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The market did though. Ignore the raw values and consider the amounts taken into consideration by the economic actors, expected returns, which have a probabilit

The market did though. Ignore the raw values and consider the amounts taken into consideration by the economic actors, expected returns, which have a probability component. As the chance of payoff for startups is low, a high payoff may actually be required to accurately price the market to draw the requisite amount of labor.

clicks 13y ago
Isn't that then a really good argument that relying on markets is decidedly not the way to go, and that socialism, for example, is more fair and just than capitalism? In the end, we all want a society that's "fair" to the largest amount of people, where each person gets about as much as they toil for. It seems the market is apparently doing a pretty lousy job, if we've come to a reality where two lucky dudes who were well connected could sell their photo-sharing app for a billion all the while a good half of the country risks getting financially decimated come an unforeseen disease or bad accident somewhere.
Steko 13y ago
"Ignore the raw values" You can't ignore the raw values and just look at means, aggregates and weighted probability functions when the problem we're talking about is inequality. "chance of payoff for startups is low ..." What you're describing is entrepreneurial risk, not the price of labor.
- BrianEatWorld 13y ago
  You have to though, because when people are considering what career path to pursue, they aren't looking at one scenario, they are looking at the expected scenario. For a start-up this means lots of long hours at low pay with a slim chance at making it big. If you lower that big payoff, start-up employment then becomes long hours at low pay for a slim chance at making very little. If this were the case, no on would work in start-ups. You can't affect the "slim chance" part of the equation because no one knows what ideas will be successful. I am talking about the price of labor, but in aggregate not an individual. This is what sets the incentives for the labor and incentives, not any set nominal value that may be decreed objectively "correct", are what the market sets. Both responses also seem to object along the lines of the Labor Theory of Value. Do you truly believe that the price of a product (wages or otherwise) should be directly tied to the amount of labor going into said product?

clicks 13y ago

Isn't that then a really good argument that relying on markets is decidedly not the way to go, and that socialism, for example, is more fair and just than capitalism? In the end, we all want a society that's "fair" to the largest amount of people, where each person gets about as much as they toil for. It seems the market is apparently doing a pretty lousy job, if we've come to a reality where two lucky dudes who were well connected could sell their photo-sharing app for a billion all the while a good half of the country risks getting financially decimated come an unforeseen disease or bad accident somewhere.

Steko 13y ago

"Ignore the raw values" You can't ignore the raw values and just look at means, aggregates and weighted probability functions when the problem we're talking about is inequality. "chance of payoff for startups is low ..." What you're describing is entrepreneurial risk, not the price of labor.

BrianEatWorld 13y ago
You have to though, because when people are considering what career path to pursue, they aren't looking at one scenario, they are looking at the expected scenario. For a start-up this means lots of long hours at low pay with a slim chance at making it big. If you lower that big payoff, start-up employment then becomes long hours at low pay for a slim chance at making very little. If this were the case, no on would work in start-ups. You can't affect the "slim chance" part of the equation because no one knows what ideas will be successful. I am talking about the price of labor, but in aggregate not an individual. This is what sets the incentives for the labor and incentives, not any set nominal value that may be decreed objectively "correct", are what the market sets. Both responses also seem to object along the lines of the Labor Theory of Value. Do you truly believe that the price of a product (wages or otherwise) should be directly tied to the amount of labor going into said product?