> This sentence is just wrong. First of all a rational actor will not intentionally pay a worker the value of their production; you get no profit.
In the econ 101 textbook simplified free market that the author is refering to firms do not make any economic profit. If a firm in a free market is turning an economic profit more firms will enter that market, raising supply, lowering price and driving profits to zero.
A better translation from the original German is probably "Joyful Science", though.
Not sure if that's where the parent was going, but I learned something new today.
Wasn't Nietzsche nihilist, though? Seems like it would be hard to be joyful if your science leads to nihilism.
It's more accurate to call Nietzsche an existentialist, as long as one keeps in mind that this term can refer to a wide spectrum of different moral and ontological ideas.
I'd call myself a realist -- and I think there's a lot of overlap with nihilism there, in that I try and see the world "as it is", and not "how I wish it was".
The world is a messy, ugly, dark place. It really is, and it's kind of amazing how people go out of their way to pretend that either that darkness doesn't exist, or that it's somebody else's job to keep it at bay.
There is a light in our world, though -- it's us, if we choose to be.
And so, regardless of the futility in the grand scheme of things, I invest effort to find joy in all that I can, and bring that sense of joyfulness to those around me, because it makes my corner of the world just a little brighter.
> There is a light in our world, though -- it's us, if we choose to be.
I can easily argue the opposite. The world itself is beautiful. Just sit at a mountain top or in the forest or on a beach and take in their beauty. Look at stars, galaxies, how they interact, it's absolutely stunning. Or zoom in looking at microbes, cells, molecules, atoms. The world is a gorgeous place.
What brings darkness is people. So much hate, greed, awful intrigues, all over the place. Look at the U.S. today, it's the epicenter. Everybody could be so happy. But no, hate because somebody wants to raise taxes. Or wears a gun. Or "wants to take away your 2nd amendment". Or is a misogynist. All covered over with a culture that expects everybody to find everything amazing, wonderful, best country in the world, or hate, cancel, exclude.
It's not the world that's ugly. It's the people.
If you can zoom out from that at see it as some grand, beautiful, process, then you have to apply the same filter to all of the evil stuff humans do as well, IMO.
We humans know exactly what's going on. Wr do it anyway. We keep animals in horrible conditions. And we know it. Yet we keep doing it. We treat each other horribly. We have really terrible weapons. We use them anyway. It's cruel and we know it. We spread hate and participate in racism and dehumanisation. Many of us thrive in either participating or at least watching conflict. We celebrate movies depicting humans mistreating or killing each other. We know it and we like it. Oh but it's only against the bad guys!!!1
I think it's not a fair comparison.
What if a human, or groups of humans, don't feel any guilt or don't believe what they're doing is cruel? I don't think that would help you sleep better...
Also, at least some animals are, in fact, capable of complex emotions. Pigs, apparently, can feel empathy: https://www.psychologytoday.com/us/blog/animal-emotions/2015...
It shouldn't be surprising. We are animals, after all.
> We humans know exactly what's going on. Wr[sic] do it anyway.
Perhaps that makes it worse, but I don't know that it means that animals being cruel doesn't count as "darkness" as in the grandparent comment. (It certainly doesn't refute the point that cancer is still a thing from nature and it's pretty damn dark)
But I'm pretty sure that animals would do the same stuff we do if they ever developed the capacity to do so. I see no reason to assume they wouldn't. Again- we are animals. We evolved from the same ancestors. I'm sure if my dog learned how to farm for meat, pretty much all of dog-civilization would play out with a lot of the same themes as human civilization. Not because I'm not creative enough to imagine other outcomes, but because I have no reason or evidence to assume that their form of life is fundamentally different from ours.
I'm fairly sure that aliens would observe us and the Orca who throws the crying seal in the air as the same. They would either see both as sad, or neither because "That's just what Earth life does. They kill others. They form packs and fight over territory. Some exhibit anti-social behaviors."
If I was just like some serial killer, then I'd also behave like a serial killer. Does that mean the other serial killer should not get punished? No. It just means that I should be pun8ished too if I was like them.
But I'm not really arguing humans-vs-animals. I'm arguing against world-is-dark-humans-are-light. It's the world that's light and humans who make it dark, for other humans. With exceptions of course.
Cancer is a bad example. It doesn't have an agenda. It's just a side effect of some mutation or such. Sure we can consider it dark. But compared to humans who actually have an agenda, i.e., they choose to be dark, that's a different ballpark.
Oh, there certainly is a lot of beauty in the world as well.
But it comes at a cost.
Every year or so, I try and get in at least one overnight backpacking trip, or at least one day of off-trail hiking. I'd do more, but I live in a country that cranked the "civilization" knob to 11 about a thousand years ago, and hasn't looked back since.
You really begin to appreciate things like "a hot shower" after a couple of days in the backcountry.
We can journey to those breathtaking vistas, relax, and bask in the majesty of creation because civilization makes that possible. With aircraft, roads, park rangers, clean water, nearly limitless food, all the rest.
Subsistence hunters, fishermen, and farmers certainly got to enjoy that same beauty, but I rather doubt it was as relaxing for them as it is for us.
And the reality is that violence is the price of civilization. There is not one civilization on the face of the earth that has escaped a baptism of blood and fire.
This has only gotten worse as our technological prowess has progressed.
Spending time, alone, in nature, you realize just how... vulnerable human beings are. Last time I went hiking, solo, in the US, I heard an animal approaching about twenty yards ahead of me. Turned out to be a bull, of all things.
I'm glad he was obviously used to humans -- and I was sure to give him all the room he wanted, and then some -- because, combined, my bear spray and my subcompact 9mm would have just pissed him off.
Nature, for all her beauty, is indifferent to suffering.
Human hunters work hard for an instant kill. Most other predators only work hard enough to disable their prey, and then eat it whether it is alive or dead.
As for humans being ugly... well, that's what I mean by choice.
You're totally right -- there's plenty of happiness to go around.
Part of the problem is that there's money to be made in making people unhappy.
Happy people buy less stuff.
But at least the stuff-sellers give you something. The real hustlers are the people that take your money for "the cause", whether the cause is Jesus, or Social Justice, or something else where you can be convinced to part with resources in exchange for a feeling of moral superiority.
It really is kind of amazing how wealthy politicians, preachers, and pundits can get when they successfully engineer or leverage a large social movement.
It is even more amazing how little they actually need to deliver.
That's what real greed looks like.
Another part of the problem is comparing yourself to your neighbor. I think that's even a cognitive bias, but I forgot the name -- that isn't not absolute wealth that we value, but that instead, we want to have more than the people that we can see around us.
Unless you master envy, you can never be satisfied in a world where you are always comparing yourself against the apex of whatever it is you value: wealth, strength, beauty, etc.
But all of those horrible things about humanity -- greed, envy, hatred, all the rest -- are things we can choose to overcome.
We can be better than the worst parts of our nature.
That's kind of where I was going.
You raise many good points though.
The economic definition is for a “perfectly competitive market,” one with extremely low barriers to entry. And one of the arguments about these markets is that they are the least profitable markets because firms in a less-profitable market will want to jump the extremely low barriers to switch into that market; this dilutes per-firm profits in the competitive market and concentrates them in the less-competitive market.
Economists consider those least-profits an “opportunity cost” of spending your time in the first place, and if you include that as an explicit cost then the “profit” is indeed zero.
It is true regardless that the theory predicts an economic profit of zero, but to see why it's necessary to consider the rental cost of capital. Also, since many firms own rather than rent capital, they often have a positive accounting profit even though economic profit is zero (economic profit is less since it takes into account opportunity cost: if you are using your own capital then you can't rent it out to someone else).
It's always difficult to jump into online discussions about economics because you need to give the entire econ 101 micro course in single comment just to make sure everyone is talking about the same thing.
In almost every sector of the modern American economy, the rules benefit capital over competition. In my area in New York, there were dozens of small bakeries pumping out good bread... today we pay more for shitty frozen stuff baked at the supermarket. ISPs were plentiful, now they are a monopolist service that costs 10x more than they did in 1999. We broke up standard oil decades ago... That monopoly is mostly reassembled today and we have weaker competitive forces around prices of fuel commodities than we did in the 90s.
That's not necessarily true. You assume that demand for workers exceeds supply. That is true for some vertical skilled labor. The often unspoken truth is that most jobs are commodity positions and people can be interchanged (from a labor standpoint). There is no upward trajectory of salaries for those positions.
It inevitably generates huge concentrations of capital which have immense political, social, and economic leverage, with no effective democratic checks and balances - except patchy application of anti-trust action.
The sum of the production of workers is not equal to the production of a business.
Otherwise, if a business increases revenues significantly by simply replacing its CEO, does it mean that the CEO contributes to the increased revenue all alone?
With the possible exception of lights-out facilities, the sum of the production of workers is equal to the production of a business, and even with lights out facilities, you would attribute the production of the facilities to those who build and maintain them.
A good CEO is absolutely invaluable.
A CEO differs from a General Manager.
"A chief executive officer (CEO) is the highest-ranking executive in a company, whose primary responsibilities include making major corporate decisions, managing the overall operations and resources of a company, acting as the main point of communication between the board of directors (the board) and corporate operations and being the public face of the company. A CEO is elected by the board and its shareholders." ~ https://www.investopedia.com/terms/c/ceo.asp
"A general manager (GM) is in charge of part or all of a company's operations, including generating revenue and controlling costs." ~ https://www.investopedia.com/terms/g/general-manager.asp
That's true for a single employee, but you don't need to make a profit out of every single employee.
If you do, your CEO will be extremely underpaid in relation to the rest of the market.
1. Voting Walmart shareholders think that the having Doug McMillon for $24M/year is a better deal than having me for $750k/year
2. Voting Walmart shareholders are unaware that reasonably intelligent people with no executive experience are willing to work for a lot less than McMillon.
3. There are other forces at play; e.g. CEOs as Veblen goods or good-old-fashioned corruption. Maybe the board members are also C level employees (at different companies) and they are colluding to keep the C level compensation high.
#2 seems rather unlikely so pick one of #1 and #3.
#1 Certainly does not contradict my use of intentionally, since they believe that McMillon
> This sentence is just wrong. First of all a rational actor will not intentionally pay a worker the value of their production; you get no profit.
It's correct. You're assuming whatever the worker produces is sold at cost.
1. Worker(s) make a thing.
2. Worker(s) sell a thing.
3. All the above worker(s) (if there's more than one) receive a portion of the proceeds. If it reflects their actual contribution to that thing at its selling price, it's their marginal product of labor, putting aside things like reinvestment and power imbalances. This leaves nothing left over for profits, for owners / investors to take, who did not contribute the labor to production (otherwise, they'd also be workers and we'd call that part of their compensation, not profit).
It must be, in the same idealized (free, perfectly competitive, no transaction costs) market conditions being discussed.
The textbooks are talking about economic profit, not absolute profit.
In very in-precise terms, it’s the expected profit for the given amount of risk, which to massively oversimplify can be represented by beta.
addiction to profit is a hell of a habit to kick, but it's not impossible.
Prices in the job market are set exactly the same way as any other market: by supply and demand.
They may not be directly related but to claim the CAPM “has nothing to do with this discussion” of economic profit is a bit strong.
Marginal value of production is almost always lower than average value, because of diminishing returns. Profits are made on the average value.
A Marxist take in this is that labour should be paid on the average value of production, and labour should get all the profits.
and the question becomes "who supplies the capital to enable the labour, if labour gets all the profits".
I used to work at a company which gave 10% of its profits to the workers each month as a bonus. But I was only there during some money-losing months so I got zero bonus. Imagine if that had been my entire pay!
good question - the current system ensures that labour gets paid, regardless of profits being negative or not (until the company collapses). This is enshrined into law - you cannot leave wages unpaid, and it sits above creditors in seniority.
Instead, Marx argued for worker control over the profits.
The only way "labour gets all the profits" is under the umbrella of communism - and even then, the state still extracts profit anyway (just under a different name - that of central allocation).
Communism also implies getting rid of currency altogether.
You mean socialism.
The value of their production is NOT the value of the production of the enterprise in which their production is employed.
Take a worker, whose work is worth $5 an hour according to market forces. Employing him to operate a $40,000 bakery, which generates $40 an hour in operating profits sans labor costs, does not mean the worker's labor is suddenly worth $40 an hour.
You can 100% pay workers what their labor is worth, and make a profit, and believing otherwise is a layman's understanding of the factors of production and the definition of value, and exactly the fallacy that underpinned Marx's quackery.
I see so many of these comments in Hackernews, which misunderstand basic economics, endeavor to expose some Big Lie allegedly being promoted by Economics/capitalists, and seek to defend some allegedly exploited underdog who needs laws limiting private-property/contract rights to be protected from said exploitation.
Also, there is no indication of information asymmetry playing any role in contract negotiations. Signals like market prices are an emergent phenomenon that are easily accessible to all prices.
They are easily accessible because well-resourced parties are incentivized to carry out actions that make them accessible, like a firm advertising a job opening and the pay offered as widely as possible, to maximize the number of potential applicants that see it.
This sentence is just wrong. First of all a rational actor will not intentionally pay a worker the value of their production; you get no profit.
Textbooks actually say that a worker will be paid no more than the marginal product of labor, and if labor is in short supply, they will be paid very close to their marginal product of labor. If there are a huge number of workers willing to work for $5/hr then workers won't tend to make even a penny more than this.
Information asymmetry and differences in negotiating power will further distort this, but the initial premise is already a strawman of basic microeconomics.