4 ms·

I know it seems that way on the surface but some people (typically entrepreneurs) take on more risk than most people are willing to stomach. They (capitalists)

I know it seems that way on the surface but some people (typically entrepreneurs) take on more risk than most people are willing to stomach. They (capitalists) in turn are rewarded with the multiplication of their capital investment when things pan out. If the opposite happens, they're the ones who suffer the consequences and they learn to make better decisions next time round. That is why I'm typically against government bailouts - they get in the way and undermine this natural occurrence as opposed to letting the markets weed out poor decisions and inefficiencies. Workers should also be compensated according to the quality of work (read: value brought in) that they produce. Workers can and should be wealthy too under this premise.

webmaven 10y ago
> I know it seems that way on the surface but some people (typically entrepreneurs) take on more risk than most people are willing to stomach. It isn't compensation for entreprenurial risk that people object to, but compensation for risks taken with Other People's Money (OPM), where the government supplies an implied safety net (Too Big to Fail). By extension, people object to success (whether though skill or luck) for a risk-taking entrepreneur including entry into the ranks of the capitalists, that group of people who have enough money that participation in OPM schemes is enough to sustain their membership in the exclusive club. In other words, the prize for winning the game once shouldn't include getting to play risk-free from then on. > Workers should also be compensated according to the quality of work (read: value brought in) that they produce. Workers can and should be wealthy too under this premise. OK, so what is the flaw in the current setup that prevents workers from receiving their share of the wealth created? How do you think the system should be changed?
- _andromeda_ 10y ago
  > OK, so what is the flaw in the current setup that prevents workers from receiving their share of the wealth created? How do you think the system should be changed? I have no problem with that and I agree with you (but you don't seem to think so). I think it works very well. It's brilliant that many companies have ESOPs. Early employees that take on risk by joining fledgling companies get huge rewards when things pan out. Even workers who come into the business at later stages can get huge gains of they are deemed to bring in proportional value. >government supplies an implied safety net (Too Big to Fail). I am very much against this myself. I despise it even. Socialised losses and privatised gains are evil.
  - webmaven 10y ago
    > I think it works very well. This seems to be the crux of our disagreement. I don't think the current setup works very well, at least not for the bottom 3/4 of the US population. Basically, it was working OK until circa 1975, after which point any gains in improved productivity started accruing to owners of capital almost exclusively. And the more capital you have, the larger your share of those gains, in a superlinear fashion. Meanwhile worker compensation (as measured in constant dollars) has stagnated and even shrunk somewhat recently.
    - _andromeda_ 10y ago
      >the more capital you have, the larger your share of those gains, in a superlinear fashion This is the essence of capitalism and why it works well. Gains exponentiate and as well they should. Capitalism favours retention of capital goods as opposed to the consumption of said capital. What has happened is that many folks have engaged in consumerism and the savings rate has gone down immensely. This phenomenon has negatively affected the middle class and working class more than any misconstrued notion of increased productivity without corresponding increase in compensation. If you're to address the culprit, start there. You cannot invest into a better future if you consume everything and this is exactly what has happened. Nobody cares about savings anymore. Such high time preference, it's horrible! Here's an excerpt from an Austrian (school) blog: Low time preference people value present use of their money less than a certain higher future quantity of money. High time preference people, in contrast, are willing to forego higher future quantities of money for sake of enjoying a certain lower present quantity of money. The low time preference people will therefore be inclined to lend to the high time preference people. That last part is extremely vital. It explains the perpetual cycle we seem to be in. The middle class and working class engaging in excessive consumerism will at some point need to borrow money from the fiscally disciplined to engage in even more consumerism. It has been claimed that the current savings rate is only comparable to that of medieval peasants (more validation needed on this but if it is the case, this is terrible). If all this is true, why would those gains you mention above fail to grow in a superlinear fashion? I think it is a case of eroded values more than anything else.

webmaven 10y ago

> I know it seems that way on the surface but some people (typically entrepreneurs) take on more risk than most people are willing to stomach. It isn't compensation for entreprenurial risk that people object to, but compensation for risks taken with Other People's Money (OPM), where the government supplies an implied safety net (Too Big to Fail). By extension, people object to success (whether though skill or luck) for a risk-taking entrepreneur including entry into the ranks of the capitalists, that group of people who have enough money that participation in OPM schemes is enough to sustain their membership in the exclusive club. In other words, the prize for winning the game once shouldn't include getting to play risk-free from then on. > Workers should also be compensated according to the quality of work (read: value brought in) that they produce. Workers can and should be wealthy too under this premise. OK, so what is the flaw in the current setup that prevents workers from receiving their share of the wealth created? How do you think the system should be changed?

_andromeda_ 10y ago
> OK, so what is the flaw in the current setup that prevents workers from receiving their share of the wealth created? How do you think the system should be changed? I have no problem with that and I agree with you (but you don't seem to think so). I think it works very well. It's brilliant that many companies have ESOPs. Early employees that take on risk by joining fledgling companies get huge rewards when things pan out. Even workers who come into the business at later stages can get huge gains of they are deemed to bring in proportional value. >government supplies an implied safety net (Too Big to Fail). I am very much against this myself. I despise it even. Socialised losses and privatised gains are evil.
- webmaven 10y ago
  > I think it works very well. This seems to be the crux of our disagreement. I don't think the current setup works very well, at least not for the bottom 3/4 of the US population. Basically, it was working OK until circa 1975, after which point any gains in improved productivity started accruing to owners of capital almost exclusively. And the more capital you have, the larger your share of those gains, in a superlinear fashion. Meanwhile worker compensation (as measured in constant dollars) has stagnated and even shrunk somewhat recently.
  - _andromeda_ 10y ago
    >the more capital you have, the larger your share of those gains, in a superlinear fashion This is the essence of capitalism and why it works well. Gains exponentiate and as well they should. Capitalism favours retention of capital goods as opposed to the consumption of said capital. What has happened is that many folks have engaged in consumerism and the savings rate has gone down immensely. This phenomenon has negatively affected the middle class and working class more than any misconstrued notion of increased productivity without corresponding increase in compensation. If you're to address the culprit, start there. You cannot invest into a better future if you consume everything and this is exactly what has happened. Nobody cares about savings anymore. Such high time preference, it's horrible! Here's an excerpt from an Austrian (school) blog: Low time preference people value present use of their money less than a certain higher future quantity of money. High time preference people, in contrast, are willing to forego higher future quantities of money for sake of enjoying a certain lower present quantity of money. The low time preference people will therefore be inclined to lend to the high time preference people. That last part is extremely vital. It explains the perpetual cycle we seem to be in. The middle class and working class engaging in excessive consumerism will at some point need to borrow money from the fiscally disciplined to engage in even more consumerism. It has been claimed that the current savings rate is only comparable to that of medieval peasants (more validation needed on this but if it is the case, this is terrible). If all this is true, why would those gains you mention above fail to grow in a superlinear fashion? I think it is a case of eroded values more than anything else.