Smalll Businesses

I don't really know what you are talking about. But I don't think what I've mentioned would necessarily lead to the outcomes you've detailed.First, there is no reason to limit the freedom of speech. And no reason to lock folks up either.Second, it's important to distinguish differently-derived profits. In my last post, I mentioned the increase in profits made possible by reducing employment upon the implementation of an alternate production process. These profits simply cannot be allowed to remain in the hands of the company owners. The effect of doing so is to concentrate wealth from the working class to the owning class; 'efficiencies' that simply concentrate wealth (and, in fact, do nothing else) are contrary to the interests of the public good and so no publicly controlled society (= democracy) should sensibly allow such.Finally, there is no reason why the price of highly-demanded goods should not increase as it already does in a typical supply-demand market system. In fact, I cannot see any way that prices could not increase unless being artificially controlled: as a good becomes more scarce, only those willing to pay more would win the bid to purchase it. A disgusting example of what happens when the gains from increased efficiency in labor are allowed to be concentrated.

In reality, sometimes the labor can be redirected and sometimes it cannot. There is a limit to how many times we can retrain someone, and some people have already made decisions that make them difficult to retrain. We are going to have oodles of unemployed soldiers and coal miners who have seen their last days as part of the middle class. I am not the least bit interested in being part of a 'reduced' class. Are you?

It's not about being a part of a 'reduced' classat least not in the sense that it's a bad thing. It's about realizing when society has reached a point where people can devote less of themselves to working and still receive the same benefit.In fact this goes back to the issues that were being discussed in my Replacing Consumerism thread. The sensible (and, in fact, desired) solution to being able to produce the same amount of stuff with less work is to produce the same amount of stuff with less work. If you can feed yourself with four hours of work instead of ten, then you will work for four hours. Likewise, if a society can receive the same benefit from less work, then it should work less. The only time this is a problem is when a system exists (= capitalism, feudalism, etc.) that redirects this benefit away from the workers producing it and into the hands of someone else.But a publicly-owned system for controlling society (= democratic government) should have no problem fixing this flaw and ensuring the benefit goes to those producing it: the public. That happens. In fact, it is inevitable in any changing system that some of its members will have nothing of value to contribute (whether they previously did or not).When that system is made up of monsters, then the non-contributors are left behind to starve or otherwise die.When the system is made up of rational, reasonable, and (hopefully) compassionate creatures, then the non-contributors are floated having been recognized as a necessary part of the system: everyone who does contribute pays a little toward supporting those who don't with the realization that their own prosperity is the result of the operation of the system that also creates the non-contributors. The non-contributors exist precisely because of the same system responsible for the prosperity of the contributors.Again, a publicly-owned society should have no problem making this happen. Only a society privately owned will fail to rise to meet these challenges to the human condition.Jon

I was just providing an example of a system where companies where owned by everyone, and how that particular system worked. Well back then there was a good reason no a right reason mind you because i believe speech should always be free, but they needed to do it in order to stop any descent because as you might figure if you take from the rich and give to everyone there are some people not to happy about that. Especialy since the rich have connections, for example they took land from the church and so called nobility, they dint think it would be a good idea to leat them preach how they where wronged and everyone should band behind them. Yea i think all this could be implemented with a income cap say everything above a million in private annual income is taxed at 100% Well as i said profiteers where not liked back in the day in Yugoslavia, so increasing the price because of market demands, would increase your profit making sure you would have an inspector waiting at your door pretty soon. The system was basically set up so a poor mans income and a top rich mans income where at a ratio of 1:6 anything outside those parameters could get you in trouble. If i remember correctly my grandfather from my fathers side was imprisoned 3 times for profiteering . Couldent help himself we come from a region of hagglers. Yea but it is what the capitalistic system stands for getting rich of the sweat and blood of others. Why should you pay for 850 extra workers when 150 do the job just fine in the end its all money out of your own pocket and we cant have that But i think things will change during the next financial crisis, i hear there is a new housing bauble in the works, it shouldent take more then a few years do you think that this time people will still sing protest songs while the rich sip champagne and laugh at them

That's just it: it's not money 'out of your own pocket'. It is the 99% that is responsible for most economic prosperity, yet the 1% that benefits most.

_________                     _________
|         |                   |         |
|         |  ---------------> |         |
| PRODUCE | Economic Activity | CONSUME |
|         | <---------------  |         |
|_________|                   |_________|
       ^         |||||||        ^
       |_________|||||||________|
                 Benefit
                 |||||||
                 VVVVVVV
                  _____
                 |     |
                 | 1%  |
                 |_____|                 

The benefit is produced by the bulk of society, and that is to whom it belongs. But the current system allows it to be carted off by a few slick turds.That doesn't seem right to me.Does that seem right to you?

More than that, the people who no longer produce due to greater efficiencies in production are still consumers. The economy depends on both producers and consumers. Our current economic predicament is due to poor numbers of consumers which causes production to decrease, which creates more layoffs, more people that become non-producers who then consume less (no frill purchases, no pleasure purchases, no unnecessary consumerism) -- just the opposite of what is needed.So instead a rational system would be to cut back worker hours so that all workers could continue productive work, and worker pay scales that reflect the increased production efficiencies -- if a worker can now produce twice as much as before, then their hourly pay rate should be double what it was before, his work hours can be reduced to half what it was before, they get more leisure time to engage in consuming and the economy improves.That would be social capitalism - where the workers have rights to a fair and just share of the increase in productivity.In fact having a part of society being only consumers, where they are provided with a minimum annual salary provided by government programs would be a better allocation of government funding than bailing out banks and providing big tax cuts to rich people and corporations (not=people) and subsidies like oil industry subsidies. Indeed, that would be feudal capitalism. (where resistance is feudal? )Other countries manage to do it ...

What you call a rational system has the problem that it is not self regulating. In fact, employers and investors cannot reasonably be expected to participate in a system that does not increase ROI by taking at least some portion of productivity gains for themselves.Why would I as an owner/investor buy a 2,000,000 robot that will pay for itself over five years or so if I have to give away the proceeds from increased productivity now? Wouldn't I instead invest that money somewhere else?How does your system attract investment? Love for our fellow man? Government mandate? Is marc9000 right after all?Edited by NoNukes, : No reason given.

It depends on how the robot will 'pay for itself'. Is it going to allow you to reduce labor? Is it just going to make other inputs cheaper/reduce other inputs?The point I was trying to make is that when the only purpose of the increased efficiency is to allow wealth to be concentrated into the hands of the owners at the expense of the laborers, then a fair and just public system that exists for the benefit of society as a whole has an interest in either eliminating such behaviors entirely or sharply curbing them. They can take productivity gains. The case in which they cannot is the case in which the society is already producing exactly the amount of everything that is or can be demanded. But in a society of unmet wants/needs any labor saved in the satisfaction of one want/need can be devoted to the satisfaction of another want/need (with exceptions, as we've discussed).

Yes. That is the particular idea RAZD proposed. And I simply asked the practical question of how you would get the company to act for the benefit of society. I haven't disputed here that the there is a benefit to operating as you suggest. Not if the gains are given to the employee by increasing his pay by exactly the gain in productivity. It does not seem that you want to address the question I posed to RAZD.

Nope.But until the 99% rise up and kick the shit out of the 1% and especially out of the 0,1% we are stuck with this system.

You assume that the employer is not making any money previously, whereas the truth is that they already are taking a share, and they would continue to take that same share proportional to the increased productivity: double productivity, double share.This is the same as doubling the workforce to double production. Instead of hogging all the proceeds you would be sharing the proceeds with the people that have actually done the production for you and enabled you to afford the robot.Think of employees as shareholders that invest sweat equity in your corporation -- are they less entitled to a share of the profits compared to shareholders that only invest money? Are they less committed to the success of your company than the money shareholders? Is sharing the profits with sweat equity shareholders any worse than sharing profits with money shareholders? By making good product at a good price, by having a stable and committed workforce that wants the company to succeed, and which is a valuable asset that shows the company is stable and will continue to grow. For love of a strong economy, where a strong workforce can afford to consume more than the bare necessities and thus contribute to the demand for your product. You'll have to decide that for yourself, just as you will have to decide whether you honor and respect workers as valuable participants in your company or treat them like dime a dozen slaves to your money machine.

No I did not make such an assumption. Double productivity means making the same stuff with less effort. If you then double the salary of the employees or cut their hours by the amount of the increased productivity, you get nothing for the owner. Except that you suggested that the owners share would be zero.You are assuming that there is something unfair about the employees current salary and that the owner is running some kind of charity work program. Why should an employee get an automatic raise just because the owner figures out a way to make more money? And more to the point how do you achieve that? No they are not entitled to a portion of every increase in revenue, however generated by the company. I don't see any natural reason why they ought to be, and I don't see any incentive other than force to make the owners share that way. If the employees want to buy the widget making robot then maybe they deserve a cut.Edited by NoNukes, : No reason given.

NoNukes writes: Not quite the right wording I would use.Doubling the productivity means making twice as much stuff in widgets per hour. The total company work-hours may remain the same. If the wages go up 25% across the board, you may now have 500 workers working 1600 hours per year versus the old 400 workers working 2000 hours per year. And they could each have 400 hours off now. This would be because the wages of, say, $16/hr went up to $20/hr so they hold the same income. Meanwhile the CEO's salary has also gone up 25%.Before:Company profit might be Psw - C, P is some productivity rate, widgets per hour, s is the sales price per widget and w is the work-hours and C is the cost, which can be separated into parts and labor. Some of the parts cost is fixed, F (tax on land used, etc.). Some is materials per widget, m, which if P goes up, they will go up, in proportion to the widgets produced per hour, times work-hours. And the labor cost, is in proportion to w, the work-hours, times the average hourly cost of labor, L. Note that L is the average of all workers including the owner's wages.So we have Company profit, X = Psw - F - Pmw - Lw = w(Ps - Pm - L) - FNow increase P to a new P' and see what a new L' does:After:X' = P'sw - F - P'mw - L'w = w(P's - P'm - L') - FIf L (and therefore L') are in proportion to the company profits (X or X'), then all workers from top to bottom can get a boost.Or even stranger.

An issue some have wrestled with this one for decades upon decades. My favourite:

quote:

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Suppose that, at a given moment, a certain number of people are engaged in the manufacture of pins. They make as many pins as the world needs, working (say) eight hours a day. Someone makes an invention by which the same number of men can make twice as many pins: pins are already so cheap that hardly any more will be bought at a lower price. In a sensible world, everybody concerned in the manufacturing of pins would take to working four hours instead of eight, and everything else would go on as before. But in the actual world this would be thought demoralizing. The men still work eight hours, there are too many pins, some employers go bankrupt, and half the men previously concerned in making pins are thrown out of work. There is, in the end, just as much leisure as on the other plan, but half the men are totally idle while half are still overworked. In this way, it is insured that the unavoidable leisure shall cause misery all round instead of being a universal source of happiness. Can anything more insane be imagined?

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In Praise of Idleness, Bertrand Russell (1932)

And that is very good. Such a system ensures that owners will not innovate in a direction that only concentrates wealth into their hands at the expense of their workforce, and that, if they do attempt such innovation, the workforce will be the benefactor by enjoying extra leisure time while maintaining the same income.In fact, you may find in such a system that the owners never seek innovations in saving labor while the workforce does so continuously. No longer is the owner idly plotting his next move to siphon wealth from his workforce and minimize their welfare, but the workforce itself is constantly seeking new ways to ease its own burden, increase its own leisure, and maximize its own welfare: A system where the whole of productive society is neverendingly finding new ways to better itself. Only if he figures a way to make more money at the expense of his workforce. If, on the other hand, he finds a way to make more money by, for example, reducing the amount of material required in the production of each widget, then his workers will receive no raise whatsoever, or, they will receive a raise equal to the amount of money saved by the fact that less material must be worked: the owner's benefit comes only from the amount of saving directly and actually attributable to the savings in purchasing less material.Nevertheless, in the large scale many folks at the material mine may find their hours reduced with the sale of less material. These are the true casualties of a production system built around specialization of skills; and they are to be cared for as described in Message 18. And when the employees can be made better off from the purchase of the robot, then they may well choose to innovate in that direction.