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To summarize: If you provide more value than you cost, you’re always gonna have a job. It’s a business relationship. Ain’t nobody gonna pay you $5 if you only
by Swizec 7y ago
To summarize: If you provide more value than you cost, you’re always gonna have a job.
It’s a business relationship. Ain’t nobody gonna pay you $5 if you only bring in $3. Everyone will fight to pay you $10 if you bring in $20
- djmobley 7y agoHistorically, partners in law firms haven’t had to add value themselves because they had junior lawyers to do that for them.
- Danieru 7y agoIndeed, the deeper reason for that is how law firms are only allowed to be "professional companies", no limited liability shareholders allowed. Thus the industry could never be securitized and profits sold. Instead participating in the profits requires participating in the firm, even if only in risk and name only. This also speaks to why competition is hard to create. No outside limited liability partners means no VCes or passive investors. The closest a law firm can do is loans. Loans partners will be 100% personally liable for.
- tsimionescu 7y agoNot really. Almost everyone in the world is producing more than they get payed. The only way to be guaranteed a job is to provide a better productivity/wage ratio than enough of your competitors. Depending on your profession, your competition might be smaller (eg highly specialized mechanics in the area) or huge (eg all low-skilled factory workers in the world).
- Rainymood 7y agoIf you produce $5 but can't sell it for $3, is it really $5?
- geofft 7y agoSure. Markets work slowly and capriciously. Part of the deal of taking a salaried job is that you get a paycheck now instead of waiting until you've built something and seeing who's ready to buy it and how much. Even if in the steady state someone will definitely buy it for $5, it's nice to put bread on the table today instead of maybe in a year or two. As with all financial transactions of the form "I'll trade your risky profit in the future for a low-risk profit now," you lose some money, and that money goes to the entity absorbing the risk for you.
- michaelt 7y agoIf I have a Foo I can't use myself, but that will make you $5, and you only offer me $3 for it, have I made $5 or $3?
- mason55 7y agoYou’ve created $3 in value and the person who sells it created $2 in value. Maybe they’re managing the logistics of shipping the Foo or the storefront where a customer finds it. If you can create it and sell it for $5 yourself then you’d do that.
- tsimionescu 7y agoIt depends. If I'm trying to sell an object for 5$ but can only sell it for 3, you're right, I've only produced 3$. However, if I'm working for a company and an object I created gets sold by the company for 5$,but the company is paying me 2$ and the salesman 1$,and declaring 2$ worth of profit, then the salesman and I have obviously produced 5$ worth of value together, but were paid 3$ for our work. Any profitable company by definition does exactly this (and nominally un-profitable ones may be doing the same).