Let's Debate Inequality

[Kfox]

By intervene, I mean whatever work is done by the worker on the product. Some given product had a value before his work, and then it has another value after his work. This is the extra value generated by his work.

Consider the scenario, a manager (worker) invests $1,000 in raw materials, tools, etc. to create a product. He hires a Labor (worker) to turn those raw materials into the desired product. At this point the product now has a value of $2,000. The manager tries to sell the product at $3,000, but nobody buys the product at that cost and he can only sell it for the $2,000 it cost to make. You are saying the labor (worker) should get the $1,000 for the increased value and the manager/worker should not only get no pay, but lose the $1,000 initial investment required to make it all happen; is this your point? If so, does this sound fair to you?

As I have stated multiple times already: if the employee is the one responsible for his work not generating value, sure

I said nothing about the employee being responsible for not generating value. Why can't you answer the question as asked? Why do you gotta keep adding this nonsense to the scenario?

 

[Koldo]

Consider the scenario, a manager (worker) invests $1,000 in raw materials, tools, etc. to create a product. He hires a Labor (worker) to turn those raw materials into the desired product. At this point the product now has a value of $2,000. The manager tries to sell the product at $3,000, but nobody buys the product at that cost and he can only sell it for the $2,000 it cost to make. You are saying the labor (worker) should get the $1,000 for the increased value and the manager/worker should not only get no pay, but lose the $1,000 initial investment required to make it all happen; is this your point? If so, does this sound fair to you?

That's not quite what I am saying.
In a capitalist society, it doesn't make sense to hire someone to pay them the exact ammount of value they added to the product (for multiple reasons). What I am defending is that businesses should ideally pay as close as possible to that value. This is trivial (depending on the job) when the company achieves massive profit and impossible when it has a negative net income. It is better for a company to remain functional and keep the jobs (presuming a very minimum is being paid) than for it to go kaboom.

I said nothing about the employee being responsible for not generating value. Why can't you answer the question as asked? Why do you gotta keep adding this nonsense to the scenario?

I am answering your question. But the answer is a conditional statement.

Should people who kill others be sent to jail? If not done out of self-defense or to defend someone else, yes. Without adding the 'if' statement it is impossible for me to accurately represent my perspective. The same reasoning is applicable to your question.

 

[Koldo]

There are different kinds of power and not all power is bad. Money give you compensatory power. IOW, there is a voluntary exchange of wealth for goods or services. So money alone is not bad as both parties get something they want out of the transaction.

That's presuming all the money you got was from voluntary exchanges.

However if the power you desire is the power over other people's lives regardless of what they want then political power is the ultimate way to gain that as you can also gain the enforcement of the government. If they want that kind of power, money alone won't give it to them.

Unless you are a dictator, you are better off spending money to gain political favor to get things done than being a politician yourself.

IMO, that is too complex to be decided by you or me. It depends on what the money is used for and want the economy can bear. So left to the democratic process for better or worse. When I lived in Australia, taxes were higher than in the US. However that went mostly to education, healthcare and public welfare. A lot of the money came back to the public.

In the US it doesn't work the same. A lot of the money goes to fund foreign wars and special interests. More taxes in this case does not necessarily mean a greater benefit to the public interest.

In other words, you find yourself unable to determine what is a reasonable taxation in practice. So, on what grounds did you determine that what I am suggesting would cripple the economy?

 

[muhammad_isa]

Demonstrable untrue? Demonstrate how a bank or government can prevent me from creating wealth at this very moment.

Govts. can seize your assets, devalue currency, bankrupt you by making loans expensive,
and so much more.
Your argument lacks credibility .. 'creating wealth' as far as your concerned, depends on your ability
to increase your wealth .. usually at the expense of others.

Most people understand wealth in terms of currency .. that is the usual measure. You
attempt to confuse us all with false ideas of what wealth actually is.

 

[sayak83]

Those are just claims, they don’t explain WHY people live longer, feel happier, etc when the rich has less. I’m more familiar with what is going on within the USA rather than the rest of the world, but there is proof that in the USA when income inequality is at it’s greatest, the poor do better financially, and when income inequality is lessened, the poor are worse off financially. I care about how the poor are doing than anything else.

That is fundamentally untrue. These studies include the USA. The poor are worse off when income inequality is greater in the USA. Data regarding this has been shared already. Fraction of people on low income households have increased by 7% over the last 40 years post the elimination of progressive taxation and consequent rising inequality. This has also been in sync with significant decrease in upward mobility. Poor people are far more likely to remain poor throughout their life today than 40 years ago in USA.
These trends are robust and universal.
If you wish to dispute this, share peer reviewed evidence.

Here, by the way, is the Great Gatsby Curve, which shows a direct relationship between higher wealth concentration and reduced upward mobility.
https://www.journals.uchicago.edu/doi/full/10.1086/696058?mobileUi=0&
Also since you want mechanisms, here is a set of them explaining the causes
The Great Gatsby Curve | Annual Reviews

 

[PureX]

The investor did not make sure his investment would yield the price he wanted/needed to get. And as a result, he didn't get it. His product was not viable as he was producing it. So he lost his investment.

 

[Nakosis]

That's presuming all the money you got was from voluntary exchanges.

That's the basis of capitalism. Voluntary exchange. Involuntary exchange is either done by criminals or the government.

Unless you are a dictator,

Um... politician? Stalin was both a politician and criminal.

you are better off spending money to gain political favor to get things done than being a politician yourself.

Still a voluntary exchange.

In other words, you find yourself unable to determine what is a reasonable taxation in practice. So, on what grounds did you determine that what I am suggesting would cripple the economy?

I also said it if didn't cripple the economy it could be reasonable. Though how the money is spent could still be unreasonable.

 

[muhammad_isa]

That's the basis of capitalism. Voluntary exchange..

Really??
I think not. The G7 exists to ensure their currencies are uppermost.
They accept collateral damage to their own citizens to pursue their aims.
i.e. maintaining the world order .. power of the West.

By keeping global wealth in their own pockets, they also oppress developing nations.
All the Abrahamic religions are aware of the evils of usury .. but some seek to hide it,
in order to maintain their sovereignty.

The result of that, is an ever-increasing instability .. climate-change, wars and associated catastrophes.
We will all see who "G-d favours" when we die.

 

[Nakosis]

Really??
I think not. The G7 exists to ensure their currencies are uppermost.
They accept collateral damage to their own citizens to pursue their aims.
i.e. maintaining the world order .. power of the West.

That's not good capitalism. You get government involved messing with an otherwise free market you get problems.

By keeping global wealth in their own pockets, they also oppress developing nations.
All the Abrahamic religions are aware of the evils of usury .. but some seek to hide it,
in order to maintain their sovereignty.

The result of that, is an ever-increasing instability .. climate-change, wars and associated catastrophes.
We will all see who "G-d favours" when we die.

As I'm not religious, a can't really speak to religious objections.

However, most Muslim nations seem to be capitalist. However usury is also voluntary. No one get force into an obligation with the banks.
However in some cases, I do have a mortgage. It was the only way I could get a house. So evil?

It allows me to get something which would be difficult for me otherwise.

 

[muhammad_isa]

..usury is also voluntary..

Not when it's arranged politically, on a global scale.

 

[Watchmen]

I am talking causation too, not correlation. Can you please cite now as many capitalist countries as you can that got a lot of people out of poverty that were neither: colonizers, imperialists, nor significantly supported by one of the former two?

You don’t understand correlation vs causation. After all, much of the colonizing occurred before the modern-era capitalism I’m referring to even existed.

 

[Koldo]

You don’t understand correlation vs causation.

Yes, I do.

After all, much of the colonizing occurred before the modern-era capitalism I’m referring to even existed.

Thus why capitalism is not the defining factor when it comes down to determing the economical status of a population.

 

[Kfox]

It's the fault of our accepting greed as an reasonable motive for making decisions that negatively effect millions of other people.

No, when someone tries to open a business in a community, then finds he can’t make a profit due to the laws in place, for him to pack and leave that community and go somewhere else is a perfectly reasonable response for that situation. Nobody is obligated to do business in a community that is hostile to business

Doing business in any community seriously effects the people living in that community. So yes, oversight is necessary. And that means telling the businesses what they can and cannot do in their endless pursuit of ever greater profits.

And if they don’t like it, they have every right to leave. So what are you complaining about?

Please stop being stupid.

I’m not being stupid, my question is legit! If the people of the community are getting jobs at the business, if they are getting products from the business, obviously this business is an asset to the community; if it were not the people of the community would refuse to patronage it. Just because you don’t like them doesn’t mean everybody else agrees with you.

Most businesses shouldn't even exist. If they can't treat everyone well and fairly and survive, they don't deserve to survive. Or if we need them that badly, we should subsidize them.

Most business that fail, do not fail because they mistreat their customers.

Capitalists have no interest in being beneficial to anyone but themselves and their fellow investors. Their only concern for the community ends at the profits they can extract from that community. And by community I mean their laborers, consumers, vendors, the surrounding population and the physical environment.

But the good thing about capitalism, is that the capitalist has to do some thing good for someone else before they can benefit themselves. So who cares about their concerns, so long as their actions are good.

 

[Kfox]

That's not quite what I am saying.
In a capitalist society, it doesn't make sense to hire someone to pay them the exact ammount of value they added to the product (for multiple reasons). What I am defending is that businesses should ideally pay as close as possible to that value.

But when the business is operating at a loss, the pay is nowhere near that value. And what about the cost of getting the materials and tools so the laborer can do his work? That has to be paid for too! What happens if there is no money left after all of those bills are paid; should the labor not get paid?

I am answering your question. But the answer is a conditional statement.

I'm not asking for a conditional statement; I'm asking for a straight answer.

Should people who kill others be sent to jail? If not done out of self-defense or to defend someone else, yes.

If you asked me how much I weigh, you would expect an answer like 200 lbs. But if I responded; well.... if I were on Jupiter, I would weigh 1000 tons; if I were on the moon, I would weigh 5 ounces; it all depends on where I am being weighed. If you wanted to know how much I weighed on the moon or Jupiter, you would ask how much do I weigh on the moon or Jupiter. If I wanted to know if you think someone should go to jail if they kill out of self defense, I would phrase the question that way. You're just trying to avoid answering the question.

 

[Kfox]

Govts. can seize your assets, devalue currency, bankrupt you by making loans expensive,
and so much more.
Your argument lacks credibility .. 'creating wealth' as far as your concerned, depends on your ability
to increase your wealth .. usually at the expense of others.

Most people understand wealth in terms of currency .. that is the usual measure. You
attempt to confuse us all with false ideas of what wealth actually is.

If I build a house on my own property, and sell it to you for more than it cost me to build, I will have created wealth, and no bank, or no government is gonna stop me from doing this. Your argument failed.

 

[Kfox]

That is fundamentally untrue. These studies include the USA. The poor are worse off when income inequality is greater in the USA. Data regarding this has been shared already. Fraction of people on low income households have increased by 7% over the last 40 years post the elimination of progressive taxation and consequent rising inequality. This has also been in sync with significant decrease in upward mobility. Poor people are far more likely to remain poor throughout their life today than 40 years ago in USA.
These trends are robust and universal.
If you wish to dispute this, share peer reviewed evidence.

Here, by the way, is the Great Gatsby Curve, which shows a direct relationship between higher wealth concentration and reduced upward mobility.
https://www.journals.uchicago.edu/doi/full/10.1086/696058?mobileUi=0&
Also since you want mechanisms, here is a set of them explaining the causes
The Great Gatsby Curve | Annual Reviews

Remember the recession of the late 1990’s? They had what they called the “dot-com bubble” and when it burst, along with the 911 attacks, the economy fell into a recession. During this time, billionaires lost billions, millionaires lost millions, the middle income lost thousands, and the poor lost a trickle. During this time, the gap between the rich and the poor was at the smallest level in years because obviously when the rich lose far more than the poor, there is less of a distance between the two. Then when the economy recovered, the billionaires got their billions back, the millionaires got their millions back, the middle income got their thousands back, and the poor got their trickle back.
Then around 2007 there was another great recession; and again the billionaires lost billions, millionaires lost millions, and so on; and so on; till we got to the poor who lost only a trickle. 6 years later the economy was back on the mend and everybody got their money back, even the poor who got their trickle back.
So the question becomes; when were the poor better off? With their trickle? Or without it. I say the poor were better off with their trickle; as Charles Goeth said; “Even though it might only be a drop in the bucket, at least it’s a drop”. But during the time the poor had their trickle, the distance between them and the rich was at its greatest, and during the time they were without their trickle, the gap was lessened. That’s why I say when income inequality is at its greatest, that’s when things have been best for the poor.

 

[Koldo]

But when the business is operating at a loss, the pay is nowhere near that value.

Like I have already stated.

And what about the cost of getting the materials and tools so the laborer can do his work? That has to be paid for too! What happens if there is no money left after all of those bills are paid; should the labor not get paid?

If you keep asking the same question, I will keep giving you the same answer. We have already gone over this multiple times.

I'm not asking for a conditional statement; I'm asking for a straight answer.

If you asked me how much I weigh, you would expect an answer like 200 lbs. But if I responded; well.... if I were on Jupiter, I would weigh 1000 tons; if I were on the moon, I would weigh 5 ounces; it all depends on where I am being weighed. If you wanted to know how much I weighed on the moon or Jupiter, you would ask how much do I weigh on the moon or Jupiter. If I wanted to know if you think someone should go to jail if they kill out of self defense, I would phrase the question that way. You're just trying to avoid answering the question.

If you are talking about my weight on Earth, I weigh about 95 kg. How am I avoiding your question by answering it like this?

If you ask me whether people should go to jail for killing others, how am I avoiding your question if I phrase it as: 'Yes, with the exception of those cases where it was an act of self-defense/defense of others'?

Let me see if phrasing it differently will satisfy your needs: A worker adds value to a product regardless of whether the capital owner is able to make a profit out of this additional value, and he should be paid in accordance to this (as a function of) additional value rather than the profit gained by the capital owner.

 

[Kfox]

Let me see if phrasing it differently will satisfy your needs: A worker adds value to a product regardless of whether the capital owner is able to make a profit out of this additional value, and he should be paid in accordance to this (as a function of) additional value rather than the profit gained by the capital owner.

Thanks for answering my questions. I think what you’re talking about is an accounting nightmare. Especially when you have an assembly line type situation where 100 hands touch the product before it becomes a finished product; to try and figure out the value each hand provided, especially when some of the hands might be inspectors whose hands adds no value, but is necessary to ensure quality work by the hands that do.
I believe the best system is for both employee and employer negotiate a wage prior to hiring, and employee is paid the agreed upon wage regardless of profit (or lack thereof) the product brings.

 

[muhammad_isa]

If I build a house on my own property, and sell it to you for more than it cost me to build, I will have created wealth, and no bank, or no government is gonna stop me from doing this. Your argument failed.

What have "if's" got to do with things?
It's also possible that while you build your house, the market collapses and you lose money.

The fact of the matter is, wealth/currency is controlled by central banks and govt.
If 'creating wealth' was independent of this, monetary policy would have no effect on inflation.

 

[muhammad_isa]

Then around 2007 there was another great recession; and again the billionaires lost billions, millionaires lost millions, and so on; and so on; till we got to the poor who lost only a trickle. 6 years later the economy was back on the mend and everybody got their money back, even the poor who got their trickle back.

False!

The distribution of household incomes in the United States became more unequal during the post-2008 economic recovery. Income inequality in the United States grew from 2005 to 2012 in more than two thirds of metropolitan areas. Median household wealth fell 35% in the US, from $106,591 to $68,839 between 2005 and 2011.
Great_Recession - Wikipedia