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Isn't that the entire point of the free market? To find the price that incentivizes the necessary level of production of a good/service? The alternative is a c

Isn't that the entire point of the free market? To find the price that incentivizes the necessary level of production of a good/service? The alternative is a central authority setting prices, which has historically had disastrous results.

Firadeoclus 8y ago
The "necessary" level of production as far as people are able to pay for it. In the iterated free market game power is not equally distributed, which directly affects people's ability to negotiate pay for their work. Another way is to keep the free market as a price discovery mechanism, but introduce a mechanism that counteracts the tendency to accumulate wealth.
Broken_Hippo 8y ago
Well, in romantic theory, yes. But unfortunately, society doesn't value folks that clean toilets and folks that clean toilets need income to buy food, shelter, and other things. The balance of power seriously works against the person cleaning toilets, and they have no real power over the wages they are paid. The market forces that determine pay are more competition between folks that hire others to clean toilets. If all of your competitors pay twice as much as you, you might not have quality employees... or any at all, if a job is readily available. If you have a lot of folks desperate for income, you can pay less. If there are few folks that are willing to clean toilets, you probably pay more. You could go without folks to clean toilets, but your average Western accountant probably isn't going to clean the office toilets or breakroom willingly unless it becomes standard for office jobs everywhere. Many places simply cannot leave dirty facilities - and in some jobs, you probably would rather have separate staff cleaning (hospitals, for example). Luckily, there are a lot of levels between "unregulated, free-market-will-take-care-of-it" and complete control from a central authority. Minimum wages, worker rights, workplace safety, safety nets that ensure less desperate people, and so on.
- CryptoPunk 8y ago
  If the supply of people able and willing to clean toilets is great compared to the demand for toilet cleaning service, the wage for toilet cleaners will be low. We can redistribute profits from investors to low wage workers like the people who clean toilets, but the consequence of that is lower return on investment, and with it, lower rates of investment/economic-growth. In the long, policies that lower economic growth rates are very detrimental to all classes of workers. What increases wages for people like toilet cleaners is high levels of production relative to population. Investment is the mechanism by which we increase production, and profits are how 1. resources are distributed to those who are most effective at growing the economy's level of production 2. people are incentivized to invest to increase production. There's no escaping economic laws, and no free lunch from policies that redistribute income from high income earners to low income earners.
Kluny 8y ago
There are other alternatives. Money isn't only kind of compensation that counts. Once I've covered my expenses - food, housing, transport (that can be public transport if I'm in an area where it's adequate), and medical, I don't care much for extra money. I know this is true, because I have fairly slack hours at the moment and could use my free time to make more money, but I choose not to because I have enough. Other compensation that I'd accept instead - social status, respect, ability to spend my time in beautiful places and talk to interesting, educated people, opportunities to work in interesting buildings or locations, opportunities to work for organizations that I believe in, ability to have more kids, and live in a community that sees childrearing as a community responsibility. All these things are easier to find if you have money, but they're not exactly things money can buy.

Firadeoclus 8y ago

The "necessary" level of production as far as people are able to pay for it. In the iterated free market game power is not equally distributed, which directly affects people's ability to negotiate pay for their work. Another way is to keep the free market as a price discovery mechanism, but introduce a mechanism that counteracts the tendency to accumulate wealth.

Broken_Hippo 8y ago

Well, in romantic theory, yes. But unfortunately, society doesn't value folks that clean toilets and folks that clean toilets need income to buy food, shelter, and other things. The balance of power seriously works against the person cleaning toilets, and they have no real power over the wages they are paid. The market forces that determine pay are more competition between folks that hire others to clean toilets. If all of your competitors pay twice as much as you, you might not have quality employees... or any at all, if a job is readily available. If you have a lot of folks desperate for income, you can pay less. If there are few folks that are willing to clean toilets, you probably pay more. You could go without folks to clean toilets, but your average Western accountant probably isn't going to clean the office toilets or breakroom willingly unless it becomes standard for office jobs everywhere. Many places simply cannot leave dirty facilities - and in some jobs, you probably would rather have separate staff cleaning (hospitals, for example). Luckily, there are a lot of levels between "unregulated, free-market-will-take-care-of-it" and complete control from a central authority. Minimum wages, worker rights, workplace safety, safety nets that ensure less desperate people, and so on.

CryptoPunk 8y ago
If the supply of people able and willing to clean toilets is great compared to the demand for toilet cleaning service, the wage for toilet cleaners will be low. We can redistribute profits from investors to low wage workers like the people who clean toilets, but the consequence of that is lower return on investment, and with it, lower rates of investment/economic-growth. In the long, policies that lower economic growth rates are very detrimental to all classes of workers. What increases wages for people like toilet cleaners is high levels of production relative to population. Investment is the mechanism by which we increase production, and profits are how 1. resources are distributed to those who are most effective at growing the economy's level of production 2. people are incentivized to invest to increase production. There's no escaping economic laws, and no free lunch from policies that redistribute income from high income earners to low income earners.

Kluny 8y ago

There are other alternatives. Money isn't only kind of compensation that counts. Once I've covered my expenses - food, housing, transport (that can be public transport if I'm in an area where it's adequate), and medical, I don't care much for extra money. I know this is true, because I have fairly slack hours at the moment and could use my free time to make more money, but I choose not to because I have enough. Other compensation that I'd accept instead - social status, respect, ability to spend my time in beautiful places and talk to interesting, educated people, opportunities to work in interesting buildings or locations, opportunities to work for organizations that I believe in, ability to have more kids, and live in a community that sees childrearing as a community responsibility. All these things are easier to find if you have money, but they're not exactly things money can buy.