5 ms·

This is not 100% wrong, but you are missing an important part of the calculus, which is that as you go up the hierarchy you have more overall and more concentra

by topaz0 4y ago

This is not 100% wrong, but you are missing an important part of the calculus, which is that as you go up the hierarchy you have more overall and more concentrated power to demand higher pay, out of proportion to the value of your labor.

pdonis 4y ago
> higher pay, out of proportion to the value of your labor To the extent this is a problem, it's a problem of corporate governance. Unfortunately, I'm not sure that problem is fixable, since its root cause is a shift in corporate ownership from individual stockholders to mutual funds (because mutual funds is how most people now invest their retirement savings in 401ks or the equivalent). The effect of this on individual corporations is to make their time horizon for stock price growth much shorter, because unlike individual retirement investors, most of whom adopt a buy and hold strategy and don't trade very often, mutual funds trade stocks all the time based on short term performance.
- topaz0 4y ago
  Somehow that wasn't always the case in the past, so presumably it's also possible for things to be different in the future. If we have the audacity to imagine a different world, it is fixable through organizing and demanding that incentives be aligned with our values rather than with the spiraling fortunes of a handful of extremely self-centered people.
  - pdonis 4y ago
    > that wasn't always the case in the past Yes, that's correct. The movement of stock ownership to mutual funds largely took place in the few decades after WW II. > presumably it's also possible for things to be different in the future Yes, but the changes that would have to take place are quite drastic. I don't think disallowing mutual funds is an option. But the only other mechanism of control (aside from market forces--see below) would be to drastically change the regulations concerning corporate governance, and it's not even clear that that would do more than exchange one problem for another, since regulatory capture is a thing. The only other way to change the incentives facing corporate governance structures is to change the market, either on the producer side or the consumer side. On the consumer side, consumers would have to stop buying goods and services from companies that overpay their CEOs and underpay their workers. Unfortunately that would mean consumers choosing to take a huge economic hit, since those same companies provide huge economic value to consumers. (And in some cases, such as Google and Facebook, consumers don't even have the option of not paying, since the services are free; they would have to stop using the services altogether even though they're free, which is probably even harder to make happen than getting consumers to stop paying for something.) On the producer side, new companies that are structured differently in terms of governance (for example as worker cooperatives) would need to enter the market and out-compete the existing companies. Sooner or later that might well happen, but it could be quite a long time.
    - topaz0 4y ago
      I didn't say it would be easy. What I said is that the potential for change is rooted in organizing and class struggle. > regulatory capture Regulatory capture just is the capitalist class organizing to shape the structures of society to their continued advantage. It is class struggle. The only solution is to struggle back.
      - pdonis 4y ago
        > the potential for change is rooted in organizing and class struggle I don't think this is a useful way to view it. I would say the potential for change is in people shifting to a more long-term viewpoint instead of always chasing short-term gain and satisfaction. > Regulatory capture just is the capitalist class organizing to shape the structures of society to their continued advantage. If you don't think of yourself as a capitalist, you are dooming yourself to always be on the losing side of interactions with those that do. Particularly if they are predators. Regulatory capture is just one way that predators use the system to their own advantage at the expense of everybody else. But not all capitalists are predators. The immense wealth our society has was built by people who were both capitalists and cooperators: wealth building is positive sum, the aggregation of win-win interactions over time. But sustaining wealth building requires taking a longer term view in order to preserve the social institutions and social trust that are necessary for it to happen. Unfortunately, the current trend is in the opposite direction.
        kilna 4y ago
        > not all capitalists are predators That is simply untrue. Sure, some capitalists have good PR, touting their non-capitalist efforts in ways that intentionally confuse them with capitalism for the purpose of increasing PR value. The increase in PR value is just a more oblique means of wealth extraction. The actual act of being capitalist, i.e., extracting excess value from labor by leveraging capital (piles of money, factories, infrastructure, etc)... that is inherently predatory in nature. Capitalists use the fact that they own stuff, and the fact that workers need food, shelter and healthcare, to grift the maximum amount of value for the minimum amount of public good, PR notwithstanding. It's codified into the cornerstone concept of shareholder value. Capitalism itself is distinct from any charity or other social good that a capitalist or company might engage in, and all capitalism exploits labor. Not every act a capitalist does is predatory, but every capitalist is a predator.
seti0Cha 4y ago
I think you have the causality backwards. A person is able to demand higher pay not because they are in charge, but because the owners/upper management want them to be in charge. That is, they get hired with high pay because that's the value the employer puts on their labor. They determine that the same way the determine what they're willing to pay for other goods and services: how much do they want it, and how easy it is to get.
- topaz0 4y ago
  I don't know what point you are trying to make. You are describing some of the ways that people higher up the hierarchy have more power to demand higher wages. That's what I was talking about.
  - seti0Cha 4y ago
    Ok, let me say it a different way. They don't have the power to demand more than they are worth, because the amount the employer offers reflects what the employer thinks they are worth. You may disagree about how much value they supply, but that's not really relevant. Wages aren't set by what some 3rd party thinks is fair, they're set like other prices - how much the employee's skills are needed and the available supply of people with those skills. Hierarchy is only incidentally involved, and not always. Consider, for example, the wages of actors or professional athletes for example.
- danielscrubs 4y ago
  In my experience it’s not about labor at all. It’s very far from wanting to put the best high up and more about which social circles you get access to. It’s always a struggle between what’s best for the company and what is best for the individual board members/ceo and there is way to few real active investors for the best of the company to take priority usually.

by topaz0 4y ago

pdonis 4y ago

> higher pay, out of proportion to the value of your labor To the extent this is a problem, it's a problem of corporate governance. Unfortunately, I'm not sure that problem is fixable, since its root cause is a shift in corporate ownership from individual stockholders to mutual funds (because mutual funds is how most people now invest their retirement savings in 401ks or the equivalent). The effect of this on individual corporations is to make their time horizon for stock price growth much shorter, because unlike individual retirement investors, most of whom adopt a buy and hold strategy and don't trade very often, mutual funds trade stocks all the time based on short term performance.

topaz0 4y ago
Somehow that wasn't always the case in the past, so presumably it's also possible for things to be different in the future. If we have the audacity to imagine a different world, it is fixable through organizing and demanding that incentives be aligned with our values rather than with the spiraling fortunes of a handful of extremely self-centered people.
- pdonis 4y ago
  > that wasn't always the case in the past Yes, that's correct. The movement of stock ownership to mutual funds largely took place in the few decades after WW II. > presumably it's also possible for things to be different in the future Yes, but the changes that would have to take place are quite drastic. I don't think disallowing mutual funds is an option. But the only other mechanism of control (aside from market forces--see below) would be to drastically change the regulations concerning corporate governance, and it's not even clear that that would do more than exchange one problem for another, since regulatory capture is a thing. The only other way to change the incentives facing corporate governance structures is to change the market, either on the producer side or the consumer side. On the consumer side, consumers would have to stop buying goods and services from companies that overpay their CEOs and underpay their workers. Unfortunately that would mean consumers choosing to take a huge economic hit, since those same companies provide huge economic value to consumers. (And in some cases, such as Google and Facebook, consumers don't even have the option of not paying, since the services are free; they would have to stop using the services altogether even though they're free, which is probably even harder to make happen than getting consumers to stop paying for something.) On the producer side, new companies that are structured differently in terms of governance (for example as worker cooperatives) would need to enter the market and out-compete the existing companies. Sooner or later that might well happen, but it could be quite a long time.
  - topaz0 4y ago
    I didn't say it would be easy. What I said is that the potential for change is rooted in organizing and class struggle. > regulatory capture Regulatory capture just is the capitalist class organizing to shape the structures of society to their continued advantage. It is class struggle. The only solution is to struggle back.
    - pdonis 4y ago
      > the potential for change is rooted in organizing and class struggle I don't think this is a useful way to view it. I would say the potential for change is in people shifting to a more long-term viewpoint instead of always chasing short-term gain and satisfaction. > Regulatory capture just is the capitalist class organizing to shape the structures of society to their continued advantage. If you don't think of yourself as a capitalist, you are dooming yourself to always be on the losing side of interactions with those that do. Particularly if they are predators. Regulatory capture is just one way that predators use the system to their own advantage at the expense of everybody else. But not all capitalists are predators. The immense wealth our society has was built by people who were both capitalists and cooperators: wealth building is positive sum, the aggregation of win-win interactions over time. But sustaining wealth building requires taking a longer term view in order to preserve the social institutions and social trust that are necessary for it to happen. Unfortunately, the current trend is in the opposite direction.
      - kilna 4y ago
        > not all capitalists are predators That is simply untrue. Sure, some capitalists have good PR, touting their non-capitalist efforts in ways that intentionally confuse them with capitalism for the purpose of increasing PR value. The increase in PR value is just a more oblique means of wealth extraction. The actual act of being capitalist, i.e., extracting excess value from labor by leveraging capital (piles of money, factories, infrastructure, etc)... that is inherently predatory in nature. Capitalists use the fact that they own stuff, and the fact that workers need food, shelter and healthcare, to grift the maximum amount of value for the minimum amount of public good, PR notwithstanding. It's codified into the cornerstone concept of shareholder value. Capitalism itself is distinct from any charity or other social good that a capitalist or company might engage in, and all capitalism exploits labor. Not every act a capitalist does is predatory, but every capitalist is a predator.

seti0Cha 4y ago

I think you have the causality backwards. A person is able to demand higher pay not because they are in charge, but because the owners/upper management want them to be in charge. That is, they get hired with high pay because that's the value the employer puts on their labor. They determine that the same way the determine what they're willing to pay for other goods and services: how much do they want it, and how easy it is to get.

topaz0 4y ago
I don't know what point you are trying to make. You are describing some of the ways that people higher up the hierarchy have more power to demand higher wages. That's what I was talking about.
- seti0Cha 4y ago
  Ok, let me say it a different way. They don't have the power to demand more than they are worth, because the amount the employer offers reflects what the employer thinks they are worth. You may disagree about how much value they supply, but that's not really relevant. Wages aren't set by what some 3rd party thinks is fair, they're set like other prices - how much the employee's skills are needed and the available supply of people with those skills. Hierarchy is only incidentally involved, and not always. Consider, for example, the wages of actors or professional athletes for example.
danielscrubs 4y ago
In my experience it’s not about labor at all. It’s very far from wanting to put the best high up and more about which social circles you get access to. It’s always a struggle between what’s best for the company and what is best for the individual board members/ceo and there is way to few real active investors for the best of the company to take priority usually.