4 ms·

I'm not suggesting that "just improving people's health, education, etc. is enough." I'm suggesting that people aren't being paid enough because, structurally,

by mrow84 13y ago

I'm not suggesting that "just improving people's health, education, etc. is enough." I'm suggesting that people aren't being paid enough because, structurally, they are in a poor bargaining position, and thus can't command higher wages, and so have worse outcomes, which perpetuates their position (that being the structural part). Lots of things go into it, and looking at individuals doesn't really address the wider problem. The only reason that people accept the low wages is because they have nothing else, and once things improve enough to drive wages up the industries that rely on low-wage labour move on. Now, you can take that two ways, and I see both as true (whereas you might only see one). Firstly, the jobs have (eventually/sometimes) improved conditions, up to the point where people demand too much, and the manufacturers have to move on. Note that this wasn't a benevolent act on the part of the manufacturers - they came there because that was where they could get the best return on their investment. It isn't quick, and the manufacturers have absolutely no interest in making it quicker - uprooting an industry is expensive, so they are incentivised to stop people attaining economic independence. The other way to look at it is that the only reason that the manufacturer could extract such a low price is because the people they came to employ were in such a desperate position that they had no other choice. The only argument is that it is still fair, because it was a mutual agreement, a point which I addressed in another sub-thread: it is not fair, because it relies on coercion. We go around the world, coercing people into doing work for us for as little pay as we can get away with. I don't know if you listened to it, but the NPR t-shirt podcasts had some of this stuff in there - including a guy from the t-shirt industry saying precisely that they go to wherever the poverty is, because it's cheaper (which makes sense!) The typical refrain is that, as I already mentioned, it makes things better. Yes, sure, it sometimes does, only much slower than it could do. There are also a host of other positive and negative effects that aren't covered by these ridiculous generalisations I'm making, that can make things either much better, or much worse, for the people involved. My belief is that we should use our combined wealth to mitigate the risks of uncertain negative events, and that it doesn't cost very much to do so for people who are poor. edit: I've enjoyed the discussion btw! :)

pdonis 13y ago
> I'm suggesting that people aren't being paid enough because, structurally, they are in a poor bargaining position But how do you define "paid enough"? Enough for what? I'll agree that they aren't being paid enough to improve their situation materially, but that doesn't mean they aren't paid enough for the value they actually create, doing the work they're actually doing. > The only reason that people accept the low wages is because they have nothing else Yes, but again, that doesn't mean the low wages aren't an accurate reflection of the value those people are currently creating. > once things improve enough to drive wages up the industries that rely on low-wage labour move on Yes, by automating their processes so that a single worker is much more productive and therefore can command higher wages. Not by paying people higher wages for doing the same work they were doing before. > uprooting an industry is expensive, so they are incentivised to stop people attaining economic independence This is true, but note that it only actually works if the manufacturers have no competition. Which basically requires governments to be complicit in stopping their people from attaining economic independence. If there is free competition, then there is economic value to be captured in helping people become more productive, because the limiting factor in how much wealth can be created is almost always human productivity. So the manufacturer that comes to a poor country and builds a factory where people make T-shirts by hand won't last very long in free competition with another manufacturer that comes to that country and builds a factory where people make T-shirts by machine...and then builds a factory where people make trousers by machine...and then builds a factory where people make bicycles by machine...and so on, and so on; and thereby makes much more profit than the manufacturer who couldn't be bothered to invest in increasing workers' productivity. > I've enjoyed the discussion btw! :) So have I. :)
- mrow84 13y ago
  For "how do you define "paid enough"?", yes, I did mean they weren't paid enough for the value they create, because of the price distortions I talked about that occur during the bargaining (price setting) process. For "Yes, by automating their processes so that a single worker is much more productive and therefore can command higher wages. Not by paying people higher wages for doing the same work they were doing before." - automation absolutely is the only route to long term prosperity: it is what has create civilisation as we know it. However, like I said there are strong incentives to stop people becoming more productive, because it is to our benefit, even in a market, once we have invested in a certain kind of productivity (indeed this goes both ways, with workers wanting to protect outdated forms of labour well beyond time). A lot of money gets sunk into developing places, and that money needs a healthy return. So although in principle, yes, there is something to be gained by helping people become more productive, that is on the assumption that the cost of doing so is negligible, which it often isn't. Indeed, paying those costs, the ones that help people become more productive, are exactly what should be happening, and what will be avoided by whoever it was who previously invested in those people, until the investor(s) have got their return (which is essentially an indefinite period), or until the return on a new investment will be greater than its cost (and given that we're talking about moving cities, or often countries, those costs can be large indeed). Just to (try and) be clear, I fully agree that what is required is helping people to be more productive. I don't agree that "free" competition is the optimal way to accomplish that. (I quote free because making competition free requires significant effort and enforcement, which is often lacking in the kind of environments that we are talking about) As a small provocative thought: companies are legal entities, so how about requiring companies to be licensed, prohibiting them being owned, and thus requiring all returns to be either reinvested in the company or distributed to the people who work there. Investment would be entirely through bond issue, which is perfectly sensible, can be adjusted for any desired level of risk, and has good market efficiency. Lots of our structures today aren't defined by natural law, they are just arbitrary, and perhaps they have negative effects? I'm afraid I'm off to bed, so I won't respond, but I'd be interested to read your reply if you write it. Good night/morning/afternoon/evening.

by mrow84 13y ago

pdonis 13y ago

> I'm suggesting that people aren't being paid enough because, structurally, they are in a poor bargaining position But how do you define "paid enough"? Enough for what? I'll agree that they aren't being paid enough to improve their situation materially, but that doesn't mean they aren't paid enough for the value they actually create, doing the work they're actually doing. > The only reason that people accept the low wages is because they have nothing else Yes, but again, that doesn't mean the low wages aren't an accurate reflection of the value those people are currently creating. > once things improve enough to drive wages up the industries that rely on low-wage labour move on Yes, by automating their processes so that a single worker is much more productive and therefore can command higher wages. Not by paying people higher wages for doing the same work they were doing before. > uprooting an industry is expensive, so they are incentivised to stop people attaining economic independence This is true, but note that it only actually works if the manufacturers have no competition. Which basically requires governments to be complicit in stopping their people from attaining economic independence. If there is free competition, then there is economic value to be captured in helping people become more productive, because the limiting factor in how much wealth can be created is almost always human productivity. So the manufacturer that comes to a poor country and builds a factory where people make T-shirts by hand won't last very long in free competition with another manufacturer that comes to that country and builds a factory where people make T-shirts by machine...and then builds a factory where people make trousers by machine...and then builds a factory where people make bicycles by machine...and so on, and so on; and thereby makes much more profit than the manufacturer who couldn't be bothered to invest in increasing workers' productivity. > I've enjoyed the discussion btw! :) So have I. :)

mrow84 13y ago
For "how do you define "paid enough"?", yes, I did mean they weren't paid enough for the value they create, because of the price distortions I talked about that occur during the bargaining (price setting) process. For "Yes, by automating their processes so that a single worker is much more productive and therefore can command higher wages. Not by paying people higher wages for doing the same work they were doing before." - automation absolutely is the only route to long term prosperity: it is what has create civilisation as we know it. However, like I said there are strong incentives to stop people becoming more productive, because it is to our benefit, even in a market, once we have invested in a certain kind of productivity (indeed this goes both ways, with workers wanting to protect outdated forms of labour well beyond time). A lot of money gets sunk into developing places, and that money needs a healthy return. So although in principle, yes, there is something to be gained by helping people become more productive, that is on the assumption that the cost of doing so is negligible, which it often isn't. Indeed, paying those costs, the ones that help people become more productive, are exactly what should be happening, and what will be avoided by whoever it was who previously invested in those people, until the investor(s) have got their return (which is essentially an indefinite period), or until the return on a new investment will be greater than its cost (and given that we're talking about moving cities, or often countries, those costs can be large indeed). Just to (try and) be clear, I fully agree that what is required is helping people to be more productive. I don't agree that "free" competition is the optimal way to accomplish that. (I quote free because making competition free requires significant effort and enforcement, which is often lacking in the kind of environments that we are talking about) As a small provocative thought: companies are legal entities, so how about requiring companies to be licensed, prohibiting them being owned, and thus requiring all returns to be either reinvested in the company or distributed to the people who work there. Investment would be entirely through bond issue, which is perfectly sensible, can be adjusted for any desired level of risk, and has good market efficiency. Lots of our structures today aren't defined by natural law, they are just arbitrary, and perhaps they have negative effects? I'm afraid I'm off to bed, so I won't respond, but I'd be interested to read your reply if you write it. Good night/morning/afternoon/evening.