Marxism discussion thread

Discussion in 'Politics & Current Events' started by will_shred, Aug 15, 2017.

  1. Andromalia

    Andromalia Pardon my french

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    I'm not saying capital shouldn't be rewarded, I'm saying the balance is off.

    I'm very leftwing but not a marxist, I don't believe in collectivisation and stuff. I believe that a better balance is needed, and the main point is, it wouldn't cost anyone anything in terms of living quality. At some point, earning more money stops earning you a better quality of life, so why should society aim for it ? If you earn 1 million a year instead of 5, you're not losing anything, really.

    The main reason for the failure of past marxist experiments is that they all forgot that the internationalist movements aren't internationalists just because they want a communist world. We want a world government because borders are the main issue today, most notably with tax evasion and varying legislations abuse, you know, building factories using toxic stuff in China because it's not allowed in occidental countries etc. You can't succeed when the first thing that happen if you start a socialist system is other countries central banks attacking your currency (which is what happened to France in 1982 by the way) because their companies push for the "sell shit to the poor" model.

    One of the fallacies is also, that price control stifles competition and research. That's entirely false. Price doesn't have to be the only area companies compete in. If the price for a good is fixed, then all sellers of the same good will have to compete on quality instead of price. It's easily understandable why companies selling junk food would disagree, but they are a problem. Keeping people poor so they have to buy the cheapest shit available isn't a way of moving the society forward.
     
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  2. marcwormjim

    marcwormjim SS.org Regular

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    You're losing four million.
     
  3. Drew

    Drew Forum MVP

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    No, but what it does is constrain the supply of scarce goods coming to market, or encourages their economically inefficient use. It's a layup of an example, but look at rent controls in NYC. They keep pricing artificially high for non-controlled properties, and ensure turnover at controlled properties is essentially zero. Or, on the other side, American water policy - we heavily subsidize the cost of water in the American Midwest and west in this country, because hey, people should have clean drinking water... But, what that translates to is highly inefficient private citizen water usage - say, irrigating grass lawns in a desert, right up until cities physically stop their residents from doing so in drought conditions, as well as commercial farming operations growing high-water low-value crops like alfalfa in deserts that often times are also supported by price controls, so the government is subsidizing it on both ends - broken record, Marc Reisler's "Cadillac Desert" is an eye-opening look at American water policy, all the more so for all the economic arguments that he only mentions in passing while focusing on more conventionally "green" themes like conservation of natural beauty and preservation of endangered species.

    If you'd rather a more traditional economic argument - if a price control is above the cost of production, then the benefit of the price control accrues to consumers, if the cap is below the equilibrium market price, or producers, if it's above the equilibrium market price, so it's not as clear-cut that this actually helps consumers as you might think. And, if the price level is set below the cost of production, then no one produces the good and supply evaporates (whereas in a market without price controls, the price would rise in response to the decline in supply until we reached an equilberum where producers would be able to produce a good profitably, but not at an "economic rent-seeking" profit (or, essentially, the fair value of the time and capital contributed) such that other entrants would be attracted to the market to contribute additional supply in order to capture some of that economic rent, in turn pushing the price down.
     
    Last edited: Aug 23, 2017
  4. Drew

    Drew Forum MVP

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    Less so if you think about it in marginal income terms. Remember, the textbook argument against taxation from the right is that it discourages individuals and businesses from contributing more capital or labor to the markets, therefore impacting ooverall economic growth.

    If you're in a fairly high-tax environment and you're considering embarking on a new venture, contributing either your human capital in the form of labor or your economic capital, and you were expected to generate $5mm in pre-tax income by doing so, then clearly taxes are going to be part of the equation here. If the entirety of the project's revenue was taken in taxes, then sure, you have no incentive not to do it. But, just as clearly, there are tax rates less than 100% where it still makes sense to go ahead with that investment of capital or of labor, because you're still receiving enough additional post-tax income to make it worth your while. Where that threshold is is subject to some debate - the Laffer curve is one of those concepts that's pretty clearly true in theory, that as rates exceed a certain threshold then tax revenue falls because the supply of labor starts to decline, but in practice it's pretty well accepted by mainstream economists (here I'll cite the CFA curriculum as a source, which is about as middle-of-the-road-yet-academically-rigorous as you can get) that the US's top tax rate is well below that hypothetical rate, and even much of Europe, while closer, is still probably below it.

    But, the better way of understanding that question, is would you dedicate your time or capital to an endeavor that would generate $5 million in additional profit, if after taxes you'd only receive an additional $1 million? More likely than not, for most people and depending somewhat on their circumstances and personal utility function, the answer is "yes."
     
  5. bostjan

    bostjan MicroMetal Contributor

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    Ok, say that your business plan is estimated to earn $5M before taxes. Then you have the option to start that plan in a country where regulations interfere, so that you would make only $1M before taxes, or start the plan in a country where you stand to make the entire $5M before taxes, but then pay $4M in taxes, or start the plan in another country that has a larger labour force and fewer regulations and also lower taxes, so you stand to make upwards of $5M with your business plan there, even after taxes. Which would you choose?

    Sadly, the way this works is that businesses do what is best for businesses. If it screws over a bunch of workers and their families, then that's what happens. If, for example, you chose to write legislation to pick on the service industry, such that they would no longer be profitable companies, then the service industry in that legislative region would go away, by and large.

    With manufacturing, we've seen it time and time again. You want to squeeze a little more tax out of the industry, and it packs its bags and moves to Mexico or Korea, where there is less red tape...and voila, you have 1980's Detroit.

    I'm not saying that 1980's Detroit is what will happen to the entire nation under socialism. BUT - 1980's Detroit happened because of irresponsible taxation. Stalinism happened because of irresponsible socialist policies. A lot of awful things can happen under socialism if it's not done in a smart way. Same goes for any economic political model. The model we have now in the USA is essentially capitalism with all sorts of bits and pieces from other models kind of patched in here and there. It is far from perfect, and some would say it's broken. But it could get a lot worse before it gets better.

    There are a lot of benefits to the economy under capitalism that do not exist under socialism. Maybe the best economic system is not a pure one, but a hybrid one like what we have, only with some well-thought-out reforms.
     
  6. AngstRiddenDreams

    AngstRiddenDreams Filthy Casual

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    I think his point is that the 4 million will
    make a bigger impact if it could help workers rather go in the pocket of the owner. If you can boost you're employees salary by 10k/yearly when they're making 30k, their quality of life will see a greater improvement.
     
  7. Drew

    Drew Forum MVP

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    Bostjan - hate to put you on the spot, but isn't that an argument for cutting the US corporate rate? I'd rather see the corporate rate go down and the personal rate go up.

    ARD - I think you're overthinking this - his point was as simple as 1 is less than 5. :lol:
     
  8. bostjan

    bostjan MicroMetal Contributor

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    If such is the case that paying workers $40k/yr yields a healthier business model, then companies moving labour to countries where they can pay $0.25/day would be easily pushed out of business by companies who retain their manufacturing in the USA.

    People need to keep asking for more. You have to ask for more to get more. And I agree that it's difficult to support a family by working at Starbucks, but when you start demanding what your employer cannot pay, and you get your way, it forces your employer to terminate your employment, then you get nothing.

    So, from an economic standpoint, a worker adds a certain amount of value to the company. This value amount is not static, but looking at metrics over time gives the employer a good idea of what is a fair wage. If I work at McD's selling dollar menu items, maybe my position can rake in a couple hundred bucks a day in total sales. If I demand $40k/year for such a job, then I'm not making much sense...$200 coming in for two cashiers, $300 in wages = a big nope for that business model. In fact, half that much is crazy, too, since there is the whole problem of all of the overhead around producing the thing I am selling for my employer. It all has to work out so that the company can sustain itself - I think too many people have no connection to that, and don't understand that a small business doesn't make enough in profits to pay employees what people are demanding. Now, your cashier making $16k/year could demand $30k/year, maybe, or, well, for sure more than what is currently paid, but let's be honest here and point out that fast food cashier or short order cook is not really a career intended for anyone to try to support a family.

    My theory, that is to say my model, for life and common sense, is that everything hangs in a balance. Absolutes and extremes are hardly ever viable over the long term. Asking for more from your employer is a great way to get a better wage, but there are limits, and those limits are within the realm of economics and common sense. If I demand more than I am bringing in to the company, then I demand too much. If I demand more than what my competitors in the job market demand to do the same thing, then I demand too much.

    Companies are money-making organizations, and therefore, behave as if they are greedy. The best way to harness that and control it is to start your own company. Once you've operated your own business and struggled to make ends meet that way, whilst trying to pay employees a fair wage, along with acceptable benefits, I think you get a much clearer picture of how that balance hangs.

    @Drew - Yeah, but the same applies to both. If I live in a certain country, though, I get benefits from the public services paid by tax revenue. It's like a benefits package. Public Health Care, for example, is a really nice benefit to have, economically speaking, so it keeps residents happy, on average. Free college for everyone has a much less widespread impact. Also, correct me if I'm wrong, but doesn't the corporate tax combined with the payroll tax (typically covered by employers) account for about the same revenue as personal income tax? If so, they would be on more or less equal importance in the discussion. It's been a while since I've looked at the numbers, though, so I might be way out of date.
     
    Last edited: Aug 23, 2017
  9. Drew

    Drew Forum MVP

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    Oh, I wasn't even going as far as that - simply observing that if there was no tax rate difference between the US and, say, Ireland, then we wouldn't see companies engaging in tax inversions or reincorporating overseas to reduce their tax bills.
     
  10. Andromalia

    Andromalia Pardon my french

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    My point was, past a certain level of income, having more money doesn't bring anything to your life. To take a might hearted exemple, if you're a normal male human being, you should be out after three to five hookers. Being able to purchase the services of 50 a day isn't going to change anything for you.

    That point is however moot, as I stated earlier, as long as borders are still there, the problems can't be solved short of using violence.
     
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  11. bostjan

    bostjan MicroMetal Contributor

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    9/10 billionaires disagree with your post. :lol:
     
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  12. GuitarBizarre

    GuitarBizarre Listen to physics.

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    Something that throws a spanner in the works of this idea though is the encroaching automation of the job market.

    It's easy at the moment to say that there are jobs to do if people look hard enough, but that's becoming less true.

    We're at a point in history where something is happening that has never happened before - New technology is increasing productivity, but is NOT creating new jobs in order to support that new technology. What I mean by that is, lets say you replace the horse with a combustion engine.

    The horse could be fed, watered, maintained and kept healthy by one person. It did less work than the combustion engine, but it required very little expertise or training to keep it running. In comparison, the combustion engine requires an operator/owner, a mechanic, an engineer to design it/refine it, and a regulatory body for the mechanics so that unqualified people don't fix the engines badly and hurt people in accidents. For the one farmhand the engine obsoleted by removing the horse, it created several more jobs that people can now fill.

    Fast forward to today however, and the opposite is happening - Modular parts made by machines and assembled by humans are making it possible for any idiot with 20 minutes of training, to replace, for example, computer parts that are infinitely more complex and harder to understand than a combustion engine is. There are, for example, macbook problems that can be fixed with $2 in parts, a skilled worker and the appropriate professional tools, but where Apple fix the problem by replacing the entire motherboard instead because it's cheaper to buy an entire board and fit it in 20 minutes for minimum wage, than it is to train up a professional, pay them the right amount, and buy them the tools.

    In other words, modular repairs make more material waste, but that cost is made back in not having to train staff to a high level.

    It also means one person can fix many laptops quickly, meaning not only a lower wage bill, but FEWER wage bills - technological advance in this manner is directly driving unemployment, and while there ARE jobs that can't be automated at present, there aren't as many of those jobs as we're going to need, in order to employ everyone.

    This threatens the idea of "Don't work don't eat" that our society is based on. If the jobs are being taken out of the system and not replaced by additional jobs, then eventually our productivity will reach a state where several things are true:

    1 - Our productive capacity is enough to provide for everyone.
    2 - People that don't work will not be provided for.
    3 - There isn't enough work for everyone to be doing something useful on a full-time basis.
    4 - Therefore those people won't be provided for, even though we have the means to provide for them.
    5 - We will justify this by pointing out they are not working to earn their share.
    6 - They will point out that there is nothing for them to do.

    I daresay we are ALREADY at this point, but it's being hidden from us by a particular tendency among people - People in this circumstance will make up a job for themselves to do, and they will ask others to pay them for it. If they can convince others that what they do is necessary, then they satisfy their obligations under "don't work don't eat", and they get provided for.

    A few generations down the line and we simply end up in a circumstance where the majority of jobs are useless wastes of time that benefit nobody, with a society that works itself to death for the sake of satisfying an ideal that should have been abandoned long ago.

    And of course, you'll say "there are plenty of jobs", however I counter with this - how many of those jobs are things like "Social Media Influencer" or marketing jobs that serve no actual, practical productive purpose? How many more of those jobs are there today compared to 30 years ago? How many of those jobs do you think exist because someone, consciously or unconsciously, simply needed a way to justify getting paid for something, anything they could convince someone else was useful?
     
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  13. bostjan

    bostjan MicroMetal Contributor

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    What?

    Okay, what is your argument here? I'm reading this and not really seeing a clear thread, but it sounds more like you are arguing that the human race as a whole is becoming obsolete, which I think is a pretty far stretch.

    And who is to say that jobs with high level goals, like "Social Media Influencer" or "marketing" :)lol: btw) serve no actual practical purpose?

    Maybe I am totally misunderstanding you, or else either you or I is wrong on a fundamental basis.

    The way I see it, everyone needs to be a part of some purpose in order to feel fulfilled, emotionally and psychologically. If the idea is that robots take over every single task for us, and the only jobs left are upper management telling robots what to do, then there won't be any utilitarian purpose for anyone to exist in the lower classes. But that's where I disagree. Even if we have super maintenance-free robots harvesting our crops, making our food, and producing manufactured goods, people will still find productive stuff to do, and people with money will trade that money for those productive things. Just like how horse trainers and barnhands didn't all go extinct when the internal combustion engine became widespread, there are tons of jobs today that will wane in obsolescence after new technologies are created, but jobs as a whole will never go extinct.
     
  14. GuitarBizarre

    GuitarBizarre Listen to physics.

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    Jobs as a whole won't go extinct, no, but people will eventually question why soulless drudgery under a capitalist system is the only way to justify their existence in a world where the amenities humankind requires to live, are available in such abundance.

    The problem with retaining a "don't work don't eat" job economy in the situation I describe is that eventually, the job economy devolves into "What can I convince the ultra-rich to pay me to do on a daily basis so that I don't starve".

    The ultra rich hoard money and concentrate it upwards. Their fortunes are entirely dependent on how much productive capacity they can extract from a worker, while paying that worker as little as possible, then they sell the product back to the worker in order to further consolidate the wealth. In a society where productive work cannot be found, and where the job market becomes "inventing jobs to justify a paycheck", then eventually the job market will transition into a race to the bottom.

    Also, as for your point about marketing - I consider the entire exercise of marketing to be a "Dollar Auction". You could halve the budgets of every marketing department on earth tomorrow, and the only people it would hurt would be marketing departments or extremely small businesses. For everyone else, their marketshare would remain the same, because all marketing is, is bidding on mindshare.

    Consumers cannot be convinced. All you can do is put your product in front of them more often and that is what increases your sales. Once you exceed the point where what you're doing is building awareness, and transition into the point where you're fighting for mindshare vs the competition? That's analogous to placing the $1 bid in a dollar auction. Everyone loses except the marketers, whose job is being done no better or worse than ever, it's simply costing more to have them do it.
     
  15. bostjan

    bostjan MicroMetal Contributor

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    The amenities humankind requires to live are available in such abundance, but there are so many other factors than just the existence of something. :lol:

    If a farm could be built in outer space that could grow enough food to keep 10 billion people healthy, it doesn't mean anything if you cannot distribute that food to where it needs to go.
    You consider marketing to be an obtuse waste of company money. You also consider the ultra-rich to be extremely stingy and not wanting to hand out money. The existence of marketing departments in companies operated by the ultra-rich kind of disproves either one assertion or the other.
    I really think you a little off your chump with your assessment of how marketing works, especially as we are moving toward an economy where consumers are ordering a large portion of goods off of the internet. Without product familiarity, no one will search for your products. With no one searching for your products, you won't come up in generic searches - the end result is that without public product familiarity, you can't sell your product. Marketing solves that problem.
    I'd ask you to clarify how marketing is simply a dollar auction (I know what a dollar auction is, I just fail to see how you make that connection), but really, I don't think that matters, since it was a red herring you threw into the discussion and then expounded upon simply because I chuckled at the notion a little.

    I still don't really see what your main point is. For me, that's much more important than a discussion where I try to understand why you hate marketing so much. Is the connection you intend to make that capitalism is obsolete?
     
  16. Drew

    Drew Forum MVP

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    Well, I'm not sure how far I follow or agree with this (I'll confess I'm only skimming here), but he's at least thinking in parallel to something I've been wondering, that given the increasing automation of the workforce it's possible that we're reaching a point where the supply of available labor is beginning to approach/become larger than the demand for labor. This is why you're starting to see crazy-sounding schemes like countries considering leveeing payroll taxes on robots - not only does it eliminate a double tax preference for capital expenditure vs labor expenditure (technology doesn't pay payroll taxes, and the costs of technological investment can be amortized over time), it also moves the tax from human capital to productivity in general.

    I also worry about how this plays into the minimum wage discussion - "If you can't make a profit while paying a living wage, then you shouldn't be in business" is a popular - and, IMO fair - critique of low minimum wages. But, I also wonder if the problem may be as simple is there simply aren't enough jobs that can be done profitably at $15/hr with benefits to employ the entire pool of minimum-wage workers so what you're doing is reshuffling the benefits and improving the quality of life for those lucky enough to find work while hurting it for those not. I haven't seen a TON of evidence for or against this (though, the second round in minimum wage increases in Seattle - though not the first - did result in an aggregate decline in hours worked enough to fully offset, plus some, the benefits of higher wage, averaged across the labor pool) but it's a question that I think we need to ask, and as a liberal, it's one liberals have largely wanted to dust under the rug. If that WERE the case, then that's a bit of a dilemma - wage hikes would help most, but at the sharp detriment of some.

    tl;dr - economics are complicated and any simple-sounding solutions should make you nervous about what you're not thinking about. :lol:
     
  17. bostjan

    bostjan MicroMetal Contributor

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    Another thing is that the number of careers does not increase 1:1 with population. As more people live in a city, the infrastructure takes more abuse, but, doubling the number of people doesn't mean double the number of jobs, necessarily. For example, a school with twice as many students as a smaller school rarely, if ever, has twice as many teachers, all else being equal. So, if the population increases 100%, you might only find 80% more jobs, so there is a job deficit with respect to population increase.

    Honestly, if some government starts putting payroll tax on robots, then they had better hope everyone else does as well. Some of the reasons that companies might not mind paying higher taxes to be in a nicer area for their workers doesn't translate as well if they are using mostly robots.

    Generally speaking, though, if people are making economic predictions of the future, even with a Ph.D. in economics, they typically end up wrong, for just the reason you stated in your summary. I can type out a thousand reasons why I should be right about whatever, and neglect the 1001st reason that blows them all out of the water.

    But...in the short term, it's much more precise, as fewer variables have time to act. People who say that the economic sky is falling are sometimes right, but I typically don't pay much attention to them unless I hear a compelling argument. I am pretty certain that my position won't be automated before the end of the decade. If it is, it'd be a huge surprise. Much more likely, though, would be that my position moves to another country with lower taxes. Going out 100 years from now, you could say my job will be much more likely to be automated, but by then, it won't affect me.

    So, my long-winded point is that you can worry about automatons stealing your jobs, but it's really not productive in the day and age when the trend is to move job opportunities to developing countries, where the people are working harder for much less pay, and many of the overhead costs are also significantly reduced for a business.
     
  18. marcwormjim

    marcwormjim SS.org Regular

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    One day, Jesus will return to take everybody's jobs.
     
  19. bostjan

    bostjan MicroMetal Contributor

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    EDIT: I shouldn't try to be funny in a serious thread
     
  20. Drew

    Drew Forum MVP

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    Actually, the reverse is true - there's a lot of blame directed at outsourcing for American manufacturing jobs, but the actuality is declining employment has primarily been driven by automation.

    http://fortune.com/2016/11/08/china-automation-jobs/

    Automaton allows keeping production costs down while still keeping supply chains short - important when you're talking about large, hard to ship goods, such as cars.
     

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