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>labor is purely an expense Unless you expand the view and see that an employee that gets paid has money to participate in the economy and buy your goods. Eco

by gech 9y ago

>labor is purely an expense Unless you expand the view and see that an employee that gets paid has money to participate in the economy and buy your goods. Economics is a sham science.

bbctol 9y ago
That second sentence really doesn't follow the first.
paulpauper 9y ago
The savings from automation and outsourcing far exceeds what Apple (a common example) could earn from the increased purchasing power from US Apple employees if some of those employees had slightly more money to buy Apple products. The odds of employees taking their increased wages and ONLY buying your goods, is slim, and this logic does not work for companies such as Boeing , that make products that no possible employee could ever afford.
- TimJYoung 9y ago
  You have to keep going and not stop at the first level (for example, who buys airline tickets ?). What you'll find is that, eventually, it all comes back to consumer demand.
  - bryondowd 9y ago
    But the people making decisions at any one company can't go beyond that level for their decision-making. While it would be beneficial to the company if consumers in general had more spending power, each company's decisions can only make a negligible influence on that, and would in fact just be providing a tiny subsidy that the rest of the market would likely eat up without returning the favor. Most owners and shareholders and such wouldn't stand for that, and whatever few eccentrics who would, wouldn't reach the critical mass necessary for it to benefit anyone much. I don't know of any way to resolve that short of government intervention or massive employee unionization, which are both rather far-fetched in the current environment, but perhaps will become more plausible as more people get their jobs automated.
    - TimJYoung 9y ago
      Yes, it is absolutely a problem along the same lines as the Prisoner's dilemma: https://en.wikipedia.org/wiki/Prisoner%27s_dilemma https://en.wikipedia.org/wiki/Prisoner%27s_dilemma And yes, I agree, we're going to need a countervailing market mechanism to stop it from proceeding to its logical conclusion: a persistent, severe recession. Whatever the mechanism, it's going to need to be dynamic and adaptable, or it's "dead on arrival" as a solution.
jstanley 9y ago
If an employee only receives an income from me, then the maximum amount that he can spend on my goods is the amount that I'm paying him for his work. If his work is of no inherent value, wouldn't I be better off just keeping the money rather than hope that he'll spend it all on my goods?

by gech 9y ago

>labor is purely an expense Unless you expand the view and see that an employee that gets paid has money to participate in the economy and buy your goods. Economics is a sham science.

bbctol 9y ago

That second sentence really doesn't follow the first.

paulpauper 9y ago

The savings from automation and outsourcing far exceeds what Apple (a common example) could earn from the increased purchasing power from US Apple employees if some of those employees had slightly more money to buy Apple products. The odds of employees taking their increased wages and ONLY buying your goods, is slim, and this logic does not work for companies such as Boeing , that make products that no possible employee could ever afford.

TimJYoung 9y ago
You have to keep going and not stop at the first level (for example, who buys airline tickets ?). What you'll find is that, eventually, it all comes back to consumer demand.
- bryondowd 9y ago
  But the people making decisions at any one company can't go beyond that level for their decision-making. While it would be beneficial to the company if consumers in general had more spending power, each company's decisions can only make a negligible influence on that, and would in fact just be providing a tiny subsidy that the rest of the market would likely eat up without returning the favor. Most owners and shareholders and such wouldn't stand for that, and whatever few eccentrics who would, wouldn't reach the critical mass necessary for it to benefit anyone much. I don't know of any way to resolve that short of government intervention or massive employee unionization, which are both rather far-fetched in the current environment, but perhaps will become more plausible as more people get their jobs automated.
  - TimJYoung 9y ago
    Yes, it is absolutely a problem along the same lines as the Prisoner's dilemma: https://en.wikipedia.org/wiki/Prisoner%27s_dilemma https://en.wikipedia.org/wiki/Prisoner%27s_dilemma And yes, I agree, we're going to need a countervailing market mechanism to stop it from proceeding to its logical conclusion: a persistent, severe recession. Whatever the mechanism, it's going to need to be dynamic and adaptable, or it's "dead on arrival" as a solution.

jstanley 9y ago

If an employee only receives an income from me, then the maximum amount that he can spend on my goods is the amount that I'm paying him for his work. If his work is of no inherent value, wouldn't I be better off just keeping the money rather than hope that he'll spend it all on my goods?