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[hector13]

Well, in order to make a profit off someone else’s labour, you need to pay them less than their labour is worth. It’s varying degrees of horrible depending on how bad you want to be in that regard.

That's... an interesting and questionable philosophy.

Consider a situation where the baseline is 1 year worth of food for 1 year worth of labor.  Now say that someone other than the farmer creates a plow and now the laborer can get 2 years of food for 1 year worth of labor. Who gets the "profit" here? How do you attribute the value of the labor to the plow-maker versus the the plow-user?  That is - what percentage of that extra years worth of food, goes to the plow maker versus the plow user?  Do you split it 50/50? Do you give it all to the plow-maker, since the plow enabled all the marginal increase in output?  Do you give it all to the plow-user, since it was that labor that actually generated the food?  Is it something in between?

What if it wasn't a plow-maker, but a merchant who took some of the food and carried it around the countryside? What if the merchant had to buy the food with 1 cart of lumber?  When they distribute and the food, for lumber, they end up with 2 carts of wood. The merchant had a net gain of one cart of wood... was that "stealing" from the original farmer, paying them less than their labor was worth? Or was that just getting paid for the added value associated with distributing the produce?

Does the merchant have any obligation to the farmer to give them more lumber? Should the merchant have such an obligation?

Perhaps I should clarify that I meant in order for an employer to make a profit from an employee, they need to pay the employee less than the value the employee added through their labour.

[McTraveller]

Perhaps I should clarify that I meant in order for an employer to make a profit from an employee, they need to pay the employee less than the value the employee added through their labour.

No I understood - and I disagree.  The employer can charge more than the value of the labor because the employer is adding value above what the labor provided. The labor can be fairly compensated and the employer still charge more than that.  The "employer" adds brand recognition, sales channels, testing, distribution, indemnification, and all kinds of other things.

Sales price above value of labor doesn't at all have to mean they are paying the labor less than it's worth.  Sure that's one way to increase profits, but it's not even a necessary condition for profit.  So a statement like "an employer can only profit by underpaying for labor" is just hyperbole.

[hector13]

Perhaps I should clarify that I meant in order for an employer to make a profit from an employee, they need to pay the employee less than the value the employee added through their labour.

No I understood - and I disagree.  The employer can charge more than the value of the labor because the employer is adding value above what the labor provided. The labor can be fairly compensated and the employer still charge more than that.  The "employer" adds brand recognition, sales channels, testing, distribution, indemnification, and all kinds of other things.

Sales price above value of labor doesn't at all have to mean they are paying the labor less than it's worth.  Sure that's one way to increase profits, but it's not even a necessary condition for profit.  So a statement like "an employer can only profit by underpaying for labor" is just hyperbole.

The employer also employs other people to do all of those things, either in order to be able to sell the product (sales teams, advertising, lawyers etc.) or retain employees (health and safety, HR, lawyers) to actually make a product you can sell.

At the end of the day, the difference between the value of the input and the selling price of the end product is a result of the labour that’s gone into it, and in order to make money off it, the selling price will need to be higher than the labour cost.

You can call it hyperbole, but… I disagree you on that point.

I am of the unwavering opinion that employers are lucky the employee has chosen to give up their time to work for them (and not a competitor!), not the other way round.

[Maximum™]

Yep, the only thing that adds value to materials IS labor, charging more actually isn't a good thing, getting rich shouldn't be a desired goal, profit shouldn't be considered a positive motive, it's a shitty thing to do, and only seems good in comparison to a rentier controlled market.

That is literally what "free market" meant: free from rents, not free from regulation or controls.

[McTraveller]

Because I was beat by another post:

Not true! That's only the intrinsic value of a good or service.

There is also the "market value" of a good or service, which is what someone else is willing to give up in exchange for that good or service.  Consider that the intrinsic value is essentially static - how many calories a food has, or the mechanical properties of a machine.  But the market value can change dramatically depending on sentiment. If I want a new TV, am I willing to sacrifice one vacation a year for it, or two?

My original long post:

The hyperbole is that selling something higher than the labor value to make it is somehow under-paying for labor.

Also if you always pay every cent you have to labor, and don't register it as "profit", then you can never perform "true investment", which is using profits to improve productivity.

By true investment I mean: say you need to farm all year to make enough food for yourself to eat. But you can go with reduced food (income) for a time, so you can use that effort to make a plow, so that next year you can make the amount of food you want with less effort.

So if you just give everyone "all the value of their labor", it makes it very difficult to improve productivity.  So we let "employers" have some profit, so they can more effectively use aggregate profit - way more than a single individual can sacrifice themselves - to increase overall society productivity.  Sure there's a risk that companies can use that profit poorly.

But it's almost impossible to make a law that would prevent abuse of profit but still allow "good" use of profit.  So you either slow down dramatically the pace of innovation, as it can only be accomplished by individuals sacrificing use of present income to develop new stuff, or you allow companies to potentially misuse profit.

If you do have laws about use of profit, though, it should be on the particular use of it - it can't be on something as naive as "10% profit margin is fine, but 11% is too much!"

So the debate really is - should we strive for faster productivity gains, with the risk of abusers? Or should we have slower productivity gains, also with the risk of abusers (because there will be many, many individuals who are happy to just consume every bit of their own produce, never save for famine, and never have any "spare" labor to innovate)?

(Of course, this doesn't even account for other political nonsense like who gets to own what, or taxes, or in-group out-group tribalism...)

[Maximum™]

Nobody farms to have enough food to eat, you would farm to help a community, you could farm to make sure everyone has enough to eat. Do you think modern farmers are struggling or poor? Why?

Also traditionally credit was extended to help others, like a farmer who has nothing to buy seed with, so the farmer promises to repay your loan, and then you can work out a way to sweeten the deal with interest or whatnot.

When you start making a business out of it there are shitty incentives to begin doing something called usury, predatory interest, and that is bad to begin with... but sooner or later a crop fails due to a drought or a storm or a fire or asshole neighbors or wild animals or whatever reason. Now you have someone who owes debts AND needs to borrow to survive AND needs to borrow to produce a new crop next year.

What ultimately determines whether a society succeeds or fails is what happens next: do you protect the debtors or the creditors.

If you protect the creditors then everyone who has a bad run of luck ends up owing more and more to the creditors so they begin doing ever more useless work to appease their creditors who collect ever larger piles of money and suddenly you're Rome wondering which general is gonna be next in line to sack the city and try their hand at ruling until a plague or outside tribes roll through.

If you protect the debtors then you periodically need to clear the boards because you recognize that debts which can't be paid won't be paid. Which might make creditors angry, but again, there is a reason usury is broadly recognized as a bad thing in any society which doesn't dutifully erase awareness of it *coughs and looks around at our modern world* and the failure modes of said usury friendly societies suuuuuuuuck.

Note that none of this is from my own knowledge off hand, there's an author who Doctorow also loves who wrote books like Debt: The First 5000 Years and another I think was Bullshit Jobs? David something I think, dude who came up with "We are the 99%" apparently.
_______________________________________________________________

We are currently deep in a creditor friendly cycle, capitalism initially started out as an attempt to break out of what many know as feudalism, but could more easily be understood as a renter controlled economy: manorial lords owned land and rented it to serfs who made money for them with tools they were rented with seed they were rented, which as you can guess is a pretty shit situation long term.

Trying to change that involved the radical idea that "perhaps a small group of people who inherited everything shouldn't own everything" and the arrangement which followed had people WITH stuff letting people who can DO stuff use that stuff to make other stuff better stuff.

That arrangement doesn't require a drive for ever greater profits, contrary to what anyone infected with modern economic brainworms may say, and theoretically anyone who owns capital should be motivated to spend profits on making their capital better, their workers better off so they don't lose access to them, and whatnot.

Know how you ensure they do that instead of trying to turn themselves into rent-collecting technofeudalists?

Before the pitchforks and guillotines, I mean, you need unions.

It's weird because a union is basically a tamer version of an angry mob marching on the homes of the wealthy, so you'd think big business owners would prefer a nice polite union subtly wielding their threat of horrible violence over a simmering pot of resentment leading to actual violence, but they think they're that much smarter than everyone (literally, look at two examples of people who are literally famous for being "rich ceos" to find two of the most coddled ignorant disgusting manbabies on the planet: musk and trump) so they figure they can keep us all fooled forever.

DON'T HELP THEM BY ATTACKING UNIONS, THIS BENEFITS ONLY THE UBERRICH ASSHOLES!

[McTraveller]

I think that lumps too many things into too few categories.

For example there are creditors who loan people out of their own produce - say I overproduce so I give you some, so you don’t have to farm but can make a plow or whatever.  This type of “debt” is repaid by higher productivity and almost never results in debt spirals.

The second type of creditors are the ones that result in debt spirals, where they don’t actually lend existing resources but instead lend money, which is just lending debt. The reason that can spiral is that it’s essentially unbounded. You can only loan out as much food as exists, but you can loan out more currency units than atoms exist in the universe.

But in both cases the concept of debt is wholly social and non-physical. If I give you a piece of bread and you eat it, it’s gone… the only way you “owe” me anything is by convention. This is, I fully agree, an opportunity for abuse.
 
Unions to me are chasing symptoms, not the cause, of erosion of purchasing power. It’s the same reason I dislike just handing out money to combat inflation, or forcing insurance to combat health care costs - none of those things directly increase production or reduce demand, but at best just change the numbers on the paychecks and price tags. Real affordability only improves if demand goes down or supply goes up. Union demands are tricky because on the surface they only increase consumer demand (via giving employees more spending power) without increasing supply of the things those employees buy (and sometimes reducing supply of the things those employees make).

So unless somehow union demands result in people getting funds to build tons of low-cost housing, or start new medical schools, or whatever… it just feels palliative.

EDIT: Interesting and feels somewhat related:

Apparently Maine is considering a vote to turn all its power companies into public utilities, rather than investor-owned.  Sounds good to get rid of the profit motive... but what's the motivation to keep things working well and affordably, without profit motive? I would personally prefer a system where the public owns the transmission lines and mandates at least 2 or 3 providers to generate competition for lowest generation price.  Otherwise - how do you build out more production, without going into a debt cycle?

[Lord Shonus]

Allowing for performanced based wage increases would be great.  Or if they make long term wage contracts, tieing it to inflation would be nice, rather than getting everyone stuck with 3 years of pay cuts to look forward to.

Performance-based bonuses are pretty common in union contracts, except in roles where it doesn't fit - in assembly lines, for example, there's no virtue to doing more, because nobody can work faster than the person before or after them, so there's no reason to try to go faster than the specified speed. In things like sales or individual production where there's a giant pile of work and everybody does as much as they can there is a point in doing more and plenty of contracts have bonus structures for that purpose.

Long term contracts always increase pay over the course of it, usually in excess of the inflation rate. You're never going to see a "you get a x% raise now and nothing for the next three years", it is "you get x% now and another y% per year until the next contract when we renegotiate". Explicitly tying it to the inflation rate isn't done because that would wind up hurting the workers slightly in times of low inflation (the scheduled raises are usually above the rate of inflation, so tying it to inflation would mean lower pay) and hurt the company massively in the event of a massive inflation spike. Remember that the unions do not want to kill the company - that's where their members get the money they need to live off of. The union wants the company to not only survive but thrive, because they want the company to expand and hire more union employees. The union objects when the company is raking in benjamins hand-over-fist and doesn't want to toss more than a few pennies to the workers.

[Grim Portent]

Apparently Maine is considering a vote to turn all its power companies into public utilities, rather than investor-owned.  Sounds good to get rid of the profit motive... but what's the motivation to keep things working well and affordably, without profit motive? I would personally prefer a system where the public owns the transmission lines and mandates at least 2 or 3 providers to generate competition for lowest generation price.  Otherwise - how do you build out more production, without going into a debt cycle?

Why would a state need a motive to keep power running well and providing it to all it's citizens other than the fact that power is an essential part of the life of those citizens? A public utility is like a fire department, it's just something a sensible state does to meet a certain standard of living for its people.

[Lord Shonus]

If nothing else, people are going to tend to vote for the "build more power plants so the voters can keep the lights on" advocates.

[Maximum™]

I have to laugh over the use of "sensible state" given Texas made it all private a while back and cut itself off from the rest of the power grid for "MUH FREEDOMZ" and ended up killing people during freezes AND heat waves, demonstrating yet again that unfettered profit driven capitalist methods benefit only the few who cut and run before everything goes to shit.

Really though I gotta go back to noting that any end goal you mentioned about more housing or better healthcare access is absolutely NEVER going to be achieved with weakened labor force bargaining.

We're living in the "deregulated free market" condition now, if there was any possibility that anyone would ever be better off doing any job without a union fighting for them, we would have seen it by now.

It hasn't happened, it will never happen, case closed.

[martinuzz]

In an interview with NBC's 'Meet The Press', Ukrainian president Zelensky invited Trump to come visit him in Ukraine.
Trump had said that if he would be re-elected, he would end the war within a day.
Zelensky replied to this, saying "he said that he can get the war under control and end it in less than 24 hours. Well, he is welcome. I hereby invite him to come to Ukraine. If he does come, I will need no more than 24 minutes to explain to Trump that he  cannot get this war under control".

[Lord Shonus]

Both abortion protections and marijuana legalization passed in Ohio yesterday by overwhelming margins.

[Rolan7]

That's a relief   It's good to appreciate good news.

It's a bit late for this but: I went and voted yesterday, mostly for City Council.  For research I mostly watched the candidates speak at a City Employees meeting.  Handling of lockdowns was a primary topic.  It was interesting!  No party stuff, just issues and records.

[hector13]

Both abortion protections and marijuana legalization passed in Ohio yesterday by overwhelming margins.

Pretty big deal considering it’s a Republican-led state. Republicans have said they will explore their options, but it’s in the constitution now.