I believe the technical term is liability. Workers are liabilities. You are right. A part of capitalism is to increase the assets and reduce liabilities.
Which is why it cannot help but create its own downfall. But before that we will have to end up with that unholy alliance between government and industry called fascism, as that will be the final attempt to extract wealth from a society that has been drained, by tapping directly into taxes collected by the government.
You simply cannot have a system that needs consumers to spend money when its in every single companies best interest to pay as little, preferably nothing, to those whose business and expertise you need to survive. You can expand to other nations as a temporary solution but in the end you will run out of people to sell stuff to.
Not to mention the unholy alliance between the contemporary elite "left" and capital, called globalism.
The only real counterforce to global capitalism has historically been the people of a nation, and the populist nationalism of a few nation states has been the only example ever known of an economic system that has upheld basic human dignity (whether it has been called social democracy, christian democracy or something else). This is now going down the drain.
By "populist nationalists" I mean what they really are, not necessarily what they call themselves. The Swedish Social Democrats of old are a good example who in practice created a national welfare state, often even with explicitly nationalist rhetoric.
>The only real counterforce to global capitalism has historically been the people of a nation
And yet every time there is some great nation-building exercise, the nation in question immediately attempts to build a global empire for itself, by subjugating other nations.
France of Napoleon.
Germany of Bismark.
Japan of Meiji.
Germany of Hitler.
USSR.
Current day USA.
Human dignity, my ass.
PS. Arabs of Muhammad and Mongols of Genghis also qualify.
>The US isn't trying to build a global empire of any kind
You don't have to legally control or own territory to be, in effect, an Empire. When you use your military power to force economic interactions of your liking, you are an Empire.
US has routinely interfered in politics of Central and South American countries - including military assistance for local anti-democratic forces, and in some cases (e.g. Dominican Republic), outright military occupation - to protect its economic interests there. Here's just one example - I picked this one because it is directly related to the term "banana republic", since the intervention was to protect the interests of the United Fruit Company.
It has always struck me as weird that the moment a nation enjoys some stability and prosperity, it immediately decides to throw them away for ever-growing expansionistic ambitions.
I mean I get it, we as humans can never get enough -- I've witnessed that in many people, myself included.
It's just so very sad to observe historically. It seems that if somebody sees they can get away with X, they immediately jump to doing something 10*X.
Ironically, this is the exact scheme through which many criminals have been caught -- they admitted they felt a thrill because they have not been caught, and wanted to up the risk. (The police would have never caught them if they haven't did that as well.) I don't believe the same exact phenomena is involved with nations but if you squint your eyes really hard then it does look very similar.
I think in the case of the Napoleon's France and the USSR part of their behaviour was perhaps caused by a recent history of attacks and interventions by other nations - this certainly did nothing to help the paranoia of the Soviet leadership.
No, globalism means globalism and has nothing to do with Jews. This is simply an attempt by (extremely well financed) globalists to smear anti-globalists with antisemitism.
This comment suggests that you are trying to support a political point by using obfuscated technical terms you do not understand.
"Workers" do not show up on a balance sheet: they are neither an asset not a liability "technically." There may be a payroll liability briefly, though it will then be paid out and taken off the books. Accrued vacation is a liability, which is why we have "unlimited PTO" policies.
It is impossible, in double entry bookkeeping, to "increase assets and reduce liabilities." Every asset must be balanced with a liability. That's the fundamental basis of that accounting system.
To the extent that we're speaking metaphorically, workers are assets. To the extent that we're speaking technically, it's clear that you tried to apply jargon that you didn't understand to confuse others.
Well, everyone is a number somewhere on a spreadsheet. Call me cynical, but I have long given up on the notion of company loyalty etc. Looking back at my bright-eyed idealism coming out of college, makes me laugh.
Where does that come from though? Is that still the case for the current generation of college graduates? Do the kids need to be educated closer to reality?
The notion of company loyalty is good for a productive workforce - UNTIL the illusion is shattered, which can take parts of the rest of an individuals positive world-view with it.
> The notion of company loyalty is good for a productive workforce - UNTIL the illusion is shattered
It should also be noted that this illusion is not specific to any economic system. The soviet union also saw its share of jaded idealists who were gullible to the point of believing that all those promises of owning the means of production had any credibility.
At least in capitalist economies workers are educated with regards to liberal ideas. Thus they are informed that a work relation is just like any business relation, and therefore they are compelled to look after their own best interests without falling for the "company loyalty" emotional trap. Your employer owes you the salary and you should expect nothing more in return, and consequently you as a worker are compelled to always look after more favourable arrangements just like your employer is perpetually doing wrt your job.
The comment to which you're replying wasn't intended as a jibe at capitalism, just pure observation of unrealistic expectations of a college / university graduate in an ignorance-is-bliss kind of naivete.
Faith in the reciprocation of loyalty with thine employer can be just as misplaced as with your government, whatever shape of ideology it follows (any system is corruptible; gosh-darn humans).
Well, when I was in college, I did a few internships and stuff, probably drank some of the kool-aid dished out at the time and genuinely swallowed some of the "we care for you, and really want you to excel here and make a difference in the world" type of stuff. I really did care for the companies I initially worked at and believed in the work I did.
A few years down the line and a few job changes later, I've come to the realization that broadly they are similar in what they do, the way they treat people. It's just different shades of politics, infighting, employee indifference, and perks and benefits. I don't expect anyone from corporate to have my back no matter how good the work is and how much effort I put in.
Maybe it's just my jaded inner self-talking. Christ, I am not that old, only just mid-30s and the way I am writing makes me sound like a grizzly 60 yr old! Now, get off my keyboard!
Established companies all trying to protect themselves from competition because it's an easier / cheaper approach than continuing to actually compete.
Like when a football team is in a winning position and "goes defensive" to the detriment of their effectiveness.
The problem is, once a company / team changes their approach to "the game", it's often too hard to change it back.
Capitalism has developed ADD. It's all about short-term reward and for all intents and purposes the future is too far away to consider.
It's simple. The rich are getting richer and the poor are getting poorer. With more money, the rich have more and more power to make sure that it stays that way.
The wealthy reap mnore and more of the benefits of the economy than the average person, in ever increasing measures.
The fact that a working class person might now have access to 4k TVs and new cars on finance doesn't change the fact that overall, their share in the prosperity of their nation in shrinking, even though it might seem like gradual improvement.
Luxuiries don't mean shit when you can't save, afford to treat a major illness or have to work two jobs to pay the rent.
Half of the US doesn't even have any savings and are in a state of persistent debt servitude.
Even if most people saw their share of the aggregate wealth shrink, they are still individually wealthier; this is not a zero-sum game, there is more wealth in society now than there has ever been. It is fine to argue that the system is unfair in how that wealth is distributed, but let's not lose sight of the fact that the debate is not about whether or not people are better off, it is about the degree to which they are better off. Remember that a century ago plagues were considered a fact of life in America, and today we are arguing about whether or not people can afford treatments for rare illnesses (I personally believe we could do a better job of giving people access to life-saving care, but the fact that we even have such a debate is a sign of how wealthy our civilization has become).
> Even if most people saw their share of the aggregate wealth shrink, they are still individually wealthier
What exactly do you think the end result of that trend is if it continues?
You're framing this argument as if any increase in individual wealth is to be lauded and celebrated. Most people don't think that way.
All people will see, is their meagre wealth increases (if they are even lucky enough to have seen that) and the kind of increases seen by the top tiers in society.
They'll feel angry, depressed and feel like its an injustice. Then the social contract breaks down, which it already is.
You can keep pretending like there isn't any problem with how wealth is distributed currently, but you won't be able to forever.
It really depends on the rate at which aggregate wealth grows, and the rate at which an ordinary person's share of that wealth shrinks. There is no reason the trend could not continue indefinitely upward, with the poor living better and better lives while still receiving a smaller share of society's wealth. Again, this is not zero-sum -- everyone is going to gain, but some might gain more than others.
Edit:
I am not arguing that the current system is problem-free, only that it has benefited the vast majority people, even if most people do not perceive those benefits or if they are jealous when they see the benefits accumulated by the rich. I suspect people would be much angrier if they were transported back in time and had to deal with the world as it used to exist, when people were poorer at every level of society. I am not claiming to have a political answer, but the facts are not easily denied: at every level of society people are wealthier today compared with the past.
> The wealthy reap mnore and more of the benefits of the economy than the average person, in ever increasing measures.
The success of some does not mean that others have been defeated, or forced into a position where they are worse than before.
This fallacy is often repeated by people obsessed with egalitarian views, where they consider any difference in access to resources (even those which have been earned through hard work and not squandered away) as being somehow a major injustice.
Yet, just because some multimilionaire wastes wads of cash in conspicuous consumption that doesn't mean that societies based on capitalism don't enjoy humanity's highest quality of life and access to goods and services, to the point that some are even considered by "the people" as being infinite and a god-given right.
In this particular case it does, though. It's very obvious when you contrast worker productivity with quality of life gains - it's clear that workers today are left with substantially less of the wealth that they produce in the economy than they did, say, 50 years ago. In absolute terms, that smaller proportion translates to some gains, but that's little consolation. If you used to earn $100, but someone stole $40 of it every time, and now you earn $200, but someone steals $120 of it every time, you're technically better off... but the guy who steals money from you is clearly reaping more benefits at your expense even so.
> substantially less of the wealth that they produce
That line of reasoning makes no sense at all because it also implies that workers would also be responsible for all the wealth destroyed by the course of their work, which was very substantial in the dotcom burst.
But somehow egalitarian arguments are never made in regards to any support to share the burden of a financial investment that goes bust, and the focus is on all the envy around how their neighbor profited from an investment they never made themselves.
> That line of reasoning makes no sense at all because it also implies that workers would also be responsible for all the wealth destroyed by the course of their work
I'm honestly not sure what you mean by this, or how it's relevant to what the person you replied to said.
> But somehow egalitarian arguments are never made in regards to any support to share the burden of a financial investment that goes bust, and the focus is on all the envy around how their neighbor profited from an investment they never made themselves.
1. We don't really get a choice in that do we?
Most people can't afford to invest precisely because the problems we are telling you about here; and that includes the working and disappearing middle classes that can't even save effectively due to stagnant wages that don't reflect their increased productivity.
2. On the few occasions where 'egalitarianism' as you keep putting it, is actually applied in a 'share the burden' fashion, it appears to be when massive, wealthy companies need a bail out from the tax payer after what amounts to obscenely reckless behaviour.
The name of the current capitalist game seems to be to privatise the profits and socialise the losses.
I keep hearing people say the econonomy is no zero-sum, without ever explaining it. There is a finite amnount of wealth in the world today. There will be a finite amount of wealth tomorrow, and so on.
Each and every day, your share of that daily amount decreases, while owners of capital increase exponentially. Since the financial crash the richest in society have seen massive gains while the working and middle classes have been hit hardest, many even making wages barely competetive with levels in 1970.
I'm sure your assertion that there is plenty to go around will make those people feel better as they go yet another year without any real improvement in their income.
Lions in the desert are smarter than we are then. We've "built" a far less quality world around us than even ants, bees, apes, birds. They at least have authentic bonds left. We have arrangements and schemes.
If we judge based on engagement? Can we be sure who is more invested? Regardless of the unknowns there, can we ascertain intrinsic loyalty and/or belonging and/or commensurate reward to investment and will/self contribution? I'm obviously attributing a lot to their mode of being. But if it's even remotely close to true, you don't think we have a lot to learn?
Bees are biological automatons without even the illusion of free will, and their association with each other is not comparable to society. We might have some things to learn about biochemistry or supply chain management or something, but they're not exactly philosophical analogues.
Yeah, lions have awesome lives. Nothing like roving the world, murdering other males and eating their young, taking their females to breed and hunt for you, then inevitably getting murdered yourself by other roving males. It's a utopia!
We do an approximation of the same, macrocosmically, with little to no satisfaction. And they remain in balance with their ecosystem. And as far as we can tell their mind or conscience or consciousness is uncluttered by any of their acts.
Neat! How many of your half-siblings were devoured by your father?
(Also: God, "remain in balance with their ecosystem" is such a mendacious phrase. People use it all the time, as if animals have some kind of mystical gaia sense that says, "Woah, woah, woah lion, you're using too many natural resources here. Maybe just meditate today." Here's how lions "remain in balance with their ecosystem": they try to eat everything they can. Sometimes they're unsuccessful and they starve. Sometimes they're successful and cause a local shortage of prey and then they starve. Yaaaaaaaaaaay.)
We peasants have been consistently pushing back against unfettered capitalism for hundreds of years. If our efforts are eroded too much we may not enjoy such quality of life much longer.
As well, the absolute wealth of people does not stop discontent and violent revolution. The gap is what matters.
Exactly. Life of peasants has only gotten better when peasants fought for it. Poverty in the 19th century in industrial centers was pretty horrific. People moved to the cities for work, but often got brutally exploited with very little in the way of rights, until they banded together, formed unions and demanded better working conditions.
Things have gotten a lot better since then, but if you look at historic trends, they have stagnated again in the US since the early 1980s. There's been no growth in the pay for working class people since the 1980s, while money for the rich has sky rocketed.
> the absolute wealth of people does not stop discontent and violent revolution. The gap is what matters.
So, politics of envy. It's a disgusting state of affairs if it's not enough to enjoy a high quality of life, but it's also imperative others' must not be significantly higher.
I guess you can look down on the people like that, instead of looking down on the elites parading around in their lambos while the regular people can't get health insurance for their kids.
I don't agree with the OPs off-hand dismissal of capitalism either but...
I think this trope is misused. Peasants are better off and the world is wealthier because of science, not a political ideology. The industrial revolution, scientific medicine, the green revolution...
Saudi Arabia's "peasants" (or descendants of herdsmen, properly) are wealthier because of oil mining and modern energy industry, not monarchy or capitalism or whoever else wants to take credit.
I'm not saying politics doesn't effect anything, it obviously does but capitalism can't just claim credit for everything invented in the last 200.
Btw, this is exactly what Lenin did and what Orwell parodied in 1984.
I'm not saying you can't argue that capitalism benefited the poor, but you can't just claim everything good that happened after 1800 for capitalism.
You can argue that research and development of new products is motivated by the constant churn of competition and obsolescence that isn't present in a monarchy which would be primarily concerned with stability. "My Lord, a pesant is trying to usurp my authority." "Very well, I will have him hung."
The problem with political ideas (and ideals) is that you can always argue both ways.
Historically, both modern capitalism and the industrial revolution were born and raised in monarchies. The forefathers of modern global corporations were royal charter companies.
>Historically, both modern capitalism and the industrial revolution were born and raised in monarchies.
I think that's more of an example of how the actual distribution of power in society is the only thing that matters, the label of the system being purely ceremonial. If everyone in a society is allowed to participate in a free market, you will see the fruits of capitalism, even if the market is black and the politburo insist that the state is fully communist.
In the context of my earlier point, sure, if a monarch allows other people in their society to hold enough power to participate in capitalism, then, well, the system will start looking a lot like capitalism.
Funny. I got the idea they were born on the most liberal country in Europe exactly because the peasants killed some kings there, until the kings agreed on a bill of rights.
You can't so trivially separate them. Capitalism solves a resource allocation problem, and it's the most efficient one for private goods, which most goods at the time were. Any other approach would have seen more corruption and more death from improperly allocated resources.
So yes, capitalism has helped the poor considerably, not just science. New tech without a proper distribution system is useless.
The gap is widening for real, not just "on paper".
And study after study shows that humans very much define happiness in relative terms. It doesn't matter if quality of life is rising for everybody, if the gap is rising much faster - you're going to have the populace that is unhappy, and that unhappiness eventually translates to anger (it has already started doing so).
You can either work to fix that, or you can wait for torches and pitchforks.
If you're mid-to-high middle class (which probably describes most of HN audience), torches and pitchforks will come for you first, because 1) you live next door, and 2) you don't have a personal jet to scramble to New Zealand when SHTF. Look at the Russian communist revolution for an example of how it happens, and who is the first the mob drags out against the wall.
So I wouldn't exactly look forward to it. The educated, well-off classes in US need to understand that fixing the inequality problem isn't just about empathy, or some abstract political thinking. It is literally a matter of physical survival, if you look at it long term. Either we build a society which the majority of its members consider fair, or those of us who are significantly better off than the median will perish.
The vast majority of societies all throughout history have not been what any person would consider "fair." Rebellions of the disadvantaged classes have happened, of course, but for the most part, the ruling classes have done fine.
You might reconsider whether an appeal to fairness versus naked pragmatism is the winning approach.
It's not a question of "fair", it's a question of "fair enough". Every now and then, people get pushed beyond some line past which lies violence. In a democratic society, we enjoy the benefits of seeing the signs well in advance - and there are plenty already.
For the most part, yes, the ruling classes have done fine - and so they did for the past 70 years (counting roughly since the last grand compromise of the New Deal, which turned the tide of popular discontent back then), and they grew complacent. Now the tide is rising fast again.
FWIW, I don't really consider it a fairness versus naked pragmatism - they are orthogonal. Thing is, when it comes to fairness, there's a perfectly understandable urge, especially among engineers, to get things right, even if it takes more time. And normally, I think, that's a good thing - rushing is generally not a good idea, when you can afford not to. I just don't think we can, anymore, and so a dose of naked pragmatism is needed to force the realization that we may need an imperfect solution now, because we don't have several more decades to hammer out, say, a perfect implementation of universal basic income.
Society now is far fairer than 99.9% of all societies in recorded history. There isn't any universal law that suggests that if we get 10% more income inequality we'll tip over into violence. Historically, we're currently more than "fair enough."
Expectations may have changed, but a prophecy that we're 10 years from revolution needs more justification than you've given it. There's nothing in basic human nature that makes current levels of unfairness unsustainable.
> Society now is far fairer than 99.9% of all societies in recorded history.
By what metric?
It certainly isn't the case when you look at wealth distribution. Last time we had that much wealth disparity was right before the Great Depression. Given that it was followed by the New Deal, I think it's fair to say that political elites at the time didn't see that as sustainable.
Then also, you have to consider the differences in societies then and now. Greater wealth inequality is more sustainable with more oppression, for example. If you can suppress free flow of information, you can conceal the magnitude of the gap somewhat. If you can physically remove the "rabble rousers", you can slow down the spread of discontent. And so on.
Specifically:
> Historically, we're currently more than "fair enough."
There's no such thing as "historically fair enough". "Fair enough" is what keeps the majority content, here, now. It's inherently tied to the context. When people vote en masse for brazen populists (whether left or right wing) who promise fast solutions to all their economic problems, despite the obvious risks of that arrangement, that in and of itself is clear evidence that they don't see it as "fair enough" - and so it isn't.
Your point is that inequality is high by 20th Century standards. That's certainly fair! But the vast majority of history is some combination of feudal lords, monarchs, tribal leaders and strongmen. Ask a serf about fairness.
Also, I think that your account of the New Deal is weird and wrong. It was an (only arguably successful) attempt to deal with the Great Depression, not to combat people unsatisfied with wealth inequality in the 20's.
We've had lots of brazen populists in the world, including during the 20th Century. I could be convinced that the current status quo is rapidly heading towards violence -- I'm not convinced that you're wrong. But that's quite a claim, and the evidence you've cited is very sketchy.
> But the vast majority of history is some combination of feudal lords, monarchs, tribal leaders and strongmen. Ask a serf about fairness.
You might be surprised, actually. Wealth inequality in UK was higher at the turn of the 20th century than it was at the turn of 19th, for example. And if you went a century back, it was lower still. A 16th century serf was less impoverished, relatively speaking, than a 19th century factory worker! And it was because of processes like this:
Going further back, you'll generally find that levels of inequality increased as economy went from feudal arrangements to capitalism. Under feudalism, wealth was mostly about land, and you could only hold as much land as you could protect - and other feudal lords would see to it that you wouldn't have too much, lest you became too powerful and threatening to them. But today, most wealth is intangible, and sky is the limit to how much of it can be in one hands.
So when I'm saying that our levels of inequality are lower than Victorian England, that's actually comparing to some of the periods of the worst economic inequality that we have witnessed, at least in the history in which we can reasonably measure such things. And if you only look at US, it's even worse - when I say that we're at the levels of wealth inequality last seen right before the Great Depression, consider also that it means that we're now at the levels higher than what they were at any time up to ~1850, and some reasonably argue that they are higher than they were at any point in this country's history.
> It was an (only arguably successful) attempt to deal with the Great Depression, not to combat people unsatisfied with wealth inequality in the 20's.
It was one of the most massive wealth redistribution programs in the history of the United States, and it created a great deal of the modern social safety net. Even if reduction of wealth inequality were not the explicit goal, it certainly served that purpose.
But if we look at the political campaign promises at the time, it's very clear that New Deal was sold to the public quite explicitly as a way to deal with income inequality. I mean, it was literally right there in the speech that gave us the very term "New Deal", the one that Roosevelt made in his first presidential campaign:
"Now it is worth remembering, and the cold figures of finance prove it, that during that time there was little or no drop in the prices that the consumer had to pay, although those same figures proved that the cost of production fell very greatly; corporate profit resulting from this period was enormous; at the same time little of that profit was devoted to the reduction of prices. The consumer was forgotten. Very little of it went into increased wages; the worker was forgotten, and by no means an adequate proportion was even paid out in dividends -- the stockholder was forgotten.
Enormous corporate surpluses piled up -- the most stupendous in history. Where, under the spell of delirious speculation, did those surpluses go? Let us talk economics that the figures prove and that we can understand. Why, they went chiefly in two directions: first, into new and unnecessary plants which now stand stark and idle; and second, into the call-money market of Wall Street, either directly by the corporations, or indirectly through the banks.
> study after study shows that humans very much define happiness in relative terms
Whether or not the gap is widening, that definition of happiness is very problematic. There's something wrong when, as an example, someone is happy with a "rice-and-beans" lifestyle when all their neighbors have the same lifestyle but is unhappy with a better "chicken-in-every-pot" lifestyle because some of their neighbors have caviar and foie gras (insert your preferred luxury foods).
The studies I'm familiar with all indicate that any income above a fixed amount, typically around $70k, has no effect on happiness. In other words, once all basic needs are fullfilled, income has no measurable effect on happiness.
I would dare say that "basic needs" with a $70k price sticker aren't all that basic. I mean, for starters, that's more than twice the median personal income in US. So we're talking about people who live roughly twice as well as the majority of US citizens. This includes stuff like a cozy home, good food, plenty of entertainment, Internet etc - are those really basic? Or do we perceive them as such today, because of how much the bar has been raised? Could that $70k just be "egalitarian enough" with the present income distribution, say?
But supposing that theory is right - then all we need to do to secure social stability is to ensure that $70k income for the majority of people in the country. Are there any ways to do so without massive wealth redistribution - which would, coincidentally, also reduce wealth inequality? It feels to me that regardless of which of these two theories are really correct, they prescribe essentially the same treatment, at least short-term.
"Basic needs", in this case, does not mean simply "the bare bones necessary for physical survival." It also includes enough financial security, luxury, and leisure time to actually enjoy your life. I mean, it's all about happiness, after all.
The point is that once you get beyond that figure (which I have seen quoted at around $80k, but the general idea remains), increases in income correspond to rapidly shrinking marginal increases in happiness.
So it's certainly not that once you get past that, you're stuck, flat, forever. It's that below that, lack of money is a major thing preventing you from attaining the full measure of happiness that a secure member of modern society can.
During my lifetime the global gap has got a lot smaller. There used to be a massive gap between say India and China and the US. There's still a gap but more 5x than 20x and even Africa is catching up now. The increasing inequality in the USA is partly down to domestic policies. In the 1950s and early 60s the top tax rates were 90-70% which helped even things up back then.
The question is if this is thanks to or instead of capitalism. I would say it's the latter. Capitalism put a lot of those 'peasants' in terrible conditions for a few hundred years, for the last 40 years or so things are getting slightly better and that's supposed to be thanks to capitalism? Post hoc ergo propter hoc is a fallacy for a reason.
> "peasants" are enjoying the best quality of life in humanity's history...
Well, if you ONLY count the most basic aspects human existence like availability of food and shelter, yes, they are.
BUT there's a whole lot more to the quality of life. Things like self-actualization-- the stuff at the top of Maslow's hierarchy.
People can thrive in all kinds of economic systems (capitalism included). However when a small number of people re-arrange "the universe" for their exclusive benefit, there's going to be a reaction to that and it won't be pretty. I think we should favor measured incremental adjustments to curb the worst aspects of capitalism over all-out revolution.
Banning employers from having a say in what work a terminated employee takes in the future is one such measured response.
If you look at the rise of the homeless in CA, then I don't really know if the most recent time can count as rise of availability of food and shelter...
Hunter-gatherers apparently had to work only 7 hours per week. They may not have cable TV, but they've got more nature to enjoy.
Problem is, you can't sustain a large population that way, so civilisation has always used larger and more technologically advanced populations to push out smaller and more primitive ones. But that doesn't mean the larger and more advanced populations were necessarily happier.
Now life in general is absolutely better today than it was in the past, but that doesn't mean it's better for everybody in every respect. Peasants in the West may not get slaughtered by warlords anymore, but especially in the US, there are definitely poor people who struggle to make ends meet, and are slowly sinking deeper into poverty.
Peasants in northern Europe may be enjoying the best quality of life ever, but that's not true in many other countries.
The best system we've come up with so far is clearly regulated capitalism with plenty of protections for the poor.
Some commenters below seem okay with the growing inequity in society so long as people have a better quality of life compared to the past. Is that how we measure progress in our unprecedented information age society? to a past that can't relate to the present?
IMO don't let what was be a guide for what could be. If people always did that we wouldn't have the internet to comment on.
The beatings will continue until they are accepted as a fact of life.
If humans were as free as capital to go where they can get the most benefit to me, I'd move to Denmark in a heartbeat. Truly sounds like a workers paradise, at least compared to the USA.
But we aren't free, capital is. Priorities I guess.
Non compete contracts and non poaching agreements are insidious and should be illegal. Ilegal, not just unenforceable.
But, among the many imbalances between employees and employers... few are as easy to fix. A major imbalance is information.
One radical idea is salary transparency. It would be an emotionally difficult transition, but I think the effect on salaries would be transformational.
Information is, a big part of what markets are. If you are negotiating salary armed with the same information your counterpart has, you are in a much better situation. At the very least, it would help those people who are the worst at negotiating and have an employer that will take advantage of this.
Eliminate anti competition agreements, in a year you may find a measurable marginal effect. Publish all salaries and the effects will be everywhere.
Salary transparency. Let's imagine you have a brilliant employee, you want to pay her or him twice more than others, because that person truly brings that much value for your company. Do you really think other employees would say - yes, this guy/gal is really smarter than we are, she deserves all those money? Wouldn't such person be bullied by others (think of what often happens to the best pupil in the class, where you have "grades transparency").
Let me cite François de La Rochefoucauld, "Although no one is happy with his fortune, but everyone - with his wits.
I’d rather have it that way than at my last company, where I discussed salary with someone of lesser education and talents, but who was female. She found out I was making more due to my education and negotiation, then she went complaining to all of my bosses and HR about a gender pay gap, and come Christmas time she got a raise much larger than mine so we were making the same. Even though she didn’t negotiate and had no masters.
How is that fair to me as someone who arguably deserved the higher salary? I knew more and played the market game better, yet because of my gender I then make the same as a less productive worker?
Salaries should be transparent and the reasons for higher pay should be merit based. I left that company immediately afterwards because another one offered me 50% more to do what the first company wasn’t even thinking of doing yet. So overall, I think the current system of secrecy and unjustified numbers is far from ideal.
If you got a job paying 50% more then it looks like your old company was underpaying both you and your female coworker. Could very well be they were paying her less due to her gender as they appeared to value your work equally with hers.
We have had grades transparence in both elementary and high school and good grades were not grounds for bullying. Most kids did not care about your grades at all, one way or the other. I would also argue that when there are large differences between salaries of people on similar positions, in most cases it is result of negotiation skills and random (e.g. nepotism or friendship base or I feel bad about telling no until money run out) decision making on the side of management. Because otherwise manager could explain and qualify which duties make difference and possible motivate others to learn same duties.
If you have someone worth twice as much as your other employees at the same level, then you can promote that person or perhaps figure out why your other employees aren't as productive.
I don't see why such a situation should need to affect salary transparency. It's also useful for employees to know the standards required to earn more.
This is the correct answer in theory, but in practice, I've never seen a company that was very good at paying/promoting people based on output.
It is difficult enough to measure output, especially when there's often many issues around politics and luck-of-the-draw for project assignments. Compound this with the fact that employees don't always scale with the company, or contribute at a high-level when promoted.
And yet people still earn salaries regardless of our ability to accurately gauge output. A salary is our most useful estimation of output. If salaries were known, people could look at their colleagues and say, "well, I think I'm more productive than they are, so I should be paid more", and take that to their manager, who can then counter with "actually, here's our point of view on your colleagues' productivity, and what we would expect from you in order to give you a promotion".
This is a modestly effective weapon against pay that is based on internal politics (e.g. nepotism), because it forces managers to explain pay disparities in a way that employees can at least somewhat validate.
IOW, if the boss wants to pay his worthless nephew more to sit around and do nothing, employees who recognize that he does nothing can effectively challenge their boss to either admit that they should be paid more, or alternatively lie to their faces in order to justify the nephew's salary, which, IMO, is a great excuse to begin seeking employment elsewhere.
I agree in principle - but the hypothetical was about someone who was (presumably measurably) worth twice as much as other employees.
I agree that it's difficult to measure productivity / output - but it's by no means impossible - and sharp discrepancies in productivity between employees are often highly noticeable anyway.
Interesting how Finland is handling this. I think taxes payed by person can bee looked up() and from that you can infer how much one earns. Basically making everyones salary public.
We already see it working well with professional sports; salary differences of professional athletes on the same team are absolutely humongous; yet Tom Brady doesn't get bullied for making more than his teammates. Better yet, other football players can look at Tom Brady's salary and know what they have to do to get a similar salary.
Everyone knows they make less than their boss, yet people don't bully their boss. Nurses know they make less than doctors, but they don't bully them. Adjunct professors don't bully full professors. So we can "handle" non-transparent pay when its built into job duties and titles, so it's not that much of a stretch to extend it to employees with similar job duties and titles.
The government sector already has transparent pay and ~17% of private companies have transparent pay, yet we don't see bullying there.
In fact, some preliminary research suggests employees feel more valued and feel their pay if fairer when there is pay transparency. When people don't know what their colleagues are making they tend to assume they are being underpaid.
If you're seeing mass bullying then you've got a problem that can't be solved simply by hiding salaries.
>think of what often happens to the best pupil in the class, where you have "grades transparency"
What? What happens to them? They get to speak at graduation?
The vast majority of adults are mature enough to understand that different people have different work outputs, different value to the company, and therefore have different salaries. We also are mature enough to understand that tenure and seniority are rewarded. We already accept that people get promotions at different intervals, and we already accept that only one person gets the "employee of the month" parking spot and spot bonus.
It's only been the last 5-6 years that baseball has really looked objectively at "what contributes to a win". Most front offices now use that information, but as of 6-7 years ago, it was not at all clear.
Teams pay salaries based on market price, not what actually contributes to wins. In an efficient market, these correlate, but sports contracts are by no means efficient.
The Padres' handed $144 million last winter to Eric Hosmer, who never projected to be much above average. There's still a ways to go.
Salary is a poor measure of performance because there's no salary transparency so nobody can negotiate their salary effectively!! It's a tautology! A self fulfilling prophecy.
Athletes get paid based on market rate, past performance, future potential, and a whole bunch of other factors (union agreements, budget, need, fan preference, health, cost of living, etc., etc.) they are not paid based on "contribute to win rate."
It's just like every other employee though. Lawyers probably don't contribute to the company's success more than the engineers, but lawyers are paid more because of the market rate.
In fact, since athletes have long term contracts that specify their pay no matter how well they play, and indeed, even if they play at all, their pay is even further removed from current performance than most other employees. It's not uncommon for an athlete to not play an entire season and still make millions of dollars, it's what fans called "dead money." Bobby Bonilla hasn't played baseball in the last 15 years yet he was paid $1.19 million this year by the Mets. That's twice as much as Jacob DeGrom was paid, who is a Cy Young finalist. Objectively Jacob DeGrom contributed to more wins than Bobby Bonilla.
Take a look at Rusney Castillo, he's being paid $72.5 million to pay minor league baseball. No minor leaguer is worth $70+ million. However, it's financially advantageous for the Red Sox to keep him in the minor leagues due to the luxury tax, so he remains overpaid.
So... I think rehotorical examples and reasoning are overused, in co texts like these. Ie "how would imaginary person X react if..." People are emotionally complicated and adaptive. Better to loon at real examples.
Luckily there are plenty. Salary transparency exists in all sorts of markets. Many US universities and public services publish. Finland and other Nordics have a lot of salary/tax transparency.
One really to interesting (to me) example is professional sports. Interesting because (a) sports has massive be pay discrepancies, to your point and (b) salary transparency is generally and employee/union "demand*. It's a demand for the reasons discussed here, transparency resolves an information discrepancy and improves athlete's negotiating position.
For US boxing there's a law mandating purse transparency, the Ali act. It was put in place to help boxers Vis a visit "promoters."
Apart from equalising negotiating positions somewhat, transparency will probably have other, hard to guess effects.
I wonder if the Finnish initiative has had any effect on market salary disrepencies, generally.
If you work in a government or state university staff job, your salary is already publicly available. It's not really a big deal, since those types of jobs have rather strict salary ranges based on position classification and job responsibilities. So you pretty much know going in that everyone doing the same thing is probably making in the ballpark of the same salary.
It's also a good place to look for baseline salary information when you're negotiating. You can pretty easily find out what software developers in your state government or nearest university are making. The numbers will be on the low side compared to the private sector, but benefits and time off in those jobs are usually quite generous so consider that. And layoffs are almost unheard of.
>A major imbalance is information. One radical idea is salary transparency.
Publishing only salaries will contribute to the information imbalance because salary makes little sense without a more or less detailed job description. It may make it harder for more qualified working to justify higher salaries that they are expecting.
Detailed job descriptions won't necessarily tell you much either.
But... You can still know averages, and distributions and such. I am paid less than 82% of people/engineers at this company.
Besides that, you probably know more about your colleagues' contribution than anyone. That's the important comparison.
Apart from that, people are emotional, not stupid. We understand prices. People will live with being paid less than others. The transition will be emotional. There'll be a backlog of salary adjustments that will happen. We'll adjust though.
The point about your colleagues makes sense. However any averages and distributions would be grossly misleading. It's like analyzing home prices without taking into account home design, location, age, neighborhood, etc.
Transparent prices make sense when the good is commodity, or the service is highly standardized. When work is becoming a service with many variables publishing salaries would produce confusion and boost feelings of injustice (rightfully or not). I see where you're coming from -- price transparency is typically good for market efficiency. However, providing an adequate, accurate salary information on the job market doesn't seem feasible without structured, comparable job descriptions which doesn't seem realistic.
>people are emotional, not stupid.
People maybe not stupid (yet stupidity is relative, not absolute), but they are frequently not rational either. People frequently can't adequately estimate themselves. Most drivers thinks they drive better than half of other drivers. Most people think they're more attractive than half of other people. The same happens on the job market too. Imagine, everyone gets a rank on the dating market from 0 to 10. How many people do you think would agree with that rank? How is it different from salaries?
It's hard for employees to know how valuable it is for them to sign a non-compete. It's hard for companies to advertise their desirability based on, "those other guys will make you sign a non-compete. We won't." So it becomes low cost for people to ask for it.
In the current environment, non-competes should be banned: California proves this is a viable approach. But perhaps a better long term solution that seems within technical reach right now would be some kind of AI legal assistant that could demystify and educate people about the contacts they're asked to sign.
Like imagine if you had a smartphone app. You scanned the contract with your camera and the app said, "This is a non-compete agreement. 60% of the companies in this field use them. Best estimate is that signing it costs you $30k in lifetime earnings."
Then a job seeker could just negotiate to their own best interest.
The poor are, in most cases, not qualified to do very skilled high-paying work. That is part of why they are poor. Are the jobs they can get really requiring non-competes? If I take a job at an Amazon distribution center, am I going to be asked to agree that I won't later go to Wal-Mart? And if I do, will Amazon actually bother to enforce that?
Last time I had a decision to make on a non-compete, I did consult with a lawyer and he basically said there are no guarantees, but generally a non-compete cannot be enforced if it prevents you from earning a living.
Edit: the article implies that places like McDonald's do this. I worked there (albeit years ago), and at that time it was not true. We would have been rightly laughed at if we asked for a non-compete on a minimum-wage job like that. It was hard enough to hire people who were reasonably well-groomed, punctual, and energetic. We would not have added unnecessary barriers like that.
Define "years ago". Improvements to technology over the past few decades have disproportionately eliminated low-skill jobs, leading to an increasingly desperate job market for low-education workers. Desperate people don't have the luxury of refusing a contract based on something abstract like a non-compete. Hell, if it were legal for McDonald's to pay their line workers exclusively in McDonald's Fun Bux rather than dollars, they would still have a surplus of applicants. Desperation is the ultimate enemy of rational decision-making, and at the end of the day poor people still need to eat.
Just because you didn't have to sign a non-compete doesn't mean there wasn't shady business going on. What the article is talking about is franchisees signing agreements not to hire employees from other franchisees in the same brand. So if a new McDonald's opened up across town with higher pay, they would not have been able to hire you.
Also there are (or at least were) fast food restaurants making their employees sign non competes. Jimmy Johns had their sandwich makers on noncompetes until 2016 [0].
Is that actually legal, and enforceable in the US?
The union for engineers in Denmark have basically told its members to just sign contracts with non-compete clauses, because they aren't actually enforceable. Not without the company compensating you financially, even if you're fired.
Assuming a five year non-compete clause, the company should expect to pay you for those five years. Essentially the worker sign away their most marketable skills, and that's no free.
They are enforceable in some parts of the EU. In the UK they need to be very specific about it and have a fair time limit. Saying "You can't poach any clients or employees" is unenforceable saying "You can't poach Employee A and Employee B for 1 year" is. Most companies just have a poorly worded contract that isn't enforceable.
In Denmark the law is very clear on what you can require in a non-compete, and what level of compensation you must at minimum include. Maximum of 12 months, and they must give you a 150% old salary one time payment at the onset. And if you are either unemployed or working in a significantly new job type after 3months they must supplement your salary up to 50% if you old one for the duration of the contracts.
Owing to the very clear rules, I have never heard anyone from Unions saying they where unenforceable, so I’m curious if you have any reference on that part?
This is because the philosophy of "at-will employment" being good is a lie sold to the public. It is to benefit the corporation, and thus the rich, and not the human or the poor.
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[ 5.1 ms ] story [ 187 ms ] threadYou simply cannot have a system that needs consumers to spend money when its in every single companies best interest to pay as little, preferably nothing, to those whose business and expertise you need to survive. You can expand to other nations as a temporary solution but in the end you will run out of people to sell stuff to.
The only real counterforce to global capitalism has historically been the people of a nation, and the populist nationalism of a few nation states has been the only example ever known of an economic system that has upheld basic human dignity (whether it has been called social democracy, christian democracy or something else). This is now going down the drain.
Can you give me some examples? I'm honestly curious as I can't think of any off the top of my head.
By "populist nationalists" I mean what they really are, not necessarily what they call themselves. The Swedish Social Democrats of old are a good example who in practice created a national welfare state, often even with explicitly nationalist rhetoric.
And yet every time there is some great nation-building exercise, the nation in question immediately attempts to build a global empire for itself, by subjugating other nations.
France of Napoleon.
Germany of Bismark.
Japan of Meiji.
Germany of Hitler.
USSR.
Current day USA.
Human dignity, my ass.
PS. Arabs of Muhammad and Mongols of Genghis also qualify.
Just because the US is involved in conflicts you may disapprove of in the Middle East does not make current day USA on par with Hitler's Germany.
There's also a sizable internal backlash against recent wars and historically isolationism has been popular in the US.
You don't have to legally control or own territory to be, in effect, an Empire. When you use your military power to force economic interactions of your liking, you are an Empire.
For examples, read: https://en.wikipedia.org/wiki/Banana_republic
https://en.wikipedia.org/wiki/1954_Guatemalan_coup_d%27%C3%A...
It has always struck me as weird that the moment a nation enjoys some stability and prosperity, it immediately decides to throw them away for ever-growing expansionistic ambitions.
I mean I get it, we as humans can never get enough -- I've witnessed that in many people, myself included.
It's just so very sad to observe historically. It seems that if somebody sees they can get away with X, they immediately jump to doing something 10*X.
Ironically, this is the exact scheme through which many criminals have been caught -- they admitted they felt a thrill because they have not been caught, and wanted to up the risk. (The police would have never caught them if they haven't did that as well.) I don't believe the same exact phenomena is involved with nations but if you squint your eyes really hard then it does look very similar.
To anyone who is not in the loop (of the alt-right/4chan jargon), "globalism" is currently a code-word for "Jews".
"Workers" do not show up on a balance sheet: they are neither an asset not a liability "technically." There may be a payroll liability briefly, though it will then be paid out and taken off the books. Accrued vacation is a liability, which is why we have "unlimited PTO" policies.
It is impossible, in double entry bookkeeping, to "increase assets and reduce liabilities." Every asset must be balanced with a liability. That's the fundamental basis of that accounting system.
To the extent that we're speaking metaphorically, workers are assets. To the extent that we're speaking technically, it's clear that you tried to apply jargon that you didn't understand to confuse others.
Where does that come from though? Is that still the case for the current generation of college graduates? Do the kids need to be educated closer to reality?
The notion of company loyalty is good for a productive workforce - UNTIL the illusion is shattered, which can take parts of the rest of an individuals positive world-view with it.
It should also be noted that this illusion is not specific to any economic system. The soviet union also saw its share of jaded idealists who were gullible to the point of believing that all those promises of owning the means of production had any credibility.
At least in capitalist economies workers are educated with regards to liberal ideas. Thus they are informed that a work relation is just like any business relation, and therefore they are compelled to look after their own best interests without falling for the "company loyalty" emotional trap. Your employer owes you the salary and you should expect nothing more in return, and consequently you as a worker are compelled to always look after more favourable arrangements just like your employer is perpetually doing wrt your job.
Faith in the reciprocation of loyalty with thine employer can be just as misplaced as with your government, whatever shape of ideology it follows (any system is corruptible; gosh-darn humans).
A few years down the line and a few job changes later, I've come to the realization that broadly they are similar in what they do, the way they treat people. It's just different shades of politics, infighting, employee indifference, and perks and benefits. I don't expect anyone from corporate to have my back no matter how good the work is and how much effort I put in.
Maybe it's just my jaded inner self-talking. Christ, I am not that old, only just mid-30s and the way I am writing makes me sound like a grizzly 60 yr old! Now, get off my keyboard!
Like when a football team is in a winning position and "goes defensive" to the detriment of their effectiveness. The problem is, once a company / team changes their approach to "the game", it's often too hard to change it back.
Capitalism has developed ADD. It's all about short-term reward and for all intents and purposes the future is too far away to consider.
The rich will keep getting richer, at the expense of peasants.
Historically, the second half of that assertion is not borne out.
The wealthy reap mnore and more of the benefits of the economy than the average person, in ever increasing measures.
The fact that a working class person might now have access to 4k TVs and new cars on finance doesn't change the fact that overall, their share in the prosperity of their nation in shrinking, even though it might seem like gradual improvement.
Luxuiries don't mean shit when you can't save, afford to treat a major illness or have to work two jobs to pay the rent.
Half of the US doesn't even have any savings and are in a state of persistent debt servitude.
What exactly do you think the end result of that trend is if it continues?
You're framing this argument as if any increase in individual wealth is to be lauded and celebrated. Most people don't think that way.
All people will see, is their meagre wealth increases (if they are even lucky enough to have seen that) and the kind of increases seen by the top tiers in society.
They'll feel angry, depressed and feel like its an injustice. Then the social contract breaks down, which it already is.
You can keep pretending like there isn't any problem with how wealth is distributed currently, but you won't be able to forever.
Edit:
I am not arguing that the current system is problem-free, only that it has benefited the vast majority people, even if most people do not perceive those benefits or if they are jealous when they see the benefits accumulated by the rich. I suspect people would be much angrier if they were transported back in time and had to deal with the world as it used to exist, when people were poorer at every level of society. I am not claiming to have a political answer, but the facts are not easily denied: at every level of society people are wealthier today compared with the past.
IMO there is much more happening then arguing over slices of a unsustainably growing pie.
That's definitely the biggest problem with all of this in my mind.
The success of some does not mean that others have been defeated, or forced into a position where they are worse than before.
This fallacy is often repeated by people obsessed with egalitarian views, where they consider any difference in access to resources (even those which have been earned through hard work and not squandered away) as being somehow a major injustice.
Yet, just because some multimilionaire wastes wads of cash in conspicuous consumption that doesn't mean that societies based on capitalism don't enjoy humanity's highest quality of life and access to goods and services, to the point that some are even considered by "the people" as being infinite and a god-given right.
That line of reasoning makes no sense at all because it also implies that workers would also be responsible for all the wealth destroyed by the course of their work, which was very substantial in the dotcom burst.
But somehow egalitarian arguments are never made in regards to any support to share the burden of a financial investment that goes bust, and the focus is on all the envy around how their neighbor profited from an investment they never made themselves.
I'm honestly not sure what you mean by this, or how it's relevant to what the person you replied to said.
> But somehow egalitarian arguments are never made in regards to any support to share the burden of a financial investment that goes bust, and the focus is on all the envy around how their neighbor profited from an investment they never made themselves.
1. We don't really get a choice in that do we?
Most people can't afford to invest precisely because the problems we are telling you about here; and that includes the working and disappearing middle classes that can't even save effectively due to stagnant wages that don't reflect their increased productivity.
2. On the few occasions where 'egalitarianism' as you keep putting it, is actually applied in a 'share the burden' fashion, it appears to be when massive, wealthy companies need a bail out from the tax payer after what amounts to obscenely reckless behaviour.
The name of the current capitalist game seems to be to privatise the profits and socialise the losses.
I keep hearing people say the econonomy is no zero-sum, without ever explaining it. There is a finite amnount of wealth in the world today. There will be a finite amount of wealth tomorrow, and so on.
Each and every day, your share of that daily amount decreases, while owners of capital increase exponentially. Since the financial crash the richest in society have seen massive gains while the working and middle classes have been hit hardest, many even making wages barely competetive with levels in 1970.
I'm sure your assertion that there is plenty to go around will make those people feel better as they go yet another year without any real improvement in their income.
Capitalism is far from perfect but it seems to be the best system we've come up with so far.
(Also: God, "remain in balance with their ecosystem" is such a mendacious phrase. People use it all the time, as if animals have some kind of mystical gaia sense that says, "Woah, woah, woah lion, you're using too many natural resources here. Maybe just meditate today." Here's how lions "remain in balance with their ecosystem": they try to eat everything they can. Sometimes they're unsuccessful and they starve. Sometimes they're successful and cause a local shortage of prey and then they starve. Yaaaaaaaaaaay.)
As well, the absolute wealth of people does not stop discontent and violent revolution. The gap is what matters.
Things have gotten a lot better since then, but if you look at historic trends, they have stagnated again in the US since the early 1980s. There's been no growth in the pay for working class people since the 1980s, while money for the rich has sky rocketed.
It's time to pick up that fight again.
So, politics of envy. It's a disgusting state of affairs if it's not enough to enjoy a high quality of life, but it's also imperative others' must not be significantly higher.
I think this trope is misused. Peasants are better off and the world is wealthier because of science, not a political ideology. The industrial revolution, scientific medicine, the green revolution...
Saudi Arabia's "peasants" (or descendants of herdsmen, properly) are wealthier because of oil mining and modern energy industry, not monarchy or capitalism or whoever else wants to take credit.
I'm not saying politics doesn't effect anything, it obviously does but capitalism can't just claim credit for everything invented in the last 200.
Btw, this is exactly what Lenin did and what Orwell parodied in 1984.
I'm not saying you can't argue that capitalism benefited the poor, but you can't just claim everything good that happened after 1800 for capitalism.
Historically, both modern capitalism and the industrial revolution were born and raised in monarchies. The forefathers of modern global corporations were royal charter companies.
I think that's more of an example of how the actual distribution of power in society is the only thing that matters, the label of the system being purely ceremonial. If everyone in a society is allowed to participate in a free market, you will see the fruits of capitalism, even if the market is black and the politburo insist that the state is fully communist.
In the context of my earlier point, sure, if a monarch allows other people in their society to hold enough power to participate in capitalism, then, well, the system will start looking a lot like capitalism.
So yes, capitalism has helped the poor considerably, not just science. New tech without a proper distribution system is useless.
And study after study shows that humans very much define happiness in relative terms. It doesn't matter if quality of life is rising for everybody, if the gap is rising much faster - you're going to have the populace that is unhappy, and that unhappiness eventually translates to anger (it has already started doing so).
You can either work to fix that, or you can wait for torches and pitchforks.
I am honestly waiting. People are only going to put up with this for so long.
So I wouldn't exactly look forward to it. The educated, well-off classes in US need to understand that fixing the inequality problem isn't just about empathy, or some abstract political thinking. It is literally a matter of physical survival, if you look at it long term. Either we build a society which the majority of its members consider fair, or those of us who are significantly better off than the median will perish.
You might reconsider whether an appeal to fairness versus naked pragmatism is the winning approach.
For the most part, yes, the ruling classes have done fine - and so they did for the past 70 years (counting roughly since the last grand compromise of the New Deal, which turned the tide of popular discontent back then), and they grew complacent. Now the tide is rising fast again.
FWIW, I don't really consider it a fairness versus naked pragmatism - they are orthogonal. Thing is, when it comes to fairness, there's a perfectly understandable urge, especially among engineers, to get things right, even if it takes more time. And normally, I think, that's a good thing - rushing is generally not a good idea, when you can afford not to. I just don't think we can, anymore, and so a dose of naked pragmatism is needed to force the realization that we may need an imperfect solution now, because we don't have several more decades to hammer out, say, a perfect implementation of universal basic income.
Expectations may have changed, but a prophecy that we're 10 years from revolution needs more justification than you've given it. There's nothing in basic human nature that makes current levels of unfairness unsustainable.
By what metric?
It certainly isn't the case when you look at wealth distribution. Last time we had that much wealth disparity was right before the Great Depression. Given that it was followed by the New Deal, I think it's fair to say that political elites at the time didn't see that as sustainable.
Then also, you have to consider the differences in societies then and now. Greater wealth inequality is more sustainable with more oppression, for example. If you can suppress free flow of information, you can conceal the magnitude of the gap somewhat. If you can physically remove the "rabble rousers", you can slow down the spread of discontent. And so on.
Specifically:
> Historically, we're currently more than "fair enough."
There's no such thing as "historically fair enough". "Fair enough" is what keeps the majority content, here, now. It's inherently tied to the context. When people vote en masse for brazen populists (whether left or right wing) who promise fast solutions to all their economic problems, despite the obvious risks of that arrangement, that in and of itself is clear evidence that they don't see it as "fair enough" - and so it isn't.
Your point is that inequality is high by 20th Century standards. That's certainly fair! But the vast majority of history is some combination of feudal lords, monarchs, tribal leaders and strongmen. Ask a serf about fairness.
Also, I think that your account of the New Deal is weird and wrong. It was an (only arguably successful) attempt to deal with the Great Depression, not to combat people unsatisfied with wealth inequality in the 20's.
We've had lots of brazen populists in the world, including during the 20th Century. I could be convinced that the current status quo is rapidly heading towards violence -- I'm not convinced that you're wrong. But that's quite a claim, and the evidence you've cited is very sketchy.
You might be surprised, actually. Wealth inequality in UK was higher at the turn of the 20th century than it was at the turn of 19th, for example. And if you went a century back, it was lower still. A 16th century serf was less impoverished, relatively speaking, than a 19th century factory worker! And it was because of processes like this:
https://en.wikipedia.org/wiki/Enclosure
Going further back, you'll generally find that levels of inequality increased as economy went from feudal arrangements to capitalism. Under feudalism, wealth was mostly about land, and you could only hold as much land as you could protect - and other feudal lords would see to it that you wouldn't have too much, lest you became too powerful and threatening to them. But today, most wealth is intangible, and sky is the limit to how much of it can be in one hands.
https://voxeu.org/article/europe-s-rich-1300
So when I'm saying that our levels of inequality are lower than Victorian England, that's actually comparing to some of the periods of the worst economic inequality that we have witnessed, at least in the history in which we can reasonably measure such things. And if you only look at US, it's even worse - when I say that we're at the levels of wealth inequality last seen right before the Great Depression, consider also that it means that we're now at the levels higher than what they were at any time up to ~1850, and some reasonably argue that they are higher than they were at any point in this country's history.
https://www.washingtonpost.com/news/wonk/wp/2016/07/01/incom...?
> It was an (only arguably successful) attempt to deal with the Great Depression, not to combat people unsatisfied with wealth inequality in the 20's.
It was one of the most massive wealth redistribution programs in the history of the United States, and it created a great deal of the modern social safety net. Even if reduction of wealth inequality were not the explicit goal, it certainly served that purpose.
But if we look at the political campaign promises at the time, it's very clear that New Deal was sold to the public quite explicitly as a way to deal with income inequality. I mean, it was literally right there in the speech that gave us the very term "New Deal", the one that Roosevelt made in his first presidential campaign:
"Now it is worth remembering, and the cold figures of finance prove it, that during that time there was little or no drop in the prices that the consumer had to pay, although those same figures proved that the cost of production fell very greatly; corporate profit resulting from this period was enormous; at the same time little of that profit was devoted to the reduction of prices. The consumer was forgotten. Very little of it went into increased wages; the worker was forgotten, and by no means an adequate proportion was even paid out in dividends -- the stockholder was forgotten.
Enormous corporate surpluses piled up -- the most stupendous in history. Where, under the spell of delirious speculation, did those surpluses go? Let us talk economics that the figures prove and that we can understand. Why, they went chiefly in two directions: first, into new and unnecessary plants which now stand stark and idle; and second, into the call-money market of Wall Street, either directly by the corporations, or indirectly through the banks.
Throughout the nation me...
Whether or not the gap is widening, that definition of happiness is very problematic. There's something wrong when, as an example, someone is happy with a "rice-and-beans" lifestyle when all their neighbors have the same lifestyle but is unhappy with a better "chicken-in-every-pot" lifestyle because some of their neighbors have caviar and foie gras (insert your preferred luxury foods).
But supposing that theory is right - then all we need to do to secure social stability is to ensure that $70k income for the majority of people in the country. Are there any ways to do so without massive wealth redistribution - which would, coincidentally, also reduce wealth inequality? It feels to me that regardless of which of these two theories are really correct, they prescribe essentially the same treatment, at least short-term.
The point is that once you get beyond that figure (which I have seen quoted at around $80k, but the general idea remains), increases in income correspond to rapidly shrinking marginal increases in happiness.
So it's certainly not that once you get past that, you're stuck, flat, forever. It's that below that, lack of money is a major thing preventing you from attaining the full measure of happiness that a secure member of modern society can.
https://en.m.wikipedia.org/wiki/Mondragon_Corporation
BUT there's a whole lot more to the quality of life. Things like self-actualization-- the stuff at the top of Maslow's hierarchy.
People can thrive in all kinds of economic systems (capitalism included). However when a small number of people re-arrange "the universe" for their exclusive benefit, there's going to be a reaction to that and it won't be pretty. I think we should favor measured incremental adjustments to curb the worst aspects of capitalism over all-out revolution.
Banning employers from having a say in what work a terminated employee takes in the future is one such measured response.
Problem is, you can't sustain a large population that way, so civilisation has always used larger and more technologically advanced populations to push out smaller and more primitive ones. But that doesn't mean the larger and more advanced populations were necessarily happier.
Now life in general is absolutely better today than it was in the past, but that doesn't mean it's better for everybody in every respect. Peasants in the West may not get slaughtered by warlords anymore, but especially in the US, there are definitely poor people who struggle to make ends meet, and are slowly sinking deeper into poverty.
Peasants in northern Europe may be enjoying the best quality of life ever, but that's not true in many other countries.
The best system we've come up with so far is clearly regulated capitalism with plenty of protections for the poor.
This is a short story I think may be relevant.
Some commenters below seem okay with the growing inequity in society so long as people have a better quality of life compared to the past. Is that how we measure progress in our unprecedented information age society? to a past that can't relate to the present?
IMO don't let what was be a guide for what could be. If people always did that we wouldn't have the internet to comment on.
If humans were as free as capital to go where they can get the most benefit to me, I'd move to Denmark in a heartbeat. Truly sounds like a workers paradise, at least compared to the USA.
But we aren't free, capital is. Priorities I guess.
But, among the many imbalances between employees and employers... few are as easy to fix. A major imbalance is information.
One radical idea is salary transparency. It would be an emotionally difficult transition, but I think the effect on salaries would be transformational.
Information is, a big part of what markets are. If you are negotiating salary armed with the same information your counterpart has, you are in a much better situation. At the very least, it would help those people who are the worst at negotiating and have an employer that will take advantage of this.
Eliminate anti competition agreements, in a year you may find a measurable marginal effect. Publish all salaries and the effects will be everywhere.
Let me cite François de La Rochefoucauld, "Although no one is happy with his fortune, but everyone - with his wits.
How is that fair to me as someone who arguably deserved the higher salary? I knew more and played the market game better, yet because of my gender I then make the same as a less productive worker?
Salaries should be transparent and the reasons for higher pay should be merit based. I left that company immediately afterwards because another one offered me 50% more to do what the first company wasn’t even thinking of doing yet. So overall, I think the current system of secrecy and unjustified numbers is far from ideal.
That is negotiating.
Sounds like you didn't play the market game as well as she did after all.
I don't see why such a situation should need to affect salary transparency. It's also useful for employees to know the standards required to earn more.
It is difficult enough to measure output, especially when there's often many issues around politics and luck-of-the-draw for project assignments. Compound this with the fact that employees don't always scale with the company, or contribute at a high-level when promoted.
This is a modestly effective weapon against pay that is based on internal politics (e.g. nepotism), because it forces managers to explain pay disparities in a way that employees can at least somewhat validate.
IOW, if the boss wants to pay his worthless nephew more to sit around and do nothing, employees who recognize that he does nothing can effectively challenge their boss to either admit that they should be paid more, or alternatively lie to their faces in order to justify the nephew's salary, which, IMO, is a great excuse to begin seeking employment elsewhere.
I agree that it's difficult to measure productivity / output - but it's by no means impossible - and sharp discrepancies in productivity between employees are often highly noticeable anyway.
() might be wrong here.
I'm not sure about the details though.
Everyone knows they make less than their boss, yet people don't bully their boss. Nurses know they make less than doctors, but they don't bully them. Adjunct professors don't bully full professors. So we can "handle" non-transparent pay when its built into job duties and titles, so it's not that much of a stretch to extend it to employees with similar job duties and titles.
The government sector already has transparent pay and ~17% of private companies have transparent pay, yet we don't see bullying there.
In fact, some preliminary research suggests employees feel more valued and feel their pay if fairer when there is pay transparency. When people don't know what their colleagues are making they tend to assume they are being underpaid.
If you're seeing mass bullying then you've got a problem that can't be solved simply by hiding salaries.
>think of what often happens to the best pupil in the class, where you have "grades transparency"
What? What happens to them? They get to speak at graduation?
The vast majority of adults are mature enough to understand that different people have different work outputs, different value to the company, and therefore have different salaries. We also are mature enough to understand that tenure and seniority are rewarded. We already accept that people get promotions at different intervals, and we already accept that only one person gets the "employee of the month" parking spot and spot bonus.
In my experience, business do a horrible job of measuring performance. It's 95% subjective.
Teams pay salaries based on market price, not what actually contributes to wins. In an efficient market, these correlate, but sports contracts are by no means efficient.
The Padres' handed $144 million last winter to Eric Hosmer, who never projected to be much above average. There's still a ways to go.
Athletes get paid based on market rate, past performance, future potential, and a whole bunch of other factors (union agreements, budget, need, fan preference, health, cost of living, etc., etc.) they are not paid based on "contribute to win rate."
It's just like every other employee though. Lawyers probably don't contribute to the company's success more than the engineers, but lawyers are paid more because of the market rate.
In fact, since athletes have long term contracts that specify their pay no matter how well they play, and indeed, even if they play at all, their pay is even further removed from current performance than most other employees. It's not uncommon for an athlete to not play an entire season and still make millions of dollars, it's what fans called "dead money." Bobby Bonilla hasn't played baseball in the last 15 years yet he was paid $1.19 million this year by the Mets. That's twice as much as Jacob DeGrom was paid, who is a Cy Young finalist. Objectively Jacob DeGrom contributed to more wins than Bobby Bonilla.
Take a look at Rusney Castillo, he's being paid $72.5 million to pay minor league baseball. No minor leaguer is worth $70+ million. However, it's financially advantageous for the Red Sox to keep him in the minor leagues due to the luxury tax, so he remains overpaid.
https://www.bostonglobe.com/sports/redsox/2018/03/10/contrac...
Luckily there are plenty. Salary transparency exists in all sorts of markets. Many US universities and public services publish. Finland and other Nordics have a lot of salary/tax transparency.
One really to interesting (to me) example is professional sports. Interesting because (a) sports has massive be pay discrepancies, to your point and (b) salary transparency is generally and employee/union "demand*. It's a demand for the reasons discussed here, transparency resolves an information discrepancy and improves athlete's negotiating position.
For US boxing there's a law mandating purse transparency, the Ali act. It was put in place to help boxers Vis a visit "promoters."
Apart from equalising negotiating positions somewhat, transparency will probably have other, hard to guess effects.
I wonder if the Finnish initiative has had any effect on market salary disrepencies, generally.
It's also a good place to look for baseline salary information when you're negotiating. You can pretty easily find out what software developers in your state government or nearest university are making. The numbers will be on the low side compared to the private sector, but benefits and time off in those jobs are usually quite generous so consider that. And layoffs are almost unheard of.
Publishing only salaries will contribute to the information imbalance because salary makes little sense without a more or less detailed job description. It may make it harder for more qualified working to justify higher salaries that they are expecting.
But... You can still know averages, and distributions and such. I am paid less than 82% of people/engineers at this company.
Besides that, you probably know more about your colleagues' contribution than anyone. That's the important comparison.
Apart from that, people are emotional, not stupid. We understand prices. People will live with being paid less than others. The transition will be emotional. There'll be a backlog of salary adjustments that will happen. We'll adjust though.
Transparent prices make sense when the good is commodity, or the service is highly standardized. When work is becoming a service with many variables publishing salaries would produce confusion and boost feelings of injustice (rightfully or not). I see where you're coming from -- price transparency is typically good for market efficiency. However, providing an adequate, accurate salary information on the job market doesn't seem feasible without structured, comparable job descriptions which doesn't seem realistic.
>people are emotional, not stupid.
People maybe not stupid (yet stupidity is relative, not absolute), but they are frequently not rational either. People frequently can't adequately estimate themselves. Most drivers thinks they drive better than half of other drivers. Most people think they're more attractive than half of other people. The same happens on the job market too. Imagine, everyone gets a rank on the dating market from 0 to 10. How many people do you think would agree with that rank? How is it different from salaries?
It's hard for employees to know how valuable it is for them to sign a non-compete. It's hard for companies to advertise their desirability based on, "those other guys will make you sign a non-compete. We won't." So it becomes low cost for people to ask for it.
In the current environment, non-competes should be banned: California proves this is a viable approach. But perhaps a better long term solution that seems within technical reach right now would be some kind of AI legal assistant that could demystify and educate people about the contacts they're asked to sign.
Like imagine if you had a smartphone app. You scanned the contract with your camera and the app said, "This is a non-compete agreement. 60% of the companies in this field use them. Best estimate is that signing it costs you $30k in lifetime earnings."
Then a job seeker could just negotiate to their own best interest.
Last time I had a decision to make on a non-compete, I did consult with a lawyer and he basically said there are no guarantees, but generally a non-compete cannot be enforced if it prevents you from earning a living.
Edit: the article implies that places like McDonald's do this. I worked there (albeit years ago), and at that time it was not true. We would have been rightly laughed at if we asked for a non-compete on a minimum-wage job like that. It was hard enough to hire people who were reasonably well-groomed, punctual, and energetic. We would not have added unnecessary barriers like that.
https://www.foodandwine.com/news/fast-food-non-compete-agree...
Define "years ago". Improvements to technology over the past few decades have disproportionately eliminated low-skill jobs, leading to an increasingly desperate job market for low-education workers. Desperate people don't have the luxury of refusing a contract based on something abstract like a non-compete. Hell, if it were legal for McDonald's to pay their line workers exclusively in McDonald's Fun Bux rather than dollars, they would still have a surplus of applicants. Desperation is the ultimate enemy of rational decision-making, and at the end of the day poor people still need to eat.
Also there are (or at least were) fast food restaurants making their employees sign non competes. Jimmy Johns had their sandwich makers on noncompetes until 2016 [0].
0: https://www.cnbc.com/2016/06/22/jimmy-johns-drops-non-compet...
The union for engineers in Denmark have basically told its members to just sign contracts with non-compete clauses, because they aren't actually enforceable. Not without the company compensating you financially, even if you're fired.
Assuming a five year non-compete clause, the company should expect to pay you for those five years. Essentially the worker sign away their most marketable skills, and that's no free.
The US is 52 different legal jurisdictions. This is one of the areas where there those different jurisdictions differ quite a bit.
Owing to the very clear rules, I have never heard anyone from Unions saying they where unenforceable, so I’m curious if you have any reference on that part?
2. Have an exchange where we can bid on an individual just like stock market
3. Remove taxes
4. Add exchange fee
No salaries exist. No employee is tied to a particular employer. We can get access to a person if we bid the right amount.