It's funny you mention Germany there at the end since it undermines your whole argument. German auto workers are all unionized and they earn double what American auto workers do.

It doesn't undermine my argument. I said they compete on quality. Unions can be just as tyrannical as a monopoly. If German companies didn't produce better cars than cheaper countries there would be no reason to buy them and very few people would.

Added to my above comment:

"For clarification sake I'm saying that the mass of people at the bottom of an organization can have demands that conflict with the survival of the business. It's good that there are smart people who fought their way up the bureaucracy through a meritocracy. They generally won't make a decision that will obviously drive a company straight into the dirt while this is distinct risk in unions with entitlement issues."

The problem with this is, that the demands, that can destroy a company, still can be real demands.

The company says, it has to pay you $5 per hour or they couldn't employ you and it isn't even lying.

You say, you can't work for a wage below $10 per hour and your reasons for this are valid, too.

If the company wins, the workers can't live from their wage. If the workers win, the company can't employ enough of them to conduct business.

I fail to see a problem with this at all.

1: The company goes out of business (due to inefficiency and an inability to compete) in which case it was a shitty business and shouldn't exist in the first place.

2: The company hires someone who can do the work for $5 per hour, in which case the worker who needs $10 to live is simply not living within their means.

I equate this to someone earning minimum wage complaining that they can't support their numerous kids. NO SHIT. you are not entitled to a wage capable of supporting other people.

This is what seems logical, but most of the time the second thing will happen, because there are many people who think every job is better than no job.

There are lesser jobs than people, so the companies have the bigger lever.

If the employee possesses desirable skills that are in fact worth $10 they can seek that employment elsewhere. If they cannot offer anything over the $5 employee it's a waste to pay them more.

Before there was minimum wage established in the US there was this job of pump attendant. Pump attendant was someone who would pump your gas into your car. These were jobs that paid next to nothing. These jobs disappeared almost immediately after the minimal wage law was enacted.

Now, think about it. A 16-year old would come to the gas station after school and pump gas for (let's say) 2usd/hour. But he would also learn other skills. At that time there were also body shops/car mechanics at the gas station. Because they could use cheap 2usd/hr labor of this kid. And the kid could learn car mechanics. After finishing school the kid could be actually pretty good mechanic. Go there on the job market nad having this real-life experience demand 7usd/hr job of a car mechanic. That was also a time that unemployment rate among the young was the lowest out of all the age groups. Soon after the minimal wage law was enacted the unemployment rate among the young started to be the highest among all ages group. Not only that, but also there is no one to help you at the gas pump today in the US. There are no car mechanics at the gas stations too. These people are permanently unemployed. Because 16 year old after school isn't worth the current minimal wage. He's worth half of it. He could be worth the minimal wage enacted by the Government after 6 months experience while he would be paid market rate as gas pump attendant. But that's illegal now. It's illegal to hire him, pay him and let him grow to better position. He is permanently unemployed now. Maybe for years. Again, the unemployment rate among the young is the highest among all group ages. Before the minimal wage law it was the lowest. But socialism isn't about letting people who want to work, work. About letting them grow and prosper in their future. It is about permanent ruin. 60% of people below the age of 30 in Spain are unemployed. The country is doomed because of socialism. And doesn't even get it.

Amusingly that job still exists in my neighborhood of Boston for reasons that I cannot explain. I suspect there may be a law about it but I'm not certain.

In New Jersey it is illegal for you to fill up the gas on your own. It has to be done by the pump attendant. That's the law. Not sure about Boston ;-) It might be that it makes business sense for the owner to have pump attendant at the rate or above of the minimal wage. Which is nice.

One problem with the bootstrap argument is it ignores the pyramid. So there's 5 pump attendants and one of them has the brains, motivation, luck, family connections, whatever to get promoted to be the next $7 car mechanic. Well that's just awesome for that one kid... and what is your proposal for the other four, let them eat cake? Wait for the local version of "arab spring", let the cops shoot them, hire the next batch, repeat? Soylent Green?

"It's illegal to hire him, pay him and let him grow to better position."

That's ridiculous. Managers take chances on noobs all the time, especially at the lower levels.

"Again, the unemployment rate among the young is the highest among all group ages"

Hello Arab Spring, coming soon to a failed state near you. Historically a graph with a y-axis of "desperate angry unemployed young men" tends to peak around revolutions and upheavals. The future is on a path that is aimed much more toward France in the 1790s than USA in the 1950s. There are probably startup implications to this trend toward inequality for awhile, then revolution.

> So there's 5 pump attendants and one of them has the brains, motivation, luck, family connections, whatever to get promoted to be the next $7 car mechanic.

They all move on. Not necessarily to become car mechanics. The other one could be helping at the cash register at times, yet another one help to put merchandise on the shelves. Yet another one hand-wash cars. The fallacy of socialism is pointed out by you exactly: you think that 80% of people (4 out of 5) are idiots who can't do better in life and need the Government protection. Then Government comes along introduces a law that makes 80% of them unemployed, hence the proof that more Government in needed!

> "It's illegal to hire him, pay him and let him grow to better position." > That's ridiculous. Managers take chances on noobs all the time, especially at the lower levels.

It gets better than that. There are free internships. You can get them for free - 0usd per hour, you can get them for 7usd/hr. But to give them employment at market price? Illegal! Genius!

>"Again, the unemployment rate among the young is the highest among all group ages" >Hello Arab Spring, coming soon to a failed state near you.

Like Spain. Or Greece. Or some other place where socialists Governed for the past 50 years. Like... failed arabian states. Learn your history. They all have been socialist. That's why failing. From Saddam to Mubarak.

>Historically a graph with a y-axis of "desperate angry unemployed young men" tends to peak around revolutions and upheavals. The future is on a path that is aimed much more toward France in the 1790s than USA in the 1950s. There are probably startup implications to this trend toward inequality for awhile, then revolution.

Well, yeah. Guess what. If you forbid people to work, and kill businesses (places where they go to work), all you will end up with is violence.

"can't do better in life and need the Government protection."

I mostly agree with your points, but this one fails. I say there's a pyramid. You say thats a politically incorrect concept to think about from a psuedo-right perspective, therefore it surely doesn't exist and all topic change-y. Bzzt try again. Is there or is there not a pyramid of skills, and if a working definition of the level of civilization is looking at how the downtrodden are treated, what are you proposing?

There is another issue that as a civilization we've decided civilization means citizens will have police, fire, libraries, schools, national defense, unemployment, welfare of some forms, foreign aid, all that stuff (More civilized nations or more civilized people believe health care belongs on this list, and I agree). Anyway it takes $X to provide those services privately or via taxes, or the govt at an overhead cost of Y*$X will provide those services by taking extra money from everyone else and redistributing from each according their ability and to each according to their need. The "welfare queen" in this situation is the service station, getting labor hours at a below civilization market cost. Essentially the welfare queen service station is stealing money from me as a taxpayer rather than paying their employees a legitimate fair wage. This is the well known "walmart effect" where poverty increases when walmart moves in, because the employees are below poverty line so the net effect is negative on .gov and the residents of that .gov who know have to pay higher taxes so Sam Walton's heirs can become richer, all while being told this is fairness, capitalism style. Why should I as a 3rd party be impoverished to make a rich welfare queen business owner richer, because a welfare queen business owner doesn't feel like paying his employees what has been determined to be a fair minimum wage? I legitimately and legally and ethically earn enough income to pay enough taxes to pay my share of national defense; why should I have to chip in more than my share because some welfare queen business owner isn't competent enough to match my level of business skill and pay his fair share of taxes via paying his workers a fair wage?

Your more fundamental failure is not recognizing that when .gov and .com merge, as they've done globally, a marketing game of divide and conquer makes losers out of people fighting on either side. The goal is the destruction of the middle classes globally. They're winning. Some countries are trying a PR campaign where .com and .gov merge and pretend .gov is in the drivers seat of the prison wagon, and some countries have a PR campaign where .com ang .gov merge and pretend .com is in the drivers seat of the prison wagon. However, if you're the guy in the prison wagon at the start of a real world "skyrim" game do you really care about which PR campaign is superior and who's pretending to drive that prison wagon?

> I mostly agree with your points, but this one fails. I say there's a pyramid. You say thats a politically incorrect concept to think about from a psuedo-right perspective, therefore it surely doesn't exist and all topic change-y. Bzzt try again. Is there or is there not a pyramid of skills, and if a working definition of the level of civilization is looking at how the downtrodden are treated, what are you proposing?

Let me put it this way. For the simplicity sake let's present workforce as the pyramid. So you have 1% who enjoy 50%+ or more of the wealth. You have 80% who are doing just fine. And you have 20% who are rock bottom poor and screwed over big time. The problem I have with socialism is that it obsesses about the poorest 20% so much, that is screws it over for the rest, the 80%. And at the end of the day everyone is poor because none of these socialist policies really work well. They just make everyone poorer. Margaret Thatcher is a great example of that on works. When she was the Prime Minister the income of the poorest 20% has been growing the fastest since the end of the WW2. The problem is that the other 80% was getting richer even faster. So poor felt like they are not getting their fair share. Without understanding that if you start introducing policies wealth transfer from 80% to the poor 20%, the poor won't get richer! They'll be still poor. You are so obsessed with this one pump attendant who made it big that by introducing the laws to take some wealth from the rich attendant, you don't see that the same law makes the other 4 attendants poorer too. The problem with socialists is that they want to feel so much, they forget to think.

>There is another issue that as a civilization we've decided civilization means citizens will have police, fire, libraries, schools, national defense, unemployment, welfare of some forms, foreign aid, all that stuff (More civilized nations or more civilized people believe health care belongs on this list, and I agree).

Equaling civilization with socialism doesn't work in my book. What about equaling the amount of freedom and responsibility with being civilized. So, if you - like one of my coworkers - eat, eat, eat and eat all day. She is fat, I tell you. And then - no excercise. Zero. Nada. Nothing. And then cigarettes. And then you go there and tell me it is civilized that I'm taxed higher to pay for her doctor, so I don't have money for my kid's school supplies? Nice. Very civilized. And where is her responsibility here? And where is my freedom to spend money on what I want, not what you want, my coworker wants, or the Government wants? What happened with this in our civilization?

>Anyway it takes $X to provide those services privately or via taxes, or the govt at an overhead cost of Y*$X will provide those services by taking extra money from everyone else and redistributing from each according their ability and to each according to their need.

And we know it doesn't work. 20 years after communism failed there are still people who believe that you can run economy on a premise of Marxist "redistributing from each according their ability and to each according to their need. " Again, go back to your history books. Don't listen to me. Even hard core communists like Slavoj Zizek will tell you that economically that didn't and can't work.

>The "welfare queen" in this situation is the service station, getting labor hours at a below civilization market cost.

And what is "civilization market cost" ? 1usd/hr? 2usd/hr? 50usd/hr? 1000usd/hr ? Can you define this nonsense?

> Essentially the welfare queen service station is stealing money from me as a taxpayer rather than paying their employees a legitimate fair wage.

If there wasn't welfare state, nobody would be taking money from you.

>This is the well known "walmart effect" where poverty increases when walmart moves in, because the employees are below poverty line so the net effect is negative on .gov and the residents of that .gov who know have to pay higher taxes so Sam Walton's heirs can become richer, all while being told this is fairness, capitalism style.

Why these people work at WalMart? Because they couldn't find a better job! So WalMart is doing the a favor because without WalMart they would have ended up at even more shitty job. And shitty jobs are good. I had one - was sorting out garbage. Once you do that type of job, you'll learn how to move up, without any stupid Government program. And if you stay at that level. It's 20% of the poorest. Why would you rather screw it for the 80%, to have it better for 20%. And then the 20% would be still poor too. That's what communism taught us. Everybody became poor. They made everyone equal. In their poverty.

>Why should I as a 3rd party be impoverished to make a rich welfare queen business owner richer, because a welfare queen business owner doesn't feel like paying his employees what has been determined to be a fair minimum wage?

Nobody told you to vote for leftist welfare programs. If you voted for them, yeah, you need to pay for them. I know sucks, to have people voting for that nonsense that cost me money too bro, so we're in it together.

>I legitimately and legally and ethically earn enough income to pay enough taxes to pay my share of national defense; why should I have to chip in more than my share because some welfare queen business owner isn't competent enough to match my level of business skill and pay his fair share of taxes via paying his workers a fair wage?

What is fair wage? 5usd/hr? 10usd/hr? 50usd/hr? Is it fair when a guy cleaning WalMar makes as much as software developer? You think?

>Your more fundamental failure is not recognizing that when .gov and .com merge, as they've done globally, a marketing game of divide and conquer makes losers out of people fighting on either side. The goal is the destruction of the middle classes globally. They're winning. Some countries are trying a PR campaign where .com and .gov merge and pretend .gov is in the drivers seat of the prison wagon, and some countries have a PR campaign where .com ang .gov merge and pretend .com is in the drivers seat of the prison wagon. However, if you're the guy in the prison wagon at the start of a real world "skyrim" game do you really care about which PR campaign is superior and who's pretending to drive that prison wagon?

This what you describe, this merge, is a very fascinating topic indeed. But its proper name is fascism (or corporationism as Duce called it), not capitalism. So, I'm afraid you might be barking at a wrong tree here. Let me give you example here: it were few Republicans, Tea Party sympathizers who voted against big banks bail-outs. All Democrats and rest of the Republicans voted for the fascist state where banks and the Government are in bed together. But not people who are by the left called the 'extreme right'. Tea Party and others, who believe in capitalism, have been and will always be against bank bailouts, or special treatment to big corps. They believe in free market economy and honest competition. If banks have to go bankrupt, let them. That's what capitalist would do. And we all know how left voted on this.

You keep repeating that socialism doesn't work. In the period 1928 - 1934 the socialist USSR went from an agrarian country, devastated by wars to world's second industrial power. Sent the first satellite into space, first man, first space station. To this date the socialist build russian space industry is the best in the world. USSR has made a huge amount of contributions in science as well. Other socialist countries - e.g. Bulgaria - have enjoined rapid increase in industrial output, standard of living and literacy rates when going from capitalism to socialism.

It doesn't work in terms of making live of a regular person better. Your argument is akin to saying North Korea is a better place to live than Germany because North Korea can put satellites on the orbits and develop nuclear weapons. Surely it must be more advanced! In some ways, I'm sure it is, but my question to you is this: at what cost? 30 milion dead to indutrialize USSR. That was the cost. In communism individual is nothing. They will sacrifice millions on the alter of having this industrialization done.

Bulgaria example: all satellite countries in the soviet block, and I underline again all of them, were developing more slowly and had much, much worse living conditions than their Western counter-parts at all time from 1945 forwards. Just compare Eastern to Western Germany. So, don't rewrite history, communism was one that made people sick of the poverty and revolt in Eastern Europe.

On the other hand, I agree with you, that post 1989 Eastern Europe is developing slower than we would have hoped for. However, in mu humble opinion, and that's just opinion, this is because of following still socialism. Free housing, free healthcare, free this and that. People in Eastern Europe live in socialist not capitalist states. Moreover, more often than not, the "capitalization" process done by "liberals" in Eastern Europe was just simply stealing the whole industries by ex-communistic elites together with guys who are currently in power. These are very corrupt states. I like to compare my own country - Poland - to Mexico. You know Mexico has had "capitalism" for a long time. But it is not a real capitalism. People there believe in free stuff, they vote for free stuff, and they don't like or trust free market economy. This causes corruption which in turn makes them permanently poor. I think Eastern Europe is a bit like Latin America. They don't have true capitalism but some kind of a corrupt states that just failed. Adding EU socialism on top of that kind of pushes things in the right direction in my opinion - from post-communistic mentality towards more modern, western, socialists - but it is still socialism.

"And what is "civilization market cost" ? 1usd/hr? 2usd/hr? 50usd/hr? 1000usd/hr ? Can you define this nonsense?"

I would start as a first guess at minimum wage, or maybe the .gov definition of living in poverty. I'm not entirely sure what the problem with the equivalent of an amusement part "you must be this tall" sign is. We certainly permit it with real estate prices, where extensive zoning and regulation mean you must have a certain minimal level of productivity to live somewhere... why not the similar concept of a certain minimal level of productivity to work somewhere?

The walmart effect is they move in and 99% as a group end up net poorer while the 1% gets richer.

Maybe another way to put it, is someone with "enough" income provides for all their needs. Being allowed to pay someone less than their needs doesn't mean they magically just don't get their needs, thats why we call them needs. We just end up with a bloated .gov infrastructure to very inefficiently transfer tax money from more successful individuals to the poorer individuals. Its not like you're planning to starve them to death, are you? Either implement a bloated inefficient bureaucracy to steal from the slightly more successful or face outright revolution.

Take a macro view. Imagine walmart opens and collapses local labor rates for some employees below "the minimum". The next effect is walmart makes more money and .gov bureaucracy makes more money because now I pay more taxes so their kids can still attend public school, I pay more taxes for their emergency room medical care they're still going to receive, just more expensively than the care I get, etc. So the only winners in this scenario are the cheapskate welfare queen business owner who's not paying his fair share, and .gov bureaucracy middlemen who supervise stealing more of my money so the poor folks still get the same services. I'd rather walmart not open and the parasites get less money and everyone is basically richer because of it.

Your example of the coworker with the ridiculous lifestyle is spurious. You already pay her Dr bill. Its just we waste a lot of money on for profit middlemen. The other reason lifestyle is spurious is she's already being punished pretty severely, first of all she's sick which is no fun, and secondly she'd going to die young and capital punishment, however delayed, is already pretty harsh. We exist in an economic system where in addition to those two fun results she can also become impoverished which screws up her family horribly raising .gov costs even more for the rest of us, but one thing is certain that getting rid of middlemen and turning health care into a regulated utility can't possibly cost any more than it already does. Thats the point I simply don't understand about opposition to some form of socialized medicine... you're not avoiding paying $100 for her doctor bill, you're just paying $500 when she goes to the ER for treatment, and with a civilized system you'd be paying $50 because of lack of profit motive and lack of middlemen. So you're not talking about a net loss of $100 because she gets care, but a net savings of $450 because she gets better cheaper care instead of the existing "free ER" system, and you get better care because she's not clogging up the ER when you actually need the ER... Win win all around, except for the parasites and middlemen who like being parasites under the current system.

> The company says, it has to pay you $5 per hour or they couldn't employ you and it isn't even lying. You say, you can't work for a wage below $10 per hour and your reasons for this are valid, too.

The price of labor just like any other price in the free market economy is determined by supply & demand. So they need you for $5/hour. You know you are worth (i.e. can easily get) the same job for $10/hour. The capitalistic/free market way of this to work out is that you go working for 10usd/hour this way rewarding competent guys who can built cars with profit to pay you your rate and at the same time penalizing incompetent company that can't build cars with profit. At the end this means the incompetent company should go bankrupt and resources it was holding hostage - workers, machinery, real estate, steel that they used, etc, etc. can be bought on cheap via bankruptcy process by competent companies that will put all of that to better use.

That's actually what should happen in 2008 with the banks. The incompetent banks that were lending all this risky money to guys without checking if they can ever repay, should go bankrupt - Citi, GoldMan, you name it. Then via baknruptcy process they would free up a lot of workforce, a lot of bank branches, office space, etc. to be bought by competent banks on the cheap (it's bankruptcy after all) and put it all to better use. 3/4th bank from Ohio - its CEO - knew about the housing bubble in advance. He was cautious. If we allowed the market forces to work he - a competent banker - would be the one who would buy on cheap / take over assets of incompetent morons like Paulson ex-CEO from Goldman. That's how free market economy works. This transition period - when people loose their jobs, etc due to incompetent morons CEOs - is horrible. But the things get reassigned and after some time people find work at competent banks that make sense. Instead, we got Paulson and other incompetent loosers convince the Government that they - incompetent CEOs - should be bailed out by tax-money. They told a few fairies about the end of the world that will happen for sure if they go bankrupt. The same was repeated by politicians and TV talking heads. And here we go - competent banker is taxed to pay to incompetent bankers do they can do the same mistakes all over again. Just one thing - please don't call this motrosity capitalism. It isn't.

I call it corporate socialism.

when rich pay taxes to support poor - socialism. when poor pay taxes to support rich - feudalism.

The monster that is emerging its head worldwide is neo-feudalism, not socialism or capitalism. That's why political parties, or political ideologies lost sense and touch with reality some time ago. They try to explain the world that they have no tools to explain - feudal world.

feudalism was destroyed by capitalistic revolution (French revolution) which in turn was questioned (not destroyed) by socialist revolution called Bolshevik revolution. The cycle begins from the start again, next in turn in morphed feudalism. And this system is to be addressed by the values of the French Revolution AND Capitalistic Ideology. Socialist world of politics that we live in has no good answers to the threat of neo-feudalism. The answer to neo-feudalism is in capitalism.

Just saying. Would love to see a Revolution with people reovolting against their feudal masters (the 1%).

German unions also own stock and sit on the board of their employers, which is the real difference. American unions are much more parasitic as they have zero vested interest in the hosts they infest.

Do the American unions eschew financial interests in their employers out of choice?

Well, the first problem is its not true, or at least badly out of date. The UAW is close to gaining control of Chrysler aka over 50% ownership. Sounds insane, yet its true. Also I think UAW is a hair under 20% stock ownership of GM at this time. Of course there are innumerable smaller unions who own no stock and pretty much have no assets on the balance sheet, which at least makes them judgment proof if nothing else. Another problems is the concept of the local electricians union owning stock in a sole proprietorship small industry where one union card carrying industrial maint electrician works part time, and spends the rest of this time freelancing at residential small jobs, doesn't even make sense.

The fundamental problem is you really can't have two masters. So you work to optimize your stock profits; or employees? You might have to screw over some employees to boost the stock price to pay for health insurance for the retirees? So you want to move into Toyota plants but honestly, frankly, the best thing you could possibly do financially for your GM stock ownership would be to completely screw up the Toyota plant IF you moved in? Are you a non-diversified mutual fund representing the financial security of retirees, or a labor union representing the desires of the workers, or as a major owner you are by definition management representing the interests of management? If unions start owning lots of stock, who exactly is representing who and when? The game is a lot simpler if each player only has one master.

You could probably make an interesting startup game and/or cardboard eurogame of the whole crazy situation where multiple player factions represent multiple other player factions but you never really know who's representing who at what time as the game progresses.

Thanks for the extra info.

As to your point(s) - I get that having two (or more) 'masters' makes things more difficult, but it seems to me to be a pretty desirable state of affairs.

After human decision making, the next major mechanism we have for optimising economic activity is the market, and whilst it seems pretty good in situations where there are a lot of interactions (allowing it to price things effectively from the aggregate behaviour), I'm really not convinced it can handle these more subtle situations, where single big decisions have to be made that can have large, long lasting impacts.

The game sounds fun, you should try to make it!

"it seems to me to be a pretty desirable state of affairs."

Oh I wouldn't put it that way...

One interesting issue/analogy is a lot of lawyers (labor lawyers?) won't take conflict of interest jobs where they financially benefit if their client loses / opponent wins. Too much opportunity for malpractice motive, or appearance of it anyway. If you take it out of labor law, as an analogy, say you were suing a company, you'd never hire a lawyer for "your" side who gets most of his net worth by owning a 20% stake in the company you're suing, would you?

Would a board of director hire a CEO who spends part time at two jobs, both direct competitors of each other in the same field?

While there may be divergent goals between stock holders and employees I think it's incorrect to call all but the worst of them "Conflicts of Interest" (pump and dump situations maybe?). Both the employees and the stockholders rely on their business being successful.

as I posted in another comment:

"I think it's important to consider the rights of the owner as well. If I am a captain on a fishing boat, and I built/paid for the boat, I can then hire fishermen to work on my boat. There are more fishermen than captains, if there is a disagreement between the fishermen and the captain regarding where they should be fishing and it was up to a vote, the fishermen would win.

What incentive does the captain have to invest in his own boat if he has no control over where it goes or how it is run?

Why don't the fisherman go build their own boat if they don't like where the captain is fishing?

The majority in this example microdemocracy is effectively stealing the boat from the owner by using the force of the 'state' to reallocate his resources to themselves."

In this situation it's in everyone's interest to catch more fish. The conflicts will come down to how much of a cut each person gets, who gets the more comfortable cabin etc but these competing goals aren't really conflicts of interest.

The captain is perfectly free to do what he wants how he wants with his property, the boat. His boat is useless without crew. The fishermen crew are not his owned slaves (although there are people working to fix that in the USA in all but name) and if he insists on sailing into hurricanes and killing half the crew, or not providing food/water/fair pay, they're perfectly free to raise hell and refuse to work and encourage everyone else not to work until the captain agrees to reasonable demands. He owns the ship, not the crew. If the captain says "I'm going to be a bit reckless and kill half the crew and pay the other half so low their family starves, but I will make an extra 10%, so you'll like it"... well, no, they won't.

The fisherman can't build their own boat because the captains have added enough rules and regs and .gov payoffs and what boil down to bribes in an effort to reduce competition. Its not a free market and the captains like it that way. No surprise there's a wee bit of backlash. If the captains don't like backlash, try not being a crook, then start complaining.

BTW its OK if the captain is pissed off about people "stealing" his capital even if they aren't. To a first approximation a fair and reasonable deal doesn't require everyone to be perfectly happy, just more or less equally unhappy. I'm sure the union fishermen are about equally pissed off at the captain, seeing as he kills about 2% of them annually by being cheap/risky and half of all captains are of course below the median thus they're jerks to work for.

Sorry to hijack your actual point, but I think the financial investment model of company control does leave something to be desired. In particular, people invest time as well as money into their economic ventures, but this is rarely reflected in the level of control they have. The common retort is that you get paid for your time - but then a lot of people get paid for their money too, often quite handsomely (that's the whole point of investment).

What would be interesting (albeit awkward, perhaps to the point of being unworkable) is if an individual's level of control was equal to the weighted sum of the time and money (or money equivalent) that they had put in. This would mean that early investors would start with a large controlling stake, but it would diminish over time as the effects of the time people spent working at the company started to kick in.

I await the rubbishing of my ideas with moderately bated breath! ;-)

UAW was forced into being vested in Chrysler and GM as a condition of the bailout, and it's a condition that they fought tooth and nail.

Interesting. Apologies for not taking the time to do the research myself, but do you have any idea why they were so reluctant to take a stake in the companies that (I presume) their members work in?

Chrysler has been circling the drain for decades and GM isn't too far behind. Why own stock in them when you can just drain them of their remaining wealth?

I think the point on outsourcing is hinted at I the other story trending highly today about the man living without money.

If you had to look a 9 year old child labourer in the eye each time you were buying your cheaply made T-shirt, or a worker how has just completed a 14hour day making component for your phone, would you still feel as happy with your purchase.

Yes not all outsourcing is negative and not all worker abused, but when you remove visibility of production from people you limit their ability to choose based not only on the quality of the product but also the morals of the producing company.

Perhaps the 9 year old child laborer would otherwise starve. I'll gladly buy the T-shirt every time.

Or think of it like this. If all T-Shirts were required to be made in the US by union laborers working 30 hours per week and each one cost $50, I'd probably buy a heck of a lot less T shirts.

True, but maybe we don't need what we are currently buying, but are because the costs are hidden. How much of the stuff we own do we really need?

I don't understand why necessity even comes into this. We don't need a lot of things. We don't need freedom of speech. We don't need more than 2 pairs of underwear or a car either. I don't need more than 2500 calories but I like being able to go eat a big juicy $50 steak sometimes. In the US it's actually illegal to go faster than 65 mph (75 in some awesome places) so why should we make cars that go faster than that if you obviously don't need it.

If you don't need the stuff you are currently buying there's nothing stopping you from living in a 4ft high hole in the dirt and eating cereal with water instead of milk and only buying locally produced goods.

Forcing someone else to live up to your definition of necessity is a pretty shitty thing to do though IMO.

Tangent: parts of Utah and Texas have speed limits of 80-85 mph. Their speed limit laws are also prima facie, which means you can get out of a speeding ticket by proving your speed was "reasonable and prudent" even if it was in excess of the limit.

It seems as though this tangent has quickly turned into a discussion about consumerism (and indirectly its relation to capitalism).

I would willingly look a 9 year old child laborer in the eye each time I buy a cheaply made T-shirt, and I would feel good about myself.

Consider: most people in developing countries are able to choose which job they will do. It is true that some (far too many) are held in debt bondage, but the vast majority are not. Therefore, if the 9 year old child laborer is working to make cheap T-shirts, they're doing that because it's the best option available to them. If I refuse to purchase these T-shirts on principle, I'm denying them an income. I would much rather deny the income of first-world manufacturers who don't need my money.

Markets "decide" what is best by responding to price signals. If you buy a cheap T-shirt then you are saying to the market that you value low price over an ethical supply chain.

Buyers from first world countries do not (in general) deal first-hand with the labourers, they deal with factory owners who have the capital equipment necessary to do the manufacturing at the required scale. All the while that there is price pressure from the market (from you), the buyers will be pushing that price pressure onto the factory owners. As long as there is one factory owner who is willing to take that low price then all factory owners who want the same (or similar) contracts have to take that price, otherwise they are out-competed in the free market. They, in turn, push that price pressure onto their workers, preventing increases in wages.

The rest of what you said is correct: the workers take the jobs not because they want to work for such low wages, but because they are the best wages they can obtain given their skill levels. Buying cheap clothes almost directly contributes to the continuation of poverty.

As an aside, you mentioned child labour. A not uncommon strand to discussions on these issues is that people should "act more responsibly" and "choose" to get educated when they are young rather than waste their time for the short-term benefits of working. People send their children to work because they can't bring in enough money themselves, for reasons like disability (there are a lot more workplace accidents in countries with poor labour protections!) or plain poverty. How does the hypothetical 9 year old improve their lot if the best thing they can do at the age of 9 is get a job manufacturing clothes?

Let me respond to your final paragraph first. I actually don't agree with the idea that people should "act more responsibly" and "choose" to get educated. Or rather, I think they are never given the choice. Children working are forced to do so by the poverty of the parent, who were in turn forced into their life path by poverty. Of course this is not always the case, but what I have seen indicates that economic poverty is primarily due to a poverty of choices. Economic poverty flows from that.

That said, I stand by my belief that the free market is an effective way (and perhaps the most effective way) to lift people out of poverty. It's cruel, slow, and painful, but it also produces long-term improvements at a scale that mere charity cannot match. I think targeted aid is great, and I expect that it would be far more effective on a per-dollar basis, but cheap labor has a greater impact simply because the world economy throws a lot of money at it.

I disagree with your assessment that "buying cheap clothes almost directly contributes to the continuation of poverty" (However, see my caveat below). I just had a chat about this with my flatmate, who is an economist and has a much better grasp of the topic than I. He pointed out that, historically, sweatshops are only the first stage of economic development. Sweatshops provide a better (but still bad) income to unskilled laborers, which gives them enough free income to invest in their own human capital. Greater human capital attracts other investors, and the country pulls itself up by the bootstraps. South Korea, Taiwan, and Japan have built developed economies by starting with sweatshops. China is in the process of doing this. In contrast, India has more restrictions against foreign investment and sweatshops, and their economic growth has lagged behind countries with less restrictive laws.

Or, to put it more simply: sweatshops are an important stage on the road to a developed economy, because initially cheap labor is the only thing that an undeveloped country can offer to investors. If you don't allow sweatshops, you don't get any investment, and the development process stops before it truly started. There's a lot of inefficiencies, and a lot of greedy people (including us as consumers) taking bites out of the pie, but it works better than anything else we've tried.

As I mentioned above, my position is tempered by an important caveat. You point out that some countries have an ethical supply chain. I initially discarded this based on the assumption that 'ethical' usually just means 'first world', but I realize now that you are correct. I haven't yet come across a garment manufacturer with a truly ethical supply chain, but that doesn't mean they don't exist. I will make it a priority to search out such a supplier, and provide them with my patronage. If you have any suggestions, I would be happy to hear them.

You've said quite a lot, so please forgive me in advance for any lack of coherence.

I would be slightly wary of making predictions from historical trends, because we don't have a very large sample size, and there are a lot of confounding factors, a good example being cultural differences between countries, by which I mean differences in social organisation rather than what clothes people wear.

Irrespective of those differences, the general idea of an increase in skill level with continued investment has both common sense and, as far as I am aware, theoretical appeal. The issue, however, is really one of degree, and that is important for people at the hard edge of poverty. Whether it is going to take 1, 10, or 100 years for the conditions in a given region to improve matters to people who have so little money to live on that they can't afford to send their children to school, or pay for proper housing. If there is no money left over for workers to improve their lot because they are living at subsistence level, which is distressingly common, then the development process you describe cannot take place.

Distorting the free market in order to temporarily redistribute wealth downwards, with the goal of speeding up the process of improvement, is in my view an ethical action. An example of the kind of distortion that I think could be appropriate is supporting an oversight organisation along the lines of the Forest Stewardship Council. Bodies like that are by no means perfect, and are themselves often subject to market pressures, however they seem to me to be a pretty good balance of economic freedom and social ethics.

A slight aside; it strikes me that a not insignificant proportion of the increase in wealth that we enjoy has come not from people being able to afford more of everything, but rather from technological progress in methods of producing things. So for example the desk on which my computer sits is a fairly cheap affair constructed from what looks to me like veneered MDF. I do not have a nice oak writing desk, because those are still very expensive. The same kind of comparison applies to almost everything I own that has a historical counterpart: food, clothing, furniture, writing materials.

My point is that my increased "apparent" wealth seems to be driven as much by these technical improvements as by an increase in "actual" wealth (I wouldn't dare guess the actual ratio beyond saying that I feel the factors are comparable). Furthermore, I am confident in saying that technological improvement is not predicated on market freedom on the basis that there have, historically, been civilisations who have undergone technological improvement without free markets: the Romans being one example amongst many. I would also point out that we don't have enough data to know whether the current burst of technological improvement was dependent in any way on market freedom, because we only really have one data point: this particular rise of standards.

To return to your question about an ethical supplier: it kind of depends on your taste. My partner is Indian and I seem to end up getting my clothes on visits there these days, mostly as a result of laziness whilst here. Fabindia is one supplier that seems to put quite a lot of effort into ensuring good conditions in their supply chain, though they don't have the range you'd expect from a western supplier (they do seem to ship internationally though, not sure about stores). There are lots of workers cooperatives in Kerala, where my partner is from, so all the stuff they make must get on to the market somehow! Also, I don't know if you're aware but somewhat coincidentally NPR's Planet Money are doing a series of podcasts and associated things on t-shirts, and the economics of the global t-shirt trade, that sounds like it's going to be quite interesting.

Sorry for the long post :-|

>Now, foreign companies produce many of their cars in the united states with union free labor and american companies have started producing cars in mexico so they can pay the pensions for all the retired union employees.

Toyota's plants are UAW who makes the same demands as they do to GM. It's management that failed the US car industry, not the unions.

ehh, I can't find anything about this other than the following article from last year:

"While the UAW continues to represent Detroit’s Big Three manufacturers, it has all but completely failed to gain representation rights for the so-called transplant lines now run by virtually all the major foreign-owned automakers, from BMW to Toyota to Volkswagen. "

http://www.nbcnews.com/business/foreign-automakers-stubbornl...

He's probably thinking of the JAW Japanese auto workers union or the internal-ish toyota union TMWUI or whatever its called in English. Lets think about it, the Japanese unions bargain with a healthier company therefore get a better deal than the UAW gets from the failing companies in Detroit, and Japanese management as a class is superior to American management as a class (just look at the financials?), therefore they keep the unions out in their transplant plants by offering a deal roughly as good as the union deals in Japan. The transplant workers know they'll get a better deal by piggy backing on the JAW workers offer and the transplant management knows keeping the workers slightly better off than they could possibly get under the UAW will keep a lot of hassle out of the plant. So pretty much everyone wins except the JAW and Toyota MotorWorkers Union (or whatever they're called) because everyone in the USA is piggy backing on their bargaining skills.

So there's two forbidden topics that can't be discussed in contemporary American culture which make it really weird when Americans try to talk about the topic, one that management is simply superior at Toyota (It is a much more successful company... wonder why? Hint its not the nuclear radiation, and management holds final responsibility always) and secondly the UAW is failing their members because the JAW can get a better deal (admittedly its easier to get a better deal when the company is successful, not failing). If you censor the forbidden topics from the discussion in the mass media, you get really weird, illogical stories and discussion.

One really weird thing you see is intentionally mixing apples and oranges to get a political outcome. So the UAW has bargained away salaries such that starting is now like $14/hr at a UAW plant, you can do better at a Toyota transplant which averages in the upper 20s. However if you carefully compare faked up total compensation of $73/hr counting all benefits and retiree amortized expenses and taxes and everything, then it looks like Toyota employees are only getting about 1/3 the pay of a UAW employee. Of course the takehome pay on a paycheck for a new Toyota employee is WAY higher than the takehome pay of a new UAW employee and will remain at that ratio, more or less, for the rest of that noobs career (or until GM finally goes out of business or gets bought out)

Here is an article[1] about how the senators and politicians in Tennessee try to avert installing a German-style Betriebsrat (workers' representation) in their Chattanooga plant. The plan is to have it with UAW.

Have this lovely quote from a manager, and not a politican: "In puncto Mitbestimmung muss klar sein: Demokratie endet für uns nicht an Werkszäunen." (Concerning worker's participation it is clear: for us, democracy does not end at factory gates [fences].)

[1]: http://www.sueddeutsche.de/wirtschaft/streit-ueber-vw-betrie...

Sorry that it's in German...

the google translation of that quote is pretty funny:

"Democracy does not end for us to plant fences"

I think it's important to consider the rights of the owner as well. If I am a captain on a fishing boat, and I built/paid for the boat, I can then hire fisherman to work on my boat. There are more fishermen than captains, if there is a disagreement between the fishermen and the captain regarding where they should be fishing and it was up to a vote, the fishermen would win.

What incentive does the captain have to invest in his own boat if he has no control over where it goes or how it is run?

Why don't the fisherman go build their own boat if they don't like where the captain is fishing?

The majority in this example microdemocracy is effectively stealing the boat from the owner by using the force of the 'state' to reallocate his resources to themselves.

I beg your pardon? VW is trying to establish a workers' representation in their plant, with politicians actively working against it because they fear that this will, over time, drive up the general level of income, which, in turn, will lead to other car manufacturers moving to other states.

This has little to do with workers taking over from the owner, and everything with wages kept artificially low in order to attract international companies simply because of these artifically low wages.

Ya that's messed up. An excellent example of unnecessary govt meddling.

> One problem with this is people as a group tend to be stupid. What stops the workforce from voting to reduce their work hours to 30 hours per week?

Seems reasonable to me. How much work (both input and output) is required of humans in a society is that society's choice. Many people think that, e.g., American society has a cultural expectation of working longer and harder than is necessary or appropriate. Especially when you could possibly have rebalancing schemes to employ more people for fewer hours each. shrug

> One problem with this is people as a group tend to be stupid. What stops the workforce from voting to reduce their work hours to 30 hours per week?

What stops them from doing that today?

The fact the company can hire someone else.

That won't help the company if the law has been changed to set a 30 hour maximum, which is my point: Why are you generally not seeing electoral support for 30 hour maximum work weeks?

From my current boss, and sadly repeated by a significant number of coworkers, "Because our competition is working more than we are. If we don't work these crazy hours they win."

To add insult to injury, this particular employer is the least efficient place I've ever worked. I'd estimate the average employee works 70-80 hours a week, but 1/2 to 2/3 of that is simply working around poor management or fixing mistakes that could have been avoided.

So, when I seek to get my fellow employees to consider the possibility of working toward a 30 hour workweek, I get the "our competition" argument. When I try to introduce efficiencies, I get the "we don't have time to learn/employment/etc." arguments.

Sadly, because of the economy and commitments I have, I haven't been able to find another job that I think is enough of a good bet. As soon as I do, I'm outa here!