costs into the salary of a single employee who may be more motivated to make a better product overall, and thus help the company's overall bottom line? Isnt that what you would call an investment??

Your premise here is somewhat accurate, but your conclusion is skewed to make your point. We agree that the market won't allow you to pay less than fair market rates, lest you won't attract enough laborers or properly qualified laborers. What you miss is the other side of that coin. You can not pay above market rates either because the competition will not allow it. Trying to pay higher rates than your competition for the same labor output and quality will result in them serving the customers more efficiently than you, with the high cost producer on a path of contraction and possible closing of the business (like GM). Deciding how much a company can afford to pay is a mathematical/economic calculation, not a moral decision. The free market and global economy does not allow this to be a moral issue regardless of how much one might think it should be.

All I'm saying is that I think the natural relationship is closer to 50/50 versus some perceived 90/10 (in favor of management) that most CEOs seem to believe

This is your opinion, but it doesn't make it so. And, in reality, it doesn't matter what "CEOs seem to believe" either. All that matters is what the going market rate is as determined by your competitors and other employers. The CEO must be aware of this market rate and must work within this market rate, but the CEO does not set the market rate as an individual employer.

Some employees would be happier with 60/40 or 70/30 rates of risk/reward. But I would say that the ball is definitely not in labor's court at the moment, and I expect that to change as whole industries go out of business and we see a rise in the number of conglomerate businesses with union organizations.

Don't hold your breath waiting for that change. The high unemployment of today means that laborers are willing to take less pay and less benefits for the opportunity of working. Market conditions currently favor the employer. Not because the CEO deemed it so, but because of the excess supply and dwindling demand of the current labor market. People are more desparate for work thus are willing to take less compensation in return. You are more likely to see less union power in this environment, not more. Just look at the concessions already being provided by labor unions in the US automotive industry.

ricket, your heart may be in the right place, but your ideas are not based in economic reality. If you had the experience of having run a business this would become obvious to you. A business can not expect to stay in business if they overpay for labor anymore than if they overpaid for their raw materials, or their utilities, or their insurances, or any of their multitude of business expenses. Labor is simply another line item in the budget that must be managed. You may not like this from a moral standpoint, but it's the stark reality of the business world.

[rjwjr]

Re: How to deal with the economically redundant? Tax the rich

It is easy for Management to say that their contribution is greater, but again management itself is worthless without labor. Labor also is worthless without management.

I don't agree. There are a very, very few individuals that could do what Henry Ford did. There are over 5 billion people (current world population being around 7 billion) that can do what his laborers did.

I have been an unskilled laborer and I have been a business owner. I can speak from experience in telling you that running a successful business is, indeed, many powers more difficult than being a general laborer.

All of our arguments actually come down to this one premise...I feel like you have an underappreciation for business owners and managers and an unrealistic view of the importance of labor. You feel that labor deserves more.

Unfortunately, the facts and the realities don't support your beliefs. Our starting rate for unskilled labor prior to 2005 was $6.75 and we had all of the workers we needed. We grew with the construction boom into early 2008, but due to very low unemployment in the area, had to raise our starting rate to $8.50 to attract enough laborers for our growth. Today, I could replace every single unskilled worker that I employ with replacements at $6.75 again. It doesn't matter that you think that $6.75/hr, or even $8.50/hr, is not a moral wage and that those workers deserve more, including a share of profits. All that matters is that individuals are choosing, by their own free will, to accept that wage for the work involved. Your opinion of that fact is of little concern to me as the employer or the individual that needed that job and was willing to fill it.

My advice is for you to start a business of your own and use it as a vehicle to make the world a better place, one employee at a time. Let me know what industry you choose because you'll be some soft competition.

[Starving Steve]

Re: How to deal with the economically redundant? Tax the rich

ASH, my online friend, you know I have an opinion as to why this is not so.

The bottom line is that financial equality, and financial success for that matter, is not as important as freedom, fairness, justice, and the basic rights as detailed by our founding fathers. Socialism is the antithesis of our founding principles and Constitution relative to property rights and personal responsibility and limited government and the rule of law. The more we move toward socialism, the more we weaken the USA and the ideals that have made us great for over 200 years.

The whole premise of the equalization of wealth is rooted in the misguided belief that money is the road to happiness. It's not. More often than not, as we've all experienced, the journey is rewarding, the achievment is rewarding, the "having" is empty and unfulfilling relative to the "getting there". Are we supposed to be jealous and resentful of Michael Jordan or Tiger Woods or Warren Buffet because they have so much more than we? Is our first instinct really to try to find us a way to take some of what they got? I sure hope not. It's theirs and they earned it fair and square.

As for our current (financially) poor in the US, why should the thinking be any different? Why should they expect to take from you and me anymore than the people of Darfur or Ethiopia or the slums of Thailand should be able to take from them?

Socialism, central planning, wealth distribution and these other utopias are impractical pipe dreams when viewed in a broader context. Eventually, like with Social Security, the inverted pyramid of producers to receivers will cause the entire system to fail. To date, there remains no better, no more fair system than that established by the founding fathers in our Declaration and Constitution. The further we stray from those principles, the weaker, less free, and less just we become as a society.

I take the exact OPPOSITE point-of-view as you express in your blog above. The United States is the laughing-stock of the world to-day, and "greed is NOT good". The American capitalist system is a complete 100% FAILURE.

But just wait, gang war and civil strife come next. The discontent in America is boiling. Here in California, there are already drive-by shootings on the freeways, day and night, nearly everywhere.

I could not give one sh*t about the "founding fathers" of America. Life now in America is about one thing and one thing only: SURVIVAL. And you Republicans brought this state-of-affairs on with your tax revolts, your supply-side economics, and your "greed is good" philosophy.

We need some socialism just to survive, and you Republicans to-day do NOT understand that, nor do you Repukes even care to understand that. The American winner-take-all capitalist system has led America over a cliff.