Political Theory

Re: income distribution

Caley McKibbin — Sat, 05 Dec 2009 06:34:49 GMT

Gottfried, did you see the thread with the story about the eternal skeptic?

Re: income distribution

Praetyre — Sat, 05 Dec 2009 04:22:36 GMT

gottfried:

can you elaborate on that? How are AMD (not bankrupt yet), PanAm, GM, Ford (not bankrupt yet), Chrysler, Lehman brothers, etc. a product of the state?

AMD's products are protected by international copyright law. Nobody can make processors they have patented without legal penalties, granting them an artificial advantage in the microprocessor market. Pan American Airlines is, of course, an airline, and airlines are one of the most regulated industries on the planet (and one of the most inefficient). In some places, I believe, they are legally required to be subsidized. General Motors, Ford and Chrysler have both received significiant protectionist advantages in the past, as well as IP benefits internationally. As well as this, General Motors recently received bankruptcy protection to the tune of billions from the United States government. Lehman Brothers benefitted from the fractional reserve banking system and the Federal Reserve, as well as a trader in US treasury securities.

Re: income distribution

bbnet — Fri, 04 Dec 2009 23:52:03 GMT

gottfried:
You would consider this ok because this is how the free market must be allowed to operate?

You forgot to mention the ensuing worker strike and slashing of tires of all the managers Lamborghinis..

Re: income distribution

bloomj31 — Fri, 04 Dec 2009 23:50:57 GMT

gottfried:

You would consider this ok because this is how the free market must be allowed to operate?

I can tell you that you will have to do a LOT of convincing in order to get this raw form of social darwinism acceped by society. (lets see how far Peter Schiff gets in his senate race).

1. If it's their money, they can do with it as they please. Just because it looks like they're greedy and mean doesn't mean that they don't get the same property rights you or I do.

2. Class warfare is at the foundation of Marxism. If people in this country succumb to that type of politics, they deserve what they get. Peter Schiff represents a turn away from class warfare in my opinion. If he wins, it will be proof that there are people out there who are willing to consider principle and precedent instead of the emotional appeal of class and identity politics.

Re: income distribution

Spideynw — Fri, 04 Dec 2009 23:36:32 GMT

gottfried:
You would consider this ok because this is how the free market must be allowed to operate?

Do you think it is OK for the government to tell Peter Schiff he is on a hiring freeze?

Re: income distribution

Giant_Joe — Fri, 04 Dec 2009 23:27:56 GMT

gottfried:

Lets say you are a worker at company XYZ, which is by far the largest employer in town. The management of XYZ announces that either the employees accept a 20% wage cut and work 10 hours more a week or the plant gets closed and the production is moved to China. Since you own a flat in the town (which would be worthless if the company closes and 50% of the people have to leave the town to find a new job) and you are afraid of not finding a new job you accept the new working conditions. At the same time you find out the manamgenet increased their own wages by 30%. You would consider this ok because this is how the free market must be allowed to operate?

Much like a mining town where the mine is quickly becoming worthless?

It's also possible for these people to organize and to advertise the fact that there will be plenty of labor for companies to buy in the town after XYZ shuts down. The company owes people only as much as the contract states. If these people stay in town, don't do anything, lose their jobs, and get assistance from the state, what have the learned? They plunder from the rest of society because they feel they have the right to be shielded from mistakes they make. Just because people feel like they should have something isn't justification for them to get it.

We can take the moral approach, where these people adapt or get help from voluntary charity. Or we can have things arbitrarily stolen from other people to shield these now unemployed people from their lack of foresight, planning, and responsibility.

This has nothing to do with what's popular. It has everything to do with what's ethically sound and evades moral hazard. What happens the next time a company like XYZ comes around, pulls the same stunt and leaves, and the people get bailed out again?

If XYZ had 1000 employees who were laid off, and the next company had 1000 employees who were laid off, don't you think that people would start flocking to this city looking to get employed by the next XYZ? When this one takes off and leaves people unemployed, they'll be saved by government yet again! Meaning more people can come to the town, and know that they don't have to worry about getting laid off or their wages reduced because the government will step in to save them yet again! In fact, they'll get lazier and let the place offer the ultimatum because they know that they will be covered by the government without having to work!

Welfare for people or companies helps to nullify the incentive for people to become productive members of society.

If this mining town closes, so be it. It's usefulness to the free society has been greatly diminished.

Care to get into explaining the bourgeois? We have lots of material countering that nonsense. :)

Re: income distribution

Knight_of_BAAWA — Fri, 04 Dec 2009 23:14:39 GMT

Please learn what social darwinism is before using the term.

Re: income distribution

gottfried — Fri, 04 Dec 2009 22:58:29 GMT

@all

thanks for the useful links. i will have a look at them!

here is a final question. Consider the following (frequent) scenario:

Lets say you are a worker at company XYZ, which is by far the largest employer in town. The management of XYZ announces that either the employees accept a 20% wage cut and work 10 hours more a week or the plant gets closed and the production is moved to China. Since you own a flat in the town (which would be worthless if the company closes and 50% of the people have to leave the town to find a new job) and you are afraid of not finding a new job you accept the new working conditions. At the same time you find out the manamgenet increased their own wages by 30%. You would consider this ok because this is how the free market must be allowed to operate?

I can tell you that you will have to do a LOT of convincing in order to get this raw form of social darwinism acceped by society. (lets see how far Peter Schiff gets in his senate race).

Re: income distribution

Giant_Joe — Fri, 04 Dec 2009 21:39:37 GMT

Sure. Should the CEOs pay out $10 million a year if the company is losing money?

If the CEO of Nintendo made $100 million a year, while the company lost $500 million a year what is it my business? If we are dealing with completely private industry that produces things I want at a price I'll buy, what does it matter how much the CEO gets paid?

There is a large disparity, and that fact isn't an ethical problem, unless ethics are found on stealing, not recognizing private property, or on the use of force to set things the way they "should" be set.

Re: income distribution

bloomj31 — Fri, 04 Dec 2009 20:00:58 GMT

What's wrong with CEOs getting paid a lot of money if their company is doing well?

Re: income distribution

Giant_Joe — Fri, 04 Dec 2009 19:41:32 GMT

What's wrong with disparity in pay?

On AMD...

Every Fab they built in the past 15 years was about half-funded by states.

They had just won a $1.5B anti-trust settlement, which is another case of state intervention.

Jerry started the company, it was his company, and he did what he wanted with it. Despite the CEO getting paid so much, people still agree to continue working, or even start working for the firm.

Re: income distribution

gottfried — Fri, 04 Dec 2009 16:25:26 GMT

Snowflake:
It would be one thing if they had used goernment powers for social good, but instead used them for personal gain. Confiscate all their wealth until damages are repayed.

100% agreed!

Re: income distribution

Sieben — Fri, 04 Dec 2009 16:25:19 GMT

The current sallaries of CEOs has to do with anti trust laws and other regulations. Tom Dilorenzo has an excellent piece on this. Found here

Re: income distribution

Spideynw — Fri, 04 Dec 2009 16:25:01 GMT

gottfried:

Spideynw:
Most here would say not necessarily, since the corporation is a product of the state.

can you elaborate on that? How are AMD (not bankrupt yet), PanAm, GM, Ford (not bankrupt yet), Chrysler, Lehman brothers, etc. a product of the state?

I would recommend checking out this thread for a thorough discussion about it: http://mises.org/Community/forums/t/10084.aspx

Re: income distribution

gottfried — Fri, 04 Dec 2009 16:24:11 GMT

krazy kaju:
It should be up to the shareholders of these companies to decide what happens with the CEOs

so why doesn't it work? I am not seeing law suits against anyone of the wall street crowd.

krazy kaju:
the more profitable businesses become in real terms as the economy grows, the more they'll compete for workers

is that so? in the real world it rather seems they continue moving to the most undeveloped nation in order to be able to produce for minum wages and lowest environmental standards while pushing the cheaply produced goods back into the domestic market.

I agree that what you are saying might work in areas where you need highly skilled and well educated workers but it obviously doesn't work for all those areas where no particular education is required.