Is profit different from unfair tax?

[Kuciwalker]

Your point?

[Kidicious]

Originally posted by Japher
I see what Kid is trying to get at is that companies should be required to reimburse their employees according to their profit earnings... Many companies do this, and it is built into their buisness models. Of which, many of these companies see great success.

I'm not getting at anything Japher. I'm just wondering why some people are more upset when they have to pay tax than they are when the company they work for makes profit at their expense. Only a few people bothered to take it at face value.

[Kuciwalker]

The company does not profit at their expense. They are not losing anything, unless they are being underpaid, in which case they can refuse to work unless they are paid more.

[Kidicious]

Originally posted by Berzerker
Good one, Kid, cite the capitalists who created this country to promote communism.

This country was built on hard work and the land was stolen. Capitalists didn't do any of it. The sat on their fat asses.

Originally posted by Berzerker
Pardon me, Kid, but if an employer did not make the investments in machinery and land, etc, what would your labor be worth if you were a machinist working for that employer? Less, nada? That's right, the machinist's labor is worth less without the employer's investments, so the extra money the machinist makes because of the employer's investments = PROFIT! Profit belonging to the machinist!!!

All you are talking about is organizing labor. It's not much work at all. I'm not saying that you shouldn't make a living doing it, but get real. Why should you get rich?

[Kidicious]

Originally posted by skywalker
The company does not profit at their expense. They are not losing anything, unless they are being underpaid, in which case they can refuse to work unless they are paid more.

And choose to starve I guess?

[Kuciwalker]

Here's an analogy: I buy a lump of gold from you, a miner. I transport this lump of gold to the city, where it is bought by a jeweler for a higher price than I paid you. Should I then be forced to give you the difference? I essentially am employing you to mine gold, and profiting off of it. However, it was MY work that moved the gold, and MY work and skill that got the price I did.

[Kidicious]

Originally posted by skywalker
Here's an analogy: I buy a lump of gold from you, a miner. I transport this lump of gold to the city, where it is bought by a jeweler for a higher price than I paid you. Should I then be forced to give you the difference? I essentially am employing you to mine gold, and profiting off of it. However, it was MY work that moved the gold, and MY work and skill that got the price I did.

You are assuming that the market price/wage is the fair wage. The only reason that I can see that you would do that is because the market works to your advantage, and to someone elses disadvantage.

[Kuciwalker]

Huh?

So you think I'm paying an unfair price for your gold. You have three options: hold out and see if I'll pay more, sell it to someone who will buy it for a higher price, or move it yourself.

Remember, if I don't get any gold, I "starve" too, because I have no income either.

[JohnT]

Originally posted by Kidicious
No.

The US was founded on a revolution against unfair taxation. Anger over unfair taxes is part of our national identity. Working people who know very little about economics and politcs find it so easy to critisize the government because of what they percieve as unfair taxes. It's easy to see how taxes hurt you because they come out of your check or you have to pay them directly. Why can't more working people see that profit, rent and interest comes out of their pay too?

You know, this is perhaps the most dissasociated post I have ever seen - imagine living in this world and thinking that working people do NOT see that profit, rent, and interest comes out of their pay.

Profit? It's called purchasing, and people do not assume that the merchants are selling for a loss.

Rent? It's called writing a check to your landlord and is a monthly practice for 10s, 100s of millions.

Interest? It's on the car payment, the mortgage payment, the credit card bills.

[Kidicious]

Originally posted by skywalker
Huh?

So you think I'm paying an unfair price for your gold. You have three options: hold out and see if I'll pay more, sell it to someone who will buy it for a higher price, or move it yourself.

Remember, if I don't get any gold, I "starve" too, because I have no income either.

Typical. You are completely ignoring real economic circumstance. In the economic system parties negotiating a deal either have an advantage or disadvantage in the deal. One has greater negotiating power and the other has less. That's why the market price/wage isn't fair. If you have the advantage you insist that it is fair and you ignore the real world.

[Kidicious]

Originally posted by JohnT


You know, this is perhaps the most dissasociated post I have ever seen - imagine living in this world and thinking that working people do NOT see that profit, rent, and interest comes out of their pay.

Profit? It's called purchasing, and people do not assume that the merchants are selling for a loss.

Rent? It's called writing a check to your landlord and is a monthly practice for 10s, 100s of millions.

Interest? It's on the car payment, the mortgage payment, the credit card bills.

So why don't they get mad?

[Kuciwalker]

Typical. You are completely ignoring real economic circumstance.

In the economic system parties negotiating a deal either have an advantage or disadvantage in the deal.

WRONG!

Gotcha. Finally, we have narrowed your argument down to the fallacy at its core. You are assuming this is a zero-sum game. It is not. In the example where I am paying you "fair value" (which is a pretty ephemeral concept in itself), we BOTH benefit - you get money from me for the gold, and I get "profit". A more simple proof of this is that you got the gold for "free" - you used your labor to get it out, but if I'm paying the "fair value", you are getting the same or more money in return. The economy isn't a zero-sum game because there is a constantly increasing supply of raw materials, while there is a constantly decreasing supply of "produced" materials. ALL money is made by moving something along the way from the first category to the second.

One has greater negotiating power and the other has less. That's why the market price/wage isn't fair. If you have the advantage you insist that it is fair and you ignore the real world.

Nope, "fair" IS determined COMPLETELY by supply/demand. If suddenly, five billion trillion metric tons of gold were to come on the market, why should I pay you lots and lots of money for gold? It's everywhere! Without supply and demand, any value applied to a product is completely arbitrary.

EDIT: I see he seems to be ignoring this for now, so I can make some more edits and touch this up

[Imran Siddiqui]

So why don't they get mad?

Why should they? The accept those are the costs and take them into account.

[Kuciwalker]

Originally posted by Kidicious
So why don't they get mad?

They do. Look at this thread. Look at common successful political platforms. Look at the frigging red revolution in Russia. If that's not "mad", what is?

[JohnT]

Originally posted by Kidicious


So why don't they get mad?

Because they don't view it as unfair. And why don't they view it as unfair? Because it isn't unfair. See?

[Kuciwalker]

If you have to convince someone they are being exploited, odds are they aren't

[JohnT]

Pretty much, Skywalker.

[MichaeltheGreat]

Originally posted by Kidicious


I think you're getting it.

Then why own or take capital risks? **** it, I'll just let the welfare state take care of me, and the workers can all kiss my ass.

Great system, I'm ready to sign up now.

[Berzerker]

Kid -

This country was built on hard work and the land was stolen. Capitalists didn't do any of it. The sat on their fat asses.

Who do you think led the revolution that created this country? George Washington? A capitalist?

All you are talking about is organizing labor. It's not much work at all. I'm not saying that you shouldn't make a living doing it, but get real. Why should you get rich?

Buying expensive machinery that creates the machinists' profit is not organising labor. You completely ignored my point... The value of your labor increases because of investments made by others - that increase is called "profit". So, why should the machinist "profit" from the effort of others? You look only at the profit the investor makes and ignore the profit made by the machinist.

[MichaeltheGreat]

Originally posted by Kidicious


Typical. You are completely ignoring real economic circumstance. In the economic system parties negotiating a deal either have an advantage or disadvantage in the deal.

Sometimes, yes. If you're talking about unskilled laborers doing menial work, who are easily replaced by other unskilled laborers or machines, and who generate no value added by any work experience (for example, someone who dresses up as a cell phone and holds a sign on the street pointing to a cell phone store), then yes, they have a disadvantage in the deal. Is that the employer's fault?

They also produce very little of tangible value.

They are, however, free to acquire skills with higher value, and change employers.

People who work in other fields which require specialized knowledge or training, and/or which benefit from years of worker's experience get paid more, because the value of what they produce is more, and they are less easily replaced due to the specialized nature of their skills and their experience.

The labor market adjusts accordingly.

One has greater negotiating power and the other has less. That's why the market price/wage isn't fair. If you have the advantage you insist that it is fair and you ignore the real world.

Fairness is not determined by equality of results. It is determined by the ability of either party to enter or leave the market. If the employer can't or won't hire people, he goes out of business. If the worker chooses not to work, he can starve or live off of someone else. There are penalties to both sides for leaving the market, and benefits to both sides for entering the market - and the magnitude and distribution of those costs and benefits varies with economic conditions.

During the dotcom bubble, a lot of companies deluded themselves that they needed to pay mediocre code jockeys six figures because they listed the latest and greatest things on their resumes, and it was just a "must have." Reality hit, and a lot of IT people landed on their asses, having spent their money like pimps, and so did a lot of owners and investors. Both pick up and move on, but it's "fair" because both sides were willing participants and agreed on the terms of their relationship.

[MichaeltheGreat]

Originally posted by Kidicious


So why don't they get mad?

They do. They either ***** about how unfair the system is, or they go spend what little disposable income they have on cigarettes, cheap booze and lotto tickets. Or they sit on their ass and watch "reality TV" or Monday Night Football.

Or a small minority decides to do something about their relative value in the labor market.

[Kidicious]

Originally posted by MichaeltheGreat


Then why own or take capital risks? **** it, I'll just let the welfare state take care of me, and the workers can all kiss my ass.

Great system, I'm ready to sign up now.

What is so different from letting the welfare state take care of you and collecting profit, rent, and/or interest? No difference.

Risk has to be taken, but not necessarily by individuals.

[Kidicious]

Originally posted by Berzerker
Kid -

Who do you think led the revolution that created this country? George Washington? A capitalist?



Buying expensive machinery that creates the machinists' profit is not organising labor. You completely ignored my point... The value of your labor increases because of investments made by others - that increase is called "profit". So, why should the machinist "profit" from the effort of others? You look only at the profit the investor makes and ignore the profit made by the machinist.

I could care less who bought the machines. Who built them?

[Kidicious]

Originally posted by MichaeltheGreat
Sometimes, yes. If you're talking about unskilled laborers doing menial work, who are easily replaced by other unskilled laborers or machines, and who generate no value added by any work experience (for example, someone who dresses up as a cell phone and holds a sign on the street pointing to a cell phone store), then yes, they have a disadvantage in the deal. Is that the employer's fault?

No, it's the systems fault. The employer is just playing the game. It's only the employers fault when it defends the system.

Originally posted by MichaeltheGreat
They also produce very little of tangible value.

And the employer produces nothing of tangible value.

Originally posted by MichaeltheGreat
They are, however, free to acquire skills with higher value, and change employers.

Acquiring skills costs money and takes time. The fact that they can acquire more skills does not make the current deal fair. Plus as you say, they are probably to stupid to anyway

Originally posted by MichaeltheGreat
The labor market adjusts accordingly.

Exacltly my point the price is adjusted by supply and demand and as the agents negotiating power changes. And you have decided that this is fair why?

Originally posted by MichaeltheGreat
Fairness is not determined by equality of results. It is determined by the ability of either party to enter or leave the market. If the employer can't or won't hire people, he goes out of business. If the worker chooses not to work, he can starve or live off of someone else. There are penalties to both sides for leaving the market, and benefits to both sides for entering the market - and the magnitude and distribution of those costs and benefits varies with economic conditions.

Fairness is determined by results when it is known that agents have differing negotiating power. People have to accept deals when they know they are being taken advantage of. When know that this is true, and we can see that it is by the outcomes.

Originally posted by MichaeltheGreat
During the dotcom bubble, a lot of companies deluded themselves that they needed to pay mediocre code jockeys six figures because they listed the latest and greatest things on their resumes, and it was just a "must have." Reality hit, and a lot of IT people landed on their asses, having spent their money like pimps, and so did a lot of owners and investors. Both pick up and move on, but it's "fair" because both sides were willing participants and agreed on the terms of their relationship.

This is a special case. I see it as an example of the inefficiencies of capitalism. It's hard to see any one party getting screwed. It just didn't work.

[MichaeltheGreat]

Originally posted by Kidicious


What is so different from letting the welfare state take care of you and collecting profit, rent, and/or interest? No difference.

Risk has to be taken, but not necessarily by individuals.

There's so many huge differences it's almost impossible to believe you're not trolling.

1) The "welfare state" will determine for you what it deems adequate care. If you're someplace like Norway, with a tiny population and a shitload of an easily extractible resource with huge global demand, that's one thing. In the rest of the world, it's another.

2) If you collect profit, rent or interest, (assuming these are in addition to regular earnings), you have considerable flexibility in how those are invested, and whether and how you adapt to changing economic conditions.

3) A welfare state has to have continuous revenue growth to increase standards of living over time. No welfare state has ever achieved this.

4) There is no evidence whatever that a planned economy is or will be responsive enough to create, let alone implement, emerging technologies in an efficient way.

5) The incentives are entirely different. I would have no incentive under a welfare state system to spend time since 1994 designing the software technologies I'm now completing. The first commercial installation of that system will come almost exactly a decade since the original design concept. With the welfare state, my rewards would be the same whether I put in the effort or not, and whether I succeeded marginally, spectacularly, or if I failed entirely. So why go the effort, when I could have spent more time playing at stuff that was more fun?

[MichaeltheGreat]

Originally posted by Kidicious


I could care less who bought the machines. Who built them?

If nobody bought them, the people who built them would starve. Or more precisely, the people who designed, organized and marketed those machines wouldn't hire people to build them, and would themselves lose their investment.

You have an ideological bug up your ass about owners/investors, but they are an essential part of production and all economic activity as well.

[Arrian]

It's that same old "the rich [owner/capitalist/inventor/investor/whatever] sit on their asses and get richer without doing any work" mentality Kid has displayed since he showed up here. That basic premise, utter bullshit that it might be, drives every argument he makes. You will not change his mind. IIRC, Vel and I tried, using real life examples. He brushed them off and kept on going.

You must be bored, MtG.

-Arrian

[DAVOUT]

Originally posted by Kidicious

Risk has to be taken, but not necessarily by individuals.

Sig matérial.

[MichaeltheGreat]

Originally posted by Kidicious

No, it's the systems fault. The employer is just playing the game. It's only the employers fault when it defends the system.

And the faults of centrally planned systems are even more extensive. No system is perfect. Just less imperfect.

And the employer produces nothing of tangible value.

Just the design, the means of production, the organization of people, materials, products and money that efficiiently delivers the laborer's work product to the marketplace in a marketable form. Do you really want to buy a car by hiring each individual designer and laborer, then going out and finding them the necessary machine tools, and renting them the necessary shop space? Or maybe each one is expected to provide his own machine tools and work in his back yard? And do the laborers and parts and machine suppliers (or all laborers in your self-limited world view, since nothing else counts) want to wait until you get a complete product before they get paid? Ahhh, but comrade, great Stateski Carski pays them. And in five years, you vill get your Trabant.

No, you just want to buy the ****ing car, not spend a year or two of your life organizing production to get your equivalent of Fred Flintstone's car. Or waiting your turn to get the state approved piece of **** that's decades behind real world technology. GM, or Toyota or whoever acts as an integrator of all their different laborers and subcontractors and vendors, to take a whole bunch of related but separate pieces of work, and deliver them into a single, useful package for the consumer.

Acquiring skills costs money and takes time. The fact that they can acquire more skills does not make the current deal fair. Plus as you say, they are probably to stupid to anyway

So does organizing labor, capital, workspace, marketing, and procurement of source materials.

Exacltly my point the price is adjusted by supply and demand and as the agents negotiating power changes. And you have decided that this is fair why?

If your ideal centrally planned economy doesn't adjust for supply and demand, it'll work just fine - all the slack in employment will be taken up by people working in construction to build warehouses to hold the **** that nobody wants, or in transport taking it from the factories to the warehouses, or in the black markets producing what people do want.

It's fair because all participants have the opportunity to plan for changes in the labor markets, to anticipate them, and to decide how they want to deal with those changes.

Fairness is determined by results when it is known that agents have differing negotiating power. People have to accept deals when they know they are being taken advantage of. When know that this is true, and we can see that it is by the outcomes.

People don't have to accept deals. If someone offers to hire me for either my software development or energy consulting work, but they'll only pay me $15.00 an hour, I'll laugh in their face. 25 years ago, when I was a teenage scab construction laborer, I would have jumped at $15.00 an hour, even if you adjust back for inflation. The difference? I worked at changing my market value and bargaining power.

If people refuse to change their job market value and decide to remain unskilled, don't expect me to sympathize with them, any more than I'd sympathize with a business who claims to want an IT staff, or TIG welders, or high voltage journeyman electricians, but will only pay $10.00 an hour, and goes out of business rather than pay market costs for skilled labor.

This is a special case. I see it as an example of the inefficiencies of capitalism. It's hard to see any one party getting screwed. It just didn't work.

It's only one example of a fairly common case. Labor shortages in skilled or specialty labor have created imbalances in the market in favor of those employees until the market adjusted - generally by more and more people pursuing the skills necessary to get those jobs. Obviously, the further down you are in the skills/value level you bring to the marketplace, the less likely that a shortage of labor is going to appear to benefit you, but the demand side of the labor market is a big part of why you train in some skills, and don't bother with others.

[MichaeltheGreat]

Originally posted by Arrian


You must be bored, MtG.

-Arrian

Yeah - coffee hasn't kicked in this morning, and I'm not motivated to go workin' for da man just yet.

Although I would like to see one of the commies here (who all insist they're not into Soviet style central planning) describe in detail the nuts and bolts of how their great system would work.