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The Opposition
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Importing More Workers Breaks Capitalism
Oct 17th, 2018 at 11:10am
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My state just raised the minimum wage, and shockingly, not everyone lost their jobs. This wasn't supposed to happen, said capitalists, because your employer is already paying you very close to the amount you're producing for the company!

This is not a discussion about whether minimum wage is moral. It's not. It's a discussion of why reality does not match the capitalists' predictions.

Importing pure labour, without importing more property, breaks the mechanism capitalists tout as perfect.

Ideally, if a worker is providing $12/hour worth of value to the company, he would be able to negotiate his salary up to very close to that amount, as long as the company still makes some profit.

However, not if there are fifty other people begging for that job at $6/hour.

In this unbalanced a situation, some of those workers are supposed to become entrepreneurs, hire some of the other workers at perhaps $8/hour, take the $12/hour value those workers create, and still underbid the company that only pays $6/hour. They take less profit and pass that on to the customer, selling their product for less.

Let's say for the sake of example that the company produces apples, and they're hiring apple pickers.

Raising an orchard takes both time and money, the new labour has no money, and remember that I specified that only importing labour without more property has this effect.

Well, they can get a loan, you might say.

Except that with the same amount of property in play, the competition for the same amount of loans just shot up as well, as well as the competition for land and resources. This brings us right back to the same game of musical chairs we were at with the fifty applicants and one job: Not everyone who needs a loan to fix the industry and push wages higher, actually gets their loan. And capitalism doesn't happen. At least, not how it's touted on the box.

So we get government-enforced minimum wage hikes instead, and not everyone loses their jobs because the truth is that some are providing well over $12/hour of value to the company, they just can't negotiate their salaries higher because the population of labour is being continuously, and artificially, inflated.

Welfare and immigration are to blame, but of the two, only welfare is aggressive. The problem might just as easily proceed with only immigration.

Something Bob might be interested in is that this controlled population explosion is not only good for the companies and bad for the workers - it's also the reason they can dump more money into the economy and defer some of the inflation: There are more people to go along with the extra money. This, too, enriches those making the decisions about policy.
  

This moral relativism of yours is exactly what lets government take this freedom, then that freedom, until we have lost them all.
-SnarkySack
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Snarky Sack
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Re: Importing More Workers Breaks Capitalism
Reply #1 - Oct 17th, 2018 at 4:06pm
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Admittedly, I will cherry pick your analysis.

The Opposition wrote on Oct 17th, 2018 at 11:10am:
My state just raised the minimum wage, and shockingly, not everyone lost their jobs. This wasn't supposed to happen, said capitalists, because your employer is already paying you very close to the amount you're producing for the company!

This is not a discussion about whether minimum wage is moral. It's not. It's a discussion of why reality does not match the capitalists' predictions.

Importing pure labour, without importing more property, breaks the mechanism capitalists tout as perfect.

Ideally, if a worker is providing $12/hour worth of value to the company, he would be able to negotiate his salary up to very close to that amount, as long as the company still makes some profit.


Yes, that is the Marxist analysis of the labor-capital relationship.  Not that that make it wrong, Marx was a genius.  His analysis is worthy of understanding.  Under Marx, if a capitalist hires a worker for ten dollars an hour and the worker adds twelve dollars an hour in value to the capitalist's products, the capitalist is expropriating two dollars worth of what Marx called "surplus value."  That's why Marx said "capitalism is theft."

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However, not if there are fifty other people begging for that job at $6/hour.


Under the free market system, if there are people willing to work for $6 an hour, then $6 is the market value of the labor.  So the worker can only add $6 per hour in value to the products.  How much value that hour of labor adds depends on the free market value of the product after that hour.

For example, suppose you paid a worker to assemble automobile electrical harnesses for 8 hours.  He is to take spools of wire, crimpers, solderers, etc and following a blueprint, make four per 8 hour period.  How much the value of the wiring harness is doen't depend on how much you paid him.  You could pay him a thousand dollars an hour but that doesn't mean the harnesses are worth that much.  Or you could pay him twenty dollars an hour, but if he screws it up and comes up with an unusable tangle of wires, it winds up being worth less after the labor.

So where does the value come from that allows the capitalist to charge $30 for a product with only $10 in material, $6 in labor and $4 in miscellaneous expenses?  Where did the other $10 come from?

I say, from the mind of the capitalist.  Her inventiveness, managerial skills, ability to forecast demand in the market, ability to create demand in the market, and effectiveness as a leader allowed her to direct her workers so that they could apply 6$ worth of labor to $14 worth of raw material and supplies and produce $30 dollars worth of products.

Making things become worth more than the sum of their parts and labor is exactly how wealth is created.  When we reward wealth creators, we get more wealth.  When we punish wealth creators, we get less.

Jeff will never understand that.





  

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Re: Importing More Workers Breaks Capitalism
Reply #2 - Oct 17th, 2018 at 5:44pm
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The Opposition wrote on Oct 17th, 2018 at 11:10am:
My state just raised the minimum wage, and shockingly, not everyone lost their jobs.
I'm trying to imagine if everyone had lost their job... Shocked
  
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Jeff
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Re: Importing More Workers Breaks Capitalism
Reply #3 - Oct 17th, 2018 at 5:52pm
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Snarky Sack wrote on Oct 17th, 2018 at 4:06pm:
Admittedly, I will cherry pick your analysis.


Yes, that is the Marxist analysis of the labor-capital relationship.  Not that that make it wrong, Marx was a genius.
So was Napoleon. Alexander the Great. Hannibal. Hannibal Lecter... Hitler. Bismark. Stalin.

Marx's fantasies have been disproved so many times it isn't funny.

I'm thinking that, because you can't make any sense of what Marx said, and you get warm feelings about Marx as a Father figure, you just accept that whatever he meant, it is certainly good, and smarter people than you have it figured out how and where Marx's genius will manifest itself next.
  
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Re: Importing More Workers Breaks Capitalism
Reply #4 - Oct 17th, 2018 at 5:55pm
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Snarky Sack wrote on Oct 17th, 2018 at 4:06pm:
Under the free market system, if there are people willing to work for $6 an hour, then $6 is the market value of the labor.  So the worker can only add $6 per hour in value to the products.  How much value that hour of labor adds depends on the free market value of the product after that hour.


Right, and if you have a free market system, prices are also controlled by the market. 

If almost no one can afford to buy your product, and you therefore fail to sell any and starve over the winter, you will learn a valuable lesson...

It's better to lower your prices so you sell all of your product. Smiley
  
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Re: Importing More Workers Breaks Capitalism
Reply #5 - Oct 17th, 2018 at 5:59pm
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Snarky Sack wrote on Oct 17th, 2018 at 4:06pm:
So where does the value come from that allows the capitalist to charge $30 for a product with only $10 in material, $6 in labor and $4 in miscellaneous expenses?  Where did the other $10 come from?


If people will pay, I will offer a better version of the same product for $50, and I think I can produce the product for $7... $13 at the most. I'll make huge profits if anybody buys my product. Smiley
  
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Re: Importing More Workers Breaks Capitalism
Reply #6 - Oct 18th, 2018 at 10:44am
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Jeff wrote on Oct 17th, 2018 at 5:52pm:
So was Napoleon. Alexander the Great. Hannibal. Hannibal Lecter... Hitler. Bismark. Stalin.

Marx's fantasies have been disproved so many times it isn't funny.

I'm thinking that, because you can't make any sense of what Marx said, and you get warm feelings about Marx as a Father figure, you just accept that whatever he meant, it is certainly good, and smarter people than you have it figured out how and where Marx's genius will manifest itself next.


Marx' genius was not in discovering a new way to look at the capitalist-worker relationship that described it accurately.  His ideas were neither new nor accurate.  His genius was in the writing.  His writings were simple enough for even the public-school educated factor worker to understand.  So the factory owners were hoisted on their own petards, having lobbied for public school to provide job skills for future workersand then having Marx reach out to them with his manifesto.

The purpose of public schools was to provide a workforce  that could read things like, "No Smoking Within 100 Feet" and "Danger Live Steam."  Also to have a pool of potential supervisors who could add and subtract simple sums and read instruction manuals. 

Your idea that "communities" voted to tax themselves for public school is fantasy. 


  

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Re: Importing More Workers Breaks Capitalism
Reply #7 - Oct 18th, 2018 at 10:45am
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Jeff wrote on Oct 17th, 2018 at 5:59pm:
If people will pay, I will offer a better version of the same product for $50, and I think I can produce the product for $7... $13 at the most. I'll make huge profits if anybody buys my product. Smiley


Which they won't, if they know your reputation.
  

"I think I'll backtrack." - Jeff
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Re: Importing More Workers Breaks Capitalism
Reply #8 - Oct 18th, 2018 at 2:37pm
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Snarky Sack wrote on Oct 18th, 2018 at 10:44am:
Marx' genius was not in discovering a new way to look at the capitalist-worker relationship that described it accurately.  His ideas were neither new nor accurate.  His genius was in the writing.  His writings were simple enough for even the public-school educated factor worker to understand.
Marx wrote a lot of totally wrongheaded crap and made it sound like some sort of justice.

His ideas about capital and markets are completely wrong, which is why they produce such horrible results.

You are right that Marx was trying to appeal to working people (the proletariat) who were not highly educated, if educated at all, but they never bought into his nonsense. Over time, Marxism has really ever appealed only to peasants and the intelligentsia... The only two classes ignorant enough to believe his theories could work in practice.
  
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Re: Importing More Workers Breaks Capitalism
Reply #9 - Oct 18th, 2018 at 2:40pm
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Snarky Sack wrote on Oct 18th, 2018 at 10:44am:
Your idea that "communities" voted to tax themselves for public school is fantasy. 


Sorry, it's not, and the earliest schools in America taught (if you stayed through 12 years) the equivalent of today's college education.
  
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