6 ms·

then what do you mean by the tenets of marxist economics? what's quack about them?

CryptoPunk 7y ago
Profit isn't surplus value generated by the worker that has been appropriated by the employer. Value is not an objective property that employers are attaining for below its true value to earn a profit. Value is subjective. If I value my free time at $20 an hour, and you value my labor at $40 an hour, we will be able to come to an agreement where you pay me $30 an hour, and we will both benefit according to our subjective perception of value. Profit is compensation for investors that drives, sustains and incentivizes the work of acting as a responsible steward of capital.
- ianleeclark 7y ago
  > If I value my free time at $20 an hour, and you value my labor at $40 an hour, we will be able to come to an agreement where you pay me $30 an hour, and we will both benefit according to our subjective perception of value. This is the price, not value. Value is the benefit provided to an economic agent from a good or service, whereas price is the exchange value for a good or service.
  - CryptoPunk 7y ago
    Right, the price I get for my labor is the value I am attaining for it. The price the employer gets for the product of my labor is the value the employer is getting for it. The value that I as an employee can attain for my labor is not equal to the value the employer can get for its product. The employer's capital is adding value that enables them to sell the product of my labor for more than I can sell the labor alone for. There is no grand con in the free market exchange process. No exploitation that Marxists uncovered that condemns all employers as exploiters who deserve to have their property seized.
    - ianleeclark 7y ago
      > The price the employer gets for the product of my labor is the value the employer is getting for it. This is demonstrably untrue. Your employer almost necessarily needs to profit from hiring you. If they hire you at 30$, they may make 40$. So, the value they are provided in hiring you is roughly 40$. The price they pay is 30$. Edit: this was likely a bad example because people are going to fly off the rails thinking I'm advocating for the LTV, but the point I'm trying to show is this: the employer is willing to pay the price of 30$ because they value the employee's work higher than the cost of the currency. So, to state it again, the price is 30$, but the value is > 30$. This isn't even a marxist critique. This is mainstream economics saying that value and price are distinct. > There is no grand con in the free market exchange process. No exploitation that Marxists uncovered that condemns all employers as exploiters who deserve to have their property seized. I don't care. I'm just hoping that you can use basic economic terminology correct before calling others quacks.
      - oh_sigh 7y ago
        They don't get "provided" value simply by hiring you, they derive value generally from hiring you and mixing your labor with their capital. OP was talking about the value for the worker in taking a wage from an employer in the part you quoted. Clearly the employer wants to make a profit from hiring employees - I don't see how you can think OP would think otherwise based on what they wrote. An employer who hires people who only cost money will soon be out of capital, and same with an employer who just breaks even(since there is uncertainty in any forecast, and you can't go below $0)
        ianleeclark 7y ago
        > They don't get "provided" value simply by hiring you This might be a dialectual/regional difference, but the word, at least to me, means something along the lines of "gain access to." If a value is a perceived benefit of a good or service, then "gaining access to a resource through hiring" is semantically the same as "the value they are provided in hiring you." This really isn't an ideological argument I'm providing, the guy just isn't using the two words correctly in the context that he's speaking. > I don't see how you can think OP would think otherwise based on what they wrote. It's just incredibly confusing when he's mixing terminology that has standard definitions within economics.
- interpenetrate 7y ago
  at first i found it odd you would dismiss trotsky's intellect (a task traditionally carried out by marxists) on the basis of his economics, but now it's obvious that "inflammatory classist conspiracy theories, hate propaganda against the properties classes, and Marxist quack economics" was just you repeating yourself three time. i thought there might be something particular about your intense reaction to trotsky's name, but your account of marx's political economy is so broken (e.g. for marx profit and surplus value are two very separate categories, and in marx's analysis employers indeed do not attain labor power below its true value) that there can't be any foundation on which you could legitimately criticize trotsky's intellectual work. this makes sense because you also just admitted to not actually knowing anything about what trotsky might have written.
  - CryptoPunk 7y ago
    >>e.g. for marx profit and surplus value are two very separate categories, and in marx's analysis employers indeed do not attain labor power below its true value For Marx, the employer's profit was solely expropriated surplus value generated by workers: https://en.wikipedia.org/wiki/Surplus_value https://en.wikipedia.org/wiki/Surplus_value >>Marx uses the term Mehrwert to describe the yield, profit or return on production capital invested, i.e. the amount of the increase in the value of capital. Hence, Marx's use of Mehrwert has always been translated as "surplus value", distinguishing it from "value-added". According to Marx's theory, surplus value is equal to the new value created by workers in excess of their own labor-cost, which is appropriated by the capitalist as profit when products are sold. Read his own words: https://www.marxists.org/archive/marx/works/1847/wage-labour/ch07.htm https://www.marxists.org/archive/marx/works/1847/wage-labour... >>We have said: "Wages are not a share of the worker in the commodities produced by him. Wages are that part of already existing commodities with which the capitalist buys a certain amount of productive labor-power." But the capitalist must replace these wages out of the price for which he sells the product made by the worker; he must so replace it that, as a rule, there remains to him a surplus above the cost of production expended by him, that is, he must get a profit. The man also believed that automation would reduce the demand for labor, and with it, wages: https://www.marxists.org/archive/marx/works/1847/wage-labour/ch09.htm https://www.marxists.org/archive/marx/works/1847/wage-labour... >>But even if we assume that all who are directly forced out of employment by machinery, as well as all of the rising generation who were waiting for a chance of employment in the same branch of industry, do actually find some new employment – are we to believe that this new employment will pay as high wages as did the one they have lost? If it did, it would be in contradiction to the laws of political economy. We have seen how modern industry always tends to the substitution of the simpler and more subordinate employments for the higher and more complex ones. How, then, could a mass of workers thrown out of one branch of industry by machinery find refuge in another branch, unless they were to be paid more poorly? and >>To sum up: the more productive capital grows, the more it extends the division of labour and the application of machinery; the more the division of labour and the application of machinery extend, the more does competition extend among the workers, the more do their wages shrink together. This was proven wrong in his own lifetime as factory worker wages rapidly grew in industrializing Britain. He was an economically illiterate quack promoting basic fallacies like Ludditism that are popular with laymen.
- comex 7y ago
  Formalizing it in terms of the value of free time is not wrong, but it seems rather unhelpful. For most people, the amount of time they spend working is not very elastic, so it's more of a question of where they can sell a fixed amount of working time for the highest price (wage), and what that price is. In a perfectly competitive market, the highest wage would approximate the value the employer derives for the work, with some discount to account for things like the risk the employer takes on and the need for growth. But real markets tend to be far from perfectly competitive. Depending on how hard it is to switch jobs, which is affected by factors like the level of demand by other employers for the same type of work, and the difficulty of retraining for other types of work, the employer may have a semi-monopsony status, in which case the wage may be far below the value the employer derives. The employee still works voluntarily, because they are still gaining value compared to not working, but they don't gain nearly as much value as they would in a competitive market. For that reason, unions and minimum wage laws, among other things, can often create higher wages without driving employers out of business (though not always). I don't know very much about Marxism, so I can't judge how well it addresses this problem; it admittedly doesn't seem to have worked out well in practice. But your libertarian fundamentalism hardly seems like an improvement!
  - CryptoPunk 7y ago
    >>But real markets tend to be far from perfectly competitive. Depending on how hard it is to switch jobs, which is affected by factors like the level of demand by other employers for the same type of work, and the difficulty of retraining for other types of work, the employer may have a semi-monopsony status, in which case the wage may be far below the value the employer derives. Of course real-world economies are highly chaotic/complex and are going to deviate from simple economic models, with numerous outliers that don't adhere to what would be seen in the assumptions of a perfectly efficient/competitive market that exists in economic model, but that is no justification for crude cookie cutter interventions that introduce systemtic distortions. There is no reason to assume the distortions that exist in an ostensibly free market will generally push wages to below their market rate. They are just as likely to push it above. The most reasonable assumption that the distortions that push it above market wages balance the ones that push it below, resulting in average mostly aligning with the true market wage. In the absence of definitive evidence either way, we should opt to trust basic economic theories and respect free market rules, and not actively intoduce laws that blatantly restrict contracting rights in the hope that these new distortions will counter-act some hypothesized imbalance of distortion that exists at labor's expense. These remediative rules are just as likely to exasperate existing distortions as they are to counter them, while introducing a host of new distortions that would otherwise not be present. >>For that reason, unions and minimum wage laws, among other things, can often create higher wages without driving employers out of business (though not always). The wage gains are not a free lunch. It comes at some cost. And that cost can include more than employers being driven out of business, though as we saw in the 50s through 70s in the US, that was often the outcome of unions getting a strangehold over major industries. The fact is, it's impossible to measure the impact of every intervention in a large economy, whether it be rent control, minimum wage, or giving unions a monopoly over a company's negotiation and hiring decisions. In the absence of definitive evidence of the impact of any given proposed intervention, we should opt to trust economic theories that say price floors/caps create and obstructions of contracting rights create economic deadweight losses.

Profit isn't surplus value generated by the worker that has been appropriated by the employer. Value is not an objective property that employers are attaining for below its true value to earn a profit. Value is subjective. If I value my free time at $20 an hour, and you value my labor at $40 an hour, we will be able to come to an agreement where you pay me $30 an hour, and we will both benefit according to our subjective perception of value. Profit is compensation for investors that drives, sustains and incentivizes the work of acting as a responsible steward of capital.

ianleeclark 7y ago
> If I value my free time at $20 an hour, and you value my labor at $40 an hour, we will be able to come to an agreement where you pay me $30 an hour, and we will both benefit according to our subjective perception of value. This is the price, not value. Value is the benefit provided to an economic agent from a good or service, whereas price is the exchange value for a good or service.
- CryptoPunk 7y ago
  Right, the price I get for my labor is the value I am attaining for it. The price the employer gets for the product of my labor is the value the employer is getting for it. The value that I as an employee can attain for my labor is not equal to the value the employer can get for its product. The employer's capital is adding value that enables them to sell the product of my labor for more than I can sell the labor alone for. There is no grand con in the free market exchange process. No exploitation that Marxists uncovered that condemns all employers as exploiters who deserve to have their property seized.
  - ianleeclark 7y ago
    > The price the employer gets for the product of my labor is the value the employer is getting for it. This is demonstrably untrue. Your employer almost necessarily needs to profit from hiring you. If they hire you at 30$, they may make 40$. So, the value they are provided in hiring you is roughly 40$. The price they pay is 30$. Edit: this was likely a bad example because people are going to fly off the rails thinking I'm advocating for the LTV, but the point I'm trying to show is this: the employer is willing to pay the price of 30$ because they value the employee's work higher than the cost of the currency. So, to state it again, the price is 30$, but the value is > 30$. This isn't even a marxist critique. This is mainstream economics saying that value and price are distinct. > There is no grand con in the free market exchange process. No exploitation that Marxists uncovered that condemns all employers as exploiters who deserve to have their property seized. I don't care. I'm just hoping that you can use basic economic terminology correct before calling others quacks.
    - oh_sigh 7y ago
      They don't get "provided" value simply by hiring you, they derive value generally from hiring you and mixing your labor with their capital. OP was talking about the value for the worker in taking a wage from an employer in the part you quoted. Clearly the employer wants to make a profit from hiring employees - I don't see how you can think OP would think otherwise based on what they wrote. An employer who hires people who only cost money will soon be out of capital, and same with an employer who just breaks even(since there is uncertainty in any forecast, and you can't go below $0)
      - ianleeclark 7y ago
        > They don't get "provided" value simply by hiring you This might be a dialectual/regional difference, but the word, at least to me, means something along the lines of "gain access to." If a value is a perceived benefit of a good or service, then "gaining access to a resource through hiring" is semantically the same as "the value they are provided in hiring you." This really isn't an ideological argument I'm providing, the guy just isn't using the two words correctly in the context that he's speaking. > I don't see how you can think OP would think otherwise based on what they wrote. It's just incredibly confusing when he's mixing terminology that has standard definitions within economics.
interpenetrate 7y ago
at first i found it odd you would dismiss trotsky's intellect (a task traditionally carried out by marxists) on the basis of his economics, but now it's obvious that "inflammatory classist conspiracy theories, hate propaganda against the properties classes, and Marxist quack economics" was just you repeating yourself three time. i thought there might be something particular about your intense reaction to trotsky's name, but your account of marx's political economy is so broken (e.g. for marx profit and surplus value are two very separate categories, and in marx's analysis employers indeed do not attain labor power below its true value) that there can't be any foundation on which you could legitimately criticize trotsky's intellectual work. this makes sense because you also just admitted to not actually knowing anything about what trotsky might have written.
- CryptoPunk 7y ago
  >>e.g. for marx profit and surplus value are two very separate categories, and in marx's analysis employers indeed do not attain labor power below its true value For Marx, the employer's profit was solely expropriated surplus value generated by workers: https://en.wikipedia.org/wiki/Surplus_value https://en.wikipedia.org/wiki/Surplus_value >>Marx uses the term Mehrwert to describe the yield, profit or return on production capital invested, i.e. the amount of the increase in the value of capital. Hence, Marx's use of Mehrwert has always been translated as "surplus value", distinguishing it from "value-added". According to Marx's theory, surplus value is equal to the new value created by workers in excess of their own labor-cost, which is appropriated by the capitalist as profit when products are sold. Read his own words: https://www.marxists.org/archive/marx/works/1847/wage-labour/ch07.htm https://www.marxists.org/archive/marx/works/1847/wage-labour... >>We have said: "Wages are not a share of the worker in the commodities produced by him. Wages are that part of already existing commodities with which the capitalist buys a certain amount of productive labor-power." But the capitalist must replace these wages out of the price for which he sells the product made by the worker; he must so replace it that, as a rule, there remains to him a surplus above the cost of production expended by him, that is, he must get a profit. The man also believed that automation would reduce the demand for labor, and with it, wages: https://www.marxists.org/archive/marx/works/1847/wage-labour/ch09.htm https://www.marxists.org/archive/marx/works/1847/wage-labour... >>But even if we assume that all who are directly forced out of employment by machinery, as well as all of the rising generation who were waiting for a chance of employment in the same branch of industry, do actually find some new employment – are we to believe that this new employment will pay as high wages as did the one they have lost? If it did, it would be in contradiction to the laws of political economy. We have seen how modern industry always tends to the substitution of the simpler and more subordinate employments for the higher and more complex ones. How, then, could a mass of workers thrown out of one branch of industry by machinery find refuge in another branch, unless they were to be paid more poorly? and >>To sum up: the more productive capital grows, the more it extends the division of labour and the application of machinery; the more the division of labour and the application of machinery extend, the more does competition extend among the workers, the more do their wages shrink together. This was proven wrong in his own lifetime as factory worker wages rapidly grew in industrializing Britain. He was an economically illiterate quack promoting basic fallacies like Ludditism that are popular with laymen.
comex 7y ago
Formalizing it in terms of the value of free time is not wrong, but it seems rather unhelpful. For most people, the amount of time they spend working is not very elastic, so it's more of a question of where they can sell a fixed amount of working time for the highest price (wage), and what that price is. In a perfectly competitive market, the highest wage would approximate the value the employer derives for the work, with some discount to account for things like the risk the employer takes on and the need for growth. But real markets tend to be far from perfectly competitive. Depending on how hard it is to switch jobs, which is affected by factors like the level of demand by other employers for the same type of work, and the difficulty of retraining for other types of work, the employer may have a semi-monopsony status, in which case the wage may be far below the value the employer derives. The employee still works voluntarily, because they are still gaining value compared to not working, but they don't gain nearly as much value as they would in a competitive market. For that reason, unions and minimum wage laws, among other things, can often create higher wages without driving employers out of business (though not always). I don't know very much about Marxism, so I can't judge how well it addresses this problem; it admittedly doesn't seem to have worked out well in practice. But your libertarian fundamentalism hardly seems like an improvement!
- CryptoPunk 7y ago
  >>But real markets tend to be far from perfectly competitive. Depending on how hard it is to switch jobs, which is affected by factors like the level of demand by other employers for the same type of work, and the difficulty of retraining for other types of work, the employer may have a semi-monopsony status, in which case the wage may be far below the value the employer derives. Of course real-world economies are highly chaotic/complex and are going to deviate from simple economic models, with numerous outliers that don't adhere to what would be seen in the assumptions of a perfectly efficient/competitive market that exists in economic model, but that is no justification for crude cookie cutter interventions that introduce systemtic distortions. There is no reason to assume the distortions that exist in an ostensibly free market will generally push wages to below their market rate. They are just as likely to push it above. The most reasonable assumption that the distortions that push it above market wages balance the ones that push it below, resulting in average mostly aligning with the true market wage. In the absence of definitive evidence either way, we should opt to trust basic economic theories and respect free market rules, and not actively intoduce laws that blatantly restrict contracting rights in the hope that these new distortions will counter-act some hypothesized imbalance of distortion that exists at labor's expense. These remediative rules are just as likely to exasperate existing distortions as they are to counter them, while introducing a host of new distortions that would otherwise not be present. >>For that reason, unions and minimum wage laws, among other things, can often create higher wages without driving employers out of business (though not always). The wage gains are not a free lunch. It comes at some cost. And that cost can include more than employers being driven out of business, though as we saw in the 50s through 70s in the US, that was often the outcome of unions getting a strangehold over major industries. The fact is, it's impossible to measure the impact of every intervention in a large economy, whether it be rent control, minimum wage, or giving unions a monopoly over a company's negotiation and hiring decisions. In the absence of definitive evidence of the impact of any given proposed intervention, we should opt to trust economic theories that say price floors/caps create and obstructions of contracting rights create economic deadweight losses.