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Can you provide some evidence? Germany, the country being discussed, is exceptionally productive, as is Japan and other countries with a wide variety of corpora

Can you provide some evidence? Germany, the country being discussed, is exceptionally productive, as is Japan and other countries with a wide variety of corporate governance. China's economy is large, but not very productive compared to advanced economies. Also, can you provide evidence that connects the governance model with productivity? Finally, if by productivity you mean income, I think it raises other issues: Productivity for who? It would be expected that governance models which favor shareholders generate more benefits for shareholders, and those which favor workers or other stakeholders would generate more benefits for them. It's circular to say: 1) the definition of productivity is shareholder income, 2) systems that favor shareholders are therefore more productive.

darawk 8y ago
> Can you provide some evidence? Germany, the country being discussed, is exceptionally productive, as is Japan and other countries with a wide variety of corporate governance. Japan is actually exceptionally not productive. The Japanese people have a reputation for industriousness, but their businesses are actually managed quite poorly. You can see this in their GDP (per capita) growth. Let's look at some plots: https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?end=2017&locations=JP-US-DE-CN&start=1960&view=chart https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?end=2017... These are all the countries we're talking about. Japan's GDP has been flat for a couple of decades now. Since the mid-90s, when they misinterpreted their credit expansion as evidence of their success and over-leveraged themselves buying foreign assets they couldn't afford. Germany has been more responsible, but you can see quite clearly that their productivity growth has been spiky, unstable, and plateauing for the last few years. Yes, overall their GDP per capita is quite high, as is Japan's, but I would attribute that more to a cultural bent towards work ethic and education, to generate consistent growth takes innovation, and innovation requires more than an educated populace and work ethic. It requires a friendly regulatory environment and an incentive structure that rewards people for innovating. On the other hand, look at the US and China. Those are almost impossibly smooth curves. Ya, China is still much lower in absolute terms, but their growth is steady and substantial (notably, since the introduction of capitalist reforms). China is still very much a mixed economy, but you have to look at what they regulate, and how. The Chinese government doesn't regulate their labor market very much, and they certainly don't attempt to impose any sort of co-determination with workers. They want Chinese companies to align themselves with the interest of China as a country (which generally means censorship, and sometimes arbitrarily telling them to stay out of or get into certain markets). But they don't try to tip the scales in favor of labor over capital, at least not in terms of decision making about the businesses themselves. Now, this is all a fine narrative i've constructed, but it's really quite difficult to prove something like this. There's lots of confounding variables, and lots of stuff going on. China and the US both have much larger populations, for instance. China does have some labor regulations that I would consider draconian and a drag on productivity (you have to give 30 days of notice to fire someone, you can only fire people for certain legally specified reasons, and you have to pay severance). But in my view at least, that's a substantially smaller drag than something like work councils, but it's important to state that it is really hard to prove these things. A possibly better measure of productivity is something called 'Total Factor Productivity'. Which sort of says: take the stuff your country produced, subtract the stuff it bought and the difference is your total factor productivity, i.e. how much value is your labor force adding to stuff. Here are the plots for the countries in question: https://fred.stlouisfed.org/graph/?g=lbGq https://fred.stlouisfed.org/graph/?g=lbGq In this chart, actually China isn't even growing. Only the US is. This might be due to weakness of their currency, but i'm not sure. It's complicated. In summary, I think growth is super important, it really does lift people out of poverty, and I think these sorts of regulations will stifle it. When people look at say, Jeff Bezos being worth 160 billion, they think: How is that fair? We should take some of that money and give it to the poor and needy. But most of these attempts to do that aren't going to end up taking Bezos's money and giving it to anyone. They're just going to delete it from the world. The operation isn't a move, it's an erase.
- forapurpose 8y ago
  > a substantially smaller drag Again, this statement assumes the conclusion of the debate. A drag on whom? You assume anything that costs shareholders is a drag, but the question we are discussing is just that: how important are the shareholders vis a vis workers and other stakeholders? (Also, shareholders don't live on an island - if society around them doesn't improve it will hurt their company too.) In an economic sense, aggregate output is a poor measure of individual welfare. If you put Bezos and 9 people without homes in a room, the per capita income and wealth would be in the billions, but that does little good for the 9 people. The important economic numbers are individuals'; that's why inequality or distribution measures matter. > When people look at say, Jeff Bezos being worth 160 billion, they think: How is that fair? We should take some of that money and give it to the poor and needy. I don't hear anyone saying that. What they say is that conditions (laws, etc.) that result in massive benefits to only a tiny number of powerful people are bad conditions, and that we should change those laws, etc. so that more people benefit. They also say, we should invest more in the future and in the country as a whole, including in education and healthcare, and that will benefit everyone - rather than that tiny number of people putting more wealth (and power) in their pockets. > Japan is actually exceptionally not productive > [Japan's] GDP per capita is quite high > I would attribute that more to a cultural bent ... GDP per capita is usually the definition of productivity, output per input. Japan's productivity remains exceptional, even though it's growing slowly. We could discuss cultural bents, but we really don't know. We do know that they are exceptionally productive, at a rate over 400% of China's productivity, and Germany is even more productive, as are Northern European countries that, generally speaking, tilt even further from shareholder capitalism.
  - darawk 8y ago
    > Again, this statement assumes the conclusion of the debate. A drag on whom? A drag on productivity. We're talking about productivity. > In an economic sense, aggregate output is a poor measure of individual welfare. If you put Bezos and 9 people without homes in a room, the per capita income and wealth would be in the billions Sure, but that's not the point of measuring productivity. The argument i'm making has two steps: 1. Productivity growth is reduced via these policies. I think the data i've provided offers at least some evidence for that. 2. When you reduce productivity growth, you harm everyone, in the medium to long term. Yes, if you take all the money and redistribute it equally today, more people will be better off than they were. You will increase the utility points of the universe. For today. But in 20 years? The society that didn't redistribute all the wealth will be better off. > I don't hear anyone saying that. What they say is that conditions (laws, etc.) that result in massive benefits to only a tiny number of powerful people are bad conditions, and that we should change those laws, etc. so that more people benefit. Those are equivalent statements, except that the version you're suggesting is just a bit worse for everyone than actually just taking his money and redistributing it. The policies you're proposing will actually stunt growth, long term. Stunting growth long term harms everyone, for the rest of time. > GDP per capita is usually the definition of productivity, output per input. Japan's productivity remains exceptional, even though it's growing slowly Ya, but it's growth that creates progress. Improving productivity is how we lifted billions of people out of poverty over the last century. We didn't do it by redistributing wealth. We didn't do it by slowing down growth. We did it by making a pie so big that even if you only have a tiny slice, you're still doing pretty well. And the bigger the pie gets, the smaller the slice you'll need to have a very comfortable life. This is the promise of capitalism. Think about all the things that used to be the purview of the rich alone. Transportation, safety, healthcare, clean food, clean water, shelter, banking, access to information and education. All of that is the result of compound economic growth caused and created by capitalism. > We do know that they are exceptionally productive, at a rate over 400% of China's productivity, and Germany is even more productive, as are Northern European countries that, generally speaking, tilt even further from shareholder capitalism. Again, growth is the only thing that matters. If you want to predict civil unrest, social problems, revolutions and unhappiness generally, you look at the derivative of productivity, not productivity itself.

darawk 8y ago

> Can you provide some evidence? Germany, the country being discussed, is exceptionally productive, as is Japan and other countries with a wide variety of corporate governance. Japan is actually exceptionally not productive. The Japanese people have a reputation for industriousness, but their businesses are actually managed quite poorly. You can see this in their GDP (per capita) growth. Let's look at some plots: https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?end=2017&locations=JP-US-DE-CN&start=1960&view=chart https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?end=2017... These are all the countries we're talking about. Japan's GDP has been flat for a couple of decades now. Since the mid-90s, when they misinterpreted their credit expansion as evidence of their success and over-leveraged themselves buying foreign assets they couldn't afford. Germany has been more responsible, but you can see quite clearly that their productivity growth has been spiky, unstable, and plateauing for the last few years. Yes, overall their GDP per capita is quite high, as is Japan's, but I would attribute that more to a cultural bent towards work ethic and education, to generate consistent growth takes innovation, and innovation requires more than an educated populace and work ethic. It requires a friendly regulatory environment and an incentive structure that rewards people for innovating. On the other hand, look at the US and China. Those are almost impossibly smooth curves. Ya, China is still much lower in absolute terms, but their growth is steady and substantial (notably, since the introduction of capitalist reforms). China is still very much a mixed economy, but you have to look at what they regulate, and how. The Chinese government doesn't regulate their labor market very much, and they certainly don't attempt to impose any sort of co-determination with workers. They want Chinese companies to align themselves with the interest of China as a country (which generally means censorship, and sometimes arbitrarily telling them to stay out of or get into certain markets). But they don't try to tip the scales in favor of labor over capital, at least not in terms of decision making about the businesses themselves. Now, this is all a fine narrative i've constructed, but it's really quite difficult to prove something like this. There's lots of confounding variables, and lots of stuff going on. China and the US both have much larger populations, for instance. China does have some labor regulations that I would consider draconian and a drag on productivity (you have to give 30 days of notice to fire someone, you can only fire people for certain legally specified reasons, and you have to pay severance). But in my view at least, that's a substantially smaller drag than something like work councils, but it's important to state that it is really hard to prove these things. A possibly better measure of productivity is something called 'Total Factor Productivity'. Which sort of says: take the stuff your country produced, subtract the stuff it bought and the difference is your total factor productivity, i.e. how much value is your labor force adding to stuff. Here are the plots for the countries in question: https://fred.stlouisfed.org/graph/?g=lbGq https://fred.stlouisfed.org/graph/?g=lbGq In this chart, actually China isn't even growing. Only the US is. This might be due to weakness of their currency, but i'm not sure. It's complicated. In summary, I think growth is super important, it really does lift people out of poverty, and I think these sorts of regulations will stifle it. When people look at say, Jeff Bezos being worth 160 billion, they think: How is that fair? We should take some of that money and give it to the poor and needy. But most of these attempts to do that aren't going to end up taking Bezos's money and giving it to anyone. They're just going to delete it from the world. The operation isn't a move, it's an erase.

forapurpose 8y ago
> a substantially smaller drag Again, this statement assumes the conclusion of the debate. A drag on whom? You assume anything that costs shareholders is a drag, but the question we are discussing is just that: how important are the shareholders vis a vis workers and other stakeholders? (Also, shareholders don't live on an island - if society around them doesn't improve it will hurt their company too.) In an economic sense, aggregate output is a poor measure of individual welfare. If you put Bezos and 9 people without homes in a room, the per capita income and wealth would be in the billions, but that does little good for the 9 people. The important economic numbers are individuals'; that's why inequality or distribution measures matter. > When people look at say, Jeff Bezos being worth 160 billion, they think: How is that fair? We should take some of that money and give it to the poor and needy. I don't hear anyone saying that. What they say is that conditions (laws, etc.) that result in massive benefits to only a tiny number of powerful people are bad conditions, and that we should change those laws, etc. so that more people benefit. They also say, we should invest more in the future and in the country as a whole, including in education and healthcare, and that will benefit everyone - rather than that tiny number of people putting more wealth (and power) in their pockets. > Japan is actually exceptionally not productive > [Japan's] GDP per capita is quite high > I would attribute that more to a cultural bent ... GDP per capita is usually the definition of productivity, output per input. Japan's productivity remains exceptional, even though it's growing slowly. We could discuss cultural bents, but we really don't know. We do know that they are exceptionally productive, at a rate over 400% of China's productivity, and Germany is even more productive, as are Northern European countries that, generally speaking, tilt even further from shareholder capitalism.
- darawk 8y ago
  > Again, this statement assumes the conclusion of the debate. A drag on whom? A drag on productivity. We're talking about productivity. > In an economic sense, aggregate output is a poor measure of individual welfare. If you put Bezos and 9 people without homes in a room, the per capita income and wealth would be in the billions Sure, but that's not the point of measuring productivity. The argument i'm making has two steps: 1. Productivity growth is reduced via these policies. I think the data i've provided offers at least some evidence for that. 2. When you reduce productivity growth, you harm everyone, in the medium to long term. Yes, if you take all the money and redistribute it equally today, more people will be better off than they were. You will increase the utility points of the universe. For today. But in 20 years? The society that didn't redistribute all the wealth will be better off. > I don't hear anyone saying that. What they say is that conditions (laws, etc.) that result in massive benefits to only a tiny number of powerful people are bad conditions, and that we should change those laws, etc. so that more people benefit. Those are equivalent statements, except that the version you're suggesting is just a bit worse for everyone than actually just taking his money and redistributing it. The policies you're proposing will actually stunt growth, long term. Stunting growth long term harms everyone, for the rest of time. > GDP per capita is usually the definition of productivity, output per input. Japan's productivity remains exceptional, even though it's growing slowly Ya, but it's growth that creates progress. Improving productivity is how we lifted billions of people out of poverty over the last century. We didn't do it by redistributing wealth. We didn't do it by slowing down growth. We did it by making a pie so big that even if you only have a tiny slice, you're still doing pretty well. And the bigger the pie gets, the smaller the slice you'll need to have a very comfortable life. This is the promise of capitalism. Think about all the things that used to be the purview of the rich alone. Transportation, safety, healthcare, clean food, clean water, shelter, banking, access to information and education. All of that is the result of compound economic growth caused and created by capitalism. > We do know that they are exceptionally productive, at a rate over 400% of China's productivity, and Germany is even more productive, as are Northern European countries that, generally speaking, tilt even further from shareholder capitalism. Again, growth is the only thing that matters. If you want to predict civil unrest, social problems, revolutions and unhappiness generally, you look at the derivative of productivity, not productivity itself.