patrick.net

Reality says

On the contrary, the big government advocates like yourself are the creationists: Intelligent Design by bureaucrats. Whereas the free marketeers believe in the free market competition fostering the evolution of businesses.

Right. Whereas Cars, 747s, Smartphones are simply "poofed" into existence by the unmoved mover or a singular entrepreneur, and not the result of 100s of engineers, metallurgists, computer scientists, jet propulsion experts, etc. etc. coordinated by a team of another few hundred, and built by thousands or tens of thousands.

That's central planning, baby. So was the Hoover Dam, the Apollo Mission, WW2, the Interstate Highway System, the Fiber Optic Cable infrastructure, etc. etc. etc.

What is the difference between 1000 bureaucrats managing the broad financial aspects of the economy and 1000 top banksters? The former are indirectly elected; the latter are unaccountable.

You'll notice that between 1936-1980, there was not a single catastrophic failure of the banking system or a nationwide real estate crisis, etc. under the direction of evil bureaucrats. In the 90s, when we began finalizing the transfer of financial control to solely private, for-profit actors, all of sudden we had Blackstone, Dot Com Bust, Real Estate Bubble and Collapse, ridiculously huge loans given to corrupt officials (from Alabama to Greece) and massive Bailouts for banks worldwide. Hell, California even had brown-outs and power outages - not because of government failure, but because the state government was prevented from regulating Enron's manipulation of energy by neoliberals in the Bush Administration.

This is nothing new - everytime the government takes their boot off the neck of banksters, this happens, and not just in the US. The reason Canada had the least fallout from the crisis was precisely because Canada kept Great Depression-era bank rules in effect.

NoDan8267 says

You are essentially asking the question, why can't the government fix a "fair" price for everything.

Not at all. I'm saying determine distribution of revenue based on productivity, not bargaining power. This has nothing to do with government or price fixing.

How would you calculate productivity in your scheme? Since you want something that displaces the two-way negotiation (bargaining) between the two parties directly involved in the transaction, wouldn't you then have to have an all-knowing government or "board" to make up some kind of formulae?

Dan8267 says

Reality says

Dan8267 says

Why is determining wages based on bargaining power rather than productivity a problem?

Because productivity is dependent on the value of output products and/or services, both of which have subjective value, it is not possible to determine productivity objectively without the market-driven two-way negotiation process.

I'm not saying that the prices of products aren't determined by markets. I'm saying the distribution of the revenue from those sales should be determine by means other than bargaining power. You are confusing two separate things.

What means do you have in mind? Interesting to note that you are retreating from your earlier position about basing on "productivity," which is indeterminant and ever changing based on the ever changing value of the output products. Two way negotiations / bargaining by the two parties directly involved in the transaction is the most effective way of price discovery, for both end products/services and for intermediate inputs, including labor.

Dan8267 says

Abortion is accessible to most women living in systemic poverty

So much for conservative "family values" and a pro-life stance. Republicans have been trying to overturn Roe v. Wade for 40 years. You want abortion by the mother's choice to be illegal, but abortion to be mandatory even against the mother's will if she's poor. What a dystopia you are proposing.

You must have me confused with someone else. I'm not against abortion, nor am I advocating mandatory abortion. However, women in poverty should not have the right to loot from taxpayers; otherwise, you create the real dystopia we have right now: adverse selection resulting in over-representation of children being born to parents with sub-par genes and being raised in sub-par environment. In other words, what your retarded system has produced is reinforcement of failures, turning the gene pool and society backwards towards atavism.

In fact every social ill that you are bitching and moaning about is directly created by impoverishing people for the sole purpose of redirecting all wealth produced by the working people to the owners.

Utter nonsense. The welfare queens that you keep talking about are not workers at all. Your artificial division of "working people" vs. "owners" is utterly non-sensical. Most owners work and/or have ben working. The strongest argument for private ownership is actually promoting work through letting people keep the ownership of their own labor output. Political redistribution is actually a process that set up the real working people against owners (the political parasites: the welfare class, corporate welfare recipients and the bureaucratic enablers.)

And you still haven't addressed why the a few people who produce nothing should be the ones deciding how to distribute the wealth produced by others.

You mean those in the government?

thunderlips11 says

Evil Statism forces parents to feed their children, and prevents them from exercising their right of ownership to starve them! Freedom! Liberty! End Tyranny!

Anybody still wondering why Austrians can't get a job in Academia? If the press got a whiff of what Austrian Professors taught College Students...

So, when did you adopt any starving children? Of course you did not. Instead, you want other people's income to be confiscated to pay for starving children, while you pilfer from that money flow. You are just a liar and a fraud.

thunderlips11 says

That is an irrelevant point even if it is true. At the rate the FED payroll for research Economists is growing, it may well soon hire all PhD economists than all other institutions combined, if not already. It is already by far the top employer of Economics PhD's.

Citation, please.

.

http://www.federalreserve.gov/careers/economist.htm

The FED board alone employes over 300 Economics Ph.D's! That's not including any of the regional FED's.

thunderlips11 says

The most recently retire FED chairman, Bernanke, had previously been a professor at Princeton before taking the FED job;


The current real power wielder at the FED, Fischer, was professor at MIT, and thesis advisor to Bernanke.


The current ECB head, Mario Draghi, was also a student of Fischer's.

That's great, but it doesn't prove the Federal Reserve is the #1 employer of economist PhDs in the USA.

That was in response to a different question, namely, evidence that academia and FED/government are revolving doors. As for "that's great," only to those dumb enough not to see their own enslavement.

thunderlips11 says

On the contrary, the big government advocates like yourself are the creationists: Intelligent Design by bureaucrats. Whereas the free marketeers believe in the free market competition fostering the evolution of businesses.

Right. Whereas Cars, 747s, Smartphones are simply "poofed" into existence by the unmoved mover or a singular entrepreneur, and not the result of 100s of engineers, metallurgists, computer scientists, jet propulsion experts, etc. etc. coordinated by a team of another few hundred, and built by thousands or tens of thousands.

That's central planning, baby.

Are you kidding? Are you that clueless? Central Planning is not a reference to free people individually choosing to play a role in a bigger project that each can quit at any time after fulfilling contractual obligations. Central planning refers to coercive planning by government bureaucrats that all other members of the society have to comply due to threat of violence. Let's take the list you put forth:

For cars, Central Planning meant the soviet style production of Lada's into the 1980's based on the 1950's design, because the factories were told what to produce, and consumers did not get to choose but assigned cars by the government based on their rankings in the soviet society. In the free market, teams of designers and factory workers and bean counters in various different car manufacturers put forth hundreds of different models in those same 30+ years, and consumer choice decided what was to be produced.

For 747, Boeing took the risk to design and manufacture the plane. If it did not work out well, the company would have gone bankrupt, and its hold on resources would be taken over by competitors . . . just like what happened to Boeing's competitor MD.

Smart phones, free market and consumer choice have driven smart phones through multiple generations of evolution to result in what we have today. In a Central Planning economy, like Cuba and North Korea, the cell phone was banned because it's potentially subversive to the regime!

thunderlips11 says

So was the Hoover Dam, the Apollo Mission, WW2, the Interstate Highway System, the Fiber Optic Cable infrastructure, etc. etc. etc.

Hoover Dam and Apollo Mission were huge wastes. That's why huge dam projects have no been attempted again in the US after Hoover Dam. Apollo's politically driven moon shot is a big reason why space industry has been so slow for those decades. Fiber Optic Cable infrastructure was largely laid by private corporations. Private funds built highways too before the federal government took over as monopoly. Waging wars, well, that is indeed the specialty of the big government monopoly. LOL.

thunderlips11 says

What is the difference between 1000 bureaucrats managing the broad financial aspects of the economy and 1000 top banksters? The former are indirectly elected; the latter are unaccountable.

Nope, neither is elected, neither are accountable. Banksters in a fiat money central banking system are bureaucrats. In case you did not realize, the head banksters are appointed by the President! and approved in Senate hearings.

You'll notice that between 1936-1980, there was not a single catastrophic failure of the banking system or a nationwide real estate crisis, etc. under the direction of evil bureaucrats.

There were quite a few actually:

1. the founding of Fanny Mae in 1938 was actually the result of nationwide real estate crisis due to FDR's inflationary policies making low interest 30yr mortgage unavailable from portfolio lenders;

2. Some 30 years later, LBJ had to take Fanny Mae off the government balance sheet and turn them into GSE's with ambiguous "guarantee" from the government because those mortgage liabilities would sink the US government balance sheet under the then prevailing Bretton Wood system;

3. The US government default on the Bretton Wood guarantee on the value of USD promise after western European countries ran on the "bank." What followed after the second bankruptcy of the US (1st being the FDR delinking domestically) was massive inflation in the 70's, as reflected by the two "oil shocks."

In the 90s, when we began finalizing the transfer of financial control to solely private, for-profit actors, all of sudden we had Blackstone, Dot Com Bust, Real Estate Bubble and Collapse, ridiculously huge loans given to corrupt officials (from Alabama to Greece) and massive Bailouts for banks worldwide. Hell, California even had brown-outs and power outages - not because of government failure, but because the state government was prevented from regulating Enron's manipulation of energy by neoliberals in the Bush Administration.

The Electricty Utility Restructuring Act was passed in 1996, in the middle of Clinton Administration. The first brownouts took place in 2000, when Clinton was still in office. Likewise, the repeal of Glass-Steegal also took place during Clinton administration. It's silly to blame "neoliberals" in the Bush Administration for things that had taken place before they even took office.

Reality says

Are you that clueless?

Yes he has, been drinking the Kool aid too long

Reality says

How would you calculate productivity in your scheme?

There are many ways to calculate the productivity, almost all of which are better than letting the owner set a ratio based on bargaining power. Hell, the owner already has to have a damn good idea of what the employee is worth in order to make a hiring decision in the first place. The problem is that he'll always lie and say the workers are less productive so that he can keep a larger share of the profits.

Wage transparency will reveal the true worth of work done across businesses and yes, there are formulas and mathematical laws that have already been developed to address this problem. The Law of Equalization of Net Income is one example. Here's another...

Set the revenue that the owner gets to the median wage of his workers. The only way the owner can increase his personal wealth is to increase the wealth of the workers. The owner's financial incentives are now in line with the wealth producing workers. The owner or business manager will do what it takes to increase that median wage, which is ultimately a function of the productivity of the workers. It also has the advantage of incentivizing businesses to stay small and productive rather than large an unproductive like in the current system.

There are many other solutions that will come about with refinement of ideas.

Reality says

Two way negotiations / bargaining by the two parties directly involved in the transaction is the most effective way of price discovery, for both end products/services and for intermediate inputs, including labor.

Feel free to justify that statement with proof or evidence. Two way negotiation between two parties of equal bargaining power might be the most effective way of price discovery for end products and services, but even so, it is clearly not the most effective way of price discovery when bargaining power is unequal. Nor is there any reason to believe that if it's true for end products it's also true for the internals of product and service development. In fact, I can easily show it's not by giving a single example that contradicts this belief. Just one counter-example is enough to disprove a law.

Counterexample: Ownership of a mineral mine

Let's say there is a potential quarry site full of gold. Society wants that gold. Who owns the gold? The only sensible answer is everyone in the society as it is a natural resource that wasn't created by any person. However, society needs people to did up the gold and to smelt it in order for the gold to be useful.

Under our current system, Edgar, being a member of the owner class, has some political connections that he uses to secure "mineral rights" to the site. He pays men, who are desperate for employment because they are not in the owner class, a meager amount to do the dangerous work of mining and smelting the ore. These men do all the work and are the only persons being productive or producing wealth. They also endure all the adverse health effects.

The wealth in this system is the natural wealth, that is the value of the creation of the gold ore by nature, and the production wealth, that is the value of mining and smelting the gold. The first part of the wealth was created by nature and should be assigned to society as a whole. The second part of the wealth is due to the labor of the worker, not the fact that Edgar "owns" the mine because government says he gets to for a miniscule contribution to the government or to individual politicians.

Does Edgar contribute anything? Perhaps. Some Edgars do contribute a little, others contribute nothing depending on the situation. Let's say Edgar does contribute by funding the mining tools. OK, that has value, but it's value that's easily measured. And it's fair that some of the miner's wealth production goes to Edgar for his contribution of funding the mining tools. What's not fair is that on average 90% of each miner's production goes to Edgar and 10% goes to miner, which is what's historically typical. Miners make a poor living while the owners get rich essentially doing nothing after wrangling some underhanded deal with a corrupt politician.

Under the system I propose, one solution would be to set Edgar's income to the mean income of the miners. Edgar has motive to fire unproductive miners and replace them with productive ones that mine more efficiently. He's also motivated to use efficient tools. So the economic goal of efficient resource allocation is met. But Edgar does not have motive to exploit his workers because his income is the same as theirs.

The value of the gold end-product is still determined by supply and demand. However, the distribution of the revenue of the mining business is handled not by the bargaining power of the miners, but by their productivity. Clearly the value of a miner's productivity does not diminish if another potential miner comes to the town and is willing to do the exact same work for less money because he's desperate. The value of mining ten pounds of goal is independent of who does the mining and how desperate for a job that person is.

Bargaining power, or two-way negotiation as you call it, is NOT an effective mechanism for discovering the value of the work done. Furthermore, price and value are not the same concept, but in an efficient economy where resources are optimally allocated prices will almost exactly reflect value. The Edgars of the world mess up the system and diminish effeciency and growth by making the price of labor have nothing to do with the value of labor.

Make no mistake, even the Edgars of the world will be better off if all Edgars are forced to give up this perverted power. The Virtuous Cycle has more effect on the quality of life of even the Edgars than their ability to exploit workers do.

The particular way in which value is measure is specific to the value being measured (what industry we're talking about), but there is always a way to accurate measure value even if the value is "subjective". If slime mold can come up with a solution that's better than letting Edgar dictate how the revenue is distributed, then we humans with our god-like apprehension should also be able to.

Reality says

Central Planning is not a reference to free people individually choosing to play a role in a bigger project that each can quit at any time after fulfilling contractual obligations. Central planning refers to coercive planning by government bureaucrats that all other members of the society have to comply due to threat of violence.

Actually, central planning means planning that is centralized. It's a self-defining term like automobile.

Central planning is whenever a single entity, even if it's some loose federation of sub-entities, plans something with a common goal, vision, or mission statement. It does not matter if the entity planning is a government, a corporation, or an oligopoly. What large corporations do is, by definition, central planning. In America oligopolies rule our economy and do massive amounts of central planning including price setting, deciding the direction of technology, and standardizing contracts in the interest of the large corporations rather than the customers.

The opposite of central planning IS NOT a larger bunch of entities centrally planning against each other. The real opposite of central planning is distributed decision making, which is not possible with hierarchical decision making entities like corporations or government. For distributed decision making, you need to use relational sets and graphs.

It would be possible to implement a distributed economic system, but I doubt it will happen in my lifetime. Here's how it would work. The entire economic system would be a graph. Each node in the graph is an exchange point. A person opens up one or nodes for the purpose of exchanging work, either requesting or offering to produce some intermediate good. An entrepreneur who wants to make a new product issues a work request to the network. The smart network creates a node path that is capable of executing all work necessary to fulfill the work request. If there are no paths, that means the work cannot be done with the skills, technology, and capabilities of the economy at this time. For example, you cannot create a perpetual motion machine.

Typically, there will be a multitude of paths. The network chooses one path based upon some criteria. The actual criteria can change based on the needs of the economy. The work order is fulfilled by the path and the good(s) produced. The revenue from the sales of the goods is distributed amongst the path, which includes the entrepreneur's node, based on a criteria executed by the smart network. In this way, anyone can be an entrepreneur and not have to worry about being screwed out of his fair share of the profits because the network, which is automated and has no vested interests of its own other than running an efficient economy, determines distribution of the wealth produce.

Capitalism, communism, and feudalism are all essentially the same central-planning economic system. The only real difference is nomenclature. What do you call the people in charge: business owners, party members, or royalty. A rose by any name smells the same, as does a turd by any other name.

Dan8267 says

Actually, central planning means planning that is centralized. It's a self-defining term like automobile.

No. Central Planning means coercive planning, as opposed to market diversified decision making.

It's just like Central Banking does not mean a bank physically located at the center of the city, but means fiat money that everyone in the economy is forced to accept as money (that's how Central Bank can "bailout" banks; it's not like the central bankers are reaching into their own pockets to pay for the bailout, but they are able to reach into the pockets of everyone else because of the coercive power of fiat money).

Dan8267 says

It would be possible to implement a distributed economic system, but I doubt it will happen in my lifetime. Here's how it would work. The entire economic system would be a graph. Each node in the graph is an exchange point. A person opens up one or nodes for the purpose of exchanging work, either requesting or offering to produce some intermediate good. An entrepreneur who wants to make a new product issues a work request to the network. The smart network creates a node path that is capable of executing all work necessary to fulfill the work request. If there are no paths, that means the work cannot be done with the skills, technology, and capabilities of the economy at this time. For example, you cannot create a perpetual motion machine.

LOL. Why re-invent the wheel? You already live in a distributed economic system. You are the node! You can advertise on Craigslist for a "gig" to have your house cleaned, meal cooked, or a fridge delivered. Heck, you might even be able to advertise to have your dick sucked for a few hours before the host removes your post. Dan, you need to get laid and live the real life for a while.

The crucial difference among the various systems is the degree of coercion on the individual. Free market system minimizes coercion, whereas socialism and communism attempts to dress up coercion in various fantasies.

Reality says

No. Central Planning means coercive planning, as opposed to market diversified decision making.

Well, by that definition, unregulated capitalism IS central planning.

Even if we let you choose the definition of a term, you don't get to choose the consequences of that definition. You can't change reality by changing the association of words to definitions. Nomenclature does not determine how a system operations.

Reality says

LOL. Why re-invent the wheel? You already live in a distributed economic system. You are the node! You can advertise on Craigslist for a "gig" to have your house cleaned, meal cooked, or a fridge delivered

You obviously didn't understand what I wrote if you think Craigslist is an example of it.

You are an analog node in a digital world. You'll never understand the future that digital-minded people are building right now.

Dan8267 says

Reality says

No. Central Planning means coercive planning, as opposed to market diversified decision making.

Well, by that definition, unregulated capitalism IS central planning.

How? Do you just go around in circles and redefine various well accepted terms?

Even if we let you choose the definition of a term, you don't get to choose the consequences of that definition. You can't change reality by changing the association of words to definitions. Nomenclature does not determine how a system operations.

What are you talking about? Central banking is not a feature of Capitalism. Central Banking is one of the 10 Planks in the original Communist Manifesto by Karl Marx in 1848.

Dan8267 says

Reality says

LOL. Why re-invent the wheel? You already live in a distributed economic system. You are the node! You can advertise on Craigslist for a "gig" to have your house cleaned, meal cooked, or a fridge delivered

You obviously didn't understand what I wrote if you think Craigslist is an example of it.

You are an analog node in a digital world. You'll never understand the future that digital-minded people are building right now.

LOL. Dan, I'm probably better versed on computational theory and computational structure than you are. You are only a coder, whereas I was heavily involved in designing computers and networks.

The point of the Craigslist example is that you can initiate links/transactions to other notes as you wish.

Unregulated capitalism means corporations are free to rig the market, and they do so for their own self-interest. The only way to have any kind of free market is to smash corporations up with heavy anti-trust laws enforced with the same vigor as anti-terrorism laws.

As soon as a large corporation like Standard Oil or General Motors or Goldman Sachs exists, there is no free market.

Reality says

You are only a coder, whereas I was heavily involved in designing computers and networks.

The fact that you would even use the phrase "only a coder" demonstrates that you understand nothing of computers or networks. It's like saying "only the laws of physics" when talking about how the universe behaves and is structured.

Dan8267 says

Unregulated capitalism means corporations are free to rig the market, and they do so for their own self-interest.

Not at all. In a free market, individuals would not be forced to do business with any corporation. Corporations can rig the market and count on still getting customers only because:
1. Regulations preventing new entrants into the field;
2. Central Bank bailouts forcing the socialization of losses.

The only way to have any kind of free market is to smash corporations up with heavy anti-trust laws enforced with the same vigor as anti-terrorism laws.

Both anti-trust laws and anti-terrorism laws are nonsense. The only law required are those prohibiting the initiation of violence and coercion.

As soon as a large corporation like Standard Oil or General Motors or Goldman Sachs exists, there is no free market.

You do realize Ford owned more than half of global automobile market when GM was founded as one of hundreds of competitors to Ford, right?

Dan8267 says

Reality says

You are only a coder, whereas I was heavily involved in designing computers and networks.

The fact that you would even use the phrase "only a coder" demonstrates that you understand nothing of computers or networks. It's like saying "only the laws of physics" when talking about how the universe behaves and is structured.

Well, I was trying to be polite, and used "coder" instead of "coding monkey," if you have to ask. In the industry, there are "architects," then there are "coding monkeys."

Reality says

Dan8267 says

Unregulated capitalism means corporations are free to rig the market, and they do so for their own self-interest.

Not at all. In a free market, individuals would not be forced to do business with any corporation.

The idealized world you are describing does not remotely resemble any time in American history and does not resemble the kind of system that Republicans and so-called "pro-business" lobbyists are attempting to structure.

In a free market, no party would have more bargaining power than anyone else. That is what makes a market free. If one party is bigger and more powerful than another, then the market itself isn't free. Free players does not mean the same thing as free market.

In a free market, the Keystone Pipeline would never be built because it could not go over public land and could not use eminent domain.

Dan8267 says

The idealized world you are describing does not remotely resemble any time in American history

On the contrary, when Henry Ford had to pay more than double the prevailing wage in order to find and keep workers on his production line, the scene was remarkably free-market.

and does not resemble the kind of system that Republicans and so-called "pro-business" lobbyists are attempting to structure.

Depending on whether pro-business is at the expense of individual consumers or pro specific businesses at the expense of upstart competitors; both cases would be anti-free market.

In a free market, no party would have more bargaining power than anyone else. That is what makes a market free.

That's not true. Some businesses or individuals can have transient advantages, due to new discovery etc.. That's why prices move.

If one party is bigger and more powerful than another, then the market itself isn't free.

There are always some transient situations where some parties bigger than other parties. Free market is not constant egalitarianism enforced at all time, because the enforcer of egalitarianism would make the market unfree.

Free players does not mean the same thing as free market.

Having alternative choice (without being penalized for making those alternative choices) means free market.

In a free market, the Keystone Pipeline would never be built because it could not go over public land and could not use eminent domain.

What are you talking about? Pipelines can be built just like Warren Buffet's railroad benefitting from the pipleline delay could have been built: bargain with the landowners along the way. In fact, pipeline probably has an easier time than railroad due to pipeline requiring less width and can go underground.

You're talking religion. I'm talking engineering. You simply cannot comprehend what I'm saying and are responding nonsensically and failing to address what I've actually said. Put simply, your limited paradigm makes some concepts impossible for you to even imagine nonetheless understand. It's like trying to explain the Internet to a cave man.

Dan8267 says

You're talking religion. I'm talking engineering. You simply cannot comprehend what I'm saying and are responding nonsensically and failing to address what I've actually said. Put simply, your limited paradigm makes some concepts impossible for you to even imagine nonetheless understand. It's like trying to explain the Internet to a cave man.

I addressed every single issue you raised. You are just running away from the debate, simply because what you thought was your original thinking has already been addressed numerous times in the intellectual history of humanity.

Reality says

I addressed every single issue you raised.

You haven't addressed any point I've made. You just keep making baseless contradiction providing no evidence or reasoning while ignoring the evidence I've presented. You haven't even answered the basic question of why should anyone believe that allowing the owner-class set wages is the most efficient way to determine those wages or the best way to run an economy. You simply keep trying to shift the debate to unfounded dogma and talking points you can repeat and hope people accept because they've been said so many times.

Dan8267 says

Reality says

How would you calculate productivity in your scheme?

There are many ways to calculate the productivity, almost all of which are better than letting the owner set a ratio based on bargaining power. Hell, the owner already has to have a damn good idea of what the employee is worth in order to make a hiring decision in the first place. The problem is that he'll always lie and say the workers are less productive so that he can keep a larger share of the profits.

LOL. I guess you never heard of lay-off's and businesses going out business. BTW, how do you ever buy anything at the store? after all, the store owner has an incentive to lie about the worth of his products, no? The solution is quite simple: you'd buy from another store if you think another store offers a better deal. Your argument that employers would lie about the real productivity of worker is actually an argument for two-way bargaining! Just like the purchase at store example.

Dan8267 says

Wage transparency will reveal the true worth of work done across businesses and yes, there are formulas and mathematical laws that have already been developed to address this problem. The Law of Equalization of Net Income is one example.

While practice wage transparency towards my employees, I can see it becoming a problem for jealousy among workers in situations where workers have to work closely together. I have no idea what "The Law of Equalization of Net Income" is. Your alleged formulas and mathematical laws that have already been developed to address the calculation of productivity see remarkably like the soviet fantasy about calculating all prices for all goods and all services using mainframe computers. LOL. Basicly brainchild of morons who do not understand the purpose of market is price discovery.

Here's another...

Set the revenue that the owner gets to the median wage of his workers. The only way the owner can increase his personal wealth is to increase the wealth of the workers. The owner's financial incentives are now in line with the wealth producing workers. The owner or business manager will do what it takes to increase that median wage, which is ultimately a function of the productivity of the workers. It also has the advantage of incentivizing businesses to stay small and productive rather than large an unproductive like in the current system.

There are many other solutions that will come about with refinement of ideas.

Do workers lose their cars and homes when the business loses money in any particular year? Many owners of businesses do not pay a wage to himself at all, but derive income from dividends, which come only after paying all the workers.

Dan8267 says

Counterexample: Ownership of a mineral mine

Let's say there is a potential quarry site full of gold. Society wants that gold. Who owns the gold? The only sensible answer is everyone in the society as it is a natural resource that wasn't created by any person. However, society needs people to did up the gold and to smelt it in order for the gold to be useful.

Under our current system, Edgar, being a member of the owner class, has some political connections that he uses to secure "mineral rights" to the site.

LOL. You do realize, your problem is with "political connection" and "current system." Never mistake "political connection" for free market capitalism; nor is our current system purely free market capitalism.

He pays men, who are desperate for employment because they are not in the owner class, a meager amount to do the dangerous work of mining and smelting the ore. These men do all the work and are the only persons being productive or producing wealth. They also endure all the adverse health effects.

Why would those workers work for such low pay while enduring health hazard if they can find better employment? Instead of coming up with better employment for those workers, you choose to whine and advocate more political establishment, where more "political connections" would be needed to pay the political establishment, ultimately all at the expense of the hapless workers.

Reality says

Do workers lose their cars and homes when the business loses money in any particular year? Many owners of businesses do not pay a wage to himself at all, but derive income from dividends, which come only after paying all the workers.

lol. And why is that, pray tell? Could it be so that they get favorable tax treatment on dividends rather than salary? It has nothing to do with Dan's point.

Dan8267 says

The wealth in this system is the natural wealth, that is the value of the creation of the gold ore by nature, and the production wealth, that is the value of mining and smelting the gold. The first part of the wealth was created by nature and should be assigned to society as a whole. The second part of the wealth is due to the labor of the worker, not the fact that Edgar "owns" the mine because government says he gets to for a miniscule contribution to the government or to individual politicians.

How do you suppose is a good way to reduce Edgar's take? Multiple competing mines that workers can choose from? or government centralized ownership of all mines? so that the government appointed "managers" reap all the benefit while the workers get paid whatever the "managers" say (through a published standard table) and don't have the freedom to work for someone else at different pay?

Dan8267 says

Does Edgar contribute anything? Perhaps. Some Edgars do contribute a little, others contribute nothing depending on the situation. Let's say Edgar does contribute by funding the mining tools. OK, that has value, but it's value that's easily measured. And it's fair that some of the miner's wealth production goes to Edgar for his contribution of funding the mining tools. What's not fair is that on average 90% of each miner's production goes to Edgar and 10% goes to miner, which is what's historically typical. Miners make a poor living while the owners get rich essentially doing nothing after wrangling some underhanded deal with a corrupt politician.

Again, what's preventing the miners to work for someone else? How can we create more opportunities for miners? Diverse ownership by more Edgars? or Centralize into One Edgar? the government Mineral Ministry?

Dan8267 says

Under the system I propose, one solution would be to set Edgar's income to the mean income of the miners. Edgar has motive to fire unproductive miners and replace them with productive ones that mine more efficiently. He's also motivated to use efficient tools. So the economic goal of efficient resource allocation is met. But Edgar does not have motive to exploit his workers because his income is the same as theirs.

LOL. Edgar can give himself a salary of $1, like Steve Jobs did, and live off dividends or selling the mine itself after capital appreciation. If that is not allowed either under your scheme, then Edgar may well fire almost everyone, and use machines almost exclusively. Talk about massive job desctruction. The idea that the equity risk taker can only be paid the exact median income of his workers is rather absurd. How would you be able to attract shareholders and raise fund for starting and expanding business?

The value of the gold end-product is still determined by supply and demand. However, the distribution of the revenue of the mining business is handled not by the bargaining power of the miners, but by their productivity. Clearly the value of a miner's productivity does not diminish if another potential miner comes to the town and is willing to do the exact same work for less money because he's desperate. The value of mining ten pounds of goal is independent of who does the mining and how desperate for a job that person is.

The labor cost of individual worker has significant impact on the ratio of machines vs. workers. Besides, mineral price fluctuates all the time. Do you really want to be an oil worker who was making over $100k six months ago and now making $50k, just like the crude oil price has been fluctuating? Most workers prefer less volatility in their income (otherwise they'd be wildcatter bosses themselves). Someone has to take the premium to underwrite that wage stability.

Dan8267 says

Bargaining power, or two-way negotiation as you call it, is NOT an effective mechanism for discovering the value of the work done. Furthermore, price and value are not the same concept, but in an efficient economy where resources are optimally allocated prices will almost exactly reflect value. The Edgars of the world mess up the system and diminish effeciency and growth by making the price of labor have nothing to do with the value of labor.

Edgars of the world do not dictate labor prices. The workers themselves have to consent to taking the job. Which part of two-way negotiation don't you understand? Edgar is not the Minister of Mines or Minister of Labor setting national wage level for miners, at the point of a gun!

Make no mistake, even the Edgars of the world will be better off if all Edgars are forced to give up this perverted power. The Virtuous Cycle has more effect on the quality of life of even the Edgars than their ability to exploit workers do.

When was the last time you paid the grocery checkout girl $20 extra for scanning your grocery? According to your theory, you'd be better of if you are forced to give up that extra $20: the virtuous cycle has more effect on the quality of life of even you!

Dan8267 says

The particular way in which value is measure is specific to the value being measured (what industry we're talking about), but there is always a way to accurate measure value even if the value is "subjective". If slime mold can come up with a solution that's better than letting Edgar dictate how the revenue is distributed, then we humans with our god-like apprehension should also be able to.

You need to stop inhaling slime mold and stop eating hallucinating mushrooms.

Reality says

Your argument that employers would lie about the real productivity of worker is actually an argument for two-way bargaining! Just like the purchase at store example.

Hardly, and what the typical employer does is hardly bargaining anyway. A better solution is transparency and wages set by criteria not controlled by owners.

Reality says

How do you suppose is a good way to reduce Edgar's take? Multiple competing mines that workers can choose from? or government centralized ownership of all mines?

Once again you are ignoring everything written so far and embracing the standard talking points involving a false dichotomy that either workers have to be raped by owners or raped by the government, as if there are no other options. The fact that you keep making a false dichotomy indicates that either you do not understand what was written or you are deliberately misrepresenting it.

I've already outlined the solution: divorce ownership from control over distribution of business revenue. No government control of the mines is necessary. Nor are competing mines necessary. In fact, in there real world there simply aren't sufficient competing businesses to enable workers to have a choice.

Reality says

Again, what's preventing the miners to work for someone else?

Again, Dan8267 says

And more importantly, those who don't can't get a job because of monetary policy.

Although it is almost never mentioned in conjunction with the welfare debate, the U.S. Federal Reserve has an official policy of raising interest rates whenever unemployment falls below a certain point--now about 6.2 percent (Extra!, 9-10/94). In other words, if all the unemployed women on welfare were to find jobs, currently employed people would have to be thrown out of work to keep the economy from "overheating."

When the entire economy is controlled by the owner class and the owner class wants at least 6.2% unemployment to keep wages down, there will always be at least 6.2% unemployment.

Reality says

Diverse ownership by more Edgars? or Centralize into One Edgar?

Another false dichotomy that has nothing to do with the ideas presented in this thread. You've missed the entire point. There is no need for any owners, government or private, central or competing. In effect every worker should own his productivity rather than owe it to some other "owner" simply for the privilege of being a working, productive member of society. Again, you are avoiding the issue at hand and spouting irrelevant dogma.

tatupu70 says

Reality says

Do workers lose their cars and homes when the business loses money in any particular year? Many owners of businesses do not pay a wage to himself at all, but derive income from dividends, which come only after paying all the workers.

lol. And why is that, pray tell? Could it be so that they get favorable tax treatment on dividends rather than salary? It has nothing to do with Dan's point.

You are indeed raising a point not relevant to the discussion. The owner derive residual income after paying all creditors (including employees) as a matter of law, irrespective of any consideration of tax advantage.

Reality says

You are indeed raising a point not relevant to the discussion. The owner derive residual income after paying all creditors (including employees) as a matter of law, irrespective of any consideration of tax advantage.

Actually you raised the point--I was just pointing out that it had no relevance. Glad you agree.

Dan8267 says

Reality says

Your argument that employers would lie about the real productivity of worker is actually an argument for two-way bargaining! Just like the purchase at store example.

Hardly, and what the typical employer does is hardly bargaining anyway. A better solution is transparency and wages set by criteria not controlled by owners.

The owner sets wage levels at his business; the worker can choose not to work there but work for someone with better wage levels. Exactly like the store owner sets prices at his store, you the customer can choose to buy elsewhere. Government interference at setting prices at stores and at work place would only reduce competition; the result would not be beneficial to the workers and consumers.

Dan8267 says

How do you suppose is a good way to reduce Edgar's take? Multiple competing mines that workers can choose from? or government centralized ownership of all mines?

Once again you are ignoring everything written so far and embracing the standard talking points involving a false dichotomy that either workers have to be raped by owners or raped by the government, as if there are no other options. The fact that you keep making a false dichotomy indicates that either you do not understand what was written or you are deliberately misrepresenting it.

I've already outlined the solution: divorce ownership from control over distribution of business revenue. No government control of the mines is necessary. Nor are competing mines necessary. In fact, in there real world there simply aren't sufficient competing businesses to enable workers to have a choice.

LOL. Would you want to own your car if I get to use it the equal number of hours as you do? and you have no control over who uses your car? or at what rate per hour? What you are proposing is little more than a complicated scheme that promotes accounting fraud, and essentially discouraging ownership if not removing all benefit/substance of ownership altogether (i.e gradually or rapidly transitioning to centralized government ownership by default.)

tatupu70 says

Reality says

You are indeed raising a point not relevant to the discussion. The owner derive residual income after paying all creditors (including employees) as a matter of law, irrespective of any consideration of tax advantage.

Actually you raised the point--I was just pointing out that it had no relevance. Glad you agree.

I was pointing out the tax consideration has no relevance. Owner keeping the residual income after debts and wages are paid is simply a matter of law.

Dan8267 says

Diverse ownership by more Edgars? or Centralize into One Edgar?

Another false dichotomy that has nothing to do with the ideas presented in this thread. You've missed the entire point. There is no need for any owners, government or private, central or competing. In effect every worker should own his productivity rather than owe it to some other "owner" simply for the privilege of being a working, productive member of society. Again, you are avoiding the issue at hand and spouting irrelevant dogma.

Every worker indeed owns his/her own productivity: by choosing to ask for a wage level that he/she decides, instead of being decided by some kind of government-appointed board. Capital goods also have ownership, so that the disposition decisions can be made. If it is not owned by diverse private ownership, then it is by centralized government ownership by default (i.e. disposition decisions to be made by non-competing bureaucrats); we already know what centralized government ownership by default is like, reference the "communes" of the 20th century if you are not familiar with the subject.

Reality says

The owner sets wage levels at his business; the worker can choose not to work there but work for someone with better wage levels.

Only if better wages are available, which they are not because of the steps taken to ensure that workers have no bargaining power. Steps that include both monetary policy and union busting.

And again, you haven't even attempted to address why the owner should be the one setting wages instead of automating that according to criteria which best serves society.

Once more you are repeating your talking points rather than addressing the issues.

Reality says

LOL. Would you want to own your car if I get to use it the equal number of hours as you do?

The owner class doesn't own the people or their labor, so why should they have unilateral say over distribution of business revenue created by the workers? Hell, the owner class isn't even necessary. Workers are necessary; owners are not.
Reality says

What you are proposing is little more than a complicated scheme that promotes accounting fraud

You still don't even comprehend what I'm proposing. You certainly have no evidence that my proposal increases account fraud. The example of a distributed economy I gave above actually makes accounting fraud impossible since the network does all the accounting, not owners or CPAs paid by owners to fudge numbers.

Reality says

stead of being decided by some kind of government-appointed board

Once again you completely ignore what is being said because it doesn't fit in your list of approved arguments to rebut and doesn't match your talking points. You even ignore what you quote: Reality quotes Dan stating

There is no need for any owners, government or private, central or competing.

Dan8267 says

Reality says

The owner sets wage levels at his business; the worker can choose not to work there but work for someone with better wage levels.

Only if better wages are available, which they are not because of the steps taken to ensure that workers have no bargaining power. Steps that include both monetary policy and union busting.

LOL. Some businesses offer more than others under any monetary policy. Looser monetary policies would just mean higher inflation and cost of living would be higher. Besides, what's to prevent the worker from starting his/her own business

And again, you haven't even attempted to address why the owner should be the one setting wages instead of automating that according to criteria which best serves society.

Because the owner is the owner: just like if I want to drive your car, you decide how much per hour you'd charge for the use.

Once more you are repeating your talking points rather than addressing the issues.

I addressed the issues; you are just too dense/slow to understand the consequences of your proposal. You are like the soviet commissar who decided to communize the ownership of milk cows from the "rich" cow-owning farmers, without realizing that if the cow is to be communized in the morning, the cow-owners would rather privatize the cow into their own stomachs before the sun rises.

Dan8267 says

LOL. Would you want to own your car if I get to use it the equal number of hours as you do?

The owner class doesn't own the people or their labor, so why should they have unilateral say over distribution of business revenue created by the workers? Hell, the owner class isn't even necessary. Workers are necessary; owners are not.

LOL. The owners own the capital goods that are necessary to production. The owners are necessary because executive decisions regarding the capital goods are necessary. You are making the same mistake that the 20th century communists in ignoring the importance of executive decisions on how capital goods are to be used. That too has to be competitive in order to be efficient. Therefore diversified competing private ownership is critically important, instead of relegating all capital goods to government ownership by default.

Dan8267 says

What you are proposing is little more than a complicated scheme that promotes accounting fraud

You still don't even comprehend what I'm proposing. You certainly have no evidence that my proposal increases account fraud. The example of a distributed economy I gave above actually makes accounting fraud impossible since the network does all the accounting, not owners or CPAs paid by owners to fudge numbers.

You are kidding yourself. 40% of LA economy today is under the table in order to avoid taxation and regulations! More than half of cigarettes sold in NYC are contrabands! Your idea of making owner's take based on percentage of revenue no greater than his median worker would just make the owner hide profit and balloon expenses, just like the war-time 10% profit cap did on the accounting books at munition makers.

Dan8267 says

stead of being decided by some kind of government-appointed board

Once again you completely ignore what is being said because it doesn't fit in your list of approved arguments to rebut and doesn't match your talking points. You even ignore what you quote: Reality quotes Dan stating

There is no need for any owners, government or private, central or competing.

I was not using talking points. You just don't understand the consequences of your proposal. I even went so far as to ask you, what would happen to your car ownership if all benefit of ownership is removed? Say, owning the car is worth $100 a day to you, for commute and pleasure; what if there is a $100/day tax on your car ownership? or a tax raised to such a level where making you physically and emotionally no better off than walking? Would you still own the car? No, you would not (if you answer yes, then raise the tax even higher, recursive until you answer no; that's the point at which all your ownership benefit is squeezed out of you). You would give up the car, just like everyone else owning car at that point. Then all cars will effectively be owned by government by default. What do you think will happen to the cars? They will be abandoned and abused.

Likewise, if you remove all benefit associated with owning capital goods, capital goods will be abandoned to default government ownership. That's exactly what happened in the 20th century in communist countries that "communized." The result was massive destruction of capital and misallocation of capital as capital goods became managed by non-competing bureaucrats even as they became nominally owned by "all people." Capital goods have multiple possible uses: a car can be a private conveyance, can be taxi, can be tree stump puller, can be dead weight door stopper, can be source of scrap metal, etc. etc. ownership decides how it is to be used and by who. Do not tell me someone using your car as a taxi would have the same productivity as the yahoo using your convertible to pull tree stumps in his backyard.

Reality says

Then all cars will effectively be owned by government by default. What do you think will happen to the cars?

You analogy does not even remotely apply. Basing distribution of revenue on productivity rather than bargaining power will not cause the productivity to be owned by government, but rather by those being productive and creating the wealth. Workers will have far more incentive to be productive and do a good job if they are getting paid according to their productivity rather than their bargaining power. Under the current systems most workers do just enough to not get fired because even if they worked their hardest, their wages won't increase because their wages are determined by bargaining power, not productivity.

Once more you resort to red herrings rather than addressing the core issue.