31 Dec 14
Originally posted by EladarNothing is automatic but yeah, if you are productive you'll get a job and earn more in a capitalistic society. I honestly thought that was a fact, not a debatable position.
You are the one who made the claim that if you are more productive you will automatically make more money due to capitalism.
31 Dec 14
Originally posted by quackquackSo all that unemployment in the 1930s and after Wall Street wrecked the economy in 2008 was just because people were lazy, unproductive slackers?
Nothing is automatic but yeah, if you are productive you'll get a job and earn more in a capitalistic society. I honestly thought that was a fact, not a debatable position.
31 Dec 14
Originally posted by quackquackI doubt you will get many economists to agree with you on this "fact" especially as it doesn't really make much sense to talk about someone's productivity in a vacuum. Someone's productivity depends, apart from his own talents and skills, on many external factors in society.
Nothing is automatic but yeah, if you are productive you'll get a job and earn more in a capitalistic society. I honestly thought that was a fact, not a debatable position.
31 Dec 14
1 edit
Originally posted by quackquackI tend to agree with KN and no1 that productivity is not very well correlated with wages.
Nothing is automatic but yeah, if you are productive you'll get a job and earn more in a capitalistic society. I honestly thought that was a fact, not a debatable position.
Wages are set by the market forces of supply and demand or labor. The employer has the incentive to pay as little as he can get away with under market conditions. While it's possibly true that the maximum salary the employer will pay is the worker's productivity, the minimum is probably a better barometer of actual salary.
The basic philosophy behind socialism, in fact, is that the worker should be paid what he produces rather than what the market forces dictate the employer can get away with paying him. Alas, this leaves little room for profit and thus little reason to innovate or to try to produce more than your salary dictates, which is the main reason Communism failed, IMO.
31 Dec 14
1 edit
Originally posted by quackquackI never said that Socialism or Communism would bring about better results. All systems are run by people which means they are inherently corrupt and a chosen few will always manipulate the system. I'm just calling you on your belief in a big lie.
Nothing is automatic but yeah, if you are productive you'll get a job and earn more in a capitalistic society. I honestly thought that was a fact, not a debatable position.
31 Dec 14
Originally posted by sh76We can agree to disagree. Its been my experience that the free market does an excellent job in allowing people to go where they are valued most. People will compete for those who can produce more for them and will compensate them accordingly.
I tend to agree with KN and no1 that productivity is not very well correlated with wages.
Wages are set by the market forces of supply and demand or labor. The employer has the incentive to pay as little as he can get away with under market conditions. While it's possibly true that the maximum salary the employer will pay is the worker's productivity, the mi ...[text shortened]... o try to produce more than your salary dictates, which is the main reason Communism failed, IMO.
31 Dec 14
1 edit
Originally posted by sh76"I tend to agree with KN and no1 that productivity is not very well correlated with wages."
I tend to agree with KN and no1 that productivity is not very well correlated with wages.
Wages are set by the market forces of supply and demand or labor. The employer has the incentive to pay as little as he can get away with under market conditions. While it's possibly true that the maximum salary the employer will pay is the worker's productivity, the mi ...[text shortened]... o try to produce more than your salary dictates, which is the main reason Communism failed, IMO.
It isn't always.
"Wages are set by the market forces of supply and demand or labor."
That is more reliable, and is just as much a market force. It is why people who run fast, catch footballs, and evade tacklers get millions for playing a game. In another sense these guys are productive, because without their talents stadiums would not be filled with paying fans, and there would be no lucrative TV contracts.
It is probable that in a really free market that productivity would be a more major factor, but when other factors distort those market forces, productivity becomes secondary to things like membership in a union, or what good old boys club you belong to.
31 Dec 14
Originally posted by quackquackI would agree with you totally, if markets were allowed to operate without distortions.
We can agree to disagree. Its been my experience that the free market does an excellent job in allowing people to go where they are valued most. People will compete for those who can produce more for them and will compensate them accordingly.
01 Jan 15
Originally posted by quackquackWell, people do generally work where they get paid most (given some obvious restrictions like family obligations, how enjoyable the work is, etc.), but that implies no relation between wage and productivity. 'Cause there isn't one. Say I run a widget factory and I have a pool of 10 qualified people to make widgets, and I need them all, putting them in a good negotiating position. Suppose that I pay them a wage of X. Now the Widget School class is graduating, and suddenly I get 50 qualified people to choose from (assume for simplicity that they are equally qualified). Some of these people are likely willing to work for less, so I can fire some of my staff, hire some of the new graduates, and lower overall wage costs.
We can agree to disagree. Its been my experience that the free market does an excellent job in allowing people to go where they are valued most. People will compete for those who can produce more for them and will compensate them accordingly.
See how the actual productivity of the widget makers plays no role? At most it will determine whether my factory is profitable or not, but even that correlation is loose since the price of the product and the utility it provides (taking productivity in its most meaningful sense, i.e. the amount of utility provided per hour worked) are not linearly dependent.
01 Jan 15
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Originally posted by KazetNagorraSkilled workers can command a higher wage because they produce more.
Well, people do generally work where they get paid most (given some obvious restrictions like family obligations, how enjoyable the work is, etc.), but that implies no relation between wage and productivity. 'Cause there isn't one. Say I run a widget factory and I have a pool of 10 qualified people to make widgets, and I need them all, putting them in a ...[text shortened]... aningful sense, i.e. the amount of utility provided per hour worked) are not linearly dependent.
I am currently working for an Australian company that occasionally wins contracts in foreign countries where local labor is cheap. But the main driving factor for hiring locals is not their low cost but regulation demanding an expat/local ratio. Cheap unskilled labor producing not much versus high cost expat labor producing enough.
This is a real world example. Not "widgets"🙄
01 Jan 15
Originally posted by WajomaAnd what would this Australian company do if market conditions change and suddenly there would be a lot more qualified expats willing to work for them? Pay them the same, out of the goodness of their hearts? Or maybe pay them less in response to supply and demand of labour?
Skilled workers can command a higher wage because they produce more.
I am currently working for an Australian company that occasionally wins contracts in foreign countries where local labor is cheap. But the main driving factor for hiring locals is not their low cost but regulation demanding an expat/local ratio. Cheap unskilled labor producing not much ...[text shortened]... gh cost expat labor producing enough.
This is a real world example. Not "widgets"🙄
01 Jan 15
1 edit
Originally posted by KazetNagorraYou under estimate the link between productivity and wages. So I don't have a degree in Physics but this is an area I do have some experience.
And what would this Australian company do if market conditions change and suddenly there would be a lot more qualified expats willing to work for them? Pay them the same, out of the goodness of their hearts? Or maybe pay them less in response to supply and demand of labour?
