3 ms·

This is painfully naive. People are paid by the value they produce minus the maximum extraction ownership can get.

Terr_ 6mo ago
A milder version would be: People are paid based on the marginal cost of replacing them. But still, either of those is a far cry from claiming it's "the value they create". It's not hard to show either. Imagine you're on an island and have been gored in the stomach by a wild animal, and a skilled surgeon can save your life. Most people would instantly agree that continued existence is of immense "value". However after making that decision, you discover that you're on an island where almost everyone is a surgeon and the going-rate is much lower than you expected. Are we supposed to believe that your new knowledge somehow reaches backwards in time and retroactively changes the "value" of Not Dying? No, that'd be crazy. Valuation is never the same as price-point.
- WalterBright 6mo ago
  The value of something is what the buyer is willing to pay for it and the seller is willing to sell at. There is no other meaningful definition of the value of an item or service. > either of those is a far cry from claiming it's "the value they create". Nobody is going to hire someone who produces less value than their pay.
  - nixon_why69 6mo ago
    Elon Musk stopped producing value quite a while ago, nowadays all he does is tweet stupid stuff. Meanwhile his net worth has skyrocketed. Everyone who's ever spent 6 months in big tech knows how easily compensation is divorced from value. Plenty of net-negative, work-creating behavior gets rewarded with big raises.
    - WalterBright 6mo ago
      > Elon Musk stopped producing value quite a while ago No evidence of that. > Everyone who's ever spent 6 months in big tech knows how easily compensation is divorced from value. You could always sell your yourself to a big tech company with your expertise in who are the value ones. A person with that skill would be very valuable to a company.
      - nixon_why69 6mo ago
        Sir, I understand that you did some cool, useful stuff in your career and got rewarded for it and that's a case of the system working, but if you can't see various sycophants and crooks getting just as rich or richer, while contributing nothing, then I can't see it for you.
        WalterBright 6mo ago
        I need to see some evidence that Musk contributes nothing.
        nixon_why69 6mo ago
        Count his tweets over the last few years, WaPo did a big story on it recently, its like 70 tweets/day. Then divide his remaining attention over the number of companies he's running. Or look at the effectiveness of his management of DOGE which is the most public/transparent example we have. I do think up until 2020 he was useful, there's a reason nobody else made electric cars or self landing rockets work. But most of his wealth accumulation has been since then.
        WalterBright 6mo ago
        1. I follow Musk on twitter, and most of them consist of a single emoji and retweet of some other post. 2. What better way to keep an eye on how things are working on twitter by dogfooding the platform? 3. An effective manager does not micromanage a company. He finds competent people and delegates the authority. 4. Most of his tweets are advocacy of the products of his various companies. A major part of being a CEO is being the top salesman for the company. 5. WaPo is owned by Bezos, who competes directly with SpaceX. 6. His companies seem to be doing quite well. Why mess with success?
WalterBright 6mo ago
> the maximum extraction ownership can get And people demand the maximum pay they can get. It's the Law of Supply and Demand. Consider this. You hire Bob for $10/hr, and he produces $100/hr in value. What's going to happen? Your competitor hires him away from for $20/hr. Then another competitor hires Bob away for $30/hr. This proceeds until Bob gets paid about $85/hr. The ROI of hiring Bob is somewhere around 15%. There's a good reason why the vast bulk of the American workforce is paid much more than minimum wage.
- croon 6mo ago
  This is true in a friction-less market with total information symmetry. No such market has ever existed.
  - WalterBright 6mo ago
    You are correct that there is no friction-less market. However, lack of information is called "risk", and risk strongly affects what you will pay for something. A low risk deal will cost you more than a high risk deal. Risk is part of every transaction in a market economy, and is priced in.
    - croon 6mo ago
      Ok, branching from your previous post again, why isn't what you're describing happening? https://fredblog.stlouisfed.org/2023/03/when-comparing-wages-and-worker-productivity-the-price-measure-matters/ https://fredblog.stlouisfed.org/2023/03/when-comparing-wages...
      - WalterBright 6mo ago
        The article starts out being wrong by using wages rather than total compensation. The latter is the complete pay package, which includes paid time off, health insurance benefits, retirement benefits, etc. These typically add about 40% to the wages/salaries.

Terr_ 6mo ago

A milder version would be: People are paid based on the marginal cost of replacing them. But still, either of those is a far cry from claiming it's "the value they create". It's not hard to show either. Imagine you're on an island and have been gored in the stomach by a wild animal, and a skilled surgeon can save your life. Most people would instantly agree that continued existence is of immense "value". However after making that decision, you discover that you're on an island where almost everyone is a surgeon and the going-rate is much lower than you expected. Are we supposed to believe that your new knowledge somehow reaches backwards in time and retroactively changes the "value" of Not Dying? No, that'd be crazy. Valuation is never the same as price-point.

WalterBright 6mo ago
The value of something is what the buyer is willing to pay for it and the seller is willing to sell at. There is no other meaningful definition of the value of an item or service. > either of those is a far cry from claiming it's "the value they create". Nobody is going to hire someone who produces less value than their pay.
- nixon_why69 6mo ago
  Elon Musk stopped producing value quite a while ago, nowadays all he does is tweet stupid stuff. Meanwhile his net worth has skyrocketed. Everyone who's ever spent 6 months in big tech knows how easily compensation is divorced from value. Plenty of net-negative, work-creating behavior gets rewarded with big raises.
  - WalterBright 6mo ago
    > Elon Musk stopped producing value quite a while ago No evidence of that. > Everyone who's ever spent 6 months in big tech knows how easily compensation is divorced from value. You could always sell your yourself to a big tech company with your expertise in who are the value ones. A person with that skill would be very valuable to a company.
    - nixon_why69 6mo ago
      Sir, I understand that you did some cool, useful stuff in your career and got rewarded for it and that's a case of the system working, but if you can't see various sycophants and crooks getting just as rich or richer, while contributing nothing, then I can't see it for you.
      - WalterBright 6mo ago
        I need to see some evidence that Musk contributes nothing.
        nixon_why69 6mo ago
        Count his tweets over the last few years, WaPo did a big story on it recently, its like 70 tweets/day. Then divide his remaining attention over the number of companies he's running. Or look at the effectiveness of his management of DOGE which is the most public/transparent example we have. I do think up until 2020 he was useful, there's a reason nobody else made electric cars or self landing rockets work. But most of his wealth accumulation has been since then.
        WalterBright 6mo ago
        1. I follow Musk on twitter, and most of them consist of a single emoji and retweet of some other post. 2. What better way to keep an eye on how things are working on twitter by dogfooding the platform? 3. An effective manager does not micromanage a company. He finds competent people and delegates the authority. 4. Most of his tweets are advocacy of the products of his various companies. A major part of being a CEO is being the top salesman for the company. 5. WaPo is owned by Bezos, who competes directly with SpaceX. 6. His companies seem to be doing quite well. Why mess with success?

WalterBright 6mo ago

> the maximum extraction ownership can get And people demand the maximum pay they can get. It's the Law of Supply and Demand. Consider this. You hire Bob for $10/hr, and he produces $100/hr in value. What's going to happen? Your competitor hires him away from for $20/hr. Then another competitor hires Bob away for $30/hr. This proceeds until Bob gets paid about $85/hr. The ROI of hiring Bob is somewhere around 15%. There's a good reason why the vast bulk of the American workforce is paid much more than minimum wage.

croon 6mo ago
This is true in a friction-less market with total information symmetry. No such market has ever existed.
- WalterBright 6mo ago
  You are correct that there is no friction-less market. However, lack of information is called "risk", and risk strongly affects what you will pay for something. A low risk deal will cost you more than a high risk deal. Risk is part of every transaction in a market economy, and is priced in.
  - croon 6mo ago
    Ok, branching from your previous post again, why isn't what you're describing happening? https://fredblog.stlouisfed.org/2023/03/when-comparing-wages-and-worker-productivity-the-price-measure-matters/ https://fredblog.stlouisfed.org/2023/03/when-comparing-wages...
    - WalterBright 6mo ago
      The article starts out being wrong by using wages rather than total compensation. The latter is the complete pay package, which includes paid time off, health insurance benefits, retirement benefits, etc. These typically add about 40% to the wages/salaries.