Is History Over?

[Diogenes]

Obviously NO ONE earned the oil that was in the ground, they just came along and declared that it was their's, and the system protects those who make such claims early enough.

Well, remember, a lot of people got rich wildcatting, but a lot more didn't.

She made her money by investing it correctly to find and extract that oil.

http://en.wikipedia.org/wiki/Wildcatter

More like her Husband made her a lot of money by investing it correctly. Of course, he might just have inherited the land.

Your response misses the entire point. (That there are a lot of people who are simply GIVEN a windfall by fate.)

Most people don't begrudge someone the fruits of their labor. What irks is that a lot of people get the fruits while performing no labor, or minuscule labor.

[Diogenes]

the burden of proof falls on the person claiming this is a problem.

I agree, to a point. Those who claim the current situation is good also have a burden.

I am not confusing causes with effects. It is useful to examine the causes of our current situation. Timothy Noah (from his Slate.com articles) guessed the following amounts of responsibility for the "Great Divergence." Great Divergence = increasing disparity in income. I've eliminated factors he raised but dismissed as not having any effect and changed his order. I'm not going to write about immigration or tax policy.

* Immigration is responsible for 5 percent.
* Tax policy is responsible for 5 percent.
* Trade is responsible for 10 percent.
* The decline of labor is responsible for 20 percent.
* Various failures in our education system are responsible for 30 percent.
* Wall Street and corporate boards' pampering of the Stinking Rich is responsible for 30 percent.

Some questions for the reader:
Do you believe the decline of organized labor is good for the Republic?

I believe the decline of organized labor is not only good, but inevitable.

When it is time to negotiate my wage with my employer, how will I fare better, alone or collectively with my fellow wage earners?

Depends on whether you mean long term or short term. In the short term, if you can force employers to pay *YOU* more, then you are ahead. In the long term, you are simply creating a force which points in the direction of removing you from the payroll, lest the employer be destroyed by non-union competition. If only there were some way the unions could FORCE an employer to keep them employed. Oh... wait....

That's not going to work against a global work force.

After all, it is my capitalist duty to get the maximum amount of money for my labor, isn't it?

It most certainly is, and if you are a Fiscal conservative, you have no moral qualms about how you go about it. Threats and intimidation are perfectly reasonable arrows in the quiver of people who want to keep the morality out of money issues.

On the whole, I don't object to the increase of trade with other countries. One effect seems to be the decline of manufacturing in the US. Do you believe the decline in manufacturing in the US is good for the Republic?

No, it is very bad. I fault the liberals for wrecking our manufacturing base. The more they attempt to social engineer industry, the less functional it becomes.

Do you believe various failures in our educational system are good for the Republic?

Absolutely not. There is no adequate negative feedback system in place for correcting problems in the educational system. Also, many of the problems in our educational system are the consequences of the culture, policy, and the legal system.

Do you believe Wall Street and corporate boards' pampering of already well compensated people is good for the Republic?

Not really, but you might as well ask me what someone else should have for dinner. Not really any of my business. How a free people spends their money ought really be up to them. (as long as they are not doing anything treasonous or illegal.)

Modern Walmart is an interesting example:

http://abcnews.go.com/Business/walmart- ... d=11067470

Quote: "Smith, an alderman in Chicago, presented posters at a city council meeting showing that Walmart CEO Michael Duke's $35 million salary, when converted to an hourly wage, worked out to $16,826.92. By comparison, at a Walmart store planned for the Windy City's Pullman neighborhood, new employees to be paid $8.75 an hour would gross $13,650 a year.

Smith's numbers could be a bit off. Equilar, an executive compensation research firm, calculates that Duke earned just south of $20 million in 2009 and $28 million in 2008, not counting millions of dollars in potential performance awards. But the alderman argued that there's still a "sad" contrast between Duke's compensation and the wages of his employees. End quote.

Sam Walton and the people who worked with him created an international phenomenon. Walmart's effect on the economy of the United States and the world is difficult to overstate, but did Michael Duke, running an established company, work that much harder and smarter than his lowest-paid employee? Is Michael Duke responsible for the creation of that much wealth?

Not at all. He is the recipient of one of those "windfalls" of life that I mentioned in my previous message. Yeah it's irksome that some people should get so many fruits for so little toil. It IS part of how our system works though.

If you think the current situation is good, do you also think the trend to even greater income disparity (or wealth) is a good thing?

As Winston Churchill remarked, "Democracy is absolutely the worst form of government, except for all the others. " Capitalism is a lot like that. The current situation may not be great, but the currently discovered alternatives are far worse.

At what point will you think income disparity (wealth)will be a bad idea?

I don't think income disparity is a problem. A long time ago I wrote messages comparing Economics to thermodynamics. Distributed heat is worthless. It is only possible to create motive force when there is a concentrated heat source. Economics works like this too.

As for the social impact, i'd rather have thousands\millions of fabulously wealthy people than just a few or one as existed during monarchies.

The concept of Monarchy and Nobility may have left governing and politics (at least in this country) but economically the equivalents are very much with us. The difference is, nobody is forced to remain in their economic class, and have the ability to attain the upper ranks with hard work and luck.

Will you draw a line between good and bad? Where?

We don't bother. This issue is another example where I can apply one of my favorite rants. People want to create artificial boundaries where none in fact exist. It is a virtual continuum from the economically impoverished to the fabulously wealthy. Evil is not a function of wealth, it is a function of intent.

It's like a gun. It's not inherently evil, it depends on what you do with it.

E.g. 'the first things Capitalists do is get a law passed to close the market to new competitors.'

This is a real problem; markets need to be free.

...so when your rich capitalist tries to get a law passed to make life diffifult for competitors, he generally finds the going very difficult.

Not that difficult. Let's look at copyright law in the US:

From Wikipedia: "The first federal copyright act, the Copyright Act of 1790 granted copyright for a term of "fourteen years from the time of recording the title thereof", with a right of renewal for another fourteen years if the author survived to the end of the first term. The act covered not only books, but also maps and charts." And:

"Works created in or after 1978 are extended copyright protection for a term defined in 17 U.S.C. § 302. With the passage of the Sonny Bono Copyright Term Extension Act, these works are granted copyright protection for a term ending 70 years after the death of the author. If the work was a work for hire (e.g., those created by a corporation) then copyright persists for 120 years after creation or 95 years after publication, whichever is shorter."

Who benefitted most from these increases in copyright term? Why the fifty or twenty-five special benefit to works created by a corporation? That Sonny Bono must have loved him some corporations!

Finally, Bill Gates. To whom is he leaving the vast majority of his fortune?
http://www.dailymail.co.uk/news/worldne ... z114GFAF5n

'We've chosen not to pass it on to our children."

'We want to give it back to society in the way that it will have the most positive impact.

Bill Gates. The "Chance Gardner" of the computer world.

He said he did not want to leave it in his will for his children and added: 'It's like saying which children are most important."

BTW, isn't Bill Gates giving half his fortune to charity before he dies? Warren Buffett? Go look at the Wikipedia article for Warren Buffett and read the 'Philanthropy' section.

Not sure what this has to do with copyright law, but I agree with you that copyright law is far too protective of it's beneficiaries. People who invent things do far more good for the nation and the world, yet they get nothing like the protection afforded to copyright folk.

Copyright law should NOT be better than patent law.

[TallDave]

Your response misses the entire point. (That there are a lot of people who are simply GIVEN a windfall by fate.)

Who? Lottery winners?

Again, this is an economy in which people make voluntary exchanges in order to maximize their utility. Generally, those who accumulate wealth do so by offering the best value in their exchanges.

Chance or fate plays a part, but as they say -- chance favors the prepared mind, and fortune favors the bold.

[TallDave]

Sam Walton and the people who worked with him created an international phenomenon. Walmart's effect on the economy of the United States and the world is difficult to overstate, but did Michael Duke, running an established company, work that much harder and smarter than his lowest-paid employee?

Irrelevant. The point of an economic exchange is not to reward the other person for hard work, it is to maximize one's utility. We don't shop at WalMart because Sam Walton or Michael Duke worked so hard, we shop there because they offer the best prices under either man. Walton/Duke's wealth isn't a windfall either, as Dogenes suggests -- it is the entire point of an economy.

To illustrate: Let's say you decide to make your own toaster, as an artist recently decided to do, a task which he found out is surprisingly difficult. It would probably take you a month or so working from scratch. So you work about 160 hours, and in the end produce something perhaps equivalent to what anyone can buy for $20 at WalMart. So, the most anyone will pay for your work is $20/160 = 12.5 cents per hour. Now, maybe you worked really really hard on your toaster, but your labor was still basically worthless. That's not Sam Walton's fault, or Michael Duke's, that's your fault for not providing something of more value to your fellow man.

The shareholders of WalMart didn't hire Michael Duke at whatever he's paid because he works so hard, they did so to maximize their returns. They don't pay the low-level employee nearly as much because the low-level employee has a much smaller effect on their returns than the CEO.

[TallDave]

Not that difficult. Let's look at copyright law in the US: Why the fifty or twenty-five special benefit to works created by a corporation?

Presumably because corporations don't die from old age.

Personally, I think all copyrights should expire and become public domain at some point, and I hope people will vote for such a system, but as an indictment of competition in capitalism as practiced in the U.S. it's not a very strong argument because a copyrighted work usually competes with other novel copyrighted work -- i.e., you probably wouldn't go re-record The White Album and try to sell it the way you might try to copy the first cotton gin. Patents do expire, and it's generally fairly difficult to get your competition outlawed, as people tend to be outraged by that kind of behavior, except through seemingly well-intentioned safety or eco legislation which can tend to have the effect of raising barriers to entry.

One effect seems to be the decline of manufacturing in the US. Do you believe the decline in manufacturing in the US is good for the Republic?

It's largely mythical. Some industries have moved elsewhere to make us things more cheaply (gains from trade!) but output hasn't actually declined, except very recently.

(middle graph)

http://seekingalpha.com/article/133188- ... er-workers

Manufacturing jobs have declined, and yes, job loss due to increased productivity is very definitely a Good Thing.

[Aero]

Manufacturing jobs have declined, and yes, job loss due to increased productivity is very definitely a Good Thing

Unless you're one of the 15% of unemployed Americans who have spent their lives to date training and working to become proficient at one of those careers. And note that up until they were fired, those positions had to be filled by someone in order for the factory to produce goods. Workers couldn't say, "Well, that job will go away in a few years or decades, so I'd better not accept one of those positions." Had they done so, other unemployed workers would have been available and we would now still have 15% of our labor force either unemployed or forced out of the job market. (And it is 15% or more based on news reports, check it if you like.)

Of course we have been through similar episodes in the past. Look at the decline in defense industry jobs in the late 1980's and 1990's. Millions of highly skilled workers and engineers had to be retrained, but retraining is less effective as the workers near retirement age. Retrained people find themselves overqualified for the available positions even though living expenses do not decline. From an employer's point of view it is impractical to hire an overqualified worker because should that worker find a job suiting his/her qualifications, he/she will quit and take the appropriate job, and anyway, their are several eager young people for the job so their is no motivation to hire an older, overqualified person.

[GW Johnson]

When you lay off or fire skilled workers, you also generally lose the experiental art that those experienced worker had in their heads. All of the companies I worked for, in 20 years of aerospace/defense engineering, actually discouraged activities that would pass along or document that art, as "too expensive to do". Everything I heard or read indicated that attitude was prevalent throughout all industrial sectors in the US economy.

That effect is why the rocket folks in NASA had to re-learn the art of rocket work with Ares-1. In my experience, "rocket science" ain't just science. It's only about 40% science that can be learned from stuff written down, about 50% the art that was never written down and should be passed down verbally on the job, and about 10% blind dumb luck. And that's in production work. I have never had any reason to think it wasn't at least similar in all other industrial endeavors.

Penny-wise / pound-foolish companies "believe" that it's all science, so that a high school dropout can build this stuff by following the written "recipes", instead of keeping experienced engineers and technicians on their staffs. That belief in a fiction is why they generally laid off guys approaching age 50, and out-of-work engineers older than about 40-ish found they were essentially unemployable. These companies generally prefer the cheaper young workers, falsely believing them to be just as effective ("all engineers are the same, a dime a dozen, like grapes").

I went through several cycles of that nonsense during my career in that industry. A lot of the words in my post here are exactly the sentiments I heard expressed by management and human-resource "professionals." Professionals? Really? Beliving in a fiction like that? Bah, humbug.

That "let's get rid of the expensive experienced guys" attitude, more than anything else, is why it's proven so hard to recreate a scaled-up Apollo (Orion) and the Saturn replacement rockets (Ares-family) to push it, from current tinkertoys. That's why airliner development is so much more long and difficult than it used to be. That's why the bridges are starting to crumble on the interstates. Etc - etc - etc.

[Aero]

When you lay off or fire skilled workers, you also generally lose the experiental art that those experienced worker had in their heads. All of the companies I worked for, in 20 years of aerospace/defense engineering, actually discouraged activities that would pass along or document that art, as "too expensive to do". Everything I heard or read indicated that attitude was prevalent throughout all industrial sectors in the US economy.

That effect is why the rocket folks in NASA had to re-learn the art of rocket work with Ares-1. In my experience, "rocket science" ain't just science. It's only about 40% science that can be learned from stuff written down, about 50% the art that was never written down and should be passed down verbally on the job, and about 10% blind dumb luck. And that's in production work. I have never had any reason to think it wasn't at least similar in all other industrial endeavors.

Penny-wise / pound-foolish companies "believe" that it's all science, so that a high school dropout can build this stuff by following the written "recipes", instead of keeping experienced engineers and technicians on their staffs. That belief in a fiction is why they generally laid off guys approaching age 50, and out-of-work engineers older than about 40-ish found they were essentially unemployable. These companies generally prefer the cheaper young workers, falsely believing them to be just as effective ("all engineers are the same, a dime a dozen, like grapes").

I went through several cycles of that nonsense during my career in that industry. A lot of the words in my post here are exactly the sentiments I heard expressed by management and human-resource "professionals." Professionals? Really? Beliving in a fiction like that? Bah, humbug.

That "let's get rid of the expensive experienced guys" attitude, more than anything else, is why it's proven so hard to recreate a scaled-up Apollo (Orion) and the Saturn replacement rockets (Ares-family) to push it, from current tinkertoys. That's why airliner development is so much more long and difficult than it used to be. That's why the bridges are starting to crumble on the interstates. Etc - etc - etc.

Yea - So this is a "heads-up" for all you young hot dogs. You may as well plan on retiring at about 40 - 50 y/o, because a paycheck is really hard to come by beyond that age. Find something to justify the "Self-employed" that you will put on your resume. (Unfortunately, self-employed" is not the same as, "earning a living wage.")

[WizWom]

Your response misses the entire point. (That there are a lot of people who are simply GIVEN a windfall by fate.)

Who? Lottery winners?

Again, this is an economy in which people make voluntary exchanges in order to maximize their utility. Generally, those who accumulate wealth do so by offering the best value in their exchanges.

Chance or fate plays a part, but as they say -- chance favors the prepared mind, and fortune favors the bold.

Well, there is the "fate" of being born to someone who was a good businessman. Not all scions of a rich family are good businessmen themselves.

[hanelyp]

Manufacturing jobs have declined, and yes, job loss due to increased productivity is very definitely a Good Thing.

The truest measure of the economy is goods and services produced. Keeping someone on the payroll who isn't pulling their weight is bad for both the company and the economy as a whole, keeping that person from other productive work. At the same time, sometimes businesses are short sighted in who they let go, and usually pay for it in the long run. Wages and jobs can both deceive as measures of economic strength.

[Aero]

Manufacturing jobs have declined, and yes, job loss due to increased productivity is very definitely a Good Thing.

The truest measure of the economy is goods and services produced. Keeping someone on the payroll who isn't pulling their weight is bad for both the company and the economy as a whole, keeping that person from other productive work. At the same time, sometimes businesses are short sighted in who they let go, and usually pay for it in the long run. Wages and jobs can both deceive as measures of economic strength.

I would not suggest keeping a group of assemblers on the payroll after robotic machinery has been installed, doing the jobs faster and with higher quality product. However, it was the profits generated by product produced by that group of assemblers that enabled the purchase of the robotic machinery. Putting laborers with outmoded skills on the street in mass creates a social problem. As it stands, neither the robotic machinery or the company that owns it has any responsibility to those assemblers, beyond unemployment insurance. That is a good first step, and might be enough if the company hadn't moved the robots off shore thereby eliminating all the jobs at the plant, not just those replaced by the robots.

Unemployment insurance and retraining should work well, as long as there are descent wage jobs available for the retrained workers. It breaks down when the number of jobs is significantly fewer than the number of available workers as seems to be the case today. Have the jobs really moved off shore, have they simply been automated out of existence, or are they out there waiting for the properly retrained workers? And is there any motivation for the unemployed assembler to seek retraining while still drawing unemployment, or is it the hard times following the lapse of the unemployment insurance benefit that spurs the retraining efforts. I suspect it is the latter, but to be effective, retraining should be started sooner, rather than later.

[MSimon]

What irks is that a lot of people get the fruits while performing no labor, or minuscule labor.

Yeah. Just thinking to make money is a really bad idea. Or getting lucky.

We can outlaw thinking and luck or perhaps get a government bureau to confiscate unearned profits.

Or we can become a truly Christian nation and abjure envy.

The envious have done more damage to our nation (by at least a factor of 100X) than all the dopers and alcoholics that have ever lived here. So who is Master D worried about? Dopers. While giving the envious an oblique ("What irks...") boost.

[MSimon]

Manufacturing jobs have declined, and yes, job loss due to increased productivity is very definitely a Good Thing.

The truest measure of the economy is goods and services produced. Keeping someone on the payroll who isn't pulling their weight is bad for both the company and the economy as a whole, keeping that person from other productive work. At the same time, sometimes businesses are short sighted in who they let go, and usually pay for it in the long run. Wages and jobs can both deceive as measures of economic strength.

I would not suggest keeping a group of assemblers on the payroll after robotic machinery has been installed, doing the jobs faster and with higher quality product. However, it was the profits generated by product produced by that group of assemblers that enabled the purchase of the robotic machinery. Putting laborers with outmoded skills on the street in mass creates a social problem. As it stands, neither the robotic machinery or the company that owns it has any responsibility to those assemblers, beyond unemployment insurance. That is a good first step, and might be enough if the company hadn't moved the robots off shore thereby eliminating all the jobs at the plant, not just those replaced by the robots.

Unemployment insurance and retraining should work well, as long as there are descent wage jobs available for the retrained workers. It breaks down when the number of jobs is significantly fewer than the number of available workers as seems to be the case today. Have the jobs really moved off shore, have they simply been automated out of existence, or are they out there waiting for the properly retrained workers? And is there any motivation for the unemployed assembler to seek retraining while still drawing unemployment, or is it the hard times following the lapse of the unemployment insurance benefit that spurs the retraining efforts. I suspect it is the latter, but to be effective, retraining should be started sooner, rather than later.

Or we can go for the Luddite solution and smash the machinery.

BTW what you propose will slow the adoption of machinery. Making us vulnerable to another country that does not so restrict such adoption.

The answer is World Government. Run by me.

[MSimon]

Your response misses the entire point. (That there are a lot of people who are simply GIVEN a windfall by fate.)

Who? Lottery winners?

Again, this is an economy in which people make voluntary exchanges in order to maximize their utility. Generally, those who accumulate wealth do so by offering the best value in their exchanges.

Chance or fate plays a part, but as they say -- chance favors the prepared mind, and fortune favors the bold.

Well, there is the "fate" of being born to someone who was a good businessman. Not all scions of a rich family are good businessmen themselves.

We can fix that. Don't allow the "rich" to have children.

[TallDave]

Well, there is the "fate" of being born to someone who was a good businessman. Not all scions of a rich family are good businessmen themselves.

True, which is why I was careful to say those who offer their fellow humans valuable exchanges accumulate wealth. Those who poorly allocate wealth are soon separated from it.

I think too people tend to underestimate the investment it takes to become a CEO of a large company. You're probably talking about someone who invested 30-40 years of 80-120 hour weeks just for the chance at a job like that -- and any number of missteps can knock them off the path. Not many people are willing to make that investment. I'm sure as hell not going to, for any amount of money, so I'm glad there are other people who will.

There was a poll a while back that really put the issue into perspective. It went something like this: 1) Would you like to be a millionaire? 2) Would you be willing to work 40 years of 70 hour weeks to get there? You can imagine the disparity in answers.