On Walmart, And Who Bears Responsibility For the Poor
Note: Originally posted in Discussion, edited to take comments there into account.
Yes, politics, boo hiss. In my defense, the topic of this post cuts across usual tribal affiliations (I write it as a liberal criticizing other liberals), and has a couple strong tie-ins with main LessWrong topics:
It’s a tidy example of a failure to apply consequentialist / effective altruist-type reasoning. And while it’s probably true that the people I’m critiquing aren’t consequentialists by any means, it’s a case where failing to look at the consequences leads people to say some particularly silly things.
I think there’s a good chance this is a political issue that will become a lot more important as more and more jobs are replaced by automation. (If the previous sentence sounds obviously stupid to you, the best I can do without writing an entire post on that is vaguely gesturing at gwern on neo-luddism, though I don’t agree with all of it.)
The issue is this: recently, I’ve seen a meme going around to the effect that companies like Walmart that have a large number of employees on government benefits are the “real welfare queens” or somesuch, and with the implied message that all companies have a moral obligation to pay their employees enough that they don’t need government benefits. (I say mention Walmart because it’s the most frequently mentioned villain in this meme, but others, like McDonalds, get mentioned.)
My initial awareness of this meme came from it being all over my Facebook feed, but when I went to Google to track down examples, I found it coming out of the mouths of some fairly prominent congresscritters. For example Alan Grayson:
In state after state, the largest group of Medicaid recipients is Walmart employees. I’m sure that the same thing is true of food stamp recipients. Each Walmart “associate” costs the taxpayers an average of more than $1,000 in public assistance.
Or Bernie Sanders:
The Walmart family… here’s an amazing story. The Walmart family is the wealthiest family in this country, worth about $100 billion. owning more wealth than the bottom 40 percent of the American people, and yet here’s the incredible fact.
Because their wages and benefits are so low, they are the major welfare recipients in America, because many, many of their workers depend on Medicaid, depend on food stamps, depend on government subsidies for housing. So, if the minimum wage went up for Walmart, would be a real cut in their profits, but it would be a real savings by the way for taxpayers, who would not having to subsidize Walmart employees because of their low wages.
Now here’s why this is weird: consider Grayson’s claim that each Walmart employee costs the taxpayers on average $1,000. In what sense is that true? If Walmart fired those employees, it wouldn’t save the taxpayers money: if anything, it would increase the strain on public services. Conversely, it’s unlikely that cutting benefits would force Walmart to pay higher wages: if anything, it would make people more desperate and willing to work for low wages. (Cf. this this excellent critique of the anti-Walmart meme).
Or consider Sanders’ claim that it would be better to raise the minimum wage and spend less on government benefits. He emphasizes that Walmart could take a hit in profits to pay its employees more. It’s unclear to what degree that’s true (see again previous link), and unclear if there’s a practical way for the government to force Walmart to do that, but ignore those issues, it’s worth pointing out that you could also just raise taxes on rich people generally to increase benefits for low-wage workers. The idea seems to be that morally, Walmart employees should be primarily Walmart’s moral responsibility, and not so much the moral responsibility of the (the more well-off segment of) the population in general.
But the idea that employing someone gives you a general responsibility for their welfare (beyond, say, not tricking them into working for less pay or under worse conditions than you initially promised) is also very odd. It suggests that if you want to be virtuous, you should avoid hiring people, so as to keep your hands clean and avoid the moral contagion that comes with employing low wage workers. Yet such a policy doesn’t actually help the people who might want jobs from you. This is not to deny that, plausibly, wealthy onwers of Walmart stock have a moral responsibility to the poor. What’s implausible is that non-Walmart stock owners have significantly less responsibility to the poor.
This meme also worries me because I lean towards thinking that the minimum wage isn’t a terrible policy but we’d be better off replacing it with guaranteed basic income (or an otherwise more lavish welfare state). And guaranteed basic income could be a really important policy to have as more and more jobs are replaced by automation (again see gwern if that seems crazy to you). I worry that this anti-Walmart meme could lead to an odd left-wing resistance to GBI/more lavish welfare state, since the policy would be branded as a subsidy to Walmart.
None of the major political ideologies are particularly consequentialist in the way they approach policy. Progressives by and large see the world through the following lens: There are some people who are oppressed and others who oppress them. Government policy ought to focus on emancipating the oppressed and punishing/overthrowing the oppressors. Criminal Justice: white people oppressing brown people. Abortion: Christian men oppressing women. Foreign policy: America oppressing the rest of the world (unless it’s America saving some oppressed foreigners from an oppressor). Housing policy: landlords oppressing tenants. Labor: captital oppressing unions. Taxes: the one percent oppressing the 99%. Marriage equality: straight Christians oppressing LGBT people. Progressives aren’t generally concerned about utility: they’re concerned about justice. Even the Animal Rights movement, essentially founded by arch-Utilitarian Peter Singer is focused on the class relations between animals and the humans who oppress them.
In this case, the oppressors are wealthy business owners who are exploiting the labor of the poor and helpless AND exploiting the rest of us by placing the burden for care on taxpayers.
I know this summary of liberal thought probably sounds strawman-like. I don’t mean it to be taken as a summary of progressive arguments on these issues. There are good arguments for progressive positions, many of which I agree with. Rather, this oppressed-oppressor lens is just the initial conceptual frame most progressives have in response to any political issue.
I’m not saying there can’t be real instances of oppression or that ending oppression doesn’t increase utility. But when all you have is a hammer, everything you see looks like a nail etc. Conservatives and libertarians have similar non-consequentialist frames through which they view every issue. See “The Three Languages of Politics.
The extent to which any ideology can be “true” is mostly just the extent to which their central heuristic is useful and actually describes the world. There is a minority of libertarians and an even smaller minority of progressives that actually appear to mainly care about the consequentialist effects of policy. They happen to over-represented here, but they’re pretty unusual in the rest of the world.
BIG + no other welfare state and no minimum wage is probably preferable to what America has now. I sort of worry about how hard it would be to hire someone if the BIG got too large but it probably couldn’t be worse than trying to hire someone in an environment where they could lose their house, health coverage and disability check if they begin making too much.
I like your whole comment, but disagree with the first sentence.
Apart from reading about it explicitly on LW, I was also able to approach politics as less of a mind-killer once I realized that different ideologies approach issues believing different outcomes would be ideal. But neither side realizes that (or how very different “ideal” is to each), so one just says, “ABC will work! XYZ is crazy!!” and the other says, “What?! ABC will never work! History shows XYZ is clearly the best policy!” Each side means something different by “work”, and so spiralling mind-kill ensues...
Actually, I’ve found my best friends, with whom I end up discussing politics with, are very consequentalist, and care very much about what ends up “working best”. Those who disagree with me simply don’t define “working” or “best” in the same way I do, and so we really ending up talking past each other and giving each other funny, mind-killed looks.
For instance, as a liberal, I concede de-regulation is better for maximizing economic growth and so I concede that right-wing fiscal policy is “better” to that end. But I’m admittedly more interested in anti-oppressionizing the world (a la your strawman progressive) and providing the basis for relatively economic equality than I am in max growth, so I am for more regulation and wealth redistribution to that end. We each believe the best possible world looks differently, and so we are asking different questions when we ask the same question. But we are approaching the issue from a consequentialist standpoint.
And so my righty friends still think I’m a bleeding-heart weirdo and I think they are greedy and heartless ;) …but at least we’ve moved our discussion passed arguing over definitions without realizing that’s what we were doing.
The other half of this is that you and your friends presumably don’t assume that those with opposing political views have the (real or hypothesized) ill effects of their preferred policies as primary goals.
Yeah, on reflection ‘consequentialist’ is probably too broad.
What do you mean by this? Would you support policies that make everyone worse of if the resulting distribution is more equal?
It would depend on what you mean by “worse off”. I wouldn’t define it as less wealth, per se. Though even if I did define it in strictly economic terms, I’m not sure any policy or redistribution could “make everyone worse off”, since a large portion of the world has zero wealth.
In economic terms, with wealth defined more or less as “stuff people want,” I find it hard to see how that could be the case, since it should follow that there’s nothing that you could take away from them which would leave them worse off. Do you think that’s accurate?
Easy. Kill everyone. Perfect equality has been achieved, so the egalitarians are happy, and everyone is worse off.
Or if you think some people’s lives are currently worse than death, instead go for the (slightly more logistically challenging) option of torturing everyone equally.
Look beyond the short term.
Okay. Please help me understand a scenario where everyone was worse off in the long term because of the redistribution of wealth.
Take a simple scenario of two cities—one is high-tech and one is a big stone-age village in the hills of New Guinea. The high-tech city is much richer.
You take half of the city’s technological bounty and bring it over to New Guinea—you redistributed wealth.
Fairly quickly the technology becomes completely useless in New Guinea, but the villagers liked it for the short period that it worked—so they abandon working in the fields and build something resembling air strips with mock airplanes sitting on them...
I must be misunderstanding. I can imagine many hypothetical scenarios where redistribution of wealth would have a net negative effect, in terms of technological advancement, economic growth, etc.
In the globe we currently inhabit, there exists some huge chunk of people who live in utter poverty and, therefore, have no wealth. In strictly economic terms, they cannot being doing any worse than they are right now. Therefore, any redistribution of wealth will either (a) not affect them or (b) benefit them. This seems to me to be true in the short term, as well as the long term.
That is not true. A small value does not equal zero. The number of people who literally have nothing is vanishingly small. Almost everyone who lives in utter poverty has some wealth, just little.
This is not true either. Consider a country like Haiti where a large chunk of population is very very poor. A few years ago they had a large earthquake. Beyond the loss of life, you are arguing that the poor did not become worse off in the aftermath of the earthquake. I don’t think this is so.
Since you are talking about a large number of people, presumably you have in mind somebody like Chinese and Indian peasants. Do you really believe they “cannot being doing any worse than they are right now”?
From my Wikipedia research, there were 923 million undernourished people in the world in 2008… where undernourishment is (roughly) a cumulative or average situation where the average person is not consuming enough nutrients to remain in good health while performing light physical activity.
Of course, I can dream up a “worse” situation. (Like they are malnourished and in a deep hole.) But I think that is beside the point. You have ~12-15% of the global population that is progressively dying via malnutrition. Any way which you define “wealth” in which these people 923 million people have non-zero wealth values is fine. I guess I’d technically agree. But practically, these people seem to have maxed out the possibilities of “worst”, short of being in a deep hole. Or being in a natural disaster.
My view of wealth has something to do with abundance beyond the minimum requirements for living. If I have a ham sandwich, it’s just hard for me to count that as wealth. And I guess a hungry guy with one ham sandwich could be doing worse in your view, correct?
Try Central Africa—multiple civil wars, child soldiers, mass rapes as standard operating procedure, limbs hacked off as punishment for minor things, an occasional bona fide genocide...
I’m quite confident now we aren’t understanding one another. I’m aware of how bad things are in many parts of Africa.
My view is that redistribution of wealth and other oppression-proofing liberal policies are a good choice because of emergency situations like poverty in Africa, among other places. From a strictly economic standpoint, I think they’ve maxed out “bad”. Clearly there are other bad things you can add to economic “worst” to make it “worse”. Often times, these things are tangled up, if not caused directly by, poverty.
Tap out.
You’re a healthy, wealthy, educated person. Being educated, you know you shouldn’t have more than, say 2 children, to be able to afford their education and ensure their good standard of living. You’ll have first child at age 25+.
I’m poor and uneducated third-world citizen. Being uneducated I don’t know how many children I can afford. Or I just don’t care, don’t think about it. I’ll have my first child at age of 18.
Now you give me half of your wealth and now you can only afford one child.
25 years from now you and your one educated child have to support me, 8 of my uneducated children… and 40 of my uneducated grandchildren. Your child can’t afford having children at all.
This is what redistribution does, exaggerated. You’re assuming the person you’ll give wealth to will use it in a sane way from your point of view. They won’t. You don’t want to admit the possibility that it may be long term better to let them die to stop this. Of course this is not ideal, not even good. Ideally you’d teach them, but will they listen?
Redistribution doesn’t have to mean giving money. It can mean giving food, education, health care..it’s not as if on-one has thought about this issue before.
Effective charity is ensuring that the money will be used in a sane way. Hence all the discussion on this site about effective altruism.
Of course I won’t argue against effective altruism or charity and I suppose charity is technically a kind of “wealth redistribution”. However, it’s different than taxes in one very important way: it’s redistributing excess wealth after my own goals have been achieved, not before.
I just used charity as an example; the same argument applies to taxes as well. The only difference is that taxes are enforced. It’s still a priority to ensure that taxes are given and used correctly. In many countries with welfare, for instance, to stay on welfare you are required to prove that you have been looking for a source of independent income. Now, scandals do happen, and they happen often, and I agree with you that it’s an important priority to make sure that welfare is only used in a positive way. I would even support a limit on having children unless someone can prove they have the financial means to take care of them. This seems both humane and efficient.
That does not follow. Why would I care about money I have no control over? Why would a politician care about efficiency over publicity? Why wouldn’t the recipient try to take more than he needs? There’s no incentive for anyone to do anything right.
How do prove your assets, when money in the bank is no longer money in the bank? And what you do with violators? Fine them? Sterilise them? Seize their children?
It would seem to me that discouraging people from hiding their money away would be a good thing?
Is that still a clinching argument if redistribution can be justified consequentialistically?
In this account, how did I get so much more healthy, wealthy, and educated than you are? Is there any way to do whatever that was to you, as well, or is it better to just let you die (or kill you)? Would it have similarly been better to let me die (or kill me) before doing whatever it was that made me so much more healthy, wealthy, and educated? How can we tell?
I can’t shake off the impression that you’re implicitly assuming the thesis. I’ll try to answer what I can.
Why the implicit assumption that redistribution has a net positive impact here? Another implicit assumption here is that we’re all born equal. Genetics aside, don’t the children inherit the mindset of their close ones to a large degree? Aren’t societies semi-stable, self-reinforcing, whatever their current wellbeing is? Africa is still poor, despite years of foreign aid. Middle east is still fighting, despite years of foreign interventions… What you need to do is to create incentives to break out of the current state of things and survival instinct is an excellent incentive which can be applied to poor people. What redistribution does is removing this powerful incentive and creating opposite ones. Basically, you’re rewarding people for making poor economic decisions.
Assuming it was redistribution that made you wealthy and educated, does it work reliably on the majority of poor people? Without forcing them somehow out of their current environment? That’s along the same lines of thought as that giving someone a million dollars reliably makes them a millionaire.
This argument only makes sense if you already believe that redistribution reliably works, or anything reliably works, for that matter. People are notoriously difficult to change.
If your relative wealth is a result of genetics, not effort, do you still have an absolute moral claim on it?
Well, I’m not an illtetrate farm labourer like my ancestors.
Why would it have to? You can argue that people have a right to the opportunity of an education, irrespective of outcomes, and you can argue that educating people up to their potential has a nett positive effect. Neither argument requires education to lead to positive outcomes in every individual case.
Western societies introduced universal free education over a century ago, and are now much richer.
The question I asked was, in your scenario, what creates/maintains/justifies the disparity between us.
Your answer seems to be that (genetics aside), in your scenario the root cause is innate advantages due to differences in early environment, which are themselves the result of self-reinforcing patterns in our societies, which causes me to make better decisions than you do.
Is that right? (It’s hard to tell, because you don’t answer my question so much as you treat it as an unarticulated assertion with which you argue.)
Yes, that’s correct. I’m arguing that redistribution in any form of giving “stuff” for free makes it worse by providing strong incentives to maintain status quo.
Have you read Yvain’s non-libertarian FAQ?
Thanks for being clear about that.
On your account does redistribution in the form of, for example, using my “stuff” to educate others in how to make better decisions necessarily make it worse?
Good question.
Yes, I am, too, quite confident that we aren’t understanding each other.
Lumifer’s point is that if you do an extreme enough redistribution, what will happen is that the whole technological system will just collapse.
Well, my point was more limited—in the example the rich high-tech city lost wealth (which they will replenish eventually) and the poor village didn’t gain anything.
You can get into a deeper analysis which would involve e.g. motivations and incentives (what happens to people who get used to living on free handouts?), necessary concentration of capital (a semiconductor fab costs a few billions of dollars, who will build it?), etc. but it’s a large topic.
Several comments up you conceded that deregulation and libertarianism maximize economic growth. Thus redistribution by reducing economic growth causes there to be less to redistribute in the future and thus makes everyone worse off in the long run.
No. I’ll tap out now.
Political ideologies are big squishy categories that contain more consequentialist and less consequentialist strains. So I think that’s the wrong way of looking at it.
E.g. amont libertarians, there are those who focus on supposed good consequences of libertarian policies, and those who focus on arguing coercion is always wrong even if it leads to good consequences. And among progressives there are people who are basically as you describe, and people like Matt Yglesias and myself and I think Yvain (I think it’s fair to call Yvain progressive).
I mentioned those strains. But they’re a very small minority—over-represented among wonks, bloggers and people smart enough to be in your social circles—but still small. Yglesias drives people to his left nuts with his stuff. And you and Yvain are not representative progressives for what I think are obvious reasons, right?
You can put me in that category of progressive too (though I like left-libertarian or liberaltarian as well). We should also be skeptical that we are actually progressives for consequentialist reasons and not merely coming up with consequentialist rationalizations for our progressive intuitions. Disagreeing with non-consequentialist liberals seems like a nice start, though.
How small that group is, sort of isn’t the point though. The point is that one dimension along which you differ from many other progressives is whether you look at policy chiefly through a lens of consequences or a lens of oppressor-oppressed. As such it is unsurprising that you find yourself disagreeing with progressive talking points from time to time.
Fair enough. It is true that most people, regardless of their politial ideology, are not consequentialists. But this looks like a case where failing to look at the consequences leads people to say silly things.
I think you’re rather generalizing Social Justice Movement mentality to progressives as a whole. They’re a vocal subset, but I think a lot more people would identify as “progressive” given an explanation of the options than would ascribe to the oppressed/oppressor lens.
If you have to explain the options to them, they’re not ideological. I’m talking about the people setting agendas and writing talking points.
I’d also second what Eugine said.
Most “progressives” do not self describe in terms a reactionary would use, and in particular members of the Social Justice movement are far more likely to self identify as “liberal” than “progressive.”
I also think most people who would self identify as “progressive” without an explanation of the terms would not frame political matters with the same lens as members of the Social Justice movement, but I don’t think that identification with the terms we’re using is a good way of isolating the ideologically active segment of the population, unless we choose to define it in not-very-useful ways.
??? “Progressive” re-entered our political vocabulary as a term of self-identification for the anti-war left in 2003. It existed to both distinguish them from pro-war democrats and as a re-branding of what had/has become an incredibly unpopular label: “liberal”. I know because I was part of that group. Because it has so many more positive connotations it is increasingly used by high-information left-of-center Americans to describe themselves. And that’s why the senate and house don’t have “liberal” caucuses—they have “progressive caucuses.”
So
I’m not using terms a reactionary would use and while “progressive” is maybe slightly less common than liberal still I’m quite sure self-identified progressives are disproportionately part of the Social Justice movement.
In that case I apologize for the misunderstanding (when I encounter the term in Less Wrong circles, it’s generally being used in Reactionary terms, which are to the best of my understanding rather broader,) but I would say that this is still overgeneralizing the outlook of a minority of liberals.
My understanding—I’m quite confident but a reactionary might correct me—is that they use the term “progressive” because that is probably the most popular term among the left’s in crowd (certainly 5-6 years ago it was, people seem to care less about branding after winning the White House).
This isn’t really in the form of evidence I can incorporate. I am/was pretty strongly embedded in left of center political culture, so single instances of disagreement don’t really tip the scales at all. If you want to analyze mainstream left-wing political discourse in a way that distinguishes it from what you call the Social Justice movement—that might help me see where you’re coming from.
I don’t think there’s a single, easily expressed lens that sums up either mainstream liberalism or conservatism, so I don’t think it’s easy to draw a contrast between the social justice movement and mainstream liberalism which holds across every issue. But I think that on many issues where a person involved in the Social Justice Movement would see a case of oppression by one group against another as a moral wrong to address, a more mainstream liberal might see as a case of harms caused by self perpetuating forces which should be corrected by deliberate intervention. In the specific case of racial inequality, for example, where a Social Justice Movement advocate might see a case of wrongful oppression of black people by white people, the view I understand as being more mainstream would be something like “historical circumstances put black people in a disadvantaged position, and the Matthew Effect ensures that things will continue to stay shitty for black people unless society makes a concerted effort to rectify this.”
I can’t say with any confidence that I have representative enough experience to describe the ideological demographics of progressives in general, but most people under the broad “liberal” umbrella aren’t involved in the social justice movement, and while some people certainly have more ideological investment in certain political issues than others, most people have a substantial cluster of political values that they care strongly enough about that, whether or not it has much bearing on their daily activities, they can still get mindkilled over them when matters touching on them are raised. So I think in a meaningful sense very few people are “not ideological.”
Those are people who haven’t thought much about the issues. If they started thinking about the issues, they’d start by looking up what the “experts”, i.e., the SJM, are saying.
I don”t think it”s a complete strawman. Marx basically says that every social conflict is about the struggle between oppressor and oppressed.
Not everyone who’s political left subscribes to that ideology but it’s certainly something that real people believe. It deeply buried in the core assumptions of socialist thought.
Marx was a liberal?!
“Liberal” is a funny word, it had quite different meanings through the history and even now tends to mean different things on different sides of the Atlantic ocean.
Quite true, but can you identify any reasonable interpretation of “liberal” that fits Marx nicely? As far as I can see, none of the usual meanings of liberalism I can think of (classical liberalism; neoliberalism; squishy, mainstream, contemporary welfare state left-liberalism) sum up his ideology well.
It shouldn’t be particularly difficult to establish a path from Marx to “contemporary welfare state left-liberalism”. It would focus on hostility to capital and the need to help the oppressed.
Marx, of course, would barf at contemporary welfare state, but he’s dead so we can conveniently ignore all that :-/
Sure. But the path from Marx to contemporary welfare state left-liberalism is sufficiently long (and with enough branches!) that using one as a representative of the other is dubious at best. As you say, Marx himself would probably take a dim view of CWSLL, if he were around to witness it.
Yeah, I agree. People calling contemporary progressives “Marxists” are usually just looking for a derogatory adjective.
However there are certain similarities and the connection between Marx and CWSLL can be made—it will be twisting and turning, and will require a fair amount of bending and averting eyes—but it will probably pass the laugh test. I don’t think that this connection is important or that pointing it out is useful, still, it’s not quite the young-earth theory.
You could probably do it cladistically too. Sorel blasts Jaures as a social democrat (which AFAICT he was) in Reflections on Violence, but Jaures read and was influenced by Marx.
On the other hand, Social Security was explicitly inspired by Bismarck’s successful attempt to buy off the socialists… but on the other other hand, many political figures at the time, including some in high places in FDR’s administration were, well, not entirely unsympathetic to the Soviets.
Marx certainly wasn’t a liberal, but many liberals have been influenced by people and movements far to the left of them; it could be argued (though I’m not good enough at history to argue it well) that the oppressor/oppressed mindset is one such influence.
American often equate liberal as being left. If I read someone on the internet writing liberal, than I usually don’t think they mean the word in it’s traditional meaning.
Just think of “The Communist Manifesto” as being a horrible warning, like Orwell’s 1984, rather than a how-to guide. ;)
Marx made no bones with categories of “oppressor” or “oppressed” whatsoever. He dealt in economic classes defined by their relation to the means of production: worker and capitalist. He actually despised the criminal lumpenproletariat.
According to Marx capitalists do oppress their workers.
That may be. Mainly, I just didn’t want to argue with any progressives that might be offended.
You have to distinguish between what they say and what they do. The major ideologies are considerably more consequential in what they do than in what they say.
You’ll have to explain what that means.
My interpretation:
Politicians try to say things that appeal to as many people as possible to maximize votes. Once they’re elected, they can be more specific and thus more consequentalist about what they do, since for the average voter, verifying what they do is more laborious than listening to what they say.
There is no hidden meaning here.
In politics there is a major difference between what politicians say and what they do. This is a rather straightforward consequence of the set of incentives they have to deal with. There are, of course, limits to the divergence of the words and the deeds, but these limits are pretty lax.
Are you implying that what happens is generally what was intended (by someone) or that policy out comes are due to wrongly anticipating consequences, rather than simply neglecting to?
Both look fine to me and are not mutually exclusive. Many policies are compromises between different parties so they might not look like especially consequentialist. Consider also that the more media visibility a policy can be expected to get, the less consequentialist it will look, extrapolating from my other comment.
I am puzzled about how you can declare progressive thought un consequnetialist without specifying a version of consequnetialism. For instance , it would not be difficult to make a consequential argument about the rich paying too little tax, and the poor too much. It is also not clear why the alternatives to progressivism fare better.
Your analysis of the short-term effects is correct, but the long term effects depend on whether “low wage workers” are permanently so. Sometimes people condemn Walmart jobs as “dead-end” and that is getting at the right point.
I’ve heard the claim that Costo and Sam’s Club (ie, Walmart) are very similar, but Costco is famous for paying its employees twice as much. But this doesn’t come out of profits—Costco spends the same amount on labor, employing half as many people, twice as productive. If Walmart could make its employees twice as productive, that would be great for society, though in the short term it would lay off half of them.
If the productivity of people is unchangeable, then Walmart is doing society a valuable service by providing a niche to people capable of no more. But if Costco employees are more productive because Costco trains them, then Costco is doing a valuable service by improving their productivity. In the first case, we want Walmart to win because only a few companies like Walmart can make use of the least productive workers. But in the second case, we want Costco to win because it is making use of the same people, but making better use. But we observe that they are evenly matched, so there’s no reason to expect either of them to win, let alone the right one. Eventually in the second scenario Walmart loses, not because Costco wins, but only when the Costco model expands into new industries, producing more training, bidding up the salaries Walmart pays.
In the particular example, I believe that Costco is not increasing productivity, but merely identifying more productive workers, and that Walmart is able to employ people that few other companies can. In general, I think the economy is generally trending away from investing in low-end worker productivity, which is terrible. In theory, raising the minimum wage should put pressure against this, but pressure to create new companies that work differently is less certain than pressure shifting the balance of power between existing companies.
(Also, there’s a third scenario where Walmart provides the training, but the productive workers graduate to Costco. I certainly think Walmart is providing filtering, letting productive people build up a resume to show to Costco; I’m less certain of whether it improves the workers.)
I worked at Walmart as a teenager. Walmart does a lot of training, but the simple fact is that they work with people who have a lot of attitude and discipline problems (like the teenage me) that would make them unemployable elsewhere.
This has always been my experience shopping at Florida Walmarts: the employees are horrible. Perhaps they could be making more money with a higher minimum wage, better unionizing or what have you, but I have always viewed Walmart’s ability to make their employees productive as some sort of miracle of capitalism.
I can’t think of another chain business I’ve experienced with the same or lower caliber of employee.
I don’t see why a vague argument against one of many political memes deserves a post in Main.
Useful illustration of the kind of mistakes thinking in terms of consequences can help you avoid.
EDIT: To elaborate—I think LessWrong could really benefit from accessible posts applying LessWrong-type ideas to topics that people who aren’t already hardcore nerds about typical LessWrong topics might have heard about and care about.
I see. I guess I am having trouble following your conclusions from your premises.
Walmart is in a low-margin business and it employs unskilled labor, so naturally they put as much squeeze on the wages as they can get away with. I don’t see anything immoral about it, it’s just business. Corporations are well known to behave like psychopaths.
There is a 100 year-old solution to this issue, it is called organized labor. While unions are out of place in many other industries, Walmart is a perfect target for unionizing, since individual workers have zero leverage against the company, while a union can fight for reasonable wages and benefits. Same applies to Amazon warehouses, by the way. So, an alternative to increase in mandatory minimum wage (which ought to be increased, by the way, in the US it is currently lower in inflation-adjusted dollars than it was 30 years ago) and to a guaranteed basic income (which shifts the burden of paying the Walmart employees from the shareholders and the customers to everyone and adds some unnecessary overhead) is to enact policies making it easier to unionize unskilled labor.
It seems to me that either (1) individuals working for those corporations ultimately make the decisions that screw over their ill-paid workers, in which case those individuals may be acting immorally; or else (2) actually the entities with agency here are the corporations themselves, in which case they may be acting immorally. Neither of these makes moral questions go away.
(I say “may be” rather than “are” because these are complicated issues and it might e.g. turn out that one can’t do better than Walmart’s employment practices after all.)
I think I agree with everything in your last paragraph.
It is rather complicated.
I am not sure I want the corporations to act morally because the moral system they pick might turn out to be one I strongly disagree with. Focusing on money keeps them safe and predictable. And if you want organizations to work towards moral goals, I see no reason for these organizations to be corporations.
A union makes sense when the workers have specialized interests, but for unskilled labor isn’t it simpler just to work through the overarching government?
The government represents different and competing interests, and it’s often biased towards those of large corporations. A trade union of unskilled workers, instead, only represents the interests of unskilled workers.
This post is almost the epitome of what I don’t want to see on LessWrong, Discussion or not.
EDIT: This post was moved to Main after I made this comment. This makes me like it even less.
It has a reasonable argument at its core: giving government benefits to low-income workers effectively means subsidizing the companies that pay low wages (and there are huge companies profiting from this). That’s an irony, because even the voters who want to give money to low-income people usually don’t want to support companies that profit by paying low wages. Giving money to low-income people regardless of their employment (via basic income or otherwise) would have a similar result, except for requiring people to work for companies that profit by paying low wages.
It has a mindkilling title: “evil” is a loaded word, and even if we insist on using it, why not use it instead on politicians and voters who enable this behavior? The problem is, each tribe has their preferences about who should be called evil, therefore the usage of the word necessarily follows the party line.
The mindkilling effect of politics is not just that it’s difficult to write a reasonable article about politics… but that even if you succeed to write a moderately reasonable article on a political topic, it is still very likely to cause unreasonable comments in the discussion. -- This is why we need more strict criteria for political articles. As it is, it is in my opinion barely okay for the Discussion, and unfit for Main. I upvoted it in the Discussion, because I appreciate the information (I am not American, so I learned something new about Walmart, which may help me understand the American culture better), but would downvote it if it moved to Main.
This reminds me of an advice for authors: don’t tell me, show me. Specifically: write an article in a way that does not scream your tribal affiliations, and then you will not have to excuse yourself.
Oh, and another thing:
Is that prediction correct? I think that this thread is full of non-mindkilled comments. The only really bad comments have been downvoted appropriately.
Yes, you are correct and I am surprised.
Now the question is, how much this is reproducible. That is, how much of the quality of the discussion can be attributed to the fact that discussing politics is a taboo here, so people breaking the taboo are extra careful because they know they will be judged more ciritically. Also, the website policy until now may have filtered away those people who enjoy mindkilling debates; having the political debates more often might invite them back.
But compared with the typical internet political discussion, this one is extraordinarily reasonable. (I also appreciate fixing the title.) I still feel afraid that having this kind of atricles more often would make things worse. But maybe we already passed some critical treshold where the existing community is sane enough to downvote the mindkilling comments even when their author is “fighting for the same side”.
EDIT: Another thing that I am afraid of, is that after writing a political article arguing (sanely) for one tribe, people from the opposing tribe would feel an urge to write an article (or preferably two articles) describing the situation from their tribe’s point of view. Which would lead to an arms race in the number of articles, and the quality would gradually go down.
That’s a big “except”.
“Evil” seems a fair description of how some people seem to view Walmart, though I’ll probably remove it anyway on re-write.
As for the rest, I’m just going to drop a link to what I’ve previously said about “politics as mindkiller.” (And say how depressing it is that so many people in this community seem to have given up on doing better.)
Better at… wasting time? (I don’t know who you think is better off having the opinion “Grayson and Sanders are wrong about Walmart” than the opinion “I don’t care what Grayson and Sanders think about Walmart.” Anyone I can think of who benefits from having that opinion can easily determine so by social cues from people they want to impress, without having to think it through.)
I’ve seen what you’ve previously said on this matter—suffice it to say that I disagree. The fact that this is now in Main makes me sad for LessWrong.
Argument?
Note: I didn’t mind it in Discussion at all and thought it was interesting. I am of the opinion that comments + discussion should not be heavily self-censored. However, I second the opinion that it shouldn’t be in Main. I’m also a relatively new user (first handle was mid 2012) so you can take my opinions on what belongs in Main with that in mind.
I think the rule of thumb is, that a post should possess at least one of the following qualities:
1) About epistemic rationality (ontology, epistemics, ethics, AI, bias reduction, scientific method, semantics, etc)
2) About instrumental rationality (self improvement, happiness, willpower, organization, social behavior, etc)
3) Furthering the Reader’s Interests (Effective Altruism, textbook recommendations, etc)
4) Meta, announcements, and notifications about things of interest to LW or closely affiliated with LW.
--
I think politics can fall into any of these. News (News! not opinions!) about some political activity or press release relating to the Singularity institute or other prominant figures on LW would fall into 4. An analysis about whether or not voting is rational would fall into 3. Descriptions of how political groups behave would fall into 2. The psychology of politically induced biases, how to do science for economic policy, etc… would fall into 1.
So your post is interesting (for me, because I follow politics), not particularly mind-killing, etc...but it’s not meeting the criteria for making me more rational or furthering my interests. It’s not simply that it’s about politics, boo on talking about politics, etc.
I can’t actually do anything about the Wal-Mart meme. Knowing about it doesn’t further my instrumental goals, nor does it improve my epistemic skill, nor can it really effect my behavior or thinking in any way. I might get hedons from reading and Learning about a Cool Thing, but that’s moving away from the stated purpose of Lesswrong.
Edit: Looking over other posts in main, I can see that there are quite a few other which did not meet my stated criteria (including some by prominent posters like Eliezer and katydee). So I suppose my stated criteria don’t actually describe things as they actually are or how they are intended to be, but how i think they aught to be.
I thought this was generally a good post, but I suggest linking to some serious research rather than a Krugman blog. In his article he links to a survey article, and there are many other good ones. These contain the same information, but lack the unnecessary partisan attacks—“Republican leaders clearly feel disdain for low-wage workers.”
Eh—Krugman is nice and concise, and popularizers like him are where I actually get my impressions of the empirical evidence of minimum wage laws. Also as far as I can tell he’s right about Republican leaders.
I think Krugman is sufficiently mind-killed on politics that it would be a mistake to get your impression of the literature from him, unless you also read the work of semi-professional Krugman watchers. In the latter case I withdraw the objection, but at that point it’d probably be easier to read the literature yourself.
I’ve yet to see the evidence that Krugman is heavily mind-killed on politics.
And completely mind-killed about politics. (I’m giving him the benefit of the doubt there.)
Also, notice his post crisis behavior. First he makes concrete predictions about what will happen with and without stimulus (things will be somewhat bad with stimulus and even worse without stimulus) meanwhile his opponents predict the stimulus will make things worse. Then the stimulus happens and things are even worse then his without stimulus prediction, his conclusion: “we didn’t stimulate enough”.
There is strong agreement among economists that the stumulus worked.
That is not at all relevant to Eugine’s point, which is a conjunction between predictions ahead of time and beliefs after the fact. If he holds now that the stimulus worked, he must hold that has previous predictions were badly wrong. Does he admit that? Moreover, he must reduce his belief in the efficacy of stimulus, even if his assessment of the state of the economy shifts more. Is he explicit that he has stronger beliefs about the efficacy of stimulus than about the future of the economy? And these economists that today have strong agreement, what did they predict ahead of time?
(I’m assuming that Eugine is correctly describing Krugman. But you didn’t object to that.)
It’s absolutely relevant. By Eugine’s account, Krugman’s opponents were predicting the stimulus would make things worse. Most economists now agree that Krugman’s opponents were wrong and the stimulus helped.
Beyond that, I’m a little unclear on what Eugine is saying: “Krugman said things would be worse without stimulus” is ambiguous between “Krugman said things would be worse without stimulus than with stimulus” and “Krugman said things would be worse without stimulus than they were at the time he was speaking.” Link to what Krugman statement exactly Eugine has in mind would be helpful. In any case, this is at least semi-relevant.
No, Eugine is perfectly clear. The only way to interpret his “things are even worse then his without stimulus prediction” is that Krugman made absolute predictions.
The simplest hypothesis is that economists are impervious to evidence and are just backdating their predictions. Yes, inference can be complicated by mechanisms; that link is relevant, quite unlike your previous link.
This isn’t corporate welfare to Walmart or it’s employees, it’s corporate welfare to our regulatory protected medical industries and guilds.
The vast majority of the supposed “welfare” spending for health care is paid in rent seeking and tribute to the regulatory state and the vested interests they entitle.
Part of Sanders’ argument relies on the belief that there is a possible free lunch, here : they believe WalMart could raise wages significantly without causing the company to explode, either not harming people in ways that count to the progressive movement (decreased profit to corporations) or by arguments of comparison to CostCo, Trader Joe’s, or other stores that have different structures. I’m pretty sure the math doesn’t work out that way, and the realistic event chain is likely to be drastically different, but it’s a very common belief. From that perspective, it’s more the concept that WalMart’s low wages are a bad equilibrium point established by existing laws, and because it is less costly to the state for WalMart to directly pay more at a different equilibrium, the state should force them to change their actions.
If it helps, almost all of the people opposing WalMart on this tactic have called for increase welfare states of the type compatible with what you’ve suggested. It’s likely to complicate getting interest from the right-wing in the United States, but since the right consider work requirements one of its biggest successes there are some much more pressing issues with trying to get them to accept a basic income guarantee.
((On the flip side, I think there are some issues with BIG or BIG-like systems that make them poor solutions to gwern’s concerns, but these probably exist outside the scope of this thread.))
You just have to make an argument that would appeal to a conservative, which I think Paine’s would. Amusingly enough, Bill O’Reilly basically bought Paine’s argument with respect to the guaranteed payments from Alaska’s oil fund, saying “It’s our oil”. Paine’s argument was “It’s our land.” It’s really not a great leap.
Conservatives reject liberal arguments because they’re not based in anything Conservatives recognize as justice. Your need for food does not justify your stealing my dinner. They may wish to give to charity to help the poor, but they reject having their money taken by force by the government to help the poor. It’s the difference between giving a gift and being robbed.
Is that really an adequate steelman of conservative or libertarian thought? It sounds only one stepped remove from “Low-wage workers are just lazy!” and two steps from “Low-wage workers are racial untermenschen!”.
If that’s what “Don’t rob me” sounds like to you, then you’re unlikely ever to have any common ground with conservatives or libertarians.
With educated, intellectual-level conservatives I find common ground quite often, since they tend to have fairly elaborate value systems that leave a lot of space for common ground. With libertarians—ie: pure proprietarians who value only private property at a political level—no, there can’t be any common ground. They have One Single Rule, and I believe more things than that matter.
That doesn’t match my idea of what a free lunch is. I believe a better descriptive term would be the deep pockets theory.
It isnt even a question of deep pockets. Require walmart to pay each employee twice as much, and they will probably fire half of them, train the remainder better, and have customers bag their own groceries. Same total labor cost. This is generally considered better on the grounds that the people fired by walmart in this situation are not really worse of—any other employment they come by is as least as good because their current employment situation verily doth sucket hose—and the people still working there would then have actual jobs.
I see no reason to believe this would happen. May I recommend a post on the subject?
Oh really? Do you think Wal-Mart employees agree with you on that point? You’re basically saying that there is no reason for anyone to work at Wal-Mart. This is… empirically wrong.
What counts as one?
This is what one tends to hear from Wal-Mart employees and former employees, yes.
Given that Wal-Mart is the biggest private employer in the world and employs over 2m people (source) I think you’re wrong as a matter of empiric reality.
Is that a very good argument though? To believe that there is a reason to do something simply because lots of people do so, sounds like a bias to me...
Well, Lumifer did just say “reason”, not “good reason”—but in the reply to Izeinwinter only the latter is relevant. I initially assumed he meant the latter, but had forgotten that when reading his reply to eli_sennesh. Retracting my upvote to the latter.
Good points. The second link is excellent, may incorporate into a revised version of the post.
But in addition to the points it makes, there’s what seems to be a questionable moral assumption here: even if Walmart could pay employees more by taking a hit in profits, why should they bear that burden alone, as opposed to spreading the cost of improving those people’s lives over the wealthy as a whole through taxes? That’s where the anti-Walmart crowd seems to assume something like, “hiring someone creates a (fairly) strong moral obligation to look after their welfare, above and beyond things like not cheating them.”
Actually, grammar, boo hiss. Just check your post title again.
Did you defect by accident here?
I’m not sure… Data point: did it come across as me being helpful?
Reflexively it came across as you being a smartass, but I quickly concluded that you were trying to be helpful. I just think you left too much room for bad interpretation.
Thanks.
(If anyone is confused, there was an extra word in my post title that I noticed and fixed before reading these comments.)
There’s still a misspelling (“
employess” for “employees”).Whatever your moral position is, government benefits to low-income workers are a subsidy to their employers.
If the government awarded benefits only to the unemployed, many low-income workers would find preferable to quit their jobs if their employers didn’t increase their wage. Since employers need employees, employers would find preferable to increase their employees’ wages enough that they don’t need government benefits.
The net effect would be a redistribution of wealth from employers (especially those who use lots of low wage labour, like Walmart) to the government (and hence to taxpayers).
On the other hand, increasing government benefits to low-income workers would redistribute wealth in the opposite direction: from the government to Walmart-like employers.
Note that neither policy significantly affects the welfare of low-income workers, since their effective purchasing power remains approximately the same.
Therefore, if you think it is morally preferable to redistribute wealth from Walmart to the taxpayers, support unemployed-only benefits (and/or minimum wages), if you think it is morally preferable to redistribute wealth from the taxpayers to Walmart instead, support guaranteed basic income and/or other low-income workers benefits.
That’s incorrect. Basic income is provided to everyone, even to those who choose not to work. Perhaps you were thinking of the Earned Income Tax Credit, which is provided only to low-income workers.
Therefore it allows employers to pay lower wages.
...only if the workers don’t mind lower wages (such as in a Silicon Valley startup). See, among many other benefits, basic income can serve as a permanent strike fund for those who are still employed. These employed strikers would not receive anything from your solution of “unemployed-only.” Furthermore, your targeted solution can be demonized as “lazy-only” and cut by politicians. Look at stigmatized food stamps today. Such drastic cuts are very unlikely with a non-stigmatizing basic income provided to everyone.
On a related note, GiveWell appears to be removing Against Malaria Foundation as their top charity, making GiveDirectly their new top charity. Donating to GiveDirectly may help legitimize the idea of an unconditional basic income. I don’t think basic income is as important as mass cryonics, but I still defend it in my upcoming “cryonics and basic income for everyone” website. Here’s hoping I finish the website someday.
workers would be getting about the same amount of many whether it came only from their employers or partially from their employers and partially from the state.
If I had a choice between e.g. $3000 monthly for working and $500 for staying at home, it would feel very different from choice between $3000 for working and $0 for staying at home. I could probably translate the “very different feeling” to better position at negotiating either higher salary or better working conditions.
It’s not obvious whether I could translate it exactly to $3500, or whether the additional money would be split between me and my employer. Please note that the labor market behaves a bit differently from typical markets, because when you pay people more, their free time becomes more valuable. For example, if you paid me 10 times more money than I make now, a likely consequence would be that I would work for you only shortly, and then enjoy an early retirement. (An effective altruist would keep working, though.) By increasing the market price, the supply can go down. So in some circumstances it could create a spiral of skilled people demanding more money, then leaving the labor market soon, which would increase the salaries of the remaining ones, etc.
Right, and that’s the point of unemployment benefits.
Well, yes and no. To get the unemployment benefits, there are some conditions (depending on the country). If I decided I want to stop working now, I probably wouldn’t get the unemployment benefits, unless I had a good excuse. They might just offer me another job, and I would have to take it, or lose the unemployment benefits. Also, I would have to do a huge amount of paperwork. All these inconveniences are big enough for me to not take this option voluntarily. If I tried this for one month, it is likely I would spend a large part of the month just visiting the bureaucrats and doing the paperwork.
With basic income without any conditions and paperwork attached, it would be like taking a vacation.
By “unemployment benefits” I mean benefits which are given to any able person of working age who doesn’t work, for whatever reason.
Some countries have unemployment benefits which have limited duration and/or are conditioned to the requirement to accept any job. That’s not what I’m talking about.
The bureaucratic hassles could be reduced to virtually zero if the government keeps track of who is employed and who isn’t.
Yes, there is a risk of fraud: people could work without declaring it (with the complicity of their employers if any) and earn both their wage and the benefits. The judicial system can deal with that.
Is there a specific country having the unemployment benefits in the way you described here?
(The way I described exists in Slovakia, and I would expect it to be in many other countries too, although I have no data about that.)
By the way, if there is a rule of “if you are not employed, you automatically get $X, no questions asked”, I hope there is also a gradual reduction of X instead of jumping from full value to zero when the person makes some money. To avoid situations like: “Sorry, this month your webpage made you $0.01 from adsense, therefore you are not eligible for the $500 from the government.”
I don’t know, possibly not. But that also applies to basic income.
There are various forms of income which are tax-exempt, I suppose that these should not count as employment.
The important part of my comment about gradual reduction was that people should never be put in a situation where if they make $N, they get additional $500 from the government, but if they make $N+0.01, they get nothing.
Regardless of how big is the $N, and how specifically they received the $0.01. Even if they received the $N using tax-exempt forms and the $0.01 using taxable forms. Or if $N is the limit for the tax-exempt form, and the $0.01 is the first cent above the limit.
Otherwise we get various kinds of crazy situations where people are punished for doing something that would otherwise be rewarded. Especially with poor people these kinds of situations are known to often lead to bad outcomes, both individually and socially.
...and the relevant part for this debate is that if this gradual reduction is implemented, the outcome is more similar psychologically to basic income than to unemployment benefits, because there is not a sharp dividing line between “not working” and “having a low-paying job”.
(A hypothetical example of a gradual reduction of government support which still does not lead to giving money to everyone would be giving people max(0, $500 − 0.2 X) money if they made $X otherwise. Which means that an unemployed person would get $500; a person who made 0.01 from adsense would get $499.99 regardless of whether adsense income belongs to some bureaucratic category or not; a person getting $200 from their job would get $460, which would make their total income $660; a person getting $2500 or more from their job would get nothing; etc.)
Whether your time becomes “more valuable” depends on what your baseline for value is. If your baseline is dollars, then your time hasn’t become more valuable. Rather, your time has the same value, but with more money, it is easier for you to purchase time. Your time becomes more valuable only relative to dollars and for many purposes this situation could more usefully be described as “dollars go down in value” rather than “time goes up in value”.
In particular this matters when comparing to poor people. Time is still valuable to them, but they are forced to use it up in order to get dollars or in order to avoid losing dollars.
Not necessarily. That’s why I brought up the example of basic income serving as a permanent strike fund to help employees demand higher wages. Employers can respond by meeting their demands, and/or automating more quickly, etc. Then society can respond to increased automation by increasing the basic income. Or not. I won’t talk about society’s transition into a gift economy here because that would take too much space.
I know you’re trying to paint Basic Income as a subsidy to employers, but it’s really not like the Earned Income Tax Credit. At all. I’ll continue this in the Luke_A_Somers thread.
Even so, payments to those who aren’t working can’t reasonably be classified as ‘redistribution of wealth from the taxpayers to Walmart’
I’m not sure that the drop will be as much, though—if everyone has a basic income, some people who are now driven to work despite hardship would not be so driven and could finally quit. Those who do work will not need to compete with them for jobs. ALSO, those on basic income would be able to buy things they presently cannot, which would increase the demand for labor further.
Right, in fact I was referring to payments to those who are working. A guaranteed basic income would not discriminate between the two, thus, in the proportion it was given to workers, it would be a subsidy to their employers.
Unemployment benefits would be sufficient to obtain these effects without transferring wealth from the taxpayers to the employers.
No. To illustrate, look at the starting point of the aforementioned subsidy to employers: the Earned Income Tax Credit. You can only make use of the EITC once you are employed, so all else being equal, the EITC contributes to the idea: “If you don’t work, you starve.” I may then feel pressured to work at McDonald’s or Walmart. By contrast, Basic Income exists external to the market, serving as a base amount for everyone to live on. Since I don’t have to worry about starving anymore, I now have more leverage in choosing if/where I want to work. Any amount I earn on top of the base amount is of my own volition for luxury items not needed for my survival. If I later want more money and my employer resists, I can use the basic income as a strike fund.
Three things. First, you seem to be forgetting my earlier point regarding staying power. Even if you rally society today to support your targeted “unemployment benefits” (I put it in quotes because I know you mean it in a welfare context that is wider than merely unemployment compensation), your welfare solution is still at risk of being stigmatized in the future and then cut by politicians. Basic income for everyone avoids this risk, and will have much greater staying power.
Second, you seem to be under the impression welfare is handed out like free candy. In reality, welfare can be a pain in the butt, whether it’s the intrusive paperwork, stressful delays, or the threat of fines and probation. Basic income bypasses this mess.
Third, you keep suggesting “taxpayers” and “corporations” are two separate things, even though corporations pay taxes too. Yes, corporations are quite adept at avoiding taxes, which is why tax reform also needs to be a part of this discussion.
My point is that you can do that with unemployment benefits without the side effect of subsidizing the employers.
Any policy is potentially subject to being reversed in the future. I don’t see why basic income would have more staying power than unemployment benefits.
Seems like these costs could be reduced to the point of irrelevance.
Not all taxpayers are corporations, and corporations have conflicting interests when they are in the role of taxpayers rather than the role of potential subsidy recipients: a corporation that employs mostly high pay labour (e.g. Google) has no interest to subsidy Walmart.
No. You can’t. One example I’ve stressed is that your unemployment benefits don’t help employees who wish to go on strike. Union dues can be decreased via Basic Income because unions won’t have to worry about strike funds anymore. Even if you’re not officially unionized, you know your coworkers get paid a Basic Income each month, and they know that you know. This simplicity-induced transparency can help you persuade/guilt-trip your co-workers to go on strike with you over, say, safer workplaces or shorter hours. And going on strike is an easier sell than getting everyone to quit for “unemployed-only” welfare (which, as I’ve stressed, your coworkers may not even end up receiving), especially if your coworkers are getting paid quite handsomely. After all, we’re not just talking about Walmart employees going on strike.
Long story short: Basic Income subsidizes employee leverage. And as Aaron Swartz emphasized, it can even help encourage employees to become entrepreneurs. Your repeated argument that Basic Income is subsidizing Walmart reminds me of this psychicpebbles video :p
Think of the aforementioned fight over food stamps today. Heck, many Americans don’t even know it’s called SNAP now, and SNAP advocates have to actively campaign to teach Americans what recipients receive. By contrast, Basic Income won’t need active campaigning once adopted: everyone will be passively reminded each month via their monthly payments. Furthermore, the endowment effect (yes I see the criticism section at that link) makes it much less likely that everyone will support a politician’s decision to cut their Basic Income monthly payments.
But only if society cares to reduce the costs! Again, people don’t even know the foods stamps program is now called SNAP. And they think recipients are all like Jason Greenslate.
To be fair, there are practical bottlenecks in the implementation of a basic income, so I do support already-existing welfare programs. It’s just that I also point out the weakness of those programs. I’m not much fun at parties.
Sure, but employees could threaten to quit their job. Anyway, how much money is currently locked as strike funds?
So can unemployment benefits: If you business fails, you have a safety net. Sure, you would have to give yourself and your employees a wage while your business is still unproductive, but that could be dealt with subsidies specifically targeted at startups.
Appeal to ridicule
If the government started to give money to everybody who turns 18 and doesn’t work I suppose that people would tend to notice.
The same endowment effect applies to taxes which affect most of the population. When the government proposes tax raises there is always some opposition, but this doesn’t prevent tax raises from occurring from time to time.
Food stamps are considered something extremely low status which only the filthy poor and social parasites would ever accept. Most people don’t care about the issue except as a social cost.
If threatening employers with the words “We’ll quit” is all that’s needed, then why do employees bother with strikes in the first place? Action gives power to words. As for your (rhetorical?) question, I’m not sure I follow. Non-unionized employees certainly don’t have a strike fund.
Hackers’ hobbies and experimentation technically don’t count as startups, even though they can lead to official companies in due time. Basic income can help support such experimentation. Furthermore, subsidies targeted specifically to startups can be opposed by established businesses as government meddling.
When an average American interviews for a job, which of the two is more likely on his mind: the wage, or the tax implications of the new job? Tax reformers face the uphill battle of a public perplexed by the complexity of taxation, as well those who feel protected from tax increases via possible deductions and loopholes. By contrast, an income stream is an easier thing to grasp. If everyone is given this income stream, any attempts to cut this income stream won’t be met with “some opposition.” It will be met with widespread opposition.
But your “lazy-only”… I mean, “unemployed-only” solution won’t fly because it will be demonized in the manner that you demonize SNAP here:
Whereas many SNAP recipients actually are employed, your “unemployed-only” solution actively discourages work. Therefore, your belief that the problems of targeted welfare “could be reduced to the point of irrelevance” seem, to put it mildly, a bit optimistic to me.
Basic income does not actively discourage work. Instead, it gives people leverage to choose their work if they so desire. Yes, I agree it is, to put it mildly, optimistic to expect adoption of basic income in the near future. However, I’m in it for the long-run.… unless, of course, someone convinces me that basic income is a bad idea. You’re currently not succeeding in this regard.
Appeal to authority
Because they would be in serious troubles if they quit and don’t have another form of income.
So either these hackers are unemployed, therefore they would be getting unemployment benefits if they existed, or they are employed, hence they can fund themselves with their salary. Until they can find an investor, of course.
Nope. Cash from unemployment benefit is indistinguishable from cash from another form of income, unlike food stamps which automatically signal you as “poor” any time you use them to buy something.
Not any more than basic income does.
Off topic.
You are not helping to keep the level of this discussion high.
Back from my Thanksgiving break. Delighted to see another turkey.
So what you’re saying is that your “unemployed-only” solution will make the words “We’ll quit” into a more credible threat, and employers will meet their demands because employers are too stupid to call their bluff? You do recognize there are benefits to being employed other than the wage, right? Health care, networking, friends, knowledge, experience, etc? And, as I suggested before, what if the employees are paid well above your “unemployed-only” solution but wish to strike for shorter hours or a safer workplace?
My great-grandfather was on the receiving end of a strike in 1940, and he lasted for two months without blinking an eye. If you tried your simple threat of “We’ll quit and go live off the benefits” on him, it would have come across like this scene from Cable Guy.
One of my contentions is that basic income has a much better chance of coming into existence than your solution, although I’ll hedge this notion with Milton Friedman’s Negative Income Tax discussed below.
Nope. We’re not talking about signalling “I’m poor” to the cashier at the supermarket. We’re talking at the level of policy. You know, Washington D.C. and all that. By the way, maybe you should have looked at a SNAP card before going all scarlet letter on me. Look at this mountain of shame. And here’s a film about the people who carry such cards. Maybe the film will help you stop calling them “filthy poor and social parasites.” Even Tyler Cowen praises SNAP.
Randomized control trials (here’s one for example) indicate that basic income encourages work. RCTs often inspire hipster cynics to complain: “Oh, they continued working just because they knew the RCT would end. If you guaranteed them basic income for life, they would quit their jobs.” Of course, such complaints are merely handwaving, unlike the empirical evidence just presented.
Are there any RCTs for your idea? If no, why? As it turns out, the Negative Income Tax RCTs decades ago were probably the closest to your idea, since it tapers off as you earn more (similar to Viliam_Bur’s suggestion in this thread). The results inspired mixed reactions, with many critics claiming a drop in labor. This paper tries to sort out the mess.
Jodie T. Allen of the Nixon administration dealt with the NIT RCTs firsthand, and she immediately noticed some practical problems. For example, just like the EITC today mistakenly gives out billions of dollars to technically ineligible recipients, the NIT will probably mistakenly give out many billions more and turn the IRS into an even bigger bureaucracy as it deals with millions of ever-changing recipients. You seem quite naive to such administrative issues, per your professed belief to Viliam_Bur:
As I’ve stated before, basic income has its implementation problems. But it’s nowhere near the level of complexity of your idea, which you insist is not that complex, because you haven’t spent much time actually thinking about it. This brings me to my main complaint against you.
On topic, because I’m actually the one keeping the level of this discussion high, just like in past encounters. See, when I pointed you to this article last year, I discovered that you didn’t actually read it, and you went right back to ridiculing cryonics advocates. Then when you gave this half-assed one-liner above, I realized you probably do this with every subject. Just to double-check, I provided more links. As far as I can tell, the only ones you click on are the ones you judge to be an assault to your character, because those links are easier to process. So tell me: why should I continue to provide links if all you’re going to do is respond with half-assed one-liners? The only link you’ve provided thus far is an off-topic Wikipedia entry.
I understand you may be pressed for time, so instead of inefficiently talking past each other, let’s just exchange some links to books of our respective ideas. I’ll go first: here’s a huge anthology of Basic Income research. Your turn.
If a single employee threats to quit, it’s not credible, just like if he or she threats to strike. If they many employees threat to quit, and they have the means to support themselves without a job, then the threat is credible.
If health care isn’t free then it should be at least included in the unemplyment benefits. The other stuff are real benefits, but they aren’t necessarily decisive to make the threat empty.
If they are payed well above the unemployment wage then they can afford to strike. And basic income wouldn’t make much differnce to them anyway.
You are making up increasingly contrived scenarios.
What is your point? Are you going to argue that food stamps are not low-status?
So if you give starving people cash, then maybe they don’t starve and improve their condition. How surprising...
These weren’t unemployment benefits, but anyway it’s unsurprising that giving away money, in whathever way, reduces incentive to work.
Oh, come on. If the government can collect taxes, then it knows how much each of its citizen makes, with the exception of criminals, who face the risk of legal prosecution.
Yes, unemployment benefits would have implementation costs. Still, these costs are probably less than the costs of the subsidy to Walmart, McDonald’s, et al. that basic income would impose on the government.
A desperate person forfeiting the last months of her short life by starving herself to death, for a most likely misguided hope in a pseudoscientific and quite prossibly fraudulent procedure is not something I would call ridiculous. “Tragic” seems a much more appropriate description.
Anyway, you are arguing ad hominem.
Just to give you a taste of your own medicine, if I were to lower myself to the this level of discourse I could say that since you buy into cryonics, which is bunk, then your general ability to form rational judgments on any topic is probably deficient, therefore you are probably wrong on basic income. I suppose that this would make sense from a Bayesian point of view. But that would be an ad hominem, hence I’m not going to make that argument.
Here’s another Wikipedia entry. Search “Argument by verbosity”.
That’s an interesting point against Basic Income Guarantees. Thank you for making me consider it.
This isn’t true, literally. Why do you think it’s true figuratively? If you have in mind the counterfactual situation in which benefits to low-income workers were removed, well, I think the economic consequences of that are complicated—much more complicated than a simple subsidy.
None of this makes it a subsidy.
But the real problem is caused by the government giving more benefits to unemployed people than to employed people. It’s hardly a serious ethical critique of Wal-Mart to say that its actions are harmful given the weird distortative incentive-misaligned modern economic world.
And then this is is combined with a minimum wage, and things continue to get complicated.
They would also hire fewer employees while doing so.
Why?
Basic supply and demand, if something costs more you buy less of it. Unless their demand for labor is completely inelastic which is rarely the case.
The demand for unskilled, low pay labour would be fairly inelastic if per-worker productivity was fixed, because these wages are set by a bargain between the employers and the workers where the employers have the majority of bargaining power.
If per-worker productivity can significantly increased by investing in optimization and automation, then yes, demand for labour becomes more flexible, and increases in labour costs would create more unemployment.
It seems to me that the gains in general efficiency of the economy would compensate for the extra costs of unemployment benefits to more people. After all, the government could always increase corporate taxes to gather the money it need to pay benefits.
In principle it is possible to imagine an hypothetical (utopian? dystopian?) future where the vast majority of people are unemployed and live on unemployment benefits, while the few people who earn an income from a job or investment pay all the taxes.
I haven’t considered this scenario in enough detail to say that this scenario would be likely or desirable, but it does seem like an intuitively plausible high-automation scenario.
Why? Most labor markets aren’t monosponies.
Or if the workers are doing something that adds some value but isn’t strictly necessary, e.g., Wall-Mart greeters.
What gains in efficiency? After all automation and other capital investments cost money, and if it was a pure efficiency gain to invest in them, the company would already have done so.
You seem to be confusing being capital intensive with being efficient. These are frequently not the same thing, for example, a company that works with metal when faced with higher labor costs might decide to simply throw out its scrap rather than reprocessing it, this is more capital intensive (the company needs to buy more raw metal) but not more efficient.
...or support government benefits directly to Walmart.
In terms of actually existing politics, which do you think people in general would dislike least: subsidizing would-be freeloaders with taxpayer money, or using that same taxpayer money to hire people (or subsidize hiring people) to do largely unproductive jobs that the market wouldn’t pay them a living wage to do? There seems to be a general feeling that it’s wrong to let people (figuratively) starve, but also that it’s bad to give people things they don’t deserve.
If the answer is “I think people in general would rather make people work for their money, even if the work itself isn’t actually worth what we’re paying” then we might as well let Wal-Mart do the hiring rather than have the government do it directly.
(Aside: The textbook example of unproductive make-work is digging ditches and filling them in again. A slightly less obviously ridiculous way to employ low-skilled workers is as “taxi drivers” for people who would rather spend their daily commute doing something other than driving but wouldn’t go to the expense of hiring a driver themselves. After all, driving is a skill that most adults actually do have...)
Imagine that you are designing a Prisonner’s Dilemma game. When all the numbers are ready, you have an additional option to increase the reward for defecting when the opponent cooperates. Would you do it?
If you expect that the player’s future decisions are already fixed and your numbers will not change them, then increasing the reward adds more value to some players, while removing value from none. Thus it would be good to increase the reward.
But if you expect that people look at the payoff matrix and choose accordingly, increasing the reward for defecting will lead to less cooperation. By increasing the reward for defecting, you are reducing cooperation… and it’s not obvious what will be the result.
Now let’s add another complication. Let’s assume that some players’ voting mechanisms are broken, so they always vote to defect, and are unable to change that. It feels moral to punish those who defect voluntarily, but it feels immoral to punish those who merely randomly received a broken voting mechanism. -- I am speaking about people who are too stupid to do the kind of work that is important in a modern society. As opposed to people who could do the work, but are too lazy, if the system allows them. Both of them are mixed in the category of unemployed, with no easy way to distinguish between them.
Unfortunately, trying to set the numbers so that no one chooses this option voluntarily, and yet those who don’t have an option of escaping it are treated well… seems like a contradiction.
(There is a sci-fi “Limes inferior” about a society where all people have to do public IQ tests, and those above some value are legally required to work, while those below the value are not. Everyone gets a basic income, the smart people get a bonus for being smart, and the working people get another bonus for work.)
I think I’m missing your point.
It seems that one approach to this is for me to treat everyone well whether they work or not, and for me to provide additional incentives to people for doing the kind of work I want people to perform. This admittedly does not have the structure of a Prisoners Dilemma game, but I’m not sure why the PD structure is important.
If I find that some people who are capable of doing that work consistently choose not to under my incentive structure, I can experiment with my incentive structure… different people are best motivated by different things, after all.
If despite that I still find that some people who are capable of doing that work consistently choose not to… well, that means less of the work I want people to perform will get done than if they chose otherwise. Which might be a huge problem, if that work is much more valuable than the stuff they choose to do.
I have a bunch of options at that point. E.g., I can figure out other ways to get that work done (e.g. automation). Or I can figure out ways to force people to do that work.
Or I can rethink my initial conditions and stop treating everyone well whether they work or not… I can instead treat people well if they do the work I want done, and poorly otherwise, and count on that differential treatment to provide the missing incentive.
But that last option is far from the only option, nor is it clear to me that it works better than the alternatives.
This seems to me almost what we have now. Yes, there is a problem about defining “treating well”. However well you treat one group of people, if you treat everyone else better, the former will complain. These days in first-world countries the unemployed people are treated much better than an average working person was centuries ago. But that’s irrelevant. We see that they are treated worse than other people are today, therefore they are not treated well.
Even if you start treating poor people much better than they are treated now, even better than the average people are now, just wait 10, at most 20 years, and they will start comparing you to Hitler, if they see that someone else is treated even better.
I agree that we should experiment more. Preferably many different experiments in smaller regions, so it is easier to stop things when they go horribly wrong. Seems to me a good first step would be giving more independence to regions; decentralizing the state power.
Expanding on my “yup” above a little… it’s certainly conceivable that we could adopt an approach to defining “treating well” that isn’t entirely relative.
For example, nation A could assert that A’s unemployed people are being treated well if they have better conditions than the unemployed in nation B (by which standard the U.S. unemployed are generally treated well). Or that A’s unemployed people are being treated well if their children don’t demonstrate significantly higher levels of deficiency-based illnesses (due to malnutrition, exposure, etc.) than the children of their employed people. Or various other standards.
The difficulty I’d expect to face when proposing such a standard isn’t that the unemployed under it would be worse off than the employed and therefore I’m Hitler, it’s that most people have already written their bottom line about whether (for example) the U.S. unemployed are generally treated well, and evaluate the standard based on whether it gives the right answer to that question.
Yes, we could. And then some people would get political karma for insisting that this isn’t the true definition of treating well, and instead is just a part of conspiracy for oppressing people.
I can imagine a situation where there are illnesses typically attributed to poverty (and some people get political karma for insisting on the poverty hypothesis), even if material poverty is not the cause. For example, you could give people tons of money to buy healthy food, and yet they could decide to spend it all on junk food and alcohol. You measure their childrens’ health, and it becomes obvious the children are not fed properly. This article describes it better than I could.
I agree that it would be great to have an absolute definition of “treating people well”, which could be reached, first in one country, and then perhaps globally. But I predict that the closer we would get to it, the more people would insist that it’s a wrong definition.
I think that in a long term it’s even worse: the bottom line depends on information the people get. In a totalitarian state, you just have to insist that everything is great, and imprison everyone who says otherwise, and after a few years people will believe that it really is great. But if you have freedom of speech, someone will always make political karma by insisting that people should have more (who wouldn’t like that?), and that not having more is completely unbearable.
I am not convinced your article shows an example of “poverty” not being caused by real poverty.
The examples in the article tend to include both poverty-related factors and non-poverty-related factors. For instance, certainly failing to press charges against an abusive, criminal, boyfriend is something that can be done by someone of any income level, but on the other hand, poor people are more likely to steal money (like this boyfriend did), more likely to be unable to treat mental illness that might result in violence, and more likely to be frustrated in ways that lead to violence. In this case the guy was a burglar and had no job (poverty leads to no money and people with no money and no job are more likely to burgle). Those aren’t 100% due to poverty (clearly frustration at poverty is only a contributing factor to violence and the person won’t be violent unless something else predisposes him to violence), but poverty affects them at the margins. Not to mention that even though each individual decision to stay with a boyfriend who has no job is technically not poverty-related, poverty cumulatively leads to a high rate of joblessness.
Poor people are also less likely to be educated and therefore more likely to make poor life decisions.
Even buying junk food is related to poverty because junk food has a lower time expenditure than other food and time has a greater relative cost to poor people than to rich people—poor people often work long hours that leave them exhausted, must spend a lot of personal time on child care, etc. Poor people also are less likely to have a supermarket with cheap non-junk food within easy commute distance. Again, none of this is 100% caused by poverty—this just raises the relative cost of non-junk food, it doesn’t make it completely non-affordable—but it certainly has an effect.
Well, it’s complicated. For poor people, some “smart” options are not really possible. On the other hand, I also see many relatively rich people making the stupid options voluntarily. Poverty can cause “stupid” (from our point of view) choices, and also stupid choices can cause poverty.
I would like to see a society where no one is forced to make the “stupid” choice. (Organizations helping poor people to press charges against criminals, providing them food and refrigerators, etc.) But even in such society I expect many people making the stupid choices voluntarily. (And then complain about an unfair society. So if we could get halfway to such society, judging from people’s reactions it would seem there was no improvement.)
A while back, a friend of mine informed me that poorer Americans consume junk food because it’s one of the few pleasures aside from alcohol that’s easily and cheaply available to people of that socioeconomic stratum, and that what she referred to as “food politics” is therefore symptomatic of privilege.
It sounded like rationalization to me at the time, and I still find the availability and time constraint arguments more convincing, but she’d have had more personal experience than I.
Recommended reading: “Why I Make Terrible Decisions, or, poverty thoughts”
There seems to be some evidence that the article is at least describing a general case, and not the author’s immediate experiences, or worse
Huh.
*updating*
Great article! In this specific case, replacing a state-subsidized work (if the author has one of those) with state-subsidized free time would be an obvious improvement. At least replacing one of these two jobs.
I am a bit confused because my first idea of a poor person is a person who can’t find a job, not a person who has two jobs (and therefore has no time to optimize their lives using the typical middle-class methods). I wonder how much should I update, and how much of this is a cultural difference. Or different kinds of poverty. Perhaps “having two jobs” is just a little bit higher economical level than “not having a job” (which explains why people keep doing it, instead of giving up). But maybe it’s something completely different than I am not aware of.
Reading the article again, I don’t quite understand why a person with two jobs complaining about a lack of time is also attending a school. Okay, it would make sense if the school is necessary for getting a better job in the future. But even then this is probably not a situation of a typical poor person.
EDIT: Everyone who was influenced by this article, please update! It is actually a hoax.
At least in the United States, less than 4% of households report under 5,000 USD in taxable income, while between 14% and 20% of households are defined as under the poverty line (depending on source). The official BLS numbers put it at 10.4 million people who are ‘working poor’, aka working or looking-for-work for half the year and also under the poverty line (pdf warning), and a little over three quarters of households under the poverty line have at least one person who fits into the “working poor” category. This is further complicated by income disparities and cost of living varying heavily from state-to-state: one can live much more comfortably on 20k in the midwest than on 40k in California.
A little over half of off-campus college students live under the poverty line, making up a significant part of total poverty . There’s a perception that a degree (and usually a four-year-degree) is necessary for any desirable “real” (non-retail non-fast food) job. Worse, there’s a perception that any degree is both necessary and sufficient for long-term “real” jobs. So you do get a lot of people trying to take classes and make ends meet at the same time, even if the system eventually shoves them out the door with a lot of student loans and a liberal arts degree that barely improves their options (or not even that: low-income folk who drop out get screwed even worse).
It’s probably not the average case, but it does make up a non-trivial portion of the total.
((On the other hand, many of the issues raised in the linked blog post show problems related to information access. “Sliding scale” payments usually mean nearly free for a low-income mother, in the odd case where she doesn’t qualify for Medicaid. The documentation necessary to set up even a post-9/11 bank account is less than that necessary to get most forms of public assistance including WIC or TANF, while there are other complex reasons people in poverty avoid bank accounts. It’s quite possible to cook basic staples with nothing more than a microwave, a plate, and a couple pieces of silverware, but that’s not really something that’s taught in Home Ec or cookbooks. And the depression self-diagnosis is… not robust.))
another emerging issue is that degrees can have a negative utility these days. if your degree can’t land you a “real” job, and employers who would otherwise take you now see you as ‘overqualified’, your options are more limited than if you never went to college in the first place.
I’ve spent a fair amount of time volunteering in fairly poor communities, and i my experience, many of the people living in those areas work multiple part-time jobs, some “official” some under-the-table.
In the US at least, statistics bare this out- even 45% of homeless people have worked a job in the last week (much fewer have regular jobs, because of the nature of homelessness). 13% have regular jobs (are working poor). ~25% or so of people below the poverty line are working poor, and the fraction has been increasing. I imagine if you include under-the-table jobs, its much higher.
My idea of a poor person is not someone without a job, but someone without money. Not having a job is one contributing factor to being poor, not part of the definition.
If you want to help poor people, and the only information you have is that they literally are without money, the only conclusion you can get from this data is that if you give them some money, you will make them less poor… well, at least in the short term.
Having information about how specifically these people are and remain poor shows opportunities for other interventions, some of which might be more effective. Thus I would like to know the most frequent “templates” for poverty.
The linked article describes a person who studies and works at two jobs, and lives in an area far away from many useful or cheap things. This can give some specific ideas about helping them. For example giving them enough money to keep only one job; or providing them a free ride to the nearest city. Some of these ideas may be more effective than others; for example if there are more people in the same area with the same problem, you could drive them to the city together by bus, instead of each of them in a separate car. Or a big refrigerator shared among multiple families. Or an advice about how to solve unusual situations that happen once in a while and they have no time to research.
Then there are people who are poor because they don’t have a job, and don’t even have the education necessary for the job. In that case, completely different specific ideas may be helpful; for example providing them the education or a simple work experience they could mention at a job interview. Or educating their children for free if they fail to understand something at school. Or perhaps teaching them how to do something useful for themselves and their neighbors, if free time is not a constraint. There are possible projects where they provide the work, and you pay for the materials and tools they need. Etc.
I always imagined the latter to be a typical example, and didn’t think much about the former. Now that I think about it, all the information I have on the former are from USA, while I have a lot of information on the latter from my country, so maybe it’s something country-specific. But maybe it’s just my limited information.
EDIT: The original article which inspired these thoughts was a hoax, so whatever conclusions were built on the provided information are extremely unreliable.
See also
Yup.
I’m all in favor of experimentation.
And if we’re already experimenting to the limits of our existing regional independence, such that increased independence will relax the rate-limiting constraint on experimentation (which I doubt we are, but is I suppose possible), then yes, increased regional independence would make sense as a next step. Though perhaps it’s best to do so in a small region, so it’s easier to stop things if it goes horribly wrong.
Of course, if we believe for other reasons that decentralizing state power is a good idea, then we should endorse doing so for other reasons, but that’s something of a nonsequitor.
/me shrugs
Disability screening in the real world isn’t perfect, but it works at least tolerably well. (“Tolerably”, in this case, means that nobody appears to be making a political issue out of it not working.)
It is an issue in the UK—the conservative government made a big issue about it, because it turned out that (off the top of my head) 75% of those on disability benefits were actually fit for either full or part-time work.
I stand corrected, then.
“Actually”? The UK government required disability benefit claimants to be re-assessed by ATOS, who rejected many claims. However that is a set of figures, not a reality: 38% of the rejected claimants were able to get their benefits re-instated on appeal, suggesting that ATOS had been given a mandate to drive figures down, rather than assess accurately.
Well the number of disabled people seems to increase whenever the economy goes down or disability benefits increase.
Of course, think of the horrible optics of trying to make a political issue out of it.
I used to have rock-paper-scissor preferences for that kind of thing (if A = “John is paid to do nothing, i.e. basic income guarantee”, B = “John is paid to do something useless, e.g. digging ditches and filling them again”, and C = “John is not paid at all”, I preferred B to A to C to B). I realized that and forced myself to resolve this when reading this post and its comment thread.
The traditional argument for B over A (that is, make-work over basic income) used to be that idleness is a vice and industriousness a virtue; that it is better to work than to sit on your ass. This seems like a lost purpose, though — the reason that work is usually better than idleness is that work accomplishes something useful. Work without purpose features prominently in depictions of hell, from the myth of Sisyphus to The Far Side.
A fourth alternative, D, might be “John is paid to take classes and learn skills.” John enrolls in art school and learns to make decorative pottery; or goes to math school and learns category theory; or goes to woodsman school and learns to build log cabins and tan squirrel hides; or goes to media-critic school and learns to write essays about reality television; or something else. Sure, there may not be a lot of demand for potters and squirrel leather, but that’s okay since the robots provide pretty much everything there is demand for.
However, I realize that in proposing D, I’m probably exposing my own bias for learning as a leisure activity ….
It’s not that simple. There are people who just don’t function without having to work for a living; give them lots of freedom and they simply use it to destroy themselves and others. Maybe they are consumed by superstimuli like World of Warcraft, or maybe they are the marginal case that is barely behaving in a civilized fashion because of the strong incentives associated with the work paradigm. You are probably thinking about the how the kinds of people who post on LessWrong would all have their lives improved with little to no downsides by such a scheme, but that’s the typical mind fallacy at work.
Many people also consider being “productive” or “making a difference” to be important parts of their identity, and while inefficient make-work could plausibly look enough like real work to trigger this instinct, free monthly paychecks can’t.
From that link:
I don’t understand how one can say “The party representative in my village sent a man to prison because the man’s wife refused to sleep with him. In Nigeria the police hired out their guns by night to the armed robbers.”, and then one paragraph later say “I never saw the loss of dignity, the self-centeredness, the spiritual and emotional vacuity, or the sheer ignorance of how to live, that I see daily in England.”
It seems to me that giving a man a choice to give you his wife for sexual favors, or go to prison, involves a significant loss of dignity, and a significant amount of self-centeredness. What is causing this disconnect? Is it simply that such vacuity is more problematic when it’s exhibited by the lower classes, than when it’s exhibited by the ruling elite?
Yvain mentioned that here:
This is not as implausible as you might think. In the spirit of Yvain’s Versailles-building czar, imagine a king of lousy moral character who likes to go around randomly raping the wives of men. In fact, he does this every week, so in a single year there are 52 men who have had to suffer the indignity of having their wives so violated. Sounds horrible, right?
Now, Wikipedia tells me that the rape rate in the U.S. is around 27 per 100,000 per year. The United States has a population of 320,000,000 or so, which works out to around 86,000 rapes per year. If the aforementioned king came to power in the United States and enacted policy changes which reduced the rape rate by even 1%, he would have paid for himself 16 times over.
What does this tell us? That a society where vast swathes of the population suffer from social pathologies is probably going to be worse than one where a tiny fraction of elites occasionally indulge themselves in transgressions against the common man. I know that, in practice, the most powerful politicians and the richest of celebrities in the U.S. could probably make my life pretty damn miserable if they wanted to, maybe because I somehow pissed them off or because they have sadistic predilections they just randomly decided to satisfy at my expense, and yet, I am not nearly as afraid of them as I am of the members of the underclass I occasionally pass by on the street.
But that isn’t a society in which “political authority … was arbitrary, capricious, and corrupt”, or where “you could tell the representative of the sole and omnipotent political party, the Party of the Revolution, by his girth alone”, or where “the police hired out their guns by night to the armed robbers”—that is a society in which a vast majority of elites, not a tiny fraction, indulge themselves regularly in a wide range of transgressions against the common man. And that isn’t merely a society in which one in a million people have to suffer their wife being raped; it’s a society in which all but one in a million people have to suffer poverty and malnutrition, and arbitrary death due to poor conditions, poor safety regulation, and poor concern for welfare in general. I think that a slight risk of street crime from the underclasses pales in comparison to the kinds of organized depravations inflicted regularly on the populace in such places.
If we’re still talking consequentially, that is.
It’s also a society in which an equivalent number have to suffer being raped.
I’m a little bit appalled to find a line of argument here that implies that only men are people!
It jarred me too, but I don’t like to point out factor-of-two mistakes in arguments relying on orders-of-magnitude differences because this.
(Well, that may be problematic for different reasons too, but I was stunned speechless by the fact that a discussion mentioning rape had managed not to mindkill anybody thus far, and was afraid that calling that out could break the spell.)
Scratch everything I just said, army1987 just summed up my position far more succinctly than I did.
EDIT: Really?
The problem with letting yourself be distracted by that kind of phrasing, is that you spend so much time crusading for Right Thinking that you never get to make your actual point. Clever debaters will notice this, and will start deliberately trolling you just to see how many times they can derail you.
Also, declaring that only men are people is a statement of value, not a statement of fact. Oftentimes, when you find someone whose values you disagree with, it is more fruitful to take their value system as given and find discongruities WITHIN it, or discongruities between that value system and the behavior of the person espousing it, than it is to merely declare that you are appalled by that value system.
Couple of things.
First, it might well be that fubarobfusco does not believe that your value system actually embeds the idea that only men are people, and therefore your suggestion about what is more fruitful to do when such a value conflict arises might not seem apposite to them. They might have instead been (as they said) objecting to the implications of the line of argument itself.
Second, do you mean to imply that fubarobfusco was actually allowing themselves to be derailed/distracted from something in this case? Or are you just expressing your concern that they might hypothetically be in some other, similar, case? (Or is this just an indirect way of suggesting that their comment was inappropriate for other reasons?)
EDIT: army1987 just explained better. Feel free to TL;DR the rest of this post and most of my previous one.
Hmm. English lacks distinction between specific and generic ‘you’. :(
I was trying to describe my own thought processes when I chose to continue the “suffer the indignity of having their wives raped” line, rather than challenge it in the typical gender-crusader fashion. (Also, I suspected that jaime2000 was stating that line hyperbolically in any case—Poe’s Law is tricky that way.)
While I agree with gender equality goals myself, displaying that I am appalled at someone else’s disregard for gender equality has an opportunity cost that I didn’t want to pay at the time, and wasn’t likely to achieve the results that one normally hopes for when performing that display. Lesswrong doesn’t seem to be the sort of place where shaming and rallying tactics work, nor do I want it to be. So I’ll try to treat people’s positions courteously as long as their positions don’t seem actively disingenuous.
When I saw fubarobfusco’s post, I read it as a shaming/rallying tactic for ‘my side’, which I felt a minor social obligation to respond to. Rather than falling into line, I decided to explain my dissent.
You can use “one” for the latter.
Ah, I see. Thanks for the explanation.
Me too, but I was too lazy to try to guesstimate whether I was right (e.g. by looking at jaime2000′s contribution history) and so I didn’t even mention that.
That’s assuming a leader’s vices somehow correlate with enacting positive societal changes (when the contrary would seem more likely). Otherwise choosing instead one of the many, just as competent and not as corrupt potential leaders is still a superior choice.
The article was comparing societies where the population was horribly poor or subjected to tyrannical leaders but still had their drive, human dignity, and joie de vivre, with the nihilistic U.K. underclass who did not have such problems but who used their freedom to do little more than eat, sleep, fuck, fight, and dope, and deciding that the former was preferable. Obviously if you can have a functioning population without vicious leaders, that would be best, and the article made no claim that this was impossible or unlikely.
It’s true that one person committing personal crimes with impunity doesn’t have much measurable effect on crime rates in a society of any size, but that’s neither surprising nor particularly informative. No matter how shiny that person’s hat.
You’d be surprised how quickly even normally very rational people go to the “but… Versailles! Droit du seigneur!” emotive argument when someone suggests that there can be socioeconomic benefits to a high level of inequality.
The same scope insensitivity which makes people care more about a single sick puppy than millions of starving people makes it very difficult to see that the highly-visible opulence of the elite costs much less than the largely invisible ‘welfare’ superstructure which provides our underclass their bread and circuses. Not to mention that one produces value for society while the other annihilates it.
If a rationalist knows anything it should be how easy it is to forget to multiply or use inappropriately anchoring null hypotheses, especially when ideological sacred cows are involved.
Ideological mind-projection. The writer who hates the English welfare state has somewhat different values from all the Third World people who want to protect their female family members from rape and eat meat once in a while. The writer therefore believes that rather than wanting to be English poor people—with food banks, benefits, and council houses—the Third World people are much better off the way they are.
I think this depends on how you read “I never saw the X.” Consider something like “I never saw the death due to accident in England that I see in Tanzania.” If you view this as the claim that no one ever dies in accidents in England, then obviously this is wrong. If you view this as the claim that death due to accident is qualitatively different in England and Tanzania, and worse in Tanzania, then it seems sensible.
We’re likely to end up in a society where human labor is unnecessary one way or another, simply because of the advance of automation and ultimately AI. We do not have the choice of preserving the “work paradigm” indefinitely — that is, unless we end up in a Bad Ending where the future of humanity is vastly warped or curtailed.
So, if humans need work, we are doomed; because productive labor aims to extinguish itself. Moreover, the extinction of labor is already in progress.
My question is: How shall the extinction of labor be distributed? I see no reason to declare that the people who currently own the robots should get to be the ones to move into a post-labor civilization, and everyone else can go to hell.
Well, EY says
(But the difference might be more about where you draw the line on the map between what you call “work” and what you call “play” than about where you think people in the territory should do in the future.)
See here (and followup here).
Very relevant … and there’s a few particularly amusing points in there, including in the comments. For instance — If a lifestyle without work reliably breaks people, then why aren’t retirees/pensioners reliably broken?
OTOH ISTR that lottery winner are pretty often broken. So I guess a lifestyle without work breaks certain people but not others, and whether it does depends not only on individual personality variance but also on circumstances, in some non-totally-obvious-a-priori way.
I award myself five points for guessing that quote was from Dalrymple.
I lack the information necessary to evaluate what is likely, but barring very specific definitions of the word “unnecessary” I don’t think it’s obvious that it’s impossible without massively curtailing the future of humanity. If the importance of the work paradigm exists and is fundamental to parts of human nature we like(1), there are a number of imaginable ways for those to be made necessary even if it could be made unnecessary. While some of these possible futures are dysutopian (Brave New World), not all of them need be.
(1) I’m not sure this is the case. Some sort of act-or-unpleasant-things-happen seems necessary to get a good future, but this may or may not circumscribe the work paradigm.
John sits resentfully in a class with a disinterested teacher, both fully aware they are wasting their time...
You could solve this by making the free money conditional on passing exams, but that would be unfair on those who failed.
Which just elucidates that the point of the exercise should be to provide humans with the abundant wealth generated by technological advancement — not to sort humans into deserving ones and undeserving ones, then send the undeserving ones to hell.
I understand the desire to make sure people aren’t suffering, but can’t we think about the suffering of future generations as well?
Paying for people to do nothing incentives doing nothing; fewer people will participate the more comfortable laying around gets compared to actual work. Worse, removing the natural selective pressures against low-IQ / high time-preference people means they will reproduce and leave the next generation with even more unproductive people for every productive person remaining to have to support. With IQ now negatively correlated with fertility, that’s a recipe for genetic disaster and societal collapse.
Buying the happiness of our generation’s underclass at the expense of who knows how many of their descendants when the system finally collapses under it’s own weight is the opposite of compassion; it’s just pushing the suffering far enough into the future that you hope you can’t see it anymore. If we really cared about making people comfortable, why shouldn’t we look for a solution where we promote the traits which lead people to build their own happiness in the long run?
I thought my other comment was way too terse, and was going to elaborate, but it looks like two people disagree. But anyway: my point is that there are ways to help people now which don’t also help them reproduce; education would be the most obvious one. (“Removing the natural selective pressures against low-IQ / high time-preference people” is not what has lead to the observed negative correlation between IQ and fertility; it’s not that stupid people have more children than they used to, it’s that smart people have fewer.)
Subsidize the hell out of IUDs, or something like that.
You mean paying people for implanting IUDs, and covering the costs involved? That could work, I suppose.
Yes, the subsidies may be so large that the cost to the end users becomes negative.
Upvoted for uncovering a psychologically plausible, real-life example of cyclic preferences.
I would be most happy to see the option “A+” = “John is paid to do nothing; and then John uses his free time to do something useful but unpaid for his community”. Because there are so many things that need to be done.
Once I saw an example on a TV: there was a village that had two big problems: a) many unemployed people, and b) no kindergarten. The local government solved this problem by paying a few local women to take care of the local children kindergarten-style at their (the women’s) homes. And I was like: “OMG, that’s the most logical solution; so obvious in hindsight! Why doesn’t this kind of stuff happen more often?” (The women were first given some quick education about various activities they should do with the children, and they had a coordinator. So the solution had a support from outside; it just relied on the work of local people.)
But to make this happen more often, there are some problems, both on the side of the local governments and on the side of the people. Every kind of work needs to be organized somehow, and organizing the work is also work, and rather difficult one; not everyone can do it well. There must be someone who does it well, and that person needs to be paid. On the other side, I can imagine that many people would try to cheat the system by pretending to do something useful for the community, but really optimizing for their own maximum convenience at the expense of everything else.
I can imagine a local non-profit organization, literally paying people for doing useful stuff, or just paying them for doing nothing when nothing needs to be done. However, when there is a work to do for the community, and a person refuses to do it or is obviously cheating, that person would be removed from the list. I can also imagine this solution would have a lot of problems, getting the money being one of them but not the only one.
I would actually say it’s definitely better, if you’re stuck subsidizing someone’s survival, to subsidize them as a “freeloader”, aka: someone with actual leisure.
If you’re thinking that this is an incentive against the work-ethic, yes, it is. I believe our culture currently overemphasizes work-ethic, and this is all part of my sneaky evil plan to convince people to value work less.
That’s one data point. What’s your guess as to what people that aren’t you think about this?
I wouldn’t venture to guess at other people’s thoughts. I’d rather just ask them.
I strongly agree. Just to be another data point :)
You do realize the only reason society functions well enough to support the large welfare states you seem to like is because enough people still have vestiges of a work ethic?
You realize there exists a happy medium between 100-hour workweeks and zero-hour workweeks? “Vestiges of a work-ethic”? Actual, factual working hours have gotten longer among all full-time employees in most countries over the past several decades, and especially (almost everywhere) the past decade or so (even before the Great Recession, which would have a normal cyclical effect of lengthening work hours in a time of high unemployment).
And no, I don’t prefer a “large welfare state”. Please actually engage me in conversation rather than simply burning a strawman of “The dirty liberal”.
Dear Lord, man.
That does not appear to be true. See e.g. this.
Interestingly, the data for Europe over the past decade actually refutes my hypothesis. As a secondary hypothesis that better fits that and other international data: hours and wages across countries appear to be equalizing as globalization occurs (again, this isn’t actually the first time). The richer countries have seen a rise in their full-time working hours, while the poorer countries have seen a reduction. It remains to be seen whether a longer timespan of data would support either of these hypotheses.
However, the effect of partition from a largely full-time economy into an economy divided between statistically distinct classes of full-time and part-time workers (the so-called “precariat”) does seem to be occurring.
My apologies.
There are multiple factors in play here, but my impression is that mostly (but not entirely) this is a good thing.
Essentially people who have a valid (from the point of view of their finances, lifestyle, etc.) choice between working full-time and part-time are exercising their choice. It works from both ends—to take stereotypical examples, a contract programmer might reduce his workload to part-time because he earns enough money and values leisure more; and a stay-at-home mom might pick up a part-time job because she has enough time and energy for it, but not for a full-time job. This is good—it represents the availability of choice.
This is a very complicated issue to unravel.
Anecdotally, I can attest that in the overemployed professions, some employers have started offering part-time hours at high hourly rates (or contracting/consulting jobs working part-year-round) as a fringe benefit to attract elite, high-skilled workers. Your contract worker is an example: I’ve done that one, earning a perfectly respectable monthly salary as a contract programmer but only working a few months at a time to get a frugal income quickly.
However, we do know that outside the conventionally-overemployed, high-hourly-rate professions, stay-at-home parenting has declined and part-timing has risen without necessarily being by choice.
I would venture to say that we should look for some numbers on hourly earnings (potentially split into full-time and part-time workers) to see what’s really going on. That sounds at least intuitively right, as I’ve known more than a few “highly-paid” scientists, programmers, lawyers, etc who end up with fairly moderate or even low hourly earnings once you account for their immense working hours.
That graph simply counts all workers, not all full-time workers. The effect I’m describing is not a unitary rise in overall hours but a partitioning of the economy into overemployed (rise in full-time hours) and underemployed (rise in part-time jobs). This matters, because a “total decline” in working hours that matches this model will be felt by the full-time worker as a heavy overtime load and by the part-time worker as a shortage of wages/hours.
Could it be related to the fact that the society becomes more complex and many jobs require more skill? That could explain why you have one overburdened worker and one unemployed person, and you still cannot give half of the former’s work to the latter.
As an obvious example, a company I work for is looking for more Java programmers. They even pay decently. There is a 14% unemployment in my country, but that’s not useful to my company, because those hundreds of thousands of people without jobs are not really good at Java or any other programming. In other areas the difference is less extreme, but it may still exist.
A “skill-demand gap” is a very viable hypothesis. However, we should look for stiffly predictive variables. There are at least some claims that capital-biased public policy has created this situation rather than just the increase in the economy’s complexity.
Keep in mind, I’m not declaring a confidence in that position, but I can certainly call it a plausible claim that tax policies favoring finance capital, employer-tilted labor policies, and a trade policy of running huge deficits could hurt the employment market generally, or specifically lead to a situation in which the employment market bisects into a high-value highly-mechanized elite and a low-value mass of less-skilled laborers.
The one thing I am highly confident in is that the level of perceived skill or expertise needed to belong to the well-paid/overburdened “skilled elite” has risen.
You linked to a Reddit discussion about the article, where currently the “best” rated comment is: “I totally don’t get the logic here.” :D
I didn’t read the original paper, but from the article it seems to me their main argument is that under the hypothesis of skill-demand gap we would see the decrease of high-paying jobs and increase of low-paying jobs (which happened) accompanied with rising wages of the low-paying jobs (which didn’t happen, and therefore the hypothesis is false).
Let’s imagine that someone loses their high-paying job because it became too complex. For example, tomorrow the whole IT business will switch from Java to Lisp, but I am unable to learn Lisp, so I lose my job. So I become a retail clerk. Why exactly should I expect a higher wage than other retails clerks? If the same thing happened to many people, I would actually expect retail clerk wages decreasing, because now there is a greater labor supply in the industry.
Similar objections were already stated in the Reddit discussion.
At least in the classical economic theory, the idea is that you and other displaced Java programmers are more skilled than the average retail worker before the switch to LISP, and at least part of those skills are transferrable. Probably not the Java programming, but at least the math, job awareness, and other various generalist skills that are part of higher-profile jobs.
((This falls apart in extremes because many job skills don’t transfer or are even counter-useful, and employers have reasons to avoid hiring high-investment workers who have other better job offers available.))
Yeah, since there was some controversy about it, I wanted to link to the controversy rather than just give one viewpoint alone.
I’m mostly trying to support the thesis that public policy has an impact, and that impact is worth investigating. The only thing I want to refute is technological determinism.
Show me the data.
Well done. This is one of those things I’d never thought of, but is obviously correct now that you point it out.
I don’t think this needs expansion. Brevity is a virtue, and this does a good job of explaining the core idea quickly and accessibly. If you run it through a spellcheck and spend fifteen minutes making the prose flow more smoothly, I’d consider it ready for Main.
Thanks. I think I’ll still try to expand slightly before moving to Main, to address a couple points made in the comments, but I’ll try to keep it mostly brief.
Good article. I think an important part of the idea behind the anti-Walmartism is the idea that Walmart is not only offering low paying jobs to people, but in doing so eliminating higher paying jobs that those people could otherwise take in the stores which a re driven out of business. They can do so because their business model is efficient, and people like their lower prices. But the anti-walmart crowd would argue that the low prices hide a negative externality for society at large, which reduces equity, and is a net utility loss.
It does seem possible that welfare changes workers’ wage preferences and allows Walmart to attract laborers for less money though, doesn’t it?
This seems implausible. If anything, I would expect taking away governent benefits to make people more desperate and more willing to work for low wages.
That implies low-wage workers have the bargaining power to exercise preferences regarding their wages.
I get the impression that the real problem with health care specifically is that we are keeping sicker people alive longer with more effective (and expensive) treatments, and this increased cost is not being reimbursed by valuable work done by those sick people. In simplistic economic terms it is not cost-effective to keep a certain class of people alive or healthy. Is that analysis evil? I think so; automation will almost certainly put 99% of unmodified humans into that class at some point in the future. The practical effect is perhaps what we are seeing; Walmart and McDonalds can’t afford to pay enough money to keep their minimum wage workers as healthy as a Silicon Valley tech worker or a NY banker, and the difference in achievable healthcare outcomes between a low income worker and a high income worker has increased significantly in the last 50 years. Remember when cancer and heart disease and even diabetes used to kill people (rich or poor) quickly and cheaply?
Guaranteed basic income or minimum wage aren’t sufficient on their own to solve the problem. Total production efficiency (or at the very least medical/health care efficiency) has to increase at a rate equal to or above the rate that medical treatments and medical technology advance. When automation unemploys people from McDonalds and Walmart they will still get sick. at roughly the same rate, and with the same diseases. The total cost of providing healthcare will not go down, barring increases in efficiency, and the cost of welfare would increase. Given those assumptions it seems like the best action is to allow McDonalds and Walmart to continue to employ people at existing, sustainable wages and leave them on welfare, and implement as much of basic income or increases in minimum wage that the rest of the economy can bear to prepare for widespread automation, and focus heavily on automating medical care to improve its efficiency.
Does that have anything to do with Walmart or health care for workers?
That’s a problem. The international statistics suggest it’s not the problem—health care expenditures don’t correlate particularly well with longevity at the high end.
Cultural tendencies towards proactive vs. reactive care might be responsible for part of this, but I’m unaware of any high-quality research on the issue. On the other hand, I haven’t been following it closely.
Evil? It depends on your moral code. However, I would certainly note that allowing the economy to kill people should be considered strongly contradictory with normal LessWrongian social goals like abolish effective scarcity and make everyone immortal.
People are dying for economical reasons all the time.
In most cases, when a person dies, there was an option to save them. Killed by a disease? With enough money, best doctors and medicine could be bought to save them. If that is not realistic, with some money they could be at least cryopreserved and given some chance of living again. Killed by a murderer? With enough money, there could have been a policeman standing on that street to prevent the crime. Killed by a random falling object? With enough money, something could be there to prevent the object from falling on someone’s head. Killed by an obesity caused by unhealthy life style? I am sure that with enough money, something could be done to prevent this, too.
Thus speaking about not allowing the economy to kill people is merely an applause light. People die for economical reasons today, and they will also die tomorrow. The only choice we have is to move more money to some area, by taking the money from another area, so we can save some people from dying by cause X at the expense of more people dying by cause Y; and we can hope that by doing some we have increased the total value (total quality-adjusted life years, or whatever is your favorite metric).
In a perfect world, an answer to “is it worth spending $ 1 000 000 to save this person’s life?” would always be yes, because in the imaginary perfect world you can always get the $ 1 000 000 without taking it from somewhere else. In real life we have choices more like “is it worth spending $ 1 000 000 to save this person’s life? or should we instead let the person die and use the money to save lives of other ten people?”. (And if you wish, you can make it more complicated by assuming that the first person is a Nobel price winner in medicine and invented a cure that saved millions of lives, but these days he is too old to invent anything more; and the other group contains one great poet, but also one murderer, et cetera.)
That is not true because of one simple observation: eventually everyone dies.
Millionaires and billionaires die, too, even with the best of doctors and security guards.
If this comment was made with the implicit intent and understanding of money as an abstraction of the resources we have available, I don’t see why it hasn’t been upvoted through the stratosphere yet.
It really, really hurts me when I see that the best options being offered by even the brightest minds and best visionaries in a given group all revolve around better redistribution of these million dollars, and not one of them asks “What if we could create a world where we don’t have to take that million dollars from somewhere else?”. Because I’m pretty sure that if someone cast Greater Wish and made everyone in a large rich country (e.g. USA) work together on this, it would happen.
I have the opposite perception. For the near and medium term, resources are finite and that means we have to make allocation trade-offs. When we’re talking about safety and health resources, those decisions are going to have consequences for who lives and who doesn’t.
I can imagine a society without resource shortages. But I can’t imagine building it even with universal agreement and cooperation. You don’t get a technological singularity just by wanting it.
Ah, I may have been overly abstract or generalized.
I agree with your assessment of the situation. What I would like to see is novel approaches at making it so that resource shortages that can be eliminated are eliminated. Cliché example: We are mere years away, barring opposition from invested parties and given continued funding and enthusiasm, from a fully automated transport and logistics infrastructure. AKA self-driven cars & trucks. (please leave argumentation of those two premises for another discussion—a Greater Wish or the circumstances I discussed in the grandparent would make those premises true for the purposes of this discussion)
Current wisdom is that these things should be left alone and “let the free market sort these things out”—which means, essentially, that we are to let shortages keep happening, because the margins of the free market will keep producing availability issues and shortages even on things where we can match supply to demand with positive net value after taking into account resources diverted from elsewhere (raw materials and human work time are the only relevant ones here once you trim the fat and all humans are fed, I believe).
So to come back to the virtual example of the million dollars, what I’d like to see is less people asking “How do we decide who to heal, cure and provide treatment for?” and more people asking “How do we dramatically increase the abstract availability and supply of medical resources and is there some way to do this without draining human resources from other industries?”
To craft a silly image, imagine an automated cold & flu treatment machine that looks like an ATM, is placed strategically to cover as many people as possible, does some basic automated symptom assessments to make sure it’s cold & flu, and provides a printout and some dosage of medication.
Once the setup is done, all that’s left is raw materials and human work to maintain the system, the human work is of a non-expert kind so not currently in any kind of shortage, and not planned to be given advances in automation, and the raw materials would be in the same ballpark as that already being consumed. An overall net gain, and the supply becomes directly tied to demand and only capped by raw materials, which in this example I’m led to believe are far more ample than what is needed to meet demand. An ideal scenario, disregarding the ridiculous feasibility issues with this scheme.
All this to say: There’s too much Utopia/Reality dualistic thinking, where there are either No Resource Shortages or Limited Resources Which Require Free Markets, and nothing in between. Sure, eventually when you trim enough fat everything comes down to a few key raw resources, which could be abstracted into “money” if you tried really really hard, but those are, in most practical cases I’ve thought of, not the bottleneck.
What if we already have created a world of much greater wealth in absolute terms, and it still isn’t benefitting the poorest?
Then we weren’t looking for a solution to this problem statement, or we failed.
The problem statement I wish were posed is: Currently, there is an attribution of (e.g.) medical resources, where wealthier people have priority and every application of medical resources prevents the application of important resources in some other place, medical or otherwise. Can we change this situation around so that the opportunity cost of any given life-changing attribution of (e.g.) medical resources will always be lower than the returns of this attribution (e.g. productivity of the healed person)?
Naturally, this is intended to be a comprehensive “opportunity cost” calculation where “killing off all elders so that the overall medical opportunity cost of healing young persons becomes lower” is an appropriately taxed option. Still an option, perhaps a repugnant one, but at least one that is properly appraised. If there’s currently no known good way to appraise this, then perhaps that might be a good first step?
Are you serious? Why shouldn’t elders get treatment if they’ve paid taxes or insurance all their life? Who’d want to take part in a society knowing they’d be euthenased when the time comes?
Er… Most doctors? (Read this if you don’t know why.)
DaFranker wasn’t offering mercy killing, DaFranker was offering termination when no longer economically viable (Ans possible recycyling into Soylent Green..why let protein go to waste
I was not. You have misread. I was saying that Option A (Kill Elders once treatment cost passes a threshold) should have its weighted value, the costs of the option, weighted appropriately, i.e. the costs should include the dramatic costs in human lives, the impact of such a policy on people’s behaviors (e.g. the costs should include the way people will act differently if they know they get terminated at age 80), and so on.
Yes, it would be an option on the table. The moral aspects of each option would be part of the cost-benefit of an ideal search for a solution. Not a filter that lets people say “Let’s not even consider this option because I find it morally reprehensible!”.
You’re not making yourself at all clear. Are you going to off perfectly healthy 80 year olds? Are you going to do anything different to the C/B decisions that already exist in healthcare systems?
I am not saying any option in particular should be done (the irony!), or that elders should be killed, or that given the choice and power I would do it. You’re making more strawmen with straw babies living in straw villages than even my overly fertile imagination can comprehend, if you’ll let me push that metaphor.
What I’m saying is that a great many possible options are being overlooked, or dismissed offhand or subconsciously, or never even imagined, simply because people look for ways to have a better distribution of resources or a bit more total money in the pool, rather than look for ways to dissociate some resources from the pool and making their supply match their demand (preferably at a lower total cost). Others yet are being discarded because of savanna heuristics, or because of societal memes that waylay even the best lines of thinking.
Killing elders is perhaps the most well-known example of this. Mercy kills and sanity suicides are the most often debated policy(ies?) that has an impact on medical resources, to my knowledge. The issues are known by lots of people, and reasonable people usually know most of the important factors and variables, so I hoped to avoid some of the more tedious parts of this discussion by mentioning something people already know, rather than coming up with a more obscure example.
You may be engaging in the typical mind fallacy. It may also help to keep in mind that humans will adopt to consider almost anything normal.
How.
Says who? Eg, apartheid was found obnoxious by the international community and shut down.
You take something you’d really dislike and assume that everyone else would also dislike it to close to the same extent, and that they wouldn’t be subject to different memes growing up in a culture where such activity was the norm.
That’s evidence that one country when it does something can get a reaction. That’s very different than a situation like this where it would a) be done by many if not all countries and b) be a much more reasonable course of action.
My attitudes are typical. where’s the fallacy?
As opposed to evidence from no countries.
Why would it be done by all countries? Because DaFranker has waved away the existence of objections?
That could well be indicative of atypicallity on your part.
This requires evidence. In the vast majority of non-universal attitudes, any given person’s attitude is _a_typical simply by virtue of there being no net majority of any attitude. Blues think A, Greens think B, Violets think C, Infrareds think Z42, and Castamogorioshites think 0101110. Feel free to replace colors and letters above with random real-world religions and traditions.
I did not wave them away, I created a hypothetical scenario in which some specific set / cluster of objections were “unapplicable” or “already solved” (within the hypothetical).
I then put forward this hypothetical as a goal to strive towards, and compare it to current goals that I often see being held, noting the differences and claiming that my hypothetical would serve better as an objective and as a problem to which we could find solutions.
Your mom.
There, at least I was overt about mine.
You need to say something, to defend your claim that there are things that coudl be done that are ratitonally desirable, but not intutively good. If there are no examples, your claim fails.
You say there are a great many: name a few.
They are not just debated, they are accepted in some quarters. However, you were saying that there were other, more radical policies. You offered killing everyone who reaches the age of 80 as an example, and then backpedaled, leaving you with no examples.
We are not discucssing an unknown attitude, or an attitude known to be non-majoritarian The majority of peope do not agree with killing old people for being old. I agree too. Iam in the majoity, so my attude is, tautologously, typical.
Better by whose standards?
What do you mean with “best doctor” in this case. Do you mean more than just a doctor who know which clinical trial says which drug is best for a particular condition?
There no straightforward way to throw money at the problem of obesity to solve it. Gastric bypass surgery might work to reduce the weight but it has it’s own disadvantages and I wouldn’t call it buying health.
I don’t think that there are many cases where you can simply buy a life in a country with a health system like Germany for $1 000 000.
You’re leaving out the possibility of needing to shuffle through a number of doctors to get a competent diagnosis. It’s a fairly frequent problem in the US. I don’t know how common it is in Germany.
Typo: I think you mean disadvantages.
Do you have a source that describes how US millionaires go through 10 doctors to get a correct diagnosis? I think most of the time in Germany what stopping people from going to more doctors isn’t financial but the fact that they trust a doctor.
Fixed.
I don’t have a source for how many non-millionaires in the US have to go through a number of doctors to get a correct diagnosis—I just know a fair number of people (some online-only) who’ve done it. They probably have average or better incomes, though it would be worth checking. It isn’t a cheap process, at least in terms of time, and I’m guessing that poor people are less likely to have the self-assurance to do it.
Your assumption is that the difference in Germany is in the degree of trust in doctors rather than better diagnosis?
I would guess that thing that separtes those people that you know online from the average person isn’t only that the have more money but that the make decisions differently than the average person.
Is that because Germany has more competent doctors, or because Germans trust their doctors even when they shouldn’t?
How does a non expert judge the competence of an expert?
Well, seeing if the doctor’s recommendations help the problem is one way.
Like this? (I’d guess Germany would be somewhere between France and Sweden.)
Your link just goes to the OP, I assume you meant to link something else.
D’oh! Fixed. Thanks.
No, that’s not the problem. In real life, the choice is, “Do we spend one million dollars on a welfare state (or labor laws, whatever) that can keep people alive longer and with more dignity, in the hope of eventually abolishing human-scale scarcity, or do we allocate one million dollars to an institutional investor’s mutual-fund portfolio?” You are making the extremely false assumption that our economy is already Pareto-optimal with respect to saving human lives.
No serious economist actually believes that. In fact, they wouldn’t even make the claim that the economy is designed to save human lives; it would be downright silly. They would point out two things:
1) If we use wealth-accumulation as an approximation of human value, the mutual-fund portfolio could, in some sense, be said to be more valuable than the human lives, in the sense that those human lives generate little value for other humans. Of course, socialists and anarchists can argue with capitalists over whether wealth-accumulation under a neoliberal capitalist economy is a good approximation of human value or not. (I side with the socialists in saying most definitely no.)
2) Real economies rarely or never actually hit Pareto-optimal equilibria, they merely oscillate around them, and in fact sometimes even rarely oscillate near them because the assumptions behind efficient-market theories are so far from real-world conditions. (There was once a paper published, IIRC, under the title *Markets are Efficient If and Only If P=NP”.)
Given these two facts, we should most probably not consider “The Economy shouldn’t be allowed to kill people” as an applause light, but instead as an ethical charge to find the deadweight losses of human lives and remove them. We can argue about zero-sum tradeoffs when we’re actually faced with one, but when instead faced with a case where a clear positive-sum move exists, we should take it.
Actually, I don’t. And it’s not even necessary for the argument. Even if we nationalized all the investment funds and hanged all the evil capitalists, someone would still die because there would not be enough money to cure them.
(How could I possibly know? My country was like this. And the people here lived on average shorter than our evil neighbors. The medicine was completely free of charge, you just couldn’t get it, because there was not enough made.)
Back to the original topic, an analysis that concludes that some people will die either way, is simply a realistic analysis. Unless we have already solved the problem of Friendly Singularity. We can, and should, look for the ways to minimize this number. It’s not going to be zero, anyway. Even if we had a world-wide government of incorruptible angels with mandatory cryonics right now.
That means that your country wasn’t ruled well. On the other hand if you live in a country like Germany you do have access to all medicine that”s proven to work in clinical trials.
When it comes to drugs the expensive part is research, marketing and other things that aren”t about the production costs of the actual drug.
Yes, but that doesn’t refute the case-by-case ummm… case, that we’re looking at a deadweight loss of human life in this particular instance. If you don’t hold that the economy is Pareto-optimal, then there are improvements we can feasibly make without suddenly causing shortages of medicine.
I’ve seen the more general claim that companies which can’t afford to pay a living wage shouldn’t exist. This would include not just companies like Walmart, but also small new companies and businesses with relatively poor owners.
Many of those businesses provide useful services, and I’ve wondered whether there’s a public good argument to be made for subsidizing them rather than eliminating them.
Which is to advocate permanent unemployment for people who can’t deliver value greater than a living wage.
I think you’d tend toward perverse incentives immediately if you tried to subsidize only the below living wage jobs.
Which is exactly what we’re currently doing, and exactly what the left-wingers are complaining about in this situation. Rather than the State spending its money on, for instance, useful jobs programs that can directly employ people for living wages in productive infrastructure work (would that totally eliminate unemployment? No. Is it an obvious first move? Yes.), tightening the labor market, stimulating demand, and helping to pay down private debts, the State instead spends its money subsidizing poverty-jobs.
And as the Right always says, you get more of what you subsidize. In this case: sub-living wages.
I’m glad that there are some left wingers now “demanding” a rollback in the perverse programs left wingers put in place in the first place.
But as I’ve asked before, are there any particularly prominent liberals doing this in the US? I’m not aware of any. Prominent liberals anywhere else?
In the US, I’m aware of prominent libertarians, and even republicans who have been advocating this for a long time.
A basic-income scheme is part of the platform of the Green Party in the US. I don’t know exactly what they want done with the rest of the welfare system, though.
http://www.gp.org/greenpages/content/volume8/issue3/oped5.php
My first google US hit. Promising. Not only basic income, but coupled with reducing corporate welfare. And the numbers don’t seem crazy - $600-$800. I consider probably the majority of the arguments used appealing to libertarians. I didn’t expect much common ground at all.
Not.
This is pie-in-the-sky promises with no hard numbers or, actually, much of any economic analysis. Instead there’s a lot of handwaving about cutting government spending and corporate welfare, introducing flat tax (!), etc.
It’s one page on a web site. How much detail did you expect? They do refer to their party platform. Did you read that to look for details?
They say:
Certainly a footnote would have been useful here. Maybe there is one in their party platform. But you can eyeball government spending and do some basic math yourself. $800 isn’t crazy talk, if you’re actually replacing other health and welfare programs.
I liked the basic principles they expressed—reduce government subsidies and tax carve outs. It surprised me to see the Greens come out in favor of that. I didn’t have high expectations in the first place.
It’s hard to tell the difference between companies who really can’t afford to pay a living wage and companies who can afford to pay a living wage but who would rather not have to. I suspect that much of the reason that people think companies that can’t afford to pay a living wage shouldn’t exist, is the fact that the latter category will, if given a chance, pretend to be the former, and the only way to prevent this is to ban them altogether.
I would have to contest that in this case, the absence of evidence is the evidence of absence. On general principle, lacking special cases with adorable old grandmothers and shiny MIT graduates, what is added to the public good by subsidizing businesses that are literally not efficient enough to keep their own employees alive? How can we claim such a business is adding net value to society?
Note that I’m trying to distinguish between a subsidy and an investment. When a shiny MIT graduate needs money for his start-up, there could easily be a public good of investing in him, but in that case the public deserves shares of stock as compensation—and will be able to realize gain from those shares as capital gains or dividends when the time comes. With Wal-Mart, the public doesn’t even receive a capital stake in the business. It just pays for private actors to get rich on jobs that are, judging by their wage levels, far less efficient and productive than the ones people used to have.
I am unaware of any such businesses. Perhaps you want to dial down your rhetoric a little bit? It looks silly.
It’s not rhetoric. If a company says they cannot pay a living wage without the subsidy, then that is what such a statement means.
What constitutes a “living wage” has literally nothing to do with how much money it takes to meet your survival needs; it is an amount of money which is supposed to support your family at a “normal standard of living” in your area. The actual cost to survive is naturally quite a bit lower than that, and can be calculated with things like the ‘Food Energy Intake’ or ‘Cost of Basic Needs’ methods of establishing poverty lines.
Adding to this confusion is the fact that the Federal Poverty Line seems to be what most people use as their yardstick, despite it being an abstraction over the entire US with no allowance for regional cost-of-living differences and appears to be a relative measure of poverty based on mean income rather than an absolute measure based on the cost of survival needs.
[Edit] Surprisingly, the Federal Poverty Line does actually seem to be an absolute measure, although I still can’t find exactly what goods are supposed to go into calculating it and there is still no allowance for regional price differences.
Let’s assume something truly basic: a living wage covers housing, food and health insurance. That is, a worker paid a living wage will not starve, will not die of treatable disease for financial reasons, and will not be removed from work via arrest for vagrancy (because they have a place to stay).
Quibbling over definitions won’t get us anywhere. Let’s talk about the real issue, and if it means we have to taboo “living wage”, so be it.
I have no problem tabooing “living wage” in our discussion, but it is important to remember that the word has an actual definition in policy terms; if we talk about paying Walmart / Sam’s Club employees a living wage that actually means one very specific thing in terms of how much money they are going to get, and it’s not a particularly intuitive amount at that.
But that’s a debate for the talking heads; if I understand you correctly, we just want to know if someone working at Walmart would starve without public assistance.
Let’s assume for the moment that the Federal Poverty Line is the number we’re trying to avoid here; above that you’re still in a shitty position but you are not actually starving (technically you’re probably not starving below it either, but I can’t find good Cost of Basic Needs data for the first world). An average Walmart employee makes about $17,600 a year plus minimal benefits for 35 hours of work a week, which is piddling but also enough to support yourself and one other person by federal standards ($15,510 a year). With another 15 hours a week of work in a second job at the federal minimum wage (remember, most states have a higher minimum) a Walmart employee can support a family of four ($23,550 a year). This is also assuming only one person in the family of four is working, which is a bit of a spherical chicken these days.
So without any public assistance at all a single person with Walmart as their primary job can definitely support themselves and another person at a level above the Federal Poverty Line, and can support a family of four at that level with an additional part time minimum wage job. It would be an uncomfortable paycheck-to-paycheck kind of existence, but all of their basic survival needs would be met out of their own income.
Now don’t misunderstand me; I’m not saying that Walmart is morally in the right here, or that their employees shouldn’t have a more comfortable and secure way of life. On the contrary, I think it’s disgraceful the way real wages have fallen in the last half-century and how many good blue-collar jobs have been destroyed by our ludicrous trade policies. But the question of whether Walmart employees would be starving without EBT is an empirical claim and one which is easily disproved.
Do you consider it unethical to pay less than it takes to pay less than it takes to live alone, but enough to hold down an appartment with a couple of roommates? Is every treatable disease, no matter the cost of treatment, included in that, or are insurance companies allowed to draw a line inconsderation of how common or expensive a treatment is? Is that insurance pool required to subsidize riskier but likely better off (ie, older) people? Is that food required to be convenient, tasty, and nutritious, or can the wage assume the employee does their own shopping and cooking with less costly food?
What if one potential employee has a different idea of what it takes to live than others?
Is Wal-Mart offering a couple of roommates?
Let’s say it’s every disease a middle-class person could get treated. The point is to eliminate class distinctions in medical care, not to suddenly wave our arms and inaugurate Utopia.
The food is required to be nutritious enough to never damage the health of the employee. Cooking time can be assumed to be traded off with working time, which can be taken to imply a 40-hour workweek as is legally considered full-time in most developed countries. Convenience and taste are left to taste, though I’m assuming at least some access to decadent upper-class luxuries (/sarcasm) such as iodized salt.
I dunno, what if we stop trying to evade the point that Wal-Mart’s wages are unlivable?
I mean, come on, we’re talking about a company that set up a charity collection for its own employees. That means even Wal-Mart acknowledges Wal-Mart pays poverty wages.
I think I was just trying to get at the fact that living wage definition can reasonably differ, and that being so, isn’t it up to the workers to evaluate for themselves, based on what they can tolerate or accomodate?
You’re going to have to go into more detail about that charity collection, because although I assume that Wal-Mart may very well pay below what one can comfortably live on alone long term, the fact that some or many of the employees inspire charitable giving doesn’t prove that—a living wage, and one that can provide enough to live on in all foreseeable bits of bad luck are two different things, at least according to your definition. And if you work at Wal-Mart, you probably are a little worse at things like long term planning or impulse control.
On a tangent, there’s another large employer I often hear about underpaying their employees—universities and grad students—but it doesn’t seem to raise the same ire. Maybe I’m not clear on the details and the difference is significant?
Would you like me to tell you about the misery of being a grad-student? I can speak from first-hand experience!
But if I do, I’m yelled at for being more fortunate than the poor sods at Wal-Mart, you see.
As to Wal-Mart and their charity incident...
I read that article; it seems to support my possibly awkwardly worded argument above that having a charity drive for employees who have had unforeseen events and are currently in hardship does not prove—or is merely weak evidence that—the store pays a wage at which the average competant person would be able to expect to live with above minimal standards of living.
For one reason, to be perhaps presumptious, workers at Wal-Mart probably have less long-term planning ability than workers at higher paid jobs—or at least draw from populations in which the skills are less common, etc—and therefore, even if paid enough to live and save, are less likely to have a “rainy day fund” and more likely to need a charity hand-out should they have a car problem, or health problem, etc. Note that it was charity provided by fellow employees, not the general public, so someone they pay clearly has more than the bare minimum.
All employers take attention: Never do anything useful for your employees, because it will create an impression that you are not paying them enough, which makes you an evil person!
(Not meant seriously. But it makes me sad that when one has decided to hate some person, any good deeds of that hated person can be very easily explained away as an evidence that the person feels guilty or needs to fix their evil image.)
Colleges and football players are starting to raise the same kind of ire in some circles. These things are to some degree a question of fashion.
It is rhetoric because “living wage” in the US is far beyond what’s needed to keep people alive. People who don’t get paid a “living wage” do not drop dead in the streets from malnutrition and exhaustion.
Can we drop the pointless definitional agreement and just find a study specifying what wage-level is necessary to keep people from dropping very preventably dead or being arrested for vagrancy?
I am not particularly interested in a study. At one point in my life I was poor. Very very poor. I have quite a good idea of how much money do you need to survive in a US city. Hint: it’s far below what is usually called “a living wage”.
It may be that no one is efficient enough to supply ,low cost low quality goods and services to people who can’t (typo corrected) afford better and pay a living wage at the same time. At that point, you can shut down the business and hope that services and goods of better quality will be supplied by the government (when?), technology will improve so that workers in those businesses will be more productive so that it’s possible to pay them more, leave the unattractive business in place as it is, or subsidize the business.
I’m not saying subsidizing the business is a great choice (keeping the system even relatively honest might be impossible), but I think it should be considered rather than just saying the business shouldn’t exist.
If we condition our reasoning on the proposition that nobody can efficiently provide goods to poor people cheaply, then yes, I would at least claim the Proper Move (which is not necessarily easy from our status quo position) is to have certain things provided as a public service.
On the second hand, if we’re already talking about instituting such a thing as a Basic Income Guarantee, then it makes good sense to do so and then remove subsidies for “sub-living efficiency” businesses. After all, with a correctly configured Basic Income, possibly plus even a small income from real business (which will be easier to come by due to the demand/money-velocity boost), even those at the lower end of the income scale should have the purchasing power to start buying, at the very least, frugal goods instead of cheap goods.
You should fix the title. It doesn’t parse in my head, and has a spelling error.
How about?
Thanks. I caught the gramatical error on my own but somehow completely missed the spelling error. I am a terrible proofreader.
If not for the two top comments solely dealing with trivial spelling errors, why, I suppose the OP’s title would never have been properly understood.
It does show a lack of care for the quality of ones work.
In keeping with Muphry’s law, your comment about how such mistakes show lack of care contains a similar mistake of its own (“ones” → “one’s”).
I will not edit my post in order to memorialize the occasion.
It shows that I dashed it off quickly, while knowing damn well I really should have been doing homework at that moment, rationalizing that it was just discussion and I could improve it later.
I don’t understand why you are worried that the anti-wal-mart meme would cause anyone, let alone a leftist, to oppose GBI … a GBI reduces the incentive to work for low wages. If it’s true that welfare is benefiting Wal-Mart and other low-paying companies, then the reason is that in the current system you lose your benefits if you don’t get a job. This is just the natural consequence of our method of imbedding an incentive to work within the welfare system.
I suppose someone who didn’t like GBI and thought work-dependent welfare was an acceptable alternative might be driven to oppose welfare in addition to GBI upon learning about this side effect.
I haven’t scrolled through all the existing comments to see if someone else has already raised this point, but while, in general, I would agree that it’s usually better for people to have poorly compensated employment that leaves them in need of some public support than to have no employment whatsoever and be even more heavily reliant on public support, I think this is not necessarily the most useful context in which to view institutions like Walmart.
In general, Walmart doesn’t create jobs where, otherwise, no jobs would have existed. Instead, it usually displaces jobs that would otherwise be created by smaller stores or chains which it can undercut by being able to more effectively employ economies of scale. While those economies of scale can deliver genuine benefit to consumers, in offering its employees such low pay and benefits that they need public assistance, Walmart creates an illusory benefit to consumers over smaller stores, by lowering prices and thus making themselves a more appealing shopping destination, but making the public shoulder the hidden cost of the employees’ low level of compensation.
wait, in that case isn’t Walmart mostly a subsidy to disadvantaged people? The vast majority of taxes are paid by the wealthy, but the vast majority of Walmart customers are the poor. This means that they get the benefit of cheaper products while paying little to none of the costs.
Well, the majority of taxes aren’t paid by the lower class, but I wouldn’t say the majority of taxes are paid by the wealthy; for those who have enough money, there are sufficient tax loopholes for them to pay less taxes by proportion of their income (Warren Buffet has for some time now been paying a lower proportion of his income in tax than his secretary). So Walmart would mostly be subsidized by the middle and upper-middle classes.
While Walmart’s customer’s certainly skew lower class, as to whether the “vast majority” are lower class, I couldn’t say.
The top 1 percent pay 36 percent of taxes while only being 19 percent of total income. The loophole thing, despite egregious examples like buffet, is wildly exaggerated.
Ialdabaoth already raised this point, but to put some numbers to it, while the the top 1 percent pays 36 of income taxes, people in that percentile make less than 40% of their income through salary and wages; most of the remainder comes from investments, which are not covered under the income tax and are taxed at a lower rate.
Except the investments tend to be in things like corporations that are themselves taxed.
But generally at a lower rate. Also, money received as income and then spent, becomes someone else’s income, which is also taxed, and so on.
So let’s do a little exercise.
Mr.Moneybags invests $1000 and in a year his share of gross profits is $100.
The Federal corporation tax rate is 35%. The state rate varies but let’s take something like 8% on the average. So after corporate taxes there is $57 left.
If this were short-term capital gains they would be treated as plain income. But let’s say these are long-term capital gains or maybe they were distributed as dividends. Then they would be taxed at 15% (unless it’s dividends and Mr.Moneybags is rich—in that case they’d be taxed at 20%). What’s left is $57 * 0.85 = $48.45. And there are state taxes as well.
So it does seem like investments are effectively taxed at somewhat over 50% rate.
Long term investments would effectively be taxed at that rate, but in the same period, non-invested money will tend to be spent and respent to the point that it’s effectively taxed at an even higher level.
(Note; as the link within that article notes, the while the nominal corporation tax is 35%, in general corporations are able to receive deductions which markedly reduce this.)
And...? I admit I don’t see your point.
The fact that long term investments may be effectively taxed at a rate over 50% (although in practice corporations usually get tax deductions that reduce it below this rate) doesn’t mean much, because over that time horizon, nearly all income will be taxed over and over again. Depending on the channels it travels through, that money could pass in and out of the government’s hands in its entirety multiple times.
I still don’t see your point. So what?
Also please note that in the Mr.Moneybags example his profit of $100 came from investing $1000. In highly simplified terms, his company spent $1000 to create value worth $1100. That $1000 spent is, as you say, someone’s income and so gets taxed again.
In this case, I’d have to ask what your point is, since I’m no longer clear on what it is I’m supposed to be responding to.
:-)
I think the original issue discussed was same old, same old—the assertion that the wealthy don’t pay their share in taxes because the tax on capital gains is lower than the tax on income and it’s precisely from capital gains that the super-wealthy get their cash flow.
There was an objection that this argument doesn’t account for corporate taxation (the corporate tax rates in the US are among the highest in the world, by the way).
You countered by handwaving that it doesn’t matter much. You also said “Also, money received as income and then spent, becomes someone else’s income, which is also taxed, and so on.” and it’s precisely the point this statement that I do not understand.
I contributed some numbers showing that it does matter and soon thereafter we ended up here.
The original contention I was responding to was that Walmart paying its employees little enough that they require public assistance is effectively a subsidy from the wealthy to the lower classes. My contention is that, while the wealthy may contribute a significant proportion, possibly even in excess of the proportion of the population’s total income that they represent (although this is highly questionable,) the majority of the subsidy would be coming from the middle and upper-middle classes. In this case, the relevance of my comment about money from sources other than long term investments being taxed more times over the same time frame is that long term investments thus represent a lower rate of money being cycled into the government over time.
As an aside, the U.S. has, by the standards of other countries, high nominal corporate tax rates, but low effective corporate tax rates
Not quite that simple
In what respect? I don’t see how the content of that article differs from the point I made. The article notes that the effective rates are not as low as one lowball estimate suggested, but they’re still much lower than the nominal rate.
Be careful that the same definition of “income” is being used in both cases; I believe that the definition Warren Buffet was using included capital gains (which is specifically not taxed as ‘income’, which is what your first link counts). Capital gains are still taxed at 15%, so if the top 1% gain most of their 19% share through capital gains (or if the share is higher than 19% when capital gains are included), then it’s likely they ARE paying less.
http://www.mercurynews.com/business/ci_24065108/wealth-gap-widens-richest-1-percent-earn-biggest according to this capital gains bumps it up to 22.5 percent.
Which is still well below the top income tax bracket of 39.6%.
Given the income tax rates, capital gains tax rates, and the average proportion from both sources composing the income of the top 1%, the average rate of tax on people in that bracket, barring any use of additional tax limiting strategies, should be somewhat under 28%, the rate paid at the $87,851 - $183,250 income tax bracket. The very wealthy, whose income is more dominated by investment revenue, would tend towards a lower rate.
If we categorize the wealthy by total wealth rather than yearly revenue though, then the top 1% pays a much lower proportion of their total wealth in tax.
So while Walmart displacing jobs that leave employees in need of public assistance can be seen as a subsidy on the lower classes, it’s not one where the wealthy are paying out either a majority or a disproportionate amount relative to their wealth.
Sorry to make my first post on LW a political one, but I’ve been hearing too much about this discussion everywhere to stay out of it, here. I’ll try to keep it short.
ChrisHallquist: I worry that this anti-Walmart meme could lead to an odd left-wing resistance to GBI/more lavish welfare state, since the policy would be branded as a subsidy to Walmart.
Quite honestly, I think this is a confused concern, or at least a misplaced one.
I’m a philosopher by education (again, my apologies), but an urban economist/macroeconomist by trade and hobby. I don’t think I’m saying anything new or surprising in mentioning that, as industrial economic growth decline, and economic growth shifts to less labor-intensive service industries, there begins a decline the growth rate of the employment-population ratio. Assuming the typical level of population growth rate decline associate with this economic transition (i.e. Western Europe/North America fertility levels, not East Asian/European fertility levels), you end up with a large ratio of low-wage/high-wage laborers. Because people respond intuitively to the two population segments with more visibly-dispersed levels of income, by claiming that this is unjust, you start to get a popular movement for social welfare. The confusion/frivolousness should be becoming somewhat apparent.
The income dispersion which is a product of the development of the economic system which created it cannot be solved by that same system; this is what leads to calls for things like living wages and other types of income redistribution—or even just labor welfare generally—through government intervention. However, these interventions in a market built around the production of capital only serve to reduce its efficiency by introducing new inflexibilities in the market, e.g., if I’m looking to start up a restaurant, I can only do so provided I have enough money to satisfy OSHA regulations. If I don’t have enough money to do so, I can’t begin to produce capital through food service, which not only deprives me of profit, but deprives local workers of (theoretically) sharing in that profit. When economic growth slows and population growth doesn’t, it’s bad for everyone.
I’m pretty strongly socialist, but I’m willing to admit social welfare and capitalism simply don’t go together...though maybe that’s less surprising than it seems to me.
I suppose this just hits on the fact that I agree with what a few other people here have said: I don’t think that people who are genuine libertarian capitalists can actually have conversations about socioeconomics with non-libertarian socialists. We have different consequences we’re trying to reach, and knowing that, we can move on and not worry about convincing each other. Frankly, it leads me to respect libertarians totally, even if I absolutely disagree with them.
But American liberals, and most European social democrats, are inconsistent. Whether or not they know it, they believe that human welfare (whatever their preferred sources of utility are) is Good, but they refuse to use a system that produces it because they believe that system—socialism—is Bad, though in their defense, it’s mostly because they misunderstand what socialism actually is (not that I’ll lay claim to an absolute understanding). Because the morality they use is deontological in nature, you end up with people creating rules AND goals (the latter because humans are planning things), separately and simultaneously(ish), instead of deciding on one starting point and letting what comes naturally happen without interference.
Feel free to introduce yourself in the welcome thread and take the census/survey, if you haven’t already.
I was going to say “Sure, fewer regulations means more, cheaper restaurants and more jobs for cooks and waiters, but also more cases of food poisoning—and if you wonder why in a free market I couldn’t just decide to avoid the kinds of restauraunt likely to give me food poisoning even if they’re cheaper, I invite you to read Section 4 in this FAQ”, but reading on I gues you’d actually agree.
So your claim is that socialism improves human welfare. You do realize that this is an empirical statement, and judging from the results of trying socialism (as well as theoretical economic arguments) it appears to be false.
Or rather socialists are constantly attempting to get all the failed attempts at socialism declared not “true socialism”.
The best defense against “no true scottsman” is to agree upon rigorous definitions beforehand. I’m willing to use yours, if you’re willing to provide it.
There’s really just six terms I tend to use in order to frame this discussion, which divide into three categories/axes:
1.Ownership of the means of production: this is private or public, the former utilizing private property, the latter dispensing of it.
Ends of the means of production: this is capitalist (MoP used for profit) or socialist (MoP used for public good)
Rules of the means of production: these are planned (typically state, but could be commune, etc.) or market-oriented (accord with supply/demand)
There have definitely been socialist countries, and most of them utilize public ownership, but as far as I know, none have used the rules of the market, which I believe is the reason for their failure.
Before I say anymore, let me know if these sound like reasonable definitions/distinctions.
I don’t know; I’m not the person who asserted “your claim is that socialism improves human welfare. You do realize that this is an empirical statement, and judging from the results of trying socialism (as well as theoretical economic arguments) it appears to be false”. I would prefer a definition that is coherent with the intent of that assertion.
Well, these three axes are not independent, are they?
Private ownership necessarily implies the profit motive and market “planning”, otherwise I don’t see how you can talk about meaningful private ownership. If the state tells you what to produce, takes away your profits, and replenishes your losses, in which sense do you own the means of production?
Public ownership with profit motive seems unappealing, besides the state can’t really have a profit motive since it’s trivial for it to get more money if it wants it.
And as I mentioned in the other post, I can’t see how public ownership and public-goods motive can work with market mechanisms.
You assume that private and state ownership are always separate. In a non-democratic system of governance, the state is not, in my view, a public enterprise accountable to the public, at least not to the extent that the demands of the public determine its actions on a practical level. The Chinese Communist Party are primarily concerned for their party’s survival; the Public Good matters only insofar as it concerns that. The members of the CCP are very much a distinct class of people—not members of the public themselves, much less worried about what the average Chinese person thinks of them (again, beyond making sure that that person doesn’t want to overthrow the CCP altogether).
“And as I mentioned in the other post, I can’t see how public ownership and public-goods motive can work with market mechanisms.”
...Really? It actually seems quite simple to me.
Presumably, I have some idea of what constitutes Public Good (as I mentioned in the other post). I don’t need to be an altruist to think that other people deserve the Public Good as much as I do; most people have an innate sense of fairness, even if it’s calibrated differently from person to person. If I have some vision of how the world is “supposed to be”—which I think most people do, even if only a very rough idea—and I firmly believe in it, and I also have an ownership claim to the means of production and will thus be rewarded myself for my efforts, then presumably I will work to provide that Public Good for myself and others. If anything, this would force people to have a very refined vision of the Public Good, to ensure that whatever public ownership group they join is one producing their particular version of the Public Good, their desire to see that vision realized enhancing their efficiency in attempting to reach it.
Now, if lots of people agree with my vision of the Public Good, lots of them will join me in producing it. If it’s a particularly materially-intensive vision of the Public Good, it will remain more expensive, and democratized ownership may make it inaccessible due to a lack of concentration of resource ownership. E.g., if a socialized and democratized MoP group aims to provide each of its members a private jet, we’re unlikely to succeed as this is a very materially-intensive product to award to individuals; it’s therefore unlikely that such a group would exist for long as none of its members would be able to benefit from being part of a group with that specified purpose. This is an example of the market acting on such an ownership structure and operation to eliminate things which are materially expensive or impossible. As the ownership of the means of production is fully democratized, no one person or group would have anymore say over the purpose of the operation of the MoP than any other person, guaranteeing a more equitable distribution of resources.
But don’t think of this sort of process as simply referring to material Goods; it can extend to social Goods as well.
Take, for example, a racist vision of the Public Good. If I decide my vision of the Public Good excludes black people, I’m denying myself both their labor and, more significantly for this discussion, their claim to ownership of the means of production. This will make it more expensive for me to produce whatever other things are part of my vision of the Public Good, making it difficult, if not impossible to implement; such an exclusionary group would, again, dissolve because of low demand for that particular vision of the Public Good
By contrast, there would be many other groups for whom race is no concern for their conception of the Public Good, and the members of such socialized MoP groups would benefit from being egalitarian by including all potential sources of human labor and all sources of claims to the ownership of the means of production, reducing the costs of producing whatever else....This is the market acting on this type of ownership structure and operation to foster things which are highly-socially desirable, as determined by the existence of high demand.
I agree, with the proviso that I believe the same thing is true for contemporary democracies as well.
That sounds very capitalistic to me. Will there be rich people? Very rich people?
So, let’s say I (and a bunch of other people) think the world needs another computer chip fab. They cost a couple of billions to build. Where will the money to build it come from, how will the owners of the capital be compensated, who will own the chip fab?
Or let’s say I’m Steve Jobs and want to make an iPhone. Most people call me crazy.
Or let’s say everybody really needs toilet paper, but nobody feels sufficiently motivated to start producing it. Eh, let someone else do it, everyone says.
So, no computer chip fabs? That’s unfortunate.
I am sorry, the market really REALLY wants computer chips. It’s willing to pay for them (I presume you’ll have money in your society).
It will also guarantee that this MoP will self-destruct in a very short time. I believe people occasionally try to run a business (or, actually, any complicated activity) by referendums. It’s rather comical how that Just. Doesn’t. Work.
Not at all. Let’s say I produce foozles. A production team of, say, 1,000 people is enough to fully satisfy the demand for foozles. That team is 100% redneck white male and likes it that way. Any problems?
“I agree, with the proviso that I believe the same thing is true for contemporary democracies as well.”
If the definition of democracy is a government which is accountable to its people, and a particular government isn’t accountable to its people, then it isn’t really a democracy. Modus tollens, right?
“That sounds very capitalistic to me. Will there be rich people? Very rich people?”
Can you explain to me why that seems particularly capitalistic? Because I’m just not seeing it.
“So, let’s say I (and a bunch of other people) think the world needs another computer chip fab. They cost a couple of billions to build. Where will the money to build it come from, how will the owners of the capital be compensated, who will own the chip fab? Or let’s say I’m Steve Jobs and want to make an iPhone. Most people call me crazy. Or let’s say everybody really needs toilet paper, but nobody feels sufficiently motivated to start producing it. Eh, let someone else do it, everyone says.”
This is where you’re beginning to insert a particular vision of the Public Good: you believe that the world is better off when it is producing chip fab plants and toilet paper. If enough people agree with you, and believe that it’s worth utilizing their MoP ownership claim and expending their labor, then those things will be produced; if not they won’t. Either a particular version of the Public Good is worthy of those two things and it happens, or it isn’t and it doesn’t.
“I am sorry, the market really REALLY wants computer chips. It’s willing to pay for them (I presume you’ll have money in your society).”
If the market really really wants computer chips, it will happen; if not, it won’t. It’s just a matter of you, as a person with a vision of the Public Good which includes computer chips, being able to convince others that the world is better off following your vision of the Public Good, including computer chips. If you can’t convince enough people to pool their ownership claims and expend their labor to produce them, they won’t happen. My guess is, in both the computer chip and toilet paper example, you’ll likely be able to convince enough people to start production of these things because the benefits from these things are fairly equitably distributed within a society—there are few people in most wealthy nations that don’t benefit in some way from these two things. The private jets were a counterexample.
“It will also guarantee that this MoP will self-destruct in a very short time. I believe people occasionally try to run a business (or, actually, any complicated activity) by referendums. It’s rather comical how that Just. Doesn’t. Work.”
So, you mean to tell me that employee-owned corporations always fail? What I’ve been describing is kind of one of those, but isn’t based around a particular kind of production, but rather a particular kind of Public Good. The necessity of smooth operation of such a corporation is why it’s so important for people to have a holistic vision of what they consider to be the Public Good.
“Not at all. Let’s say I produce foozles. A production team of, say, 1,000 people is enough to fully satisfy the demand for foozles. That team is 100% redneck white male and likes it that way. Any problems?”
Yes. Autarky is incompatible with democratic society because resource depletion is a real thing; eventually, this 100% redneck white male team is going to need a new source of labor as its members die off, and raw material as its foozles are consumed; a lack of foozles will cause members to leave, and the whole thing to dissolve. And we’re not just talking about production of a single type of material good. We’re talking about production of all the goods needed to satisfy a particular vision of the Public Good. Perhaps you’d find a few people who are completely happy with just one, material good, but most people have a number of differing desires for both material and social conditions. Those are what this system would try to produce: lifestyles, if you like.
But it’s not. That’s a separate topic, however, and our exchange is too voluminous already :-)
It would be if “ownership” really meant ownership and “rewarded for … efforts” really meant that. But your reply in the other sub-thread suggests that “ownership” is a misleading term here and you’re basically talking about a vote and a license to work. See that other sub-thread for details.
This sounds like a mystical incantation: things will just automagically happen because… well… I dunno… they will just happen.
Markets are not magical, they work through well-understood mechanisms that boil down to, crudely, price and greed. I still don’t see how these mechanisms would work in your utopia. You seem to think that the way it should happen is through rationally convincing people to commit their labor to a project. That might work for small-scale gardening or, say, art. I strongly doubt it would work for e.g. mining or public toilet cleaning.
And what happens when you were unable to convince the sufficient number of people to produce enough fertilizer and there is not enough food to go round?
Employee-owned is not at all the same thing as managed by referendum.
Oh, there are a LOT of redneck white males and they reproduce quite successfully. As its members die off, the group just hires their children, cousins, nephews, etc.
The problem is, there is a lot of demand for the lifestyle of a rich and idle leisure class, there is not a lot of demand for the lifestyle of doing hard, dirty, and dangerous things that the society needs done to keep its head above the water.
“But it’s not. That’s a separate topic, however, and our exchange is too voluminous already :-)”
...You agreed to that definition 2 posts up:
I said: “In a non-democratic system of governance, the state is not, in my view, a public enterprise accountable to the public”
You said: “I agree, with the proviso that I believe the same thing is true for contemporary democracies as well.”
“It would be if “ownership” really meant ownership and “rewarded for … efforts” really meant that. But your reply in the other sub-thread suggests that “ownership” is a misleading term here and you’re basically talking about a vote and a license to work. See that other sub-thread for details.”
All you offered in the other thread was that ownership wasn’t what I said it was; you gave no details as to what else it might be.
“This sounds like a mystical incantation: things will just automagically happen because… well… I dunno… they will just happen. Markets are not magical, they work through well-understood mechanisms that boil down to, crudely, price and greed. I still don’t see how these mechanisms would work in your utopia. You seem to think that the way it should happen is through rationally convincing people to commit their labor to a project. That might work for small-scale gardening or, say, art. I strongly doubt it would work for e.g. mining or public toilet cleaning. And what happens when you were unable to convince the sufficient number of people to produce enough fertilizer and there is not enough food to go round?”
I don’t know why you don’t see that what I’m proposing and the current reality is the same thing, in terms of how the market operates. If some person or group of people proposes a vision of the Public Good which is too resource-intensive, i.e. pricey, to be carried out for all the people who would be involved in its production, it won’t happen because most people would not willfully deprive themselves of what they feel is the price of their labor.
Though there’s probably a large number of people who’d love to take a trip to space next year, it won’t happen because we (that is to say, people who live in a system which operates according to market principles) don’t currently have a way to organize enough resources to make it happen without also having to sacrifice a lot of other things people consider to be important, even though the demand is there. And your fertilizer/food argument is another example of an obvious non-possibility. It doesn’t usually take much to convince people that they need food if they don’t want to die. If they’re unwilling to do whatever necessary to make sure they have enough food to survive, which again, seems not to be much of a problem now, then they’ll die. I don’t know of many (or any) famines caused by apathy.
Your “price and greed” are more technically known as supply (price of production) and demand (use value or, if you like, desire or greed). I feel I’ve been pretty consistent in framing my proposition in those terms.
“Oh, there are a LOT of redneck white males and they reproduce quite successfully. As its members die off, the group just hires their children, cousins, nephews, etc.”
No, no; you don’t understand. We’re not talking about a community of rednecks; we’re talking, in your specific example, of a group redneck white males who form a group solely because its membership is exclusive to people who fit those three criteria; no women are in this group because they are not included in what this group thinks is the Public Good. Hell, it doesn’t need to be that specific.
Even if we talk about a group of white people, joined together for the purpose of promoting Whiteness, the population of such a group will eventually require more resources than were available in the original plot of land this group settled on. They will then have to branch out and interface with groups who don’t believe in promoting Whiteness or that the Public Good is just for white people. That will eventually lead this Whiteness group in one of two directions: conflict, stagnation, and decline, or dissolution. This should sound like an entirely plausible situation, and resolution thereof, to anyone with a knowledge of 19th/20th century European imperialism.
“The problem is, there is a lot of demand for the lifestyle of a rich and idle leisure class, there is not a lot of demand for the lifestyle of doing hard, dirty, and dangerous things that the society needs done to keep its head above the water.”
Which is why private property ownership is problematic. It allows concentration of power such that a few can enjoy the lifestyle of the wealthy class by virtue of nothing other than ownership of private property. Without that concentration of power allowed by private property, there would be no such thing as a rich and idle leisure class because the leisure class represents a sub-optimally efficient distribution of resources (you must be aware of the marginal propensity to save/spend)--in clumps here and absence there. People may desire to have that kind of lifestyle, but if the price of satisfying the demand for it, in an equitable fashion, is too high, and there’s no individual resource clumps to pay for it, it won’t happen, just like we don’t have any group saying it’s going to send a million people into space next year.
I did not. You are making a logic error: thinking that { not(A) is_not (B) } necessarily implies { (A) is (B) }. That is not so. Here A=”democratic system of governance” and B=”public enterprise accountable to the public”.
No, you misunderstand. I am using “price and greed” to mean the following: the market signals what it likes and does not like via the price at which the market clears. This price reflects both supply and demand. There is information in this price, but this information is useless unless somebody acts on it. The usual reason to act on the basis of the price information is desire for wealth, aka greed. It is the motivation which is necessary to make the step from information to real-world consequences (usually, a change in supply).
Ah.
Yep. Reminds me of an old joke which is long but essentially boils down to pointing out that capitalism wants to make everyone rich, while socialism/communism recoils in horror and wants to make everyone equally poor...
If A and B have truth values, then { not(A) is_not (B) } does necessarily imply { (A) is (B) }. (Although “democratic system of governance” does not have a truth value, “X is a democratic system of governance” does have a truth value.)
In the case of A and B being things like a “democratic system of governance” I think we’re more likely to be talking about set membership: “x∉A ⇒ x∉B” does not imply “x∈A ⇒ x∈B” (though it implies “x∈B ⇒ x∈A”)
You mean if A and B are boolean values. In that case, yes, but that’s a special case not applicable here.
“I did not. You are making a logic error: thinking that { not(A) is_not (B) } necessarily implies { (A) is (B) }. That is not so. Here A=”democratic system of governance” and B=”public enterprise accountable to the public”.”
Fair play, but I think I can clean up the mess I’ve made there by asking if you consider a democratic government to be a kind of public enterprise. To me this seems like a reasonable assertion: a government elected democratically is beholden to its shareholders (electorate), for whom it must produce a particular batch of goods and services at a particular level of efficiency. Any democratic government which consistently fails to do so will have its managers (elected politicians) kicked out by its electorate for a new group of managers. I understand you’re likely tired of conversing with me, so I’ll just ask for a yes/no answer on that.
“No, you misunderstand. I am using “price and greed” to mean the following: the market signals what it likes and does not like via the price at which the market clears. This price reflects both supply and demand. There is information in this price, but this information is useless unless somebody acts on it. The usual reason to act on the basis of the price information is desire for wealth, aka greed. It is the motivation which is necessary to make the step from information to real-world consequences (usually, a change in supply).”
The information of supply and demand, i.e. price, isn’t useless if there’s no one to act on it, it’s non-existent. If there was no one on Earth, we wouldn’t have supply and demand, and so no price. And—this is sure to bring some laughs—the desire for wealth isn’t a rational impulse. Unless you literally have a desire for wealth, which is an instrumental good, and not what it brings you, intrinsic goods (however defined), it’s against your interest to pursue wealth beyond whatever version of your intrinsic good it buys you. That seems obvious to me—a dollar is worth its exchange value, nothing more. And how many parables are there about the wealthy, lonely old man, sitting sadly in his mansion, surrounded by piles of gold? I’d rather everyone be poor and happy than have some people wealthy and happy, some others being wealthy and unhappy, and others being poor and sad or poor and happy; wouldn’t you?
Don’t misunderstand my intent, here. If capitalism really did make everyone rich, or even just modestly comfortable, I’d have no problem with it or private property; I’m not a deontologist. But the fact of the matter is that capitalism doesn’t make everyone rich, or even modestly comfortable, but tells the lie that it can; that’s where I have a problem with it.
That would depend on the specifics. A “democratic government” could be any of a wide variety of political systems. I would guess that I’d be willing to accept some of them as “a kind of public enterprise” and not willing to accept as such some others.
I’ll reiterate my view that I do NOT consider typical contemporary democracies (e.g. the US) to be “a public enterprise accountable to the public”.
I don’t think that’s how it works in reality. To start with, consider the difference between elected politicians and the permanent government bureaucracy.
It’s quite a bit more complicated. Let me do a short run through terminal desires towards which having a great amount of wealth contributes:
consumption: maybe I like to consume expensive things
freedom: wealth buys a lot of freedom, both positive and negative
safety: wealth buys safety as well, both directly and as a buffer against volatility in the future
welfare of children: a large inheritance lets you pass the benefits of wealth to your kids
power: wealth can be transmuted (to a limited degree) into power
status: wealth can be and often is used as currency in status competitions
The level of wealth which would satisfy all these terminal desires fully is pretty high :-)
Compare it to alternatives—real ones, not imaginary.
“I don’t think that’s how it works in reality. To start with, consider the difference between elected politicians and the permanent government bureaucracy.”
No disagreement here; but that’s a matter of how a particular democratic system is laid out, not a necessary property of democracy.
“It’s quite a bit more complicated. Let me do a short run through terminal desires towards which having a great amount of wealth contributes: •consumption: maybe I like to consume expensive things •freedom: wealth buys a lot of freedom, both positive and negative •safety: wealth buys safety as well, both directly and as a buffer against volatility in the future •welfare of children: a large inheritance lets you pass the benefits of wealth to your kids •power: wealth can be transmuted (to a limited degree) into power •status: wealth can be and often is used as currency in status competitions
The level of wealth which would satisfy all these terminal desires fully is pretty high :-)”
That’s really not the point. The point is that wealth isn’t the only conceivable way to attain these goods, and that if there are better ways of doing so, wealth stops serving its purpose. I’m trying to lay out a vision of a better way of doing so, which you’re being fairly helpful in helping my figure out slightly better.
“Compare it to alternatives—real ones, not imaginary.”
All abstract concepts are imaginary. You can’t point to anything that anyone can see, hear, taste, touch, or smell and say, “this is capitalism”. The realm of abstracts is pretty damn enormous; to carry this site’s favorite metaphor, you mean to tell me that you don’t believe that there’s any map which could better describe the territory of our world than capitalism? Again, I ask—really??
I understand it may be difficult, but I thank us for trying in any case.
Maybe not, but “wealth” is a very general concept. It can be defined as an amount of value where the value itself is defined as the quality of being wanted by someone.
Well, then you probably should start by showing that your way actually does contribute towards these terminal desires. At the moment you just assert that this is so but do not show how and why.
I can point to specific societies, both historical and contemporary, and say “This one I say belongs to capitalism” and “This one I say does not belong to capitalism”.
So I’ll rephrase my suggestion: compare actual, existing societies using your yardstick of “make everyone rich, or even just modestly comfortable”. Check if the societies at the top of your list are better described as capitalist or not capitalist.
The societies at the top of the top of list are mixed economies, of a sort. It’s kinda glass-half-full to label them capitalistic.
Nowhere in the definition of capitalism does it say “There should be no social welfare programs” or “The state should not own even a tiny little itty bitty factory”.
I would call all of Western Europe capitalist easily enough, for example. There are, of course, many different flavors of capitalism.
Some people call western Europe socialist. The problem is lies in drawing contrary conclusions from the same evidence as a result of labeling it differently.
We are now in this discussion thread where aquaticko has actually defined what does he mean by “socialist”. So within this particular context these “some people” are just using different terminology.
A .has also defined what A. means by “good/successful” nation, and it isn’t what you mean, so you are nto actually refuting A. with any evidence that the successful nations are all capitalist: you are instead able to attach a different truth value to a string by interpreting the terms in it differently.
I still maintain that Western European nations are best described as having mixed economies. There is a failure mode associated with describing them as a capitalist. people go on to conclude that they are successful because they are capitalist, that the non-capitialist elements need to be removed and so on. People think that is an argument based on a fact, but it is actually based on the way they have labelled a fact.
That is not true. In this subthread we are both using the same definition: “make everyone rich, or even just modestly comfortable”.
You are, of course, free to use whatever labels you like.
That seems a valid conclusion to me. I don’t see anything wrong with that.
And that doesn’t follow. I am not sure what “non-capitalist elements” are, anyway. If you mean something like less state ownership of companies (e.g. in France) I would agree that it would be a good thing.
So are you objecting to some unnamed people not present in this thread… OK, but how is this relevant to anything here?
One way to try to sidestep this issue is to explicitly use something like aquaticko!socialist, but that might cost more awkwardness than it saves you.
“Maybe not, but “wealth” is a very general concept. It can be defined as an amount of value where the value itself is defined as the quality of being wanted by someone.”
All the more reason why it doesn’t make sense to measure wealth in terms of profit or income.
“Well, then you probably should start by showing that your way actually does contribute towards these terminal desires. At the moment you just assert that this is so but do not show how and why.”
So you really think that I’ve been speaking a nonsense through this whole debate? I’ll never claim perfection, but that seems a little unfair.
“So I’ll rephrase my suggestion: compare actual, existing societies using your yardstick of “make everyone rich, or even just modestly comfortable”. Check if the societies at the top of your list are better described as capitalist or not capitalist.”
Anything short of constant conjunction is insufficient to assume causation. I don’t think I’ve said that capitalism makes everyone worse off, but it has made some people worse off, and I do think there’s a lot of room for different concepts to do better.
Nope. I think that you focused on, to quote you, “egalitarianism, equality, and communitarianism” to the exclusion of other values. Notice how the terminal desires that we’ve been talking about in this sub-thread do not include any of those.
Sure. There’s only one problem with that—ideas similar to yours were quite popular at the beginning of the XX century. They were also “different concepts” aiming to do better than capitalism.
What was the price for trying them out?
“Nope. I think that you focused on, to quote you, “egalitarianism, equality, and communitarianism” to the exclusion of other values. Notice how the terminal desires that we’ve been talking about in this sub-thread do not include any of those.”
As I said in the other comment thread, it’s an issue of universalizability of moral laws. It’s inconsistent to write a moral rule stating that any one person ought to be sacrificed for another against his/her will because it’s not what I would consent to myself. Similarly, it’s inconsistent with reality to state a moral rule saying that everyone ought to own an entire continent by themselves. Unless you start from a base of egalitarianism and equality, nothing a person can say has any merit because anything which conflicts with those values is ultimately hypocritical and inconsistent.
“Sure. There’s only one problem with that—ideas similar to yours were quite popular at the beginning of the XX century. They were also “different concepts” aiming to do better than capitalism. What was the price for trying them out?”
Undoubtedly quite high, but as a consequentialist and utilitarian, I see no problem in saying that, if they had worked out in reaching their ends, they would’ve been worth it from the perspective of someone who believed in those ends. The ends always justify the means because from the perspective of our consciousness, time only ever moves forward.
I’d like to think I’d be willing to sacrifice myself for some greater good if I agreed with it and thought my sacrifice would help achieve it. I’ll concede I might chicken out—I’m only human—but that would be a poor thing for me to do.
You may want to think carefully about this claim. Assuming charitably that you are only talking about moral questions not other statements, this ignores the issue that even if one thinks that “egalitarianism and equality” should be basic moral axioms, one can still have derived common conclusions from a different moral base. For example, Lumifer and you almost certainly both think that say torturing cats is wrong and that deliberate genocide of human populations is also wrong (for a suitably narrow definition of genocide). So any conclusion Lumifer draw from those results will still be valid in your moral framework.
To use a different analogy, one person might be using ZFC as their axioms for math, while another uses ZF with Foundation replaced by the axiom of Anti-Foundation. The two will derive different theorems, but the vast majority of mathematics will be agreed on by both people. It wouldn’t make sense for the Foundationalist to ignore a proof that the Anti-Foundationalist did that only used Peano Artihmetic.
As I said in response to Lumifer’s post, the problem is this still leaves it up to chance. We may come to the same conclusions on one thing or another, but that is purely by accident, and if we should begin to come up with different moral axioms, I have no reason to respect his viewpoint if a.) I have no guarantee that he’ll respect mine, or b.) I have no axiom which states that I should respect other moral frameworks even if they’re different from mine. Certainly, there are many instances in which both parties to a discussion discover an idea they agree upon, but the debate continues because of how the agreement was come upon, when it shouldn’t matter.
You may want to look at the ZFC example again. Is the shared commonality of Peano Arithmetic there purely by accident?
In general, humans occupy a pretty small piece of mindspace, and the ethical and moral attitudes of people influenced by Western thought occupies a small piece of that.
I’m confused by a how a guarantee why personal respect is necessary. It doesn’t impact whether or not one of his arguments should be at all persuasive. As to the second, given your emphasis on equality and egalitarianism, I’m surprised that some form of respect for other moral frameworks would fall out from that.
I think we’ll have to disagree about that.
The point of that mention of history wasn’t that certain people were ready to sacrifice themselves. The point was that they were perfectly willing to sacrifice others.
If people aren’t treated as though they’re inherently equal, then why should any one person’s agency or vision be respected? If I’m not willing to abide by the obligation created by the existence of others’ rights, what obligation do others have to abide by the existence of my rights? And if there is no obligation in either direction, to what extent can we be said to have or acknowledge the existence of rights? I think you’d agree: none at all.
“The point of that mention of history wasn’t that certain people were ready to sacrifice themselves. The point was that they were perfectly willing to sacrifice others.”
You’ve been pointing out, throughout much of our discussion, a common definition of rights: they are both the right itself and an accompanying obligation. It’s misguided to expect a moral right without any accompanying obligation to hold much water, because whether something is a right or obligation is just a matter of perspective between the two different parties who claim them. E.g., I have a right to free religion, but this appears to be an obligation for others not to restrict my religious practice, and vice versa. It’s basic social contract theory, really, the only dysfunction in it arising when not all people affected by it are given equal say in its construction, hence the importance of egalitarianism and democracy.
Besides, we already have a form of voluntary sacrifice of agency which is practiced on a global scale; private property. We use private property laws because, while I may want to exercise my agency to get some of the resources someone else accumulates, I can’t condone thievery and pillaging because I wouldn’t want it to happen to me. So it doesn’t seem totally out-there to suggest this mutual-benefit mentality could be shifted away from or extended past private property to something else (and it seems to me that we have done that quite a lot already, e.g. laws against violence or in protection of intellectual property). I’m just suggesting a new kind of property right, but I think we’ve talked about that particular idea enough for now.
I recommend observing real life and learning history. People have rarely been treated as inherently equal and yet it very often happened that “one person’s agency or vision” was respected.
Do note that people’s capabilities vary greatly and reality doesn’t care at all about equality or fairness.
Yes, this is correct, but I don’t see how is this related to the willingness to sacrifice others.
“I recommend observing real life and learning history. People have rarely been treated as inherently equal and yet it very often happened that “one person’s agency or vision” was respected. Do note that people’s capabilities vary greatly and reality doesn’t care at all about equality or fairness.”
That essentially relies on chance. A person’s agency is most likely to be respected by me if, by chance, I see that person as roughly my equal. Most people don’t worry about violating the agency of a dog nearly as much as they worry about violating the agency of another human (although this obviously depends on one’s definition of personhood). The agency of African American people in the U.S. was frequently violated because they were perceived as being different from, and lesser than, white people.
Proximity plays a noted role, here. There’s generally a greater concern for the agency of those near you than those you don’t know about, because the only violations of agency you care about are those that seem to be a threat to you. I just think that personhood is a valuable enough thing that we ought to be more systemic in how we protect the agency of things which fit whatever definition of personhood we agree to.
“Yes, this is correct, but I don’t see how is this related to the willingness to sacrifice others.”
You cannot say that there is a right for you to sacrifice other people against their will, because, definitionally, you cannot willingly abide by the obligation to sacrifice yourself against your will for other people.
That is subject to the “what counts as the ‘same thing’?” objection. I would indeed willingly abide by the obligation to sacrifice non-Jiro people for Jiro so by your reasoning it’s okay to expect other people to abide by the same thing.
No, I don’t think so. I think a person’s agency is most likely to be respected by you if that person has shown you evidence that he is superior to you.
i am not an economist, but as far as I can tell, all of the world’s wealthier and more functional nations practice a mixture of private enterprise and public provision. The only way I can imagine your point working is if you take it that capitalist countries must inevitably exploit non-citizens.
While I do believe that capitalism is necessarily exploitative, my argument doesn’t hinge on that opinion.
If you look at what happens in those countries once they begin to implement social welfare policies, economic growth begins to slow dramatically, though it’s arguable that the causality is reversed and that welfare policies are enacted when economic growth is already slowed. In either case, welfare policies are a response to the fact that a decreasing rate of economic growth, when not coupled to an equal decrease in the growth rate of the supply of the workforce, leads to decreasing rate of improvement of the standard of living (however you’d like to define that).
Instead of assuming private production for profit and public redistribution for public good, the former which we operate in a market economy and the latter which we operate in a planned economy, which is essentially what most mixed economies now do, we could have public production for public good in a market economy. I refer you to the last comment on the page I linked to in response to Eugine above in order for a somewhat-better bu far from perfect delineation of the idea.
We certainly have done a kind of socialism before, but it’s always been based upon a command economy, generally in order to preserve or promote state power. There’s nothing about socialism that says that it requires state planning; on the contrary, there are numerous kinds of socialism which use the market. And it’s the market which is the important part of most practices of capitalism. There’s also such a thing as state, i.e. planned, capitalism. In any case, it’s just a matter of who owns the means of production and for what purpose they’re operated.
If you like, you can read a response to a post/comment on the HPlus magazine website laying out a formulation of market socialism I’ve read before; it’s the last comment on the page, under the same username as I use here: http://hplusmagazine.com/2013/11/18/book-review-braidottis-vital-posthumanism/ . I’m not retyping it just because it’s quite long. Suffice to say, it’s not the only version of market socialism that’s been devised, and there’s almost certainly a hole or two in it, but I’m curious what exactly people think of it.
The important part to note is the planned/market economy distinction. At this point in history, we’ve seen planned capitalism, market capitalism, and planned socialism. We haven’t really seen market socialism on a large scale, the closest thing being employee-owned businesses, although most of those are currently operated for profit, i.e., they’re not actually socialist per my definition.
I’m confused about the terminology that you’re using. Could you define “socialism” in the context of your posts? Giving examples would help as well.
I’ve responded to this specific request in another response on this thread, but my definition of socialism is public ownership of the means of production, operated for public good (however that ends up being defined). Again, if you have time, read that last comment on the post I linked to if you’d like to see more about how market socialism might work.
What I believe has caused the fall of socialism in the past is that most economies which operate socialistically are guided by central planning (typically by a national government). This means that production is allocated according to whatever a central planner believes it ought to be; this is obviously problematic because no one person (or committee of people which represents but a sample of a population) has sufficient information to make socially-optimal decisions on production. Therefore, socialism has been seen to fail at what it (in my understanding) has been its only real goal—production of public good; I believe that these failures demonstrate the inadequacy of planning, not socialism.
Free markets, by contrast, aggregate information from millions of people, dramatically improving their efficiency, when compared to central planning, at producing goods. This is where I believe socialism should come in. Using markets, as opposed to planning, for socialist means, i.e. production of social good, ought to significantly improve both macroeconomic efficiency by decentralizing economic power, and social welfare simply by making it the priority.
OK, so the USSR, Cuba, North Korea, and China until twenty years ago or so—all were/are socialist countries, right? On the other hand, countries like Sweden or France were never socialist—correct?
The expression “public goods” has specific meaning in econospeak, I assume you’re not using that but just talking about goods for public consumption.
But I’m still confused. The (more or less free) markets do indeed signal to the producers what to produce. The mechanism by which they do that is price. Desireable goods command high prices and so create the incentive to make more, while goods not in demand are not sold and their manufacturers either switch production or go out of business.
Given the state ownership of the means of production and the absence of the profit motive I wonder how will the market mechanism operate. After all in USSR and similar countries the “market” existed—people bought things in stores and paid money for what they bought. It’s just that the signals from this market were ignored—nobody cared about them.
What exactly would make state-owned companies with no profit motive care about prices or demand?
“OK, so the USSR, Cuba, North Korea, and China until twenty years ago or so—all were/are socialist countries, right? On the other hand, countries like Sweden or France were never socialist—correct?”
Correct. Socialistic, sure, but not socialist.
“The expression ‘public goods’ has specific meaning in econospeak, I assume you’re not using that but just talking about goods for public consumption”
No, I did not mean public goods in the economic definition. Perhaps I should have said “Public Good”: production of things which the public deems to be uppercase-goods: education, positive social interaction, food, shelter....The list would vary, but yes: “Public Good”(s) for public consumption.
As for the rest, you still haven’t separated out public/private ownership of the means of production (MoP) and capitalist/socialist operation of the MoP. And when I say “market economy”, I mean organization of the MoP such that they respond to market information, i.e. supply and demand. State ownership, as in the USSR, doesn’t respond to supply and demand information; it responds to central planning information. Planners in the USSR decided, with the necessarily-limited information they had, how much of whatever good would be produced. I’m not advocating for that.
As I said in response to another comment on this post, it seems to me you can divide economic organization along three axes: public/private ownership of MoP (i.e. w/ or w/o private property), capitalistic/socialistic operation of MoP (i.e. for profit or Public Good), and operation of MoP according to market/planned rules. Democracy plays an important role in making public ownership work, as demonstrated nicely by both China and the USSR, for different reasons.
China, provides an excellent example of what seems to me to be just about the worst of all of those options. It’s major corporations are state, i.e. (nominally) public enterprises operated for profit according to goals set by provincial and national planning committees. However, because allocation of public ownership isn’t a democratic process, the CCP sort of does whatever it wants with China’s economy, keeping a large portion of the proceeds for itself and needing only to worry about fostering enough growth, for the general citizenry, to prevent itself from being overthrown. But, you at least have the profit motive for workers forcing them to be more productive, even though the system is utterly rigged against them.
The USSR was slightly better in one theoretical way, but worse in another in reality: state enterprises, operated for social good according to goals set by a central planning committee. This means you had the handicap of planning, and there was still the problem of public ownership being allocated undemocratically, but at least the MoP were supposedly being operated for the production of Public Good. However, there was was essentially no incentive for work: no democracy, thus no pressure from the public for the government to be efficient, and no incentive from the market for workers to be productive.
I’d say more about the importance of the democratization/publicization (however you’d like to put it) of the ownership of the MoP, but again, there’s quite a bit more written in that post I linked to a few comments up.
Well, that’s the crux of the issue, isn’t it? How can you organize the means of production so that they will respond to market information without going capitalist?
That’s an interesting opinion. It’s interesting because China’s last 20 years represent a colossal success. This “worst of all” system pulled out of poverty many many more people than all the Western charities put together. The Chinese are MUCH better off now than 20 years ago—thanks to this “the worst” system.
I don’t understand—what is allocation (democratic or not) of public ownership?
“Well, that’s the crux of the issue, isn’t it? How can you organize the means of production so that they will respond to market information without going capitalist?”
Responded to this in the other comment thread we have going.
“That’s an interesting opinion. It’s interesting because China’s last 20 years represent a colossal success. This “worst of all” system pulled out of poverty many many more people than all the Western charities put together. The Chinese are MUCH better off now than 20 years ago—thanks to this “the worst” system.”
That was just a matter of convergence: China finally taking advantage of the technology and trade it had waiting at its door, anxious to better-utilize the many types of capital China has in excess of probably anywhere else on the planet (India isn’t quite as resource-rich). Soviet socialism and Leninism had a similar effect on Russia for the first few decades of the USSR. That stopped when the inefficiency of the system became too great to overcome, and China will likely slow down similarly within the next few decades after the industrial-technological-human capital space between it and the developed nations shrinks. In fact, that is exactly what we’ve seen in most other wealthy nations in East Asia: first Japan during the Meiji Restoration ending with the 80′s asset bubble, then South Korea during the Miracle on the Han through easily before the end of this decade, and Taiwan after that, likely to continue longer assuming things remain relatively peaceful with China. Singapore and Hong Kong are the two exceptions, advantaged as they are as an international trade port and traditional entrance to the mainland Chinese market, respectively.
“I don’t understand—what is allocation (democratic or not) of public ownership?”
It’s a matter of determining in what way socialized claims to ownership are distributed. Private property is essentially a legacy claim—I found it, it’s mine. It’s a natural means of private entities claiming resources, the kind you see dogs and cats using to mark their territory. Socialized claims to ownership are decided by a polity. Historically, the polity which brought about the opportunity for socialized claims has been a small cadre of people, former members of the public who’ve decided to revolt, against private (in this case, state) ownership. However, logically, enough, when they assumed power, they naturally assumed control as well, and once again a form of private ownership occurs.
However, if the polity which brings about socialism is everyone, or you have an inhumanly-magnanimous cadre of people, then everyone ought to (ought being an admittedly imperative word, here) distribute ownership claims democratically, i.e., to everyone. I’ll admit that last bit leaves a big space for things to go wrong, and that’s why I tend to prefer the inhumanly-magnanimous cadre of people, or even a single such person. Alternatively, people tend to respond well to Rawl’s idea of the veil of ignorance and iterations thereof.
Funny how that hasn’t happened under Mao who, presumably, was running a “better” system. And really, is India that resource-poor compared to China? Enough to explain the difference in growth rates?
Did they? I am not at all sure about that. Granted, trustworthy statistics are hard to come by, but it does seem to me that the living standards of the Chinese people rose much faster and further than those of Russians under Stalin. The Russians were building heavy industry plants—just like Mao did—and while certainly useful (as WW2 demonstrated), they didn’t do much for ordinary people.
Yes, I agree, but no country can support breakneck development for long. China slowing down eventually does not support your thesis that it suffers under “the worst” system.
Initial ones? Or all the time—meaning claims to ownership can be granted or taken away by the polity at will? If the latter, I would object to calling this “ownership”, it’s much more akin to a mere license.
That’s how the ownership of the former Soviet factories, etc. was distributed in the early 1990s.. Basically everyone who worked at a particular factory got a “share” of ownership of that factory in the form of the so-called “voucher”.
You can google up how well that worked.
On the other hand, if you mean non-transferable ownership then it’s not really ownership and I don’t see much use in it.
“Funny how that hasn’t happened under Mao who, presumably, was running a “better” system. And really, is India that resource-poor compared to China? Enough to explain the difference in growth rates?”
No; Mao was essentially running the same system as the USSR: state ownership of the MoP, operated for socialist ends, according to central planning doctrine—the same incentive-less structure for both government and workers. The only thing that’s changed was a kind of democratization of the ends—they now had to be somewhat responsive to the demands of the global market for China to achieve its export-oriented growth. However, China’s domestic market remains essentially constrained by planning.
On the other hand, India is, per the definition we seemed to have agreed on in the other comment thread, no more than nominally democratic (government unaccountable to public demands in a practical sense). However, because it is nominally a democracy, it can’t just go around doing whatever it wants, meaning it has the inefficiency of meeting public demands, the same kind of handicaps to growth as much richer countries, and the inefficiency of a government which is unresponsive to the public. At the same time, this façade means that the average Indian citizen can’t just be abjectly angry with the Indian government: he can and has to vote the current people out for a new group, if it’s so bad.
China doesn’t have to worry about that. Really, the Chinese system is just so incredibly messed up that it seems to be working, for now, in spite of itself. And it’s not the future slow itself down that’s a problem; if having to maintain a growth rate of 8% or better forever is problematic, which we seem to agree is the case, and China’s governmental system will collapse without that, then it’s unclear in how, in the long-term, it’s really a better system. I’ll put it to you this way: which system of governance would be easiest to drop into a wealthy, democratic, Western society which isn’t experiencing rapid economic growth: India’s or China’s?
“Did they? I am not at all sure about that. Granted, trustworthy statistics are hard to come by, but it does seem to me that the living standards of the Chinese people rose much faster and further than those of Russians under Stalin. The Russians were building heavy industry plants—just like Mao did—and while certainly useful (as WW2 demonstrated), they didn’t do much for ordinary people.”
We’re not here arguing about the speed or duration of improvement of living standards; we’re arguing about end-states. In both China and the USSR, living standards did increase dramatically for most people. And the difference is, again, partially attributable to the difference in the technological convergence space between China and the USSR. Imperial Russia was already a minor industrial power before the revolution; China was barely industrialized to any extent before Deng’s reforms in the 80′s, meaning it had nearly a century of growth to catch up on. In consideration of the facts that in neither case do we have democratization of ownership or responsiveness to a market, and in both cases convergence will end, and you see why they did/will stall and fall.
“Initial ones? Or all the time—meaning claims to ownership can be granted or taken away by the polity at will? If the latter, I would object to calling this “ownership”, it’s much more akin to a mere license.”
Initial ones; they’d be dealt out at birth to be utilized at the appropriate time, 14, or 15, or 18, or whatever age a particular vision of the Public Good decides it should be. Think of them like citizenship cards: no matter what country (or vision of the Public Good) you’re born into, you get one, and you can’t legally sell it. These differ primarily in that no one could take it away from you, either, as it’s a claim to your own labor as much as anything else, and you’re free to go to whatever vision of the Public Good appeals to you at that pre-designated age; in that way, they’re more like passports.
“That’s how the ownership of the former Soviet factories, etc. was distributed in the early 1990s.. Basically everyone who worked at a particular factory got a “share” of ownership of that factory in the form of the so-called “voucher”. You can google up how well that worked. On the other hand, if you mean non-transferable ownership then it’s not really ownership and I don’t see much use in it.”
Well, the problem is, once again, that those were ownership stakes in state-owned factories—once again, state-owned in a non-democratic system is owned by the class of people who were members of the state government, i.e. members of a private class.
When you say “non-transferable”, do you mean “non-exchangeable”? Because it seems to me as though one thing that ownership ought to be is non-transferable. I can offer to “transfer” my ownership of a particular piece of property to you in exchange for something you own, or, just as easily for you, you can try to kick me out without having to exchange anything. Short of killing me, you can’t take away my labor, or, in the scenario we’ve been working out, my claim to ownership of the MoP, and if you kill me, then neither you nor anyone else gets it, either.
This is where we can bring in both Kant and Rawls; if I devise a moral law (e.g. people ought to try to take others’ ownership claims from them by force) which I would not apply to myself, I can hardly call it a law. On the other hand, if I don’t know whether I’ll be put in the position of the person who has an ownership claim, or a person who tries to take that ownership claim, and we all agree that one of these is a bad thing, then we simply won’t let this scenario arise. This is, again, essentially the market acting on morals: not enough people want for this thing to happen, so it won’t.
Heh. I think your theory finds itself in contradiction with empirical reality. Sorry, the reality always wins.
It is not obvious to me at all that the Chinese political system will collapse without that.
Ah. So it’s not ownership at all—it’s just a work permit. Or an internal passport. I see no reason to call this “ownership”—why do you think this word fits?
No, this happened in post-Soviet times. The factories were privatized by giving (for free) the ownership shares to the workers. After that process was complete, the factories weren’t state-owned any more, they were owned by the newly-minted shareholders.
Again, I think you’re badly misusing the word “ownership”. It doesn’t mean what you think it means :-)
Sure I can, that’s what slavery is. Or if you’re talking about labor potential I can easily take it away by locking you in a cell.
You seem to think that there is something wrong with voluntary consensual exchanges of things of value. Or do you reject the whole idea of property?
“Heh. I think your theory finds itself in contradiction with empirical reality. Sorry, the reality always wins.”
It only “wins” if the sole concern of a political economy is economic growth. I’ve said pretty clearly that no one can deny that, in that sense, it’s winning. However, it’s doing so by sacrificing human welfare in a way that other systems don’t require—pollution, oppression of free expression, miserable working conditions...the list goes on. You’re continually looking at the economy as if the only figure that matters is income per capita. I don’t think I’ve denied that that’s part of it, but we have quality of life indices for a reason.
“It is not obvious to me at all that the Chinese political system will collapse without that.”
Numerous people—economists and politicians both within and outside of China—have said that, not the specific number I used for example, but that the legitimacy of the CCP government is entirely dependent upon increasing economic growth, as we already have ample evidence to suggest that it, as a planned economy, will not be able to improve quality of living independent of that. I’ll see if I can’t pull up a few quotes to that effect.
“No, this happened in post-Soviet times. The factories were privatized by giving (for free) the ownership shares to the workers. After that process was complete, the factories weren’t state-owned any more, they were owned by the newly-minted shareholders”.
If someone handed you the keys to a car which could barely run, would you go through the expense of getting it back in working condition, or just sell it for parts?
“Ah. So it’s not ownership at all—it’s just a work permit. Or an internal passport. I see no reason to call this “ownership”—why do you think this word fits?”
Tell me, why do you think it doesn’t? Because again, I’m having trouble understanding.
“Again, I think you’re badly misusing the word “ownership”. It doesn’t mean what you think it means :-)”
“You seem to think that there is something wrong voluntary consensual exchanges of things of value. Or do you reject the whole idea of property?”
Well, as you seem to totally reject my idea of ownership, care to give me yours?
“Sure I can, that’s what slavery is. Or if you’re talking about labor potential I can easily take it away by locking you in a cell.”
Yes, but is slavery generally considered a just and viable way to procure labor in a fully democratic society? No; again we can fall back to the Rawlsian veil of ignorance: if I can’t apply the rule of “all people must agree with slavery” to myself (which it seems, by the definition of slavery, that I can’t), then it’s not something people in an egalitarian democratic society will support. And locking me in a cell does nothing to remove my labor from me. You can force me to use it to produce goods for you, but again, that’s slavery, which won’t happen in an egalitarian democratic society. Or even if you don’t force me to work for you, I can still labor to find a way to escape. I fail to see an important distinction between labor and labor potential; they both refer to the ability to do work.
Nope, the concerns of a political economy are irrelevant here.
The contest is between a map and a territory and the territory always wins.
Yes, I know. But the argument to popularity is not a good way to evaluate forecasts :-/
Sure. Ownership is a bundle of rights (and each right, of course, has a corresponding obligation on the part of others). What’s exactly in this bundle varies, but typically there will be the right to exclude others (if it’s mine I don’t have to allow others to use it), the right to control, the right to destroy, the right to transfer (sell), etc.
The bundle, as I said, varies. There are limitations on most of these rights depending on your local laws, and some of them are not applicable to certain types of ownership (e.g. if you own a piece of land there is no right to destroy). Borderline cases certainly exist—e.g. you can argue that copyright is a form of property and you can argue that it is not.
You are saying that something like an internal passport gives you a share of “ownership” in all means of production in the society. What does that mean? Which rights do I, personally, have with respect to that which I “own”?
P.S. You haven’t answered the question whether you object to the notion of property in general.
“Nope, the concerns of a political economy are irrelevant here. The contest is between a map and a territory and the territory always wins.”
So, to be clear, you don’t believe that political economy is part of the territory? Really??
“Yes, I know. But the argument to popularity is not a good way to evaluate forecasts :-/”
Some people appreciate an appeal to authority, but I don’t need one to justify what I said. I’ll respond differently to an announcement that you’re going to twist my finger, if you tell me before doing so that you’ll give me a lollipop afterwards if I let you, than I would if you simply told me you were going to twist my finger, right?
“You are saying that something like an internal passport gives you a share of “ownership” in all means of production in the society. What does that mean? Which rights do I, personally, have with respect to that which I “own”?”
Well, labor seems like the obvious component here. Whatever other means of production exist now only exist because someone in the past labored to make them. I’ll concede that I haven’t totally worked out how you’d evenly divide up extra-somatic means of production, i.e. existing private property, but it seems like it ought to be possible to construct a pricing model to evaluate all the means of production in an economy and split that value equally among all participants in that economy.
Shares would represent a compensation for the price assessed of the global means of production by the global market, divided by the number of people in the world, with each person getting one share. This share is an ownership claim because it is exclusive to its original owner (no one is able to take it from me, nor can I take one from anyone else), and I control it (no one can make me use it for a purpose other than one of my choosing). I should’ve asked earlier, are you familiar with the distinction between private property rights and personal property rights? These shares would be an example of the latter, and thus have a different set of ownership rights than the private property rights we tend to focus on now.
P.S. You haven’t answered the question whether you object to the notion of property in general.”
I did on the other comment thread a little while ago, but I’ll say here as well: I’m a consequentialist. If capitalism and private property gets me the end I’m seeking, I’m fine with that. But if it doesn’t, I’m not. Values should be system-neutral.
Really really :-) Political economy is a description of how the world works. Being a description, it is a map.
Let’s do a little gedanken experiment. I hereby give you a piece of paper that represents a share, an ownership claim on your fraction of the global means of production. It is exclusive to you and you control it.
Oh, but say you, it’s fake, it doesn’t represent anything!
OK then. In the system which you describe, what can you do with you “true” ownership claim that you cannot do with the admittedly fake claim which I have just given to you?
Can you specify the end you’re seeking?
“Really really :-) Political economy is a description of how the world works. Being a description, it is a map.”
I’ve always thought that ultimately, description is the best that anyone can ever really do. We’ll be getting into epistemology if we go down this route any further; your call on whether or not you want to do that.
“Let’s do a little gedanken experiment. I hereby give you a piece of paper that represents a share, an ownership claim on your fraction of the global means of production. It is exclusive to you and you control it. Oh, but say you, it’s fake, it doesn’t represent anything! OK then. In the system which you describe, what can you do with you “true” ownership claim that you cannot do with the admittedly fake claim which I have just given to you?”
...I’m assuming that the parallel with paper currency is intentional. This is exactly the way in which any system of private property works: the validity of the claim is based on a common social contract. However, as these shares are claims to a publically-owned property, it is a type of personal property, dependent upon some particular formulation of a social contract (stipulating e.g., 1. all material goods are publically-owned, and 2. all people who are capable of conceiving of a vision of the Public Good deserve a share in this publically-owned stock of goods)....I can’t tell if I’m being led somewhere or you missed that completely, though I’m naturally leaning toward the former.
“Can you specify the end you’re seeking?”
In excruciatingly minute detail; suffice to say the most important tenets are egalitarianism, equality, and communitarianism.
May I suggest a review of the concepts of the map and the territory?
I think I missed it completely. I just don’t understand what rights does a “claim of ownership” give you. Let me ask the question again: what can you do with it? Let’s take two people, A and B. A has the “claim of ownership”, B does not. They both wake up, walk out onto the street. What can A do that B cannot? Which rights does A have that B does not?
What happens to people who do not like these tenets?
Would a kibbutz or a hippy commune be an example of a society you want?
“May I suggest a review of the concepts of the map and the territory?”
None is needed; I’m pretty sure that I understand the use of the terms map and territory here. Maps are representations of reality, territories the correspondent reality. I don’t argue against this term pairing, in fact I quite like it, and I’m pretty sure I haven’t violated them in principle. I was just heading in the direction of arguing that all anyone can ever have is a map, so to speak—I’m fundamentally an epistemological idealist. But this is a discussion we could go on about to the end of time.
“I think I missed it completely. I just don’t understand what rights does a “claim of ownership” give you. Let me ask the question again: what can you do with it? Let’s take two people, A and B. A has the “claim of ownership”, B does not. They both wake up, walk out onto the street. What can A do that B cannot? Which rights does A have that B does not?”
I think you might be under a misconception about the idea of market socialism (or my particular version of it, anyway): the only things which don’t have claims of ownership are non-people, in the broad sense. To make the scenario fit, you’d have to ask, “what can A do with A’s claim to ownership that B cannot do with A’s claim to ownership?” B cannot take A’s claim to ownership (be it his labor or the value associated with a single person’s share) and use it to work towards or in any way advance B’s vision of the Public Good if A does not agree with B’s vision of the Public Good. This is the only right/obligation that people in this theoretical can worry about: freedom to exercise agency and vision, and an obligation on the part of each person to respect the exercise of agency and vision of others.
“What happens to people who do not like these tenets?”
They’re free to participate or not participate in my, or any other entity’s, vision of the Public Good, including their own. If a particular vision is in low enough demand, then it likely won’t be achievable due to lack of resources gathered to accomplish it, and any organization around that Public Good will naturally dissolved as people become dissatisfied with it. This gives people an incentive to formulate a vision of the Public Good which is as universally-appealing and inclusive as possible.
In a sense, it’s much like the universalizability issue of the Kantian imperative. I can make any particular vision of the Public Good as specific as I like it, but as I add more and more detail to it, the more opportunities I create to turn people off from it. If my vision of the Public Good revolves around my every specific desire, it’s not likely to attract other people because I will have a different set of specific desires from other people. By contrast, if I can formulate a vision of the Public Good which is composed solely of specific desires that appeal to a lot of people, more people will join me in the pursuit of my vision of the Public Good.
This should all sound quite similar to what we have today, because it is. The difference is that, with the abolition of private property and a democratic ownership of the MoP, there’s a lot more room for many different visions of the Public Good to be realized as no one has anymore ability to impose their Public Good vision on people than anyone else does. I always thought this was a pretty meritocratic system.
A territory may be judged to win or lose according to how it is evaluated. Does the territory tell you that GDPis objectively a better metric than QUALYs?
Market socialism was tried pretty extensively in Eastern Europe during the cold war; Joseph Stiglitz wrote a pretty thorough examination of it in his book ‘Whither Socialism.’
The information problem which kills explicit central planning is still extant in market socialism because it is based on reductionist economic models which do not capture the full complexity of market behavior. In other words, neglecting easy-to-miss microeconomic issues (like information asymmetry in purchasing, to use the example he focuses on most) means creating systemic dysfunction on the macro scale. Economic models can be useful abstractions when it comes to predicting trends in real markets, but they are not what they symbolize and building a “market” around their assumptions leads to collapse.
Is that their true objection, really? I’m not from the US. and I’ve never seen this argument made to defend views against welfare. Then again, I don’t follow politics much. I’d add to this that governments funding private companies, or at least some forms of it, distort competition. This is one of many arguments I see often. I’m not sure what it implies though.
I’m not sure about the title. Are governments that pay privately hired employees’ salaries evil? Are privately hired employees who get partly payed by the government evil?
Funny. I think minimum wage is a terrible policy precisely because we’d be better off replacing it with guaranteed basic income. I think welfare is a terrible idea, for the same reason.
They all have the same intentions, but guaranteed basic income is the one the meshes the best with the invisible hand. Even if you have no idea if you should be helping the poor, minimum wage is the wrong way to help the poor, so clearly you shouldn’t have minimum wage.
It is of course possible to have both. Set a minimum income guarantee for everyone (so that even those who are not working, don’t starve), allow the minimum income to be retained by those in work (so avoiding a high effective tax rate on low incomes), and add a minimum wage as well (so discouraging low-productivity work, and incentivizing training for higher productivity work).
By the way, the major political value of describing Walmart as a “welfare queen” is that welfare recipients are stigmatised, and this line of rhetoric redirects the stigma (and tends to dilute it). It is unfair to Walmart, but perhaps no less fair than calling anyone a welfare queen.
You can have both, but minimum wage is still a bad idea. You’re better off just having a higher minimum income guarantee.
Why a bad idea, though? I guess you are disputing this point:
Here’s a simple model. Assume that full-time employees cannot live on less than $8 an hour (they starve, can’t pay rent etc.) Also assume that an employer can offer untrained staff two sorts of job:
Job 1 has very low productivity, total value of $6 per hour, but a pay-rate of $3 per hour. $3 a hour is too low to live on, but employees will accept it where that supplements a minimum guaranteed income.
Job 2 has higher productivity, total value of $14 per hour, but staff must be trained to do it, and because they now have transferable skills, the employer must offer $10 an hour to retain them. The training costs average at $2 per hour over the typical duration of the employment.
The employer offers staff Job 1 because that gives a higher profit ($3 per hour, rather than $2 per hour). Staff take it because $3 is better than nothing. But there is more economic value created if employers offer Job 2 instead. A minimum wage requires them to do that. You can argue the details, but that’s the general principle.
There is clearly a counter-argument that the minimum wage is a market intervention and can cause inefficiencies (it may result in some folks who just can’t be trained losing their $3 per hour jobs). But the counter to that counter-argument is that the minimum income guarantee is already a market intervention which is encouraging employers to offer Job 1 (as it allows employees to accept it). So a corrective intervention is needed.
That’s an inefficiency, but it seems to me that a far more central one is embedded in the assumptions of your toy model: how many unskilled jobs ($3) funge against skilled or semi-skilled ones ($10). In practice, it seems to me that the kind of jobs an employer can offer are often narrowly constrained by business requirements.
A factory owner, for example, might be able to retrain unskilled line workers (fitting Subwidget A to Subwidget B) to do semi-skilled work (operating a widget-fitting machine) for higher total productivity; that’s consistent with your model’s assumptions. But if you run, say, a hardware store, someone’s got to stack shelves, mop the floors, and run the registers, all of which take roughly the same level of training, and there’s only so many places you can squeeze out more per-body productivity by investing more. Anyone you have to fire because of minimum-wage laws there represents an economic loss: they aren’t getting paid, and you aren’t running as efficient a business as you could be.
OK, a fair criticism of the “toy” model, which was simplified to make the point. There are always multiple choices of productivity and wage level, and big moves (more than doubling employee productivity, while simultaneously quadrupling the cost of labour) usually can’t happen quickly.
Back in the real world, I did a quick look at the economic evidence, and was surprised. The latest evidence base is that the minimum wage has surprisingly little effect on anything. It seems to have no discernible effect on employment levels—see here—but it has no clear net impact on training levels either—see here.
One problem is that minimum wages tend to be varied only marginally, so it is hard to see a big effect. However, the UK provides a more dramatic experiment, where minimum wages were abolished in the 1990s, then re-introduced a few years later. Some UK assessment here on employment and on training. Again, not a big impact in either case, though training levels apparently did increase among groups affected by the minimum wage. This suggests the toy model is not totally daft.
Interesting reading, although I’m always leery of relying on a single meta-analysis of a politically charged subject. For the sake of argument, though, let’s take it as given that increasing the minimum wage has no or only a small effect on employment rates. Where’s the money coming from, then, and what would we expect that to do to the economy?
First option: It’s a free lunch; the money would otherwise go to line the pockets of (spherical, behatted, cigar-chomping) capitalists. This is implausible to me on priors, but we can put bounds on how far we can stretch it: most businesses run on margins of 15 to 20%. I’m having a slightly harder time finding figures on personnel costs, but Google informs me that 38% is a decent payroll target; factor in benefits and such and let’s call it 50% for all personnel-related expenses. This suggests that minimum wage laws could increase average wages by 10 or 20% without cutting too much into business owners’ cigar budgets, although we should really be thinking on the margins here.
Second option: It’s being passed on to consumers in the form of higher prices. On average people are making more but also paying more; this means inflation. There are institutions trying to control inflation, though, so the costs probably end up being taken out in lower interest rates or in subtler ways. Note that higher costs of consumer goods work a lot like a mildly regressive tax; lower-income people buy more in consumer goods as a share of income.
Third option: The balance of labor changes. Jobs that can’t economically be done at the lower wage points move to places that have less stringent laws, and trainable or higher-skilled jobs move in to fill the employment gaps. I don’t think I’m economist enough to analyze this fully, but it looks like we’d expect wages for those higher-skilled jobs to go down in the affected jurisdiction as a consequence of supply-and-demand issues, probably after a time lag. In any case someone’s still doing crappy jobs for crappy wages; they just don’t show up in the statistics. Frictional costs also arise; outsourcing isn’t cheap.
Fourth option: Something’s masking the effect. Either the changes are slow enough that they don’t show up in the available statistics, or something I haven’t thought of is going on.
My first reference above was more of a “meta-meta-analysis” since it surveys the results of several meta-analyses! At a high level, it is going to be quite difficult to argue that there really is a big impact on employment, but somehow all the analyses and meta-analyses have missed it. As I said, I found it surprising, but this is the full evidence base.
This is the main question addressed by the Schmitt paper. To quote the exec summary.
“The report reviews evidence on eleven possible adjustments to minimum-wage increases that may help to explain why the measured employment effects are so consistently small. The strongest evidence suggests that the most important channels of adjustment are: reductions in labor turnover; improvements in organizational efficiency; reductions in wages of higher earners (“wage compression”); and small price increases.”
One of the other hypotheses considered was a reduction in profits (which is what the toy model would suggest: the low-wage “Job 1” maximizes profits rather than productivity, and moving to “Job 2″ increases productivity but lowers profits). However, Schmitt found not many studies and not much evidence of this, except in the UK following introduction of the minimum wage from nothing. Again, I found that very surprising: if anyone is losing out by paying the minimum wage, you would expect it to be the Walmarts of the world. But not so, apparently.
Personally I would expect large corporations and the very rich to be capable of defending their position against any reasonably predictable shift in the economic environment, since they have resources and motivation to lay out more comprehensive contingency plans than anyone else. That extra productivity from “Job 2” doesn’t just vanish into the aether. Higher minimum wage means the poorest people have more money, then they turn around and spend that money at Walmart.
The ones who lose out from a higher minimum wage would be the middle managers, who are then less free to treat bottom-tier workers as interchangeable, disposable, safe targets for petty abuse. With higher wages, those workers will have more of the financial security that makes them willing to risk standing up for themselves, and specialized skills that make them more expensive to replace. That’s what wage compression, reductions in turnover, and improvements in organizational efficiency look like from the trenches.
The poorest people do not directly benefit from minimum wage, because they don’t have jobs. Many participants in the informal economy are also very poor.
One option I didn’t think of in the ancestor is that people pushed into the informal sector may still be showing up as employed in the sources being referenced: people making a lower-than-minimum-wage living as e.g. junk collectors are sometimes counted as such depending on methodology. We could pick out this effect by asking for personal earnings as well as employment status: if higher minimum wages are coming out of corporate margins somewhere, we’d expect average earnings (at least in the lower segment of the workforce) to go up, but we wouldn’t expect that if it’s pushing people into the informal sector. A survey would probably have to be carefully designed to have the resolution to pick this up, though.
Managers are more likely to abuse minimum wage workers the higher the minimum wage. At a higher minimum wage workers will value their jobs more and so will tolerate more abuse before quitting, and managers will value having the worker less because employing the worker is more costly.
There’s some evidence this is false. Now, when I tried to google it, this is the only study I found (or at least the only one I could read for free), and I don’t trust it all that much. But it is not immediately crazy to think that employers can get more effort out of employees at the lower-paid end by paying them less, eg due to loss aversion.
We have yet to establish that minimum-wage labor meets my intuitive definition of a market, where people can freely make or refuse trades and you get more by paying more.
The relative value of a job matters more than the absolute here. When a worker can walk across the street and get the same $15 an hour at McDonalds they do today at Burger King, then Burger King and McDonalds need to compete for employees based on work conditions. Managers get away with abuse only when the salary exceeds the prevailing wage for the skill set, or jobs are hard to find.
Nope. When you force a price floor above the market clearing price (the price for labor, aka the minimum wage) you create a persistent glut of supply and a shortage of demand. Managers don’t have to compete for workforce when there is a long line of people raring to get their $15/hour in front of both McDonalds and Burger King. Instead, managers spend a lot of time coming up with clever ways to to automate their business.
If some prospective employees are better than others, then that long line of people will still contain better and worse candidates, and employers may compete to get the better ones.
Yes, and in this context better means “willing to put up with abuse by bosses”.
It presumably means some combination of that, speed, diligence, etc. I wouldn’t expect abuse-tolerance to be a large fraction of what most bosses want, though no doubt some bosses are awful enough to prefer less profitable but more abusable employees.
Depends on the “abuse”. Here it means practices that increase productivity at the expense of employee quality of life. For example, insisting that employees be willing to work odd hours on short notice.
Employers always compete for better employees, but they are, generally speaking, satisficers. The marginal benefit from having a high-IQ, very conscientious, giving-his-100%-to-the-job employee flipping burgers is not very high.
You’re described a mechanism that will make managers more likely to abuse minimum-wage workers when the minimum wage is higher. But you haven’t argued against Strange7′s claimed mechanism that would make managers less likely to abuse minimum-wage workers when the minimum wage is higher.
Do you think it’s obvious that Strange7′s proposed mechanism would be outweighed by yours, or that it’s wrong altogether?
Is there actual empirical research on the relationship (if any) between minimum wage and working conditions?
(There’s one bit of Strange7′s comment that doesn’t make any sense to me: ”… and specialized skills that make them more expensive to replace”. I don’t see how increasing the minimum wage will have that effect. The rest seems reasonably plausible prima facie.)
This one?
It makes no sense. At first approximation a high minimum wage makes it more beneficial to have a (now high-paying) job, but it also makes it harder to get such a job. Given this, the workers will have more to lose and more difficulties in finding another job if fired. That makes them more willing to endure abuse so as not to lose the high-paying job.
I don’t have links handy, but I believe there were some interesting empirical case studies of the situations where a business paid much more than the prevailing wage (basically, a rich Western company set up shop in a very poor third-world country). As far as I remember, the basic results were that (a) the job becomes a valuable commodity to be bought and sold (essentially, the local power structures exert control over who can apply for the job); and (2) the workers are willing to do anything so as not to lose that job.
Now, guaranteed employment at a “living wage” actually would make employees quite resistant to managers’ abuse. However the obvious problems with that are obvious.
Sure. But having had a higher-paying job means (or at least can mean and sometimes will) having more savings (or, more likely: some savings instead of none), which means that losing your job is a nuisance rather than a cataclysm likely to put you on the streets within a month. That seems like it might be quite a big deal in terms of employee attitude.
(Yes, of course guaranteed employment would have a much stronger effect. So, less disastrously I think, would a reasonable-sized basic income.)
Lumifer is right, and I think you are effectively confusing a law that gives you the right to work at the minimum wage with actual minimum wage laws which are instead laws forbidding you from working for less than the minimum wage.
I promise that I am not confusing those things, though of course it is possible that I am confused in other ways.
The question I think is on the table, which hasn’t obviously-to-me been resolved, is this: Suppose we substantially increase the minimum wage and wait a few years. All sorts of things may change as a result. Some people will have more money. Some people will not have jobs any more. Etc. Now, look at those people who do still have minimum-wage jobs. Are those people more or less subject to abuse by their bosses?
Maybe more, because doing the same work for higher pay means they need their jobs more and their bosses are more able to fire them. Maybe less, because they may now have more savings because they’ve been being paid better. Maybe more, because actually they won’t have any more savings but they’ll stand to lose more by getting fired. Maybe less, because being better paid will bolster their confidence and make them more inclined to stand up for themselves. Etc.
I agree (for the avoidance of doubt) with the mechanism Lumifer describes. That will definitely tend to produce more abuse. But it looks to me as if there are others that go the other way. If you have compelling evidence that they aren’t real, or that they are outweighed by the one Lumifer describes, would you care to sketch it or point to it, rather than just saying “Lumifer is right” (with which I already agreed if it means “Lumifer’s mechanism works the way he says”, and which surely needs further support if it means ”… and it outweighs all other factors”) ?
That’s not exactly true. You can volunteer for far less than the minimum wage (Some would say infinitely less) if you want to. What you can’t do is employ someone for some non-zero amount of money that’s lower than the minimum wage.
The Obama administration is making it difficult for businesses to use non-paid interns to do the kind of work that paid employees do.
I don’t know. You’re talking about the propensity to save and—at the minimum-wage levels of income—it’s not obvious to me that it’s correlated with income.
We can throw images back and forth (“Now she has money left after buying food and she’ll put into a savings account!” vs. “Now she’ll just buy a bigger TV and fancier clothes ending with the same credit card debt!”), but I suspect that economics papers with relevant data exist. I also suspect that the results will show high variance and dependence on the prevailing culture (e.g. compare average savings rates in the US and China).
And ability. The higher your income, the more of it is somewhat discretionary and the easier it is to save more.
I agree that there is almost certainly real research on this, but evidently neither of us has read it yet :-).
If you can formulate that claim sufficiently precisely to be falsifiable, it shouldn’t be hard to test it.
Someone downvoted your reply, Nornagest, which I really can’t understand: I upvoted it myself.
The parent is now at −2; one more down and it will disappear from view, and we will get a heavy tax for continuing.
What is happening here? Are we just not allowed to have discussions on this forum about the possible economic gains and costs of minimum wage or minimum income policy?
Someone’s probably downvoting everything in the thread, most likely on grounds of being too political for the forum. My other comments here have taken the same hit.
Obviously I don’t agree with that policy as it’s applied locally, but I can’t really blame them either. This exchange has been relatively sane, but the discussion under other comments has had points of low quality, and I’m not totally convinced that we’re better off with the thread as a whole.
My knee-jerk assumption is that Job 1 would actually not be accepted by almost any employees. This is based on the guess that without the threat of having no money, people generally would not agree to give up their time for low wages, since the worst case of being unemployed and receiving no supplemental income does not involve harsh deterrents like starving or being homeless.
Getting someone to do any job at all under that system will probably require either a pretty significant expected quality of life increase per hour worked (which is to say, way better than $3 per hour) or some intrinsic motivation to do the job other than money (e.g. they enjoy it, think it’s morally good to do, etc.)
It’s more likely that a well-implemented basic income would simply eliminate a lot of the (legal) labor supply for low-wage jobs. I both see this as a feature and see no need for a minimum wage under this system.
It’s an interesting point, though you seem to be assuming that the minimum income would be offered completely unconditionally, with no requirement to seek employment, and no penalty for refusing it. Real world benefit systems tend to come with strings, as this is far more popular than giving permanent handouts to people who could work but just don’t want to.
Some real-world benefit systems have strings. The entire premise of a basic income is that it’s unconditional. Otherwise you call it “unemployment,” and it is an existing (albeit far from ideally implemented) benefit in at least the US. It might be reasonable to discuss the feasibility of convincing e.g. the US to actually enact a basic income, but as long as we’re discussing a hypothetical policy anyway, it’s not really worthwhile to assume that the policy is missing its key feature.
OK, there seems to be a terminology difference between basic income which is unconditional and guaranteed minimum income which usually comes with conditions, such as willingness to work.
Somewhere up the thread we were discussing “guaranteed” income and also “basic minimum income” so I wasn’t clear which was meant.
Honestly, I just can’t see an unconditional minimum income being feasible at all in the English-speaking world: critics will brand it as a “layabouts charter” and no party with a serious desire to be elected will support it. Whereas a minimum income which a) is granted conditional on willingness to work and b) is still paid to those in work (so avoiding a high effective tax rate) looks much more feasible.
Well, a Franco-Italo-German-speaking world will, evidently, hold a referendum on it soon
Ah, I guess that clears up our confusion. I wasn’t aware of that distinction either and have heard the terms used interchangeably before. I will try to use them more carefully in the future.
At any rate, I definitely agree that an actual basic income would be a hard sell in the current political climate of the US. (I’m less inclined to comment on the political climate of the English-speaking world in general, due to lack of significant enough exposure to significant enough non-US parts of it that I wouldn’t just be making stuff up).
I’d also argue that a guaranteed minimum income in the manner you describe is a far less interesting (and in my opinion desirable) policy, as it just simply doesn’t have the game-changing properties that a basic income would. As far as I’m concerned, the primary purpose of implementing a basic income would be to eliminate the economic imperative that everyone work.
If successful, this would hopefully do a number of useful things, like making the employer/employee relationships of those who still worked more of a balanced negotiation, depoliticizing automation efforts, and generally eliminating the level of human suffering produced by being between jobs, taking time to improve one’s mental health by relaxing, doing volunteer work, doing work no one will pay for, etc., in one fell swoop.
While I obviously can’t claim to know that it would work perfectly or at all, I would contend that these are desirable outcomes and that there is at least a reasonably high likelihood that a successful implementation of a basic income would produce them, and therefore that attempting to implement such a policy is worthwhile. I’d argue that the current model where a job occupies a large chunk of a given human’s time, is required (for the most part, with obvious caveats for the independently wealthy, etc.) to live, and where a given job can only exist if the market will pay for it, is broken, and will only get more broken as more automation exists, the population grows, and several other current trends continue.
Do you think there is also a list of not-useful things to go with your list of goodies? You seem to be forgetting the TANSTAAFL principle.
Well of course. It would definitely facilitate a lot of people being, by many measures society cares about, completely useless. I definitely don’t contend for example that no one would decide to go to california and surf, or play WoW full-time, or watch TV all day, or whatever. You’d probably see a non-negligible number of people just “retire.” I’m willing to bet that this wouldn’t be a serious problem, though, and see it as a definite improvement over the large number of people who are, similarly, not doing anything fun with their lives, but having to work 8 hours a day at some dead-end job or having crippling poverty to deal with.
Right. But then there are consequences to many people being “useless”, or, in econospeak, dropping out of the labor pool.
For example, the GDP of the country will go down. The labor costs will go up which means the prices will go up which means the basic income will lose some of its purchasing power. The government’s tax revenues will go down as well and that might create a problem with paying for that basic income for everyone.
And that’s just major, obvious, first-order consequences.
I agree that that is a possible consequence, but it’s far from guaranteed that that will happen. Although in sheer numbers many people may quit working, the actual percent of people who do could be rather low. After all, merely subsisting isn’t necessarily attractive to people who already have decent jobs and can do better than one could on the basic income. It does however give them more negotiating power in terms of their payscale, given that quitting one’s job will no longer be effectively a non-option for the vast majority.
This may mean that a lot of low-payscale jobs will be renegotiated, and employers who previously employed many low-paid workers would have to optimize for employing fewer higher-paid workers (possibly doing the same jobs, depending on how necessary they are, or by finding ways to automate). I don’t claim any expertise in this, but I’d find it hard to believe that there isn’t at least some degree to which it’s merely easier to hire more people to accomplish many tasks people are currently hired for, rather than impossible to accomplish them some other way. This also is an innovation-space in which skilled jobs could pop up.
As for high-payscale jobs, I could see good arguments for any number of outcomes being likely to occur. Perhaps employers would be able to successfully argue that they should pay them less due to supplementing a basic income. Perhaps employees would balk at this and, newly empowered to walk more easily, demand that they keep the same pay, or even higher pay. The equilibrium would likely shift in some way as far as where the exact strata of pay are for different professions, and I can’t claim to know how that would turn out, but it seems unlikely people would prefer to not work than to do work that gives them a higher standard of living than the basic income to some significant degree.
Similarly, people who own profitable businesses certainly wouldn’t up and quit, and thus most likely any service that the market still supports would still exist as well, including obvious basic essentials that presumably would exist in any economic system, such as businesses selling food or whatever is considered essential technology in a given era. Some businesses might fail if they’re unable to adapt to the new shape of the labor market, and profitability of larger businesses may go down for similar reasons, but the entry barrier for small businesses would also decrease, since any given person could feasibly devote all of their time and effort into running a business without failure carrying the risk of inability to continue living.
There would probably be a class of people who subsist on basic income, but we already have a fairly large homeless population, as well as a population of people doing jobs that could probably go away and not ruin the economy for anyone but that individual.
My point isn’t that everything will turn out perfectly as expected, or that I have any definitive way of knowing, obviously, but there do exist outcomes that are good enough and probable enough to pass a basic sanity-check. The risk of economic collapse exists with or without instituting such a policy, and I’m not yet convinced that this increases the likelihood of it by a considerable margin.
Instead of complaining, could this system be hacked to help the poor people? If you created a company for hiring currently unemployed unskilled people and providing them as good working conditions as possible, could you get the same subsidies Walmart does? Then those people would prefer working for you.
I imagine something similar to Mondragón Corporación Cooperativa, but focused on low-income people.
No need to hack anything, anyone who wants to can step in and create such a company.
I predict rapid learning about reasons why these people are unskilled and unemployed :-/
Not sure if it’s my idea that is wrong, or just my way of presenting it. So here is a longer version:
We observe that some people are employed by a company that effectively pays them less than most people consider an acceptable wage. Some say it’s less than living wage, but that’s probably an exaggeration. Let’s just say that the wage is considered so low that this fact offends many people, and for the purpose of this comment let’s just call it “unacceptable” without providing an exact definition of what precisely that means. (The basic intuition is that we object against a specific amount of money being paid to a person living in a specific location, regardless of which specific company would pay the money, if the work is equivalent.)
Some people conclude that the company is “evil”. Which I would translate as a moral obligation to stop doing such things, and either pay the employees an acceptable wage, or fire them. Other people conclude that the company is doing morally okay, because some people simply don’t create enough value that would translate to an acceptable wage without a state subsidy. There doesn’t seem to be an easy way to make both of these people agree on one specific answer; not merely about whether Walmart should but even about whether it could pay those people acceptable wages.
Instead of just expressing my allegiance to one of these tribes, I propose solving the problem experimentally.
If it is possible to employ the same people and give them higher wages than Walmart does, then do it. Actually, Walmart succeeds to do it while creating profit and big salaries for its management—so if you would run the company without the explicit goal of creating a profit and big salaries for the management, you could use that extra money to improve the situation of your employees compared with the employees of Walmart. If you succeed to execute this project well, it could lead to Walmart going out of market, which (if you consider Walmart evil) would be a good thing to do. (I am not trying to solve all the society’s problems here, neither from socialist nor libertarian viewpoint, just to improve one specific situation.)
On the other hand, if it is not possible to employ those people without using the same methods Walmart does (if your project predictably fails), then your only possible conclusions about Walmart’s behaviour is either that it is okay, or that Walmart should fire those employees; because they don’t have other choices.
I would prefer to see this resolved experimentally, instead of writing clever arguments on the internet. I can imagine both results, for example depending on which subset of the current Walmart’s employees one would employ. I consider one of the results more likely, but I would prefer to have experimental data instead of a smart and mostly uninformed opinion.
Confusingly, “living wage” in US parlance doesn’t mean “the minimum you can live on”, but rather the minimum needed to meet some set of quality-of-life criteria for the region after factoring in dependents. Exact definitions differ, but it usually hashes out to quite a bit higher than subsistence wages: when California was debating one a while back, I believe the number being tossed around was $13/hour in late-1990s dollars.
I don’t know exactly what Walmart pays its employees but it probably doesn’t qualify.
That’s a rather interesting criterion.
By the way of comparison, let me point out that not baptizing your children also offends many people (because from their point of view you have just pushed your child into the pits of hell). Or, for another example, polyamory offends many people, too. So?
Um, and who’s going to do it? And how would that work—you’ll set up a company which functions much like Wal-Mart? That will be pretty expensive and I am not sure you can do this—arguably Wal-Mart competitors have tried and failed.
If you want to just employ these people doing whatever, well, there is the whole market economy out there which offers choices of employment. If someone is willing to pay these people more (in money and benefits) they would switch jobs, wouldn’t they? Yes, of course there are frictions but at Wal-Mart scale the effect should be pretty obvious.
Your idea sounds great in its short and long forms, and I think Lumifer’s agreeing with you and telling you his prediction about how it will go, so you can falsify it.
I’m not sure if I understand what you’re suggesting. As I understand it, the argument isn’t that Walmart is literally getting subsidies. It’s just that Walmart employees are getting welfare, so Walmart doesn’t have to pay to support them, reducing Walmart’s costs hypothetically compared to an equivalent company which paid their workers a better wage.
So if you created a company which provided as good of working conditions as possible, your employees wouldn’t need welfare, so you wouldn’t be benefiting from the “subsidies”. Also, your costs would go up, so you’d be more likely to go out of business than Walmart.
I am suggesting to give people exactly the same money that Walmart is giving them (so the company benefits from the subsidies). But treat them well, and actually make them spend an hour or more each working day getting better education (during working hours), or something similar that will improve their lives in long term.
Such an option would be a strict improvement against Walmart. Those who have better options available are simply not our target group. We are trying to improve the lives of those who currently work cheaply for Walmart.
Where would this money come from?
No it wouldn’t. Unless you can manage a supply chain with the skill Walmart does, it would fail to provide the key service Walmart does; being a low-cost, wide variety retailer.
Even if you could do everything else Walmart did (unlikely), your labour costs would be >10% higher, and your prices accordingly higher. As such, your sales would be lower, and your customers less well off.
It might be a kaldor-hicks improvement. But it would not be a strict improvement.
I have noticed a contrarian position on the whole minimum wage thing. One that advocates buying from sweatshops, because they say “at least those people working in the sweatshops aren’t homeless”.
Possible solution to the whole minimum wage thing: model the thing as a math problem where you minimize the cost to taxpayers? Like, if (current minimum wage current number of jobs) - (hypothetical minimum wage resulting number of jobs) < 0, then the taxpayers would want to switch to the hypothetical minimum wage.
And to keep experimentation in that from being too harmful to people who have jobs, a possible solution: a limited number of sweatshops, where there is no minimum wage. The limited number is important, so that it doesn’t become a viable option for companies like Walmart to start their own sweatshops and flood the market with jobs, contaminating the experimental results.
Actually a sort of “sweatshop fallback net” might be a good idea.
You can of course do that, or any number of other things where you pick a metric and optimize it. The question is: how well does that metric capture what we actually want? For me, at least, optimizing (min wage * #jobs) doesn’t seem like it matches my values terribly well, though it’s probably better than maximizing either factor on its own.
That’s an interesting idea (though it feels rather horrible), but I’m not sure how it’s supposed to work.
If they are meant to be the only safety net for people who can’t find work at minimum wage or above: why would we expect it to be sufficient? Some people may be unable to cope with working conditions in the sweatshops; some people may simply not be able to do the work; and if the amount of sweatshop work is limited as you propose, there’s no reason why there should be enough for all the people unable to find minimum-wage-or-better work.
If there is meant to be some further safety net: why then would anyone work in the sweatshops? The usual answer would be something like “because people like to work; it gives them more sense of dignity and purpose”, and indeed people do mostly like to work rather than depend on government benefits. But now we’re talking about working conditions and pay that are almost illegally bad, so much so that the government doesn’t allow more than a very limited number of people to be stuck with them; I would expect a lot of people to prefer depending on government handouts to that, and I don’t think I’d blame them.
So maybe they’d be some kind of coercion? You don’t get your government benefits if you refuse a sweatshop job, or something. But now (1) this is not reasonable for people who, e.g., are physically incapable of doing that work, and (2) since sweatshop places are scarce, it means that some benefit claimants will (arbitrarily?) be required to work in the sweatshops and some won’t, which will surely cause resentment. I suppose you could require everyone in receipt of benefits to work in the sweatshops some fraction of the time?
Bizarrely enough there are many people who have jobs, yet cannot afford housing. Something about rising real estate prices.
Chris, I agree with your observation that people don’t think very consequentialist here. However, there is also something to be said for a solid application of common sense.
Yes, the obvious economic argument is that Walmart is under no obligation to hire employees, and any employee is free to leave whenever, so they should be allowed to treat them any way they want. The underlying assumptions here are that the (job) market is efficient so that no single company can influence it, people can get new jobs instantly, people can rationally decide whether to switch jobs on the fly, etc. etc. Of course these assumptions are not correct. For example, if a company becomes successful by beating all competition, say by driving costs lower than anyone else can, and then one day the company fires all employees and packs up and leaves there is going to be a very real hit to the economy. There certainly is not going to be an identical company performing the same service there the next day. In the case of Walmart, they are one of the largest companies in the world. It would be extremely unrealistic to assume that if they don’t pay their employees enough, everyone could just go and leave and it would be the same as if Walmart had never existed. The larger a company you are, the better a bargaining position you have, and the more capable you are of driving down wages to make a higher profit.
The point I’m trying to get across here is this: The reason many people object to Walmart’s policies is because their moral intuitions tell them that there is something wrong when a company doesn’t pay its employees enough for them to feed themselves. Yes, a lot of it boils down to “Companies Boo, people Jay!”. No, it isn’t very consequentialist. But you should probably not ignore that moral intuition, because a good helping of common sense is usually better than an overly simplistic economic argument based on unrealistic assumptions. At least in my experience.
If possible, I would like to hear the reason for the downvoting of the above post. Specifically, whether the reason is:
1) It discusses politics (in response to an article about politics?)
2) The reasoning is fallacious
3) It was written by me
4) People don’t like silly examples
5) It sounds vaguely leftish
6) The point I made is so obvious that it’s redundant
7) people prefer to have their politics debates one-sided
8) It’s too long, says very little and doesn’t have a summary preceding it. 9) Almost all of your writing is either political or meta, which suggests you don’t belong here and will only add noise. 10) You’ve clearly failed to learn from previous criticism.
Given that immediately after you posted this, about 10 of my older and unrelated posts got downvoted in a row (and counting), I’m going to guess that you are one of the people block-downvoting me. Classy.
I wish I could say that it doesn’t depress me that people would be willing to go through all that effort just to make me feel bad, but it kind of does.
Perhaps someone just went through some of your comments and didn’t like them either. You feeling bad is probably not the sole intention of those downvotes. People will be more than happy to upvote some of your comments if they start being relevant to rationality.
I looked through some of your comments, and they’re not equally downvoted. Some of them are upvoted. I expect there’s some signal there if you’re willing to look for it. Might not be a signal you like or care about, though.
The single most important reason for my downvote was the invocation of “common sense”, which I tend to read as “don’t bother doing any analysis, just fall back on your learned heuristics”; I’m fairly sure this is a correct reading in context. Now, that’s good advice in time-constrained or highly complex situations, but this is neither. To make matters worse, it’s a politically polarized topic, which implies that the salient heuristics are very likely going to be split along ideological lines: half the people you’re talking to are using their common sense, which just happens to say something different from yours. That in turn implies either that you aren’t aware of this dynamic or that you’re using rallying tactics, and I don’t want to see either one on this site.
I also feel it’s too long for its content. Additionally, it’s in a political thread, arguing for a politicized stance, and both lower my threshold for downvoting.
I’ve no idea who you are and I’ve just downvoted you because your post is a tedious wall-of-text.
LWers are mostly socialists. If you’re getting downvoted here while saying “leftish” things, what you’re saying probably has some actual problems.
Ok, while I also support a guaranteed basic income, I feel the need to side with the Wal-Mart haters here. Our case is more sophisticated than you’ve presented here.
Our case is not, “Wal-Mart pays wages that are too low to live on, therefore they’re leeching from the public dole, therefore they’re capital-E Evil.”
Our case is a basic case against neoliberalism itself, the principle that the outcomes of unregulated markets are just deserts. We are, as in many other cases, pointing out the fundamental lie of neoliberalism: that unregulated markets aren’t. Wal-Mart pays wages that are too low to live on, therefore, whatever increased productivity (which isn’t very much, frankly) we can say they’re adding to the total economy, however much they’re reducing the theoretical additional dole burden, they are not an independent firm earning profits on a “free” market without government disturbance. They are, at a fundamental level, receiving a public subsidy.
Now, in our view, there are plenty of good reasons for the State to give a firm public subsidy. However, since we of the Left are, by definition, pro-labor and anti-capital, we cannot and do not hold that “in order to increase profits by decreasing wages” is such a reason. It can’t be, after all; think of what it means for a Low Wage Subsidy to exist: both Wal-Mart’s workers and the taxpaying public are thus making pro-bono donations to the owners of Wal-Mart at a net-negative benefit to their/our selves.
Why is this a net negative for the public? Don’t we receive lower prices at Wal-Mart via this subsidy? Well yes, but even if we assumed that everyone shops at Wal-Mart in order to realize that gain, it’s financially impossible that the drop in prices thanks to the subsidy is equivalent to the value of the subsidy. If it was, Wal-Mart wouldn’t be realizing any additional profits by taking the subsidy, and the company would thus refuse it!
The only way the “Food Stamps subsidy” of Wal-Mart makes sense for the fiduciary interest of Wal-Mart itself is if the subsidy acts as a transfer of wealth from the public and the workers to Wal-Mart. This isn’t just the kind of behavior that had Karl Marx calling for revolution, it’s the kind that made Adam Smith cry out against state favors for business and in favor of genuinely free markets.
Thus, in conclusion, if Wal-Mart is not an independent firm but a publicly-subsidized one, how can we possibly say that the public does not have a moral, financial, and political stake in their business practices? Does the public not have the right to regulate the spending of its own money? Certainly, we ought to be able to pass a policy saying that any business accepting State funds - possibly even at more than one level of remove—has an obligation to use labor and environmental practices the public finds morally acceptable.
(By the way, “free market” is a term that really cannot make any consistent sense if we use it to mean that capital owners are free and labor sellers are forced by threat of starvation and also jail to work or die. At the very least, a “free market society” has an obligation to legalize vagrancy and, in general, remove all State-imposed penalties for the crime of being poor!)
I think the reasoning here would benefit from being made more explicit. (I think it’s basically correct, but at a glance it doesn’t look that way.) The argument goes like this.
Wal-Mart pays most of its employees so little that without government help they would starve, or at least have really intolerably bad lives. [Note: I do not know whether this is factually correct, but the argument here is about what follows if it is true.]
If the government didn’t provide welfare to people in this situation, Wal-Mart would not be able to pay such low wages because few workers would be willing or able to work for so little. (They would starve, or start a revolution, or something.)
So if we compare a hypothetical world without government welfare for Wal-Mart employees to the actual world, the difference is that in the actual world the employees have somewhat more money and so does Wal-Mart. Although all the government aid nominally goes to the employees, some of its actual effect is in enabling Wal-Mart to pay less and still find workers.
Therefore, Wal-Mart is effectively receiving a public subsidy.
That is indeed how the argument goes. Thank you for clarifying. I just want to add a single further clarification to (1): if the workers were paid so little they became homeless, we can presume they would be arrested for vagrancy at some point, and thus be unable to consistently come to work.
This is important to note, because our current-day ultra-inegalitarian cities like New York and London actually often have a large class of working homeless who really do face this problem.
Well, there is precedent for using incarcerated inmates as a captive work force, although admittedly that’s more common for jobs that don’t involve meeting the public.
Since we’re in an ethical discussion, slave labor shouldn’t even be raised as an issue. Of fucking course slave labor is evil.
Many people’s ethical intuitions about using incarcerated inmates as a captive work force vary depending on the language used and the specific rules governing it.
Many Americans, for example, would agree that slave labor is evil but support UNICOR.
So I’m not quite as convinced as you seem to be that this sort of thing isn’t worth specifically addressing.
To me, it’s worth addressing in the sense that, if necessary, it is worth being able to argue that prison labor is slave labor and slave labor is evil. I don’t see any reason to believe there’s even the tiniest speck of good in it.
I would say it’s also worth addressing in the sense that presuming that people arrested for vagrancy are unable to come to work may lead to false conclusions.
But, sure, if you believe that because this is an ethical discussion it goes without saying that organizations like UNICOR are presumed not to exist, since they don’t have even the tiniest speck of good, then I understand why you make that presumption without further qualification.
Putting people in prison and financially benefitting from them is an inherent conflict of interest and this certainly applies to UNCOR, especially if you get to ignore minimum wage laws.
This makes the unexamined assumption that all jobs in a free market must deliver a living wage. This is not true. A completely laissez-faire society would still have plenty of jobs not paying enough to support a single adult, because not everyone needs that sort of job: Teenagers getting some spending money during the summer, students supplementing a college grant, adults getting a second income in a household that can already support itself.
Yes, true. And in a completely laissez-faire society, the majority of current low-wage workers who do not fall into those categories would simply drop dead.
Hence why I’d think that over time, wages would rise to the level of subsistence. Even Wal-Mart doesn’t like having to clear dead bodies out of the store or having to continually train new workers because their most devoted ones, the ones who choose to stay, keep dying.
In such a laissez faire society, why would you “blame” the entity that employs them at some wage, instead of blaming the millions of entities that won’t or don’t employ them at any wage? You don’t work at Walmart for minimum wage if someone else will pay you $10. How is Walmart the bad guy for being the private entity that is willing to give you a better deal than any other entity in society (including government which is also an employer)? How is it not the “fault” of the non-employers of the minimum wage earners that they make so little?
Because the employers benefit.
I don’t claim that’s necessarily a reasonable reaction, but you certainly ought not be as surprised by it as you are signalling here. If I’m suffering, Sam is ignoring my suffering, and Pat is benefiting from my suffering, it’s a pretty common reaction to judge Pat worse than Sam.
OMG, you essentially agree with me but don’t like your reading of what you think I am signaling about the unreasonable reactions?
What are your priorities here?
Is being surprised at this sort of deep meta- wierdness also not to your taste? If so feel free to interpret my feelings as appalled, disappointed, or frustrated if that seems to you more appropriate.
Because the Third Option is being left out: independent living off the commons. This is what disappeared with the Enclosure Movement and thus signalled the rise of capitalism. Wal-Mart is the entity withdrawing this worker from subsistence on the commons, and also partially responsible for the elimination of the commons, therefore they are responsible for “beating” the Commons Offer.
I have to concur with Ms Lebovitz here; what do you mean living off the commons?
Talking about enclosure strongly implies farming/herding on public land, but that seems like an unlikely argument for you to make. What common goods have been privatized by Walmart in this situation, and how were people living off of them before?
Edit: Oops, replied to wrong comment. Was meant for the parent.
Ok, let’s see. Firstly, the enclosures were a completely English, not even Anglo-American, phenomenon; nobody else even had any commons. Secondly, the commons were just about sufficient to support something like 10% of a population of around 10 million. Thirdly, wow, I would much rather have a Walmart wage than try to scrape together meals from the land that nobody cares about enough to claim for themselves. To suggest that this is a viable alternative all over the world and in industrial times is silly.
What do you mean by living off the commons?
That doesn’t resemble any reality I’m familiar with.
It is exactly the pre-capitalist norm. You cannot discuss the iniquities of capitalism without reference to what happened before and outside capitalism.
Is Wal-Mart drawing its workers from pre-capitalist societies?
My impression is that in medieval and ancient Europe, the bulk of the population were serfs or slaves with very limited legal rights—the opposite of independence. They also had well defined land holdings—they did not “live independently off the commons”.
I have the impression that there are hunter-gathering or herding societies where the population “lived independently off the commons”—but are there examples of societies with farming and cities where this was a routine or comfortable way of life?
To find a society “before and outside” capitalism in the relevant sense, requires going very far back in the history of our civilization. Are there examples from other parts of the world that you have in mind?
Well, “outside” of capitalism was pretty thoroughly explored in the 20th century and while they produced some really splendid music the 200 million dead by the hands of their own governments was admittedly a bit of a bummer. But maybe “before” has a better answer?
Well, capitalism’s immediate predecessor, mercantilism, was a pretty sweet setup all told (although I doubt it would seem particularly appetizing to you). Divine right of Kings and the virtues of a natural aristocracy is admittedly a tough sell, but the results were pretty phenomenal; each of the great golden ages of the European empires, one after another, for centuries. But still, going a bit further back couldn’t hurt.
Well now we’re in pre-Renaissance times, pretty good for our third bullet point, but the results aren’t so encouraging. Manorialism was a pretty inefficient system even in it’s own time; it’s probably for the best that the serfs were emancipated and all those usury laws got repealed, that would really put a damper on a post-industrial society. Still you can’t argue that all those Castles and Gothic Cathedrals weren’t a blast, and you could still find some un-enclosed Commons to farm if you wanted them. Put that one in the “maybe” column then.
Before that we’re into the Classical era and they didn’t even have a proper economic system, not to mention the way slavery choked off incentives for developing labor-saving technology. And the way masters choked off the slaves, er, literally… maybe best to just slide past that one too.
Maybe go all the way back to the Bronze Age; they must have had to have had something really interesting if they were cool enough to convince aliens to help build all those monuments. Well there was a lot of collective farming, that sounds right up your alley, although the whole Pharaoh thing seems like a bit of a drag. At least you get lots of nice pyramids and ziggurats, that’s pretty bad-ass.
Well what about if we go Full Environmentalist; leave the neolithic behind and embrace the hunter gatherer! There’s certainly something to be said about it nutritionally, that’s to be sure, and there does seem to be a bit of truth to the idea that it builds a man’s heroic character. Still, that doesn’t seem likely to scale well for 10 billion people and there’s that whole “no internet or penicillin” thing to consider too. I’m still a bit attached to looking at cat pictures and not dying of diarrhea, makes it hard to get into the back-to-the-earth spirit.
So I guess you were right; a little look at history really does put “the iniquities of capitalism” into perspective. Thanks!
So every possible system other than capitalism leads to genocide? Surely you can’t actually believe that.
Out of all alternatives to capitalism that have actually been tried in practice during the last several centuries, is there one which you like and which you think is clearly superior to capitalism?
Yes: social democracy.
Social democracy does not involve capitalism? Sweden (or whatever your favorite example is) is not a capitalist country?
Very astute of you to notice that.
No, I’d go so far as to say that out of the six non-capitalist systems I mentioned only four were unarguably guilty of democide (the case against the mercantile powers relies on a stubborn refusal to understand how epidemiology works) and one of them is wholly innocent of murder on anything greater than the scale of a village.
The case for hunting and gathering just gets better and better.
Of course they aren’t. They follow OSHA and all the other regulations. They pay a corporate income of 35% of their profits and their employees pay federal and state income taxes on their pay.
If Walmart stops employing a given minimum wage employee, that employee costs government MORE in aid, not less. So even though for every min wage employer Walmart takes on, government spending goes DOWN, you still refer to that as Walmart being subsidized?
If I give a poor guy enough food for a week and he starves two weeks later, is that my fault? Somehow by giving him anything I took on full responsibility for his getting enough?
Ok. If we accept that these laws are justified, why not a law requiring all business to pay livable wages?
To me it is not whether such a law would be justified, but whom it would hurt and whom it would hurt.
Anything that makes hiring the bottom end of the labor pool more expensive will decrease the amount of that pool that is hired. There are some who claim studies that show this is not true. I claim these studies are dopey. If it were not true that raising minimum wage causes fewer from the bottom to tbe hired, why not raise it to $20/hr? $50/hr? Can anybody who even bothers to fully oxygenate their blood fail to see that if you raised the minimum wage to $50/hour there would be massive unemployment? Well tickling the wage down around only $7, $8, or $9/hr is the same thing, only writ small enough so that what is blisteringly obvious with bigger numbers can be missed by people who want to pretend it isn’t there.
If the minimum wage is raised, it will LOOK successful in the sense that the people who still have jobs, who still get jobs, will be paid more. Guess who will lose jobs? The hardest to hire. The least capable.
So if you feel more comfortable pretending that everybody can work and make a certain amount of money, AND it is easier for you to ignore the people that can’t get jobs than to pretend that $7/hour is enough, then keep going down this road. Put the hardest to hire out of the labor force entirely, pay for them on welfare, and pretend they don’t exist while congratulating those that still do have jobs on what a good job you did for them.
I don’t think that’s a correct definition.
Even limiting ourselves to attitudes to “labour” and “capital”, I suggest that to be on the Left it suffices to care more about the former and the latter. Personally, I try to be (approximately) pro-everyone, but I think the world would be improved by giving more weight to the interests of ordinary people relative to those of the rich and powerful (and of the businesses they own); that is one of the things that (as I understand it) puts me on the Left rather than the Right. No need to be anti-capital for that.
(Note: It is no part of my purpose here to advocate for the positions described in the previous paragraph. I’m just saying that I think they are left-wing rather than right-wing positions, and that they don’t require me to be anti-capital.)
I disagree, but my disagreement requires explanation.
I do not mean we on the Left are/should be anti-capital in the sense of “We hate rich people” or “We hate money”. The issue is not the particular people who hold capital, but the processes of capitalism itself. To use local terminology: we can taboo the word “capitalism” and instead say, “optimization process implemented as a social system of human societies, which maximizes the accumulation of capital”.
We can even go further than just “capital” and say “liquid wealth” or “potential human-usable optimization power”, by analogy to potential energy. We then get: “optimization process, implemented as a social system, which maximizes the accumulation of potential human-usable optimization power.”
Once we have this definition, the observed behavior of capitalism comes into a much clearer light. Yes, capitalism generates massive amounts of wealth, because it you need to generate massive amounts of wealth in order to liquidate it into potential world-shaping power. Capitalism can be industrial, when money (the definitionally most-liquid form of capital) is backed by a fixed commodity (forcing the system to physically produce large sums of that quantity and trade them around in order to accumulate capital) or financial, when money is virtual (allowing the system to “eat its own tail” by accumulating vast sums of financial wealth without engaging in real production).
We can also see, in such a definition, why anti-capitalists are anti-capitalist and why I think LessWrong-style rationalists should be anti-capitalist (in the limit): it’s a human-unfriendly optimization process operating here and now! What purpose in worrying about futuristic cyber-monsters if the social monster is already biting our heads off?
In which case I suggest that “anti-capital” is a misleading term, especially when accompanied by “pro-labor”. There is a meaningful opposition between labour and capital (meaning, roughly, the people who work and the people and institutions that tell them what to do) but not between labour and capitalism; one is a class of people and the other is a process or ideology.
(For the avoidance of doubt, by “opposition” there I don’t mean that the two have to be enemies or that their interests are always opposed; I mean that they are two things of somewhat the same kind, which might sometimes come into conflict, and for which one can meaningfully ask “which do you favour?”.)
Yes, it is—but, just as with the prospect of AI, I suggest that the question to ask might not be “how can we defeat this powerful hostile thing?” but “how can we stop this powerful thing being hostile and make it act for our benefit?”. The answer might turn out to be that we can’t—that no broadly capitalist system can really produce a society that works well for anyone other than the favoured few. But I wouldn’t bet on it. Not least because the actually-existing societies that seem to do best at providing a decent life for most of their people are broadly capitalist, with various mechanisms attached that try to fix raw capitalism’s tendency to screw over all but the wealthiest.
It’s worse than this. Capitalism only even works for the particular capitalists on a temporary basis. As the system works, the class of people owning any capital at all is narrowed, which Marx called “proletarianization” (to wit: owners of small shops are pushed out by, say, Wal-Mart, and thus forced to become wage-laborers instead). To the extent that capitalism is doing something decent for humans, this is fine; to the extent capitalism is just a big societal paper-clipper, we vitally need to stop it.
I disagree slightly: AI is far more beneficial than capitalism ;-). AI is a blank optimization process, so to speak, an AIXI implementation doesn’t come with an unfriendly utility function built-in, you have to add one and then unleash it yourself. With AI there at least exists the possibility of specifying Friendliness and getting it right; the “evil by default” behavior isn’t some cosmic force that hates us, it’s just that we only like a tiny subset of possible universes.
I think we need to speak seriously about the varieties of social optimization processes.
I agree that social democracy has produced the best observed results for human beings, and in fact contains explicit mechanisms (ie: democratic participation in allocation of the means of production) for ensuring human-friendliness. I also wish to note that markets should be considered a mere component of capitalism, and that pro-capitalist ideologues who focus primarily on markets are, essentially, rather like mechanics who focus on getting the greatest horsepower rather than on what the engine is for. So we can assume that the category of human-friendly economic systems contains at least social democracy, and also probably cooperative-based market systems, syndicalism, possibly democratic state-socialism, commons trust-based systems, and many others.
However, there are many variables that go into a market system. What we currently have is neoliberal financialized capitalism: liberalism level = state compels labor but subsidizes capital accumulation, definition of money to be accumulated = virtual credit-money rather than industrial production, allocation of the means of production = private profit-maximizing companies, donation-funded NGOs, state agencies, and almost nothing else.
Slavoj Zizek said in 2011, “It is easier to imagine the end of the world than the end of capitalism”. David Graeber has characterized neoliberalism as an ideology which, when given the choice between making capitalism seem the only possible economic system and making capitalism a long-term viable economic system, will always choose the former. It is not enough to simply rail on behalf of “free markets” or “workers’ revolutions”, we need to be rationally unpacking the variables that make social optimization processes function one way or another, and determining what values for those parameters result in something we actually like.
It is not enough to scream, “Another world is possible!” Dozens of other worlds are possible, which is why it’s imperative to stop pretending that this is the only or ideal world despite the fact that so many don’t like living here.
I think what you go on to describe is part of what I meant by “[doesn’t] work[] well for anyone other than the favoured few”. Indeed, the identity of the favoured few changes over time—though typically the really favoured are quite safe for a good while.
AI, at the moment, isn’t anything. (Or, rather, it’s a term that’s sometimes applied to a wide variety of things, mostly beneficial but nothing to do with what we both mean by AI in this context.) If and when “real” AI arrives, it has the potential to do either a lot more good than capitalism or a lot more harm or both.
No. “AI” as such doesn’t say what’s being optimized, but any actual instance of AI will be optimizing for some specific thing(s) (or acting in some specific ways, or whatever; it might be an optimization process only somewhat metaphorically). A genuinely blank optimization process wouldn’t actually do anything.
I agree that more details of the merit function are built into the term “capitalism” than into the term “AI”. But I bet that a randomly chosen merit function is a lot worse than capitalism’s. Capitalism isn’t a cosmic force that hates you any more than AI is. You’re just (if I may repurpose an aphorism of Eliezer’s) in possession of dollars it can use for something else.
If you’re reasonably content with social democracy then I don’t see how you can both hold that capitalism is intrinsically disastrous and hostile and agree with Žižek that it’s easier to imagine the end of the world than of capitalism. The end of capitalism might look like turning everywhere into Sweden. That might be difficult to achieve, but it’s not harder to imagine than the end of the world.
We seem to have drifted rather a long way from the original point at issue, namely whether being politically on the left requires one to be “anti-capital”. I haven’t seen anything so far to change my opinion that it doesn’t. Opposed to some important features fo neoliberal financialized capitalism, by all means. Opposed to capital (especially in the sense in which that’s naturally contrasted with “labour”), not so much.
Walmart’s low wage workers would disappear, drop dead, if not for the government subsidy? Billions of people survive on $2/day or less WITHOUT medicaid or other government subsidies. At more than $50/day in the US, survival is NOT the issue with minimum wage and government subsidies.
Billions of people survive on $2/day in places where the cost of living is adjusted to incomes that low. They survive, by and large, in such conditions that they are often willing to do nearly anything (including things we would consider ourselves in the First World much too good for, like working for organized crime syndicates) to move up beyond that income bracket.
You need to account for the cost of living in the US, especially the cost of housing, since one can be arrested for not having any.
That’s actually a fun statement!
1) Many people getting this far in this thread will be surprised to learn the the First World does not have organized crime!
2) it is widely stated that the source of a disproportionate number of criminals in our society are unemployed “lower class” youth, where for these purposes if is sufficient to read “lower class” as meaning hard-to-employ.
THere are a bunch of homeless people in Sandy Eggo (where I live) that manage to evade police. Are you SURE being homeless is a crime?
The modern welfare regulatory state is based on centrally planned payouts and penalties. If you’re for that system in the first place, it’s nonsense to complain that a company hires an employee who is eligible for one of the payouts. Who isn’t eligible for some payout? The premise of the system is that society is improved by centrally planned tweaking of all of us.
And of course the moral logic of condemning employers is nonsense on other grounds as well, as you point out. I don’t give Walmart employees a nickel—what right do I have to complain Walmart doesn’t give them more?
But on purely consequentialist grounds, moral logic isn’t the point. Many purposes are served by making this argument, the most benign being an attempt to squeeze more money out of Walmart.
Illogical arguments may still be effective arguments, and effective for a great many things. Don’t ask whether it’s logical, ask what it achieves.
I’d respond instead with one of Thomas Sowell’s 3 questions: compared to what? What would former Walmart employees cost the taxpayers?
Uh oh. That’s an idea from libertarians like Milton Friedman and Charles Murray. Are you sure you’re a liberal?
Ha. Yes, the usual liberal premises make those who bake the pies into criminals victimizing those who want to eat them.
I’ve got some bad news for you. You’ve gone off the liberal reservation. I say this from the libertarian side—your economic analysis is libertarian, and your moral analysis is similar to Rand’s. Ayn Rand! Prepare to be tarred and feathered.
There are plenty of liberals who think other liberals need to pay more attention to market incentives. Or I suppose Bill Clinton was off the reservation, too? Matt Yglesias? Jimmy Carter? His analysis isn’t libertarian, it’s merely informed by basic knowledge about economics.
It’s also an idea supported by lots of people who call themselves socialists. It’s almost like arguments aren’t soldiers and winning a debate doesn’t force your opponent to agree with you about everything else.
Leave a line of retreat.
Since he was talking about Walmart, liberals, and Medicaid, I took the context as the US, where few call themselves socialists, and liberals usually protest loudly when they are.
Any prominent US liberals calling for a basic income guarantee, and in particular, as an alternative and not an add on to the regulatory welfare state?
What I’m telling you is that the BIG is a policy that has been loudly lauded, not merely by run-of-the-mill progressives, but by people so far left they happily call themselves socialists.
Read the list of people involved with The U.S. Basic Income Guarantee Network and tell me it is a libertarian stronghold.
Liberal pundits tend to have considerably more political power than libertarians and so don’t spend a lot of time calling for remaking the entire US social welfare system from the ground up. And they tend to think the ongoing existence of people living in poverty is a bigger priority than shrinking the government regulatory state. But they certainly show willingness to replace some government programs while implementing a BIG and discuss it positively as an alternative to other means of alleviating poverty for exactly the same reason libertarians like it.
http://www.slate.com/blogs/moneybox/2013/02/17/guaranteed_basic_income_the_real_alternative_to_the_minimum_wage.html
http://www.washingtonpost.com/blogs/wonkblog/wp/2012/08/08/obama-doesnt-want-to-just-write-welfare-recipients-checks-but-what-if-we-did/
http://www.theatlantic.com/business/archive/2013/10/how-to-cut-the-poverty-rate-in-half-its-easy/280971/
http://www.nytimes.com/2006/11/23/business/23scene.html
If you read the articles you cite, you’d see that they refer primarily to Charles Murray and Milton Friedman.
The only reference to a prominent US liberal I see is one to Martin Luther King Jr.
It would be great if more liberals got on the train, but from your comments, they’re not really on board.
Problem is, if they’re of the disposition to meddle in people’s lives, it seems unlikely that the poor will be left out of their tender ministrations. Keeping the current punitive welfare programs intact would keep all the perverse incentives, but at a higher benefit level, making for an even larger trapped and dependent class.
The articles I cite were written by progressive pundits. And the biggest organization dedicated to it is mostly made up of socialist academics.
The percentage of self-identified libertarians who support a basic income guarantee is certainly higher than the percentage of liberals who support a basic income guarantee. Hell, it’s probably higher than the percentage of liberals who have heard of a basic income guarantee. I don’t even know that that is indicative of some special trait about libertarians—not having any political power or influence makes it much easier to defend only the best ideas. But if you want to claim victory for your tribe, no one will stop you.
Libertarians 1, Progressives 0! Go Greens! Down with the Blues!
I already agree with you.
I’m a socialist and I support Basic Income Guarantee. Jack has social proof now.
How nice for him.
It’s not proof of anything I was asking for, unless you’re some particularly prominent US liberal behind your username.
Please do not treat other people this way on Less Wrong. It’s ugly and rude.
(I am not disagreeing with the statements of fact you are making regarding basic income, at least not very much — the basic-income idea originated with Renaissance liberals and humanists, although it was adopted by Friedman and others. I am objecting to your conduct.)
As far as I know, the originator of the basic principle was Thomas Paine, though he also went for a lump sum payment on the age of majority as well. By US terminology today, he’d be a libertarian.
I don’t see anyone listed prior to Paine on the link given, and would be interested if you had a precursor to Paine.
Right-libertarians certainly claim Paine, but his Agrarian Justice proposal is strictly redistributionist — taxing inheritances and land ownership to fund pensions, a move specifically targeted at aiding the dispossessed at the expense of the wealthy. Moreover, he considered this obligatory, and not merely a charity or a political compromise. There is a whiff of Georgism or Geolibertarianism about Paine, and he is certainly no anarcho-capitalist. But he’s in that quadrant.
(Although by U.S. terminology today, anyone associated with the French Revolution would be a terrorist, sadly.)
That said, the notion of basic income is found in More’s Utopia as an alternative to killing thieves who steal because they are poor. In early examples it’s difficult to distinguish basic-income proposals from make-work proposals, though, in part because of the notion that idleness was a social ill. (Which is distinct from the right-libertarian notion that people do not deserve sustenance if they don’t work on projects the market demands.)
Minimally. The funds for widows and orphans would be. Old age pensions could either be seen as redistribution or forced retirement plans from funds owed. Paine considered payments obligatory because they were based in justice, compensation from the land possessors to the non land possessors for their exclusive use and control of “their” property. It’s land title that is redistributionist.
I don’t consider More’s basic income the same as Paine’s. Paine’s was a just compensation to a free citizen—More’s was the feeding and watering of citizen livestock subject to forced labor. Might as well say that a pack mule gets a basic income. They did at least agree on the inherent injustice of property in land, though I don’t think More made the connection between that injustice and a basic income as compensation.
To understand right libertarian thought, you first must see how they distinguish between what you deserve and what you have a right to (which I argue is crucial to a non theocratic state). No one deserves cancer, but that doesn’t give one a right to rob one’s neighbors to pay for treatment. For right libertarians, you earn what you get in free exchange with others, and they object to having those earnings confiscated by force.
All states are theocratic. The question is who the god is. For capitalist states, it’s capital accumulation (a term I use for its increased information content compared to the mere, “money”).
So theocrats like to claim. “Hey, everybody is doing it.”
Libertarians aren’t telling you to accumulate capital, they’re telling you to expect retaliation if you kill or rob your neighbors.
Certainly they are. They’re setting up a society whose core, whose driving engine, is an optimization process for capital accumulation. With that in place, the systemic incentive structure affecting everyone becomes: accumulate capital or die.
Who do you think I’ve treated how?
You do know what the problem with socialism is, right? Maggie Thatcher formulated it pretty well.
Let’s try to keep the level of discourse high.
“The problem with socialism is that you eventually run out of other people’s money.”