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economic justice | labor

Those who do the work in the workplace should get the rewards

People are taught to have a 19th century, romantic notion of capitalism a myriad of small enterprises competing in a free market. But a "free market" has never existed. Capitalism was built on pushing people off their farms and passing draconian laws to force them into the new factories, and continues to be based on violence.
A cooperative enterprise rests on a basic concept the people who do the work earn the money. Strange, isn't it, that this straightforward idea is considered radical.

It shouldn't. Yet it is. The modern capitalist system is advertised as a "meritocracy" those who work the hardest earn the most. In reality, this is a fairy tale; those who accumulate the most are those who have the most capital, often inherited. The system is called "capitalism" for a reason.

Not even the hardest-working chief executive officer works 340 times harder than his or her average employee. The financier who manipulates numbers on a computer screen, indifferent to the humanity that produces those revenues and net incomes, surely does not work hundreds of times harder. Or, likely, even as hard, particularly if the corporate raider is looting a manufacturing company with a factory floor.

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Who works harder, the factory worker or the investor? 03.Apr.2013 18:44

The Dude

My 48 year-old friend worked a 40 hour week in a Portland factory, where he was paid minimum wage, and his take-home pay after taxes was $1,100 per month. The rent on his 280 square foot studio apartment was $575 per month. He could not afford health insurance or a car, and lifting heavy boxes at the factory all day was ruining his knees.

Then he got a $120K inheritance after his mother died, and he invested most of the money in financial instruments with foreign banks that pay about 14% per annum. Now, a few years later, he lives a modest life of frugal leisure as an expate in Sri Lanka, receiving $1240 per month in income from his investments, a portion of which he reinvests to keep his principal growing.

Now, class, here is your test question: was my friend working harder at the factory job in Portland, or is he working harder now as an expate investor and beach bum in Sri Lanka?

Risk = Reward 04.Apr.2013 14:01

Fidelity

The factory worker is only working at a "job" - the worker can quit at any time. Their job is replaceable.

A private business investor (especially one who is not with a publically traded NASDAQ/NYSE company) has a much harder time transitioning their cash out of a business. Sometimes, it's actually impossible to withdraw money unless assets are sold. You see, in order for you "sell" something, you have to have a "buyer" or otherwise recieve cash for your sold shares. Not all companies/owners are in that position at all times.

I know a lot of you have never invested money in anything (certainly "Systemic Disorder" has never had ANY money except for Student Loans), so let me break this down for you on a micro-business scale.

If you wanted to open a food cart, but you had no money, I might say to you, "OK, PIMC-reader, I'll give you $20,000 if you put up $10,000. Over the first year you pay me back $10,000 and the second year you pay back the other $10,000, and on the third year you pay me $5,000 for the loan." That wouldn't be a bad deal, especially if you had a really solid business plan and you knew that you could easily pull in $50k a year in profits (damn good for a food cart). I would be considered your Partner and Investor, but I wouldn't make strategic business decisions nor involved in the day-to-day operations.

Then, you open up the food cart with the $30k in money, the cart and equipment costs $15k, supplies and overhead cost $5k, and you've got a small buffer to keep the business floating.

Unfortunately, the whole thing is a flop. You're making a quarter of what you expected to make, or maybe you're even losing money. Now, how the hell are you going to pay me back? Even if you sell the supplies and assets, you still don't have the cash to repay my loan. It looks like I'm out of a significant amount of money: I took a huge risk and it didn't pay me anything. As an investor, I CAN'T JUST QUIT and walk away, if I want my money back, I have to work with you even if I now realize you're an idiot. Perhaps you might say, "Well, maybe you shouldn't of loaned money?" Unfortunately, that's the way things get started, people borrow from each other.

Do you see the difference now between an INVESTOR and a WORKER?

Now, let's take a look at those damn CEO's: suppose a CEO is running a Shoe company worth $100 million dollars, of that $100 million, $1 million of it is actually the CEO's money, and they own $9 million in stock options. (You may not be aware of this, but most corporate officers are required to put their own money into the business, and own shares of the business.) The CEO is going to make decisions that command huge resources, and those decisions are going to carry SIGNIFICANT RISK for the company. For example: the CEO decides they're going to invest $5 million in Sandals instead of Tennis Shoes, but the sandals don't sale. Suddenly that $100 million dollar company is worth 1/20th less than it was, and the CEO's own money is worth 1/20th less than it was. The CEO personally lost lots of money after making a significant risky investment.

In the food cart analogy and CEO analogy, both businesses made bad choices, but what if that didn't happen? Well, they would make investments and those investments would pay high dividends. Taking significant risks means you can get a significant reward.

NEWFLASH @ Systemic Disorder: Most businesses do not operate in Cooperative fashion for a specific reason. The concept of a cooperative functioning as a healthy business model is predicated on numerous fallacies: 1) That all workers are smart. 2) That all workers are willing to make smart strategic business decisions instead of selfish business decisions (think of the CEO sandals story). 3) That all workers can INVEST MONEY when they join a company or willing to buy shares of the company from their pay. 4) That all workers plan to spend significant amounts of time at the company (in terms of tenure). 5) That all workers plan to spend a significant amount of time not only doing their regular job, but willing to participate in managerial decision processes (and, are they getting paid during this time?). If cooperative models were superior businesses, we would see more of them. Instead what we see are entrepreneurial partnerships between several folks, and they selectively higher people to do tasks for them.

Systemic Disorder's perception of economies and business is so incredibly nave that I'm amazed they continue to write on these subjects. Just look at this paragraph as an example: "If someone chooses to work [14 hours a day] and is personally fulfilled by doing so, that is that person's business and not mine. But if you are at your job 14 hours a day, six days a week, your family is missing all the other things you have to offer them. And no matter how nice a house you may have, you're not there to enjoy it." - Really? Maybe the amount of hours I work are none-of-your-goddamn-business, and if your boss is making you work too many hours, you should FIND A DIFFEERENT JOB. Strong argument you make against working hard: "shouldn't you be at home, enjoying your family and big house?" No, that's not what I want to do with my time. I work hard, and during my time off I can do cooler things than you because I have more resources than you. Maybe I'll go paragliding while you go for a bike ride - maybe I'll do cocaine off of a beautiful girl's ass while you drink $1 PBRs - these are my decisions.

Then there's this absurdity: "In a cooperative economy, no individual must assume all the risk. The cooperative can do so, taking loans at reasonable rates by making a good case to a publicly accountable bank operated as a public utility. Enterprises would relate to other enterprises in a cooperative, not competitive manner, eliminating much of the anxiety inherent in a capitalist system in which humans serve markets instead of the other way around." Exactly why would there be no competition? Probably because Systemic Disorder has no concept of why competition ends up naturally occurring in a market, probably because Systemic Disorder has no idea what a market is. Or, maybe Systemic Disorder imagines an economy without choice, where there's only one Shoe store and one Shoe maker and that Shoe's will be *The People's Glorious Shoe*. Who knows? This Systemic Disorder is a nave wingnut teetering on merging the State/Government with Private Business... .what's the name for that again... ?

Fedelity says Anarchists are Wingnuts. 04.Apr.2013 20:35

An Anarchist

Q: "This Systemic Disorder is a nave wingnut teetering on merging the State/Government with Private Business... .what's the name for that again... ?"

A: An Anarchist.

You're right, Fidelity 04.Apr.2013 20:51

Shaker

The the problem with The Dude's friend is that he worked in an area of the company, or maybe it was the company itself, such as a warehouse, that added little to a product beyond making it available and required nothing more than willingness and a strong back, which, despite some right-wing asses, is really never in short supply.

But the crux of the matter is that there are different levels of investing and adding value to a product. If you take a chunk of steel and make something of it that requires skill as well as labor, it's obviously going to pay more, unless it's just something common that one can make in their garage but it's easier and cheaper to just buy.

I think that Systemic Disorder's view of things isn't very thoughtful, but then, I don't believe that collectively our view of how things work isn't that, either. You've got investing people who really seem to believe in Ayn Rand, and she was as naive as anyone, including a lot of libertarians, who impress me as egotists and not good at the analysis of what made them what they are, such as Gary Johnson. The misconceptions are all across the spectrum, the left as well as the right. Socialism has its applications, as does capitalism, and I think if it wasn't for the propaganda of politics there could be a valuable discussion concerning them. But people with an idea that everyone should get paid even for nothing, and the free market people who've never seen such a thing except maybe in their dope deals don't seem intent upon compromising, and it's been to our disadvantage. I guess you've got the feeling that I lean left more than right, and you'd be correct,but I don't think that either could exist by itself without self-destruction, that we've had glimpses of both for the truth, and if one really looks at what's around, they'd see we've actually been doing that somewhat for millenia.

Maybe I'm wrong, but The Dude's friend doesn't seem to mind living at the other end...

LOL @ "An Anarchist" 04.Apr.2013 23:15

Fidelity

That was either oddly put sarcasm or incredible ignorance.

Because this is PIMC, and you likely have the education of an American, I'll at least provide you a clue: I was referring to the opposite of Anarchism. By a common definition, Anarchism seeks to abolish the state to increase the scope of liberty and end oppression. Not even Anarcho-Syndicalists would agree with you, just look on Wikipedia.

Systemic Disorder is so far removed from Anarchism or Libertarianism or any Pro-Freedom thought that I find their convictions repugnant and I see no reason to allow such noxious ideology be propagated without challenge. Systemic Disorder does not want to make you free or end your oppression, Systemic Disorder wants to subject you to poverty and misery, since they live in poverty and misery. It's an old trick and a pitfall of the indignant, bellicose rage is turned to anyone wealthy or successful rather than examining individuals by their behavior, or taking personal responsibility. I.E. "It's not my fault I signed a shitty deal with the bank, it's all the bank's fault." Or, in this case, "It's not my fault I have no skills and make no money, it's the boss's fault for keeping all the money."

@Shaker - If you try and keep your mind within the spectrum of this existing consciousness you'll never be at rest nor find any solutions to the political problems. Our lexicon of political thought is deliberately contrived to be contradictory. I've found personal satisfaction in simply rejecting all of the 100+ year old ideas on economics, as obviously Capitalism, Socialism and Communism are rife with exploitation in all empirical examples. There's no need to debate which broken system breaks less often, or to debate which whip to hit yourself with. You've got to find a new path. In my opinion, the best path is to have freedoms and use those freedoms to your advantage, to make your self wealthy in the way you feel is honest. I think you are going to continue struggling with these concepts of Capitalism vs Socialism until you just abandon them, and to do this, you'll ultimately need to abandon collectivism entirely and just work on taking care of yourself. Dr King died today a long time ago. Do you think Dr. King accepted or advocated for any 100 year old economic philosophy? No, he didn't, he wasn't a Capitalist or a Socialist or a Marxist. Dr King did not ask others to carry him, but he inspired other people to follow him. When I meet people who follow Ayn Rand or Marx I just immediately think that the person is short sighted; they have no clue as to the opportunities that are before us. The American dollar is likely going to collapse sometime soon, this will be the greatest crisis in all of humanity. As James Garfield said, "Nobody but radicals have ever accomplished anything in a great crisis." I sure as shit hope that our radicals can think of something better than what people thought of 100 years ago, especially with the internet.

So finacial investment counts for something, and labor counts for nothing? 05.Apr.2013 07:54

The Dude

So you're saying that my friend was risking nothing by destroying his knees and his back, hefting heavy boxes on a concrete floor all day?

And that he did not become a "risk taker" (or contributor) until he had some money to invest?

There's no need for any change -- we already live in Utopia! 05.Apr.2013 08:03

The Dude

Fidelity wrote: "In my opinion, the best path is to have freedoms and use those freedoms to your advantage, to make your self wealthy in the way you feel is honest."

Wow, is that ever simplistic! It's what many people claim (falsely) we have in the USA already -- "freedom and opportunity for all." According to that philosophy, there's no need for any change -- we already live in Utopia!

Maybe you too, Fidelity 05.Apr.2013 09:01

Shaker

Are a bit wrapped up in it? We use words that others can employ as clues to what our ideas mean to them. What I call things doesn't represent me, nor does it represent anything but that effort at communication. I think if you looked at what I said with anything but your ego and your need for being 'right' you would have seen in my remark my disdain for all the philosophies I mentioned simply because they are dogmatic philosophies.

I remember you mentioning that in your time as an activist you've been approached with leadership positions in national groups? Is my memory correct? I'm sure you work hard at whatever you do, but the offer, from your comments here, says much (or little) of their conception of what makes a good leader beyond expediency. I have before remarked here that I in essence have some respect for your views, but maybe what I'm writing here nothing more than what I see from you at times, and I'll admit that I'm guilty of it, too. Anyone with passion is guilty for the most part. It's the uncommon person who isn't. But that's not really the problem, being guilty of such, it's connecting passion to a philosophy without compromise that is.

That we do sometimes type before we take our head out of our ass can be forgiven, in my mind. If somehow we can't leap beyond it, well, we have what we have. And isn't what I said in the previous comment exactly that? You're forgiven, and now it's your turn...

Moron: Economics 05.Apr.2013 15:15

Fidelity

@The Dude - No, moron, **economically** the investor has more risk than the laborer. The real risk in these business/economics situations is the business going bust: your Friend would be laid off and then find new work, the business Investors would lose actual wealth. You could suppose, "Well, my friend was receiving a paycheck, and without that job there will be no paycheck and he'll lose wealth." That's false, the investor lost real wealth, the laborer only misses out on unsecured wealth they thought they had coming.

Surely, the laborer has more physical risk than an investor, but as Shaker said, "a strong back ... is really never in short supply." So, if you were a business owner, what real value would any replaceable laborer offer you? You can hire any fool to pick up and move shit, so there's no reason to pretend that your friend was any more deserving of more money than any other box-mover. Ask yourself this: why did your friend fail to find another job (or go into business himself) where his body was at less physical risk? Probably because your friend was an inexperienced and unskilled idiot. He received a huge windfall of cash and now sits on the beach getting drunk? An intelligent or enterprising person would leverage that money to do great things - your friend does not.

Obviously there's deep institutionalized injustice, inequality and limited opportunity these days, and that needs to change. You're creating a strawman with your asinine and contradictory "utopia" comment, as I clearly discuss the need for change within my comment.

Yes, the pathway of economics is exceedingly simplistic at its core. If you believe there's something I'm missing, I'm interested in understanding your thoughts.

@Shaker, your memory is correct about my past - but I'm having a hard time drawing a parallel to this discussion. People have approach me for leadership decisions for a long time, in activism, professionally, and in sports - these activists, being leftist collectivists, thought that electing me to leadership meant that I could implement their ideas, since collectivists never wanted to implement their ideas individually, they want someone else to do it. I had a reputation of completing things successfully, and I suppose this is what appealed to them - but I've never cared to ask, and I have no desire to work within their political spheres anymore, as I realized their parasitic relationship to me and their Ponzi-scheme dynamics.

I think I might have misconstrued your paragraph where you bisect the contemporary "view of how things work" specifically talking about libertarians and socialist, then: "I think if it wasn't for the propaganda of politics there could be a valuable discussion concerning them" - this made me believe that you were interested in one of these philosophies, "I lean left more than right" - I was simply trying to offer a perspective of looking beyond traditional economics. I see now that you were criticizing both.

How would you know whether or not his money is "doing great things"? 05.Apr.2013 18:55

The Dude

Because "a strong back ... is really never in short supply," the business owners demand that workers break their backs to earn a paycheck.

My friend was trained in a technical field, and his employer benefitted from that expertise, but only paid him minumum wage for backbreaking work.

Now he earns his living by investing his money. How would you know whether or not that money is "doing great things"? It appears to be financing business ventures in Southeast Asia.

By your own criteria, Fidelity, by investing his "real wealth" he is accomplishing more than any laborer.

Risk? 05.Apr.2013 21:54

Dude

Risk?

Of financial loss or death?

But money is life you say?

Then who risks more the rich or poor?

Who is in debt to whom if we should not live the same?

STUPID LABORER 06.Apr.2013 13:51

ERIC waynewignes@gmail.com

"Probably because your friend was an inexperienced and unskilled idiot."

Know why I started physics and math fidelity? because it's one of the few things left now days where a man is judged by his ethic and skill and not how he sucks d**$k. how did you get to where you are again? ever think maybe that lowly laborer did not want big plots and schemes but just an honest salary that can support his family in trade for honest work?

"You can hire any fool to pick up and move shit, so there's no reason to pretend that your friend was any more deserving of more money than any other box-mover."

and you think sitting at a desk and networking with fellow corndogs in costumes is skills? for what? so you can snort coke on a young girls ass? I'm not going to be a laborer, not because i don't love labor, but because I'm sick of pathetic jokes like you with no character living in fantasy land. i'm going to go up top and operate in a way you assholes aren't even capable of; efficiently. and i'm going to do it by taking off my costume you call a suit, and taking my 'collectivist' ass down next to my workers and working with them. that's where you corporate idiots have gotten so lost on now days; you don't understand that no one knows how to do the job better than the man doing it. you instead spend your time brainstorming idiotic and inefficient plots in a comfy room and after patting yourself on the back you send someone out to enforce it, all the while the people doing the job are just shaking their head at what idiots you guys are.

"since collectivists never wanted to implement their ideas individually, they want someone else to do it."- no. your the one wanting others to do it for you, you and other clowns like you just do everything you can to convince yourself you actually did something.


lol 08.Apr.2013 19:25

Fidelity

Wow, @Dude, you're just writing in stupid riddles now. Death does not equate to the risk of injury, plus, I doubt your "friend" was coerced into that job.

Own up to this: your friend accepted this job at minimum wage, your friend could have found more rewarding and higher-paying work that had less risk, but your "friend" did not. To say "the business owners demand that workers break their backs to earn a paycheck" is false socialist psychobabble: your friend was not forced at all, so how could it be a "demand"? It sounds like a mutual agreement. I'm sorry to break this to you, @Dude, but the only reason you get paid by people is because they're exploiting your time, body or money.

By "do great things" I was referring to personally taking ownership of a business and laboring to make that money grow, not simply surviving off of usury, as your friend appears to be doing. You, in your own words, referred to your friend as a "beach bum in Sri Lanka." Perhaps you misrepresented his investment into "financial instruments with foreign banks"? You meant to say instead "my friend is a part shareholder in a business"? I might have believed you.

@Eric - You're making a bunch of baseless and ridiculous assumptions about me. You have no idea how I make my money, or my past, or even how young I am. But hey, keep going on with your assumptions, it made me crack a smile.

I very much appreciate that at least 70% of the people (the "lowly laborer") in this world ultimately want the 21st Century American experience: TV shows, porn on demand, and shit delivered to your front door instantly. These people, this 70% of humanity, are idiots without motivation or dreams, they don't bother reading the news or understanding the world, their ultimate goal is probably procreation and easy living. They're peons, more or less. For uses of this discussion, they are emblematic of why collective businesses should not incorporate every employee into the decision making processes. I don't have any ill intentions towards these people (most of my life has been dedicated to their service and protection), but I do understand that they are easily and unfairly exploited, and then I remember what Frederick Douglass had to say about people who choose not to fight for their freedom.

"... yet you both admit your at the mercy of these radicals and the internet all the while surfing the internet and shooting them down." I view the internet as a marketplace of ideas. I don't invest a lot of my time into PIMC, but I've been in this town for a long time and I grew damn tired of this town's intellectual dishonesty. Most of it is pumped from the halls of Portland State University, from the Urban Planners, Environmentalists or other Collectivists who ultimately want to recreate Pol Pot with a smile, a bird on it, and call it "Sustainable". For a long time I just sat back and listened to Marxists, Socialists, and "Anarchists" drone on about the failures of Libertarianism & Capitalism, yada yada yada - like a lot of people, I didn't really understand what either of those two terms really meant (and I don't identify with any of those terms today). I would listen to this bullshit get passed around in a leftist circle and observe the horseshit analysis of ignorant ass people, never bothering to raise my hand and say "Hey folks, what we're talking about isn't practical or real, so we should probably abandon this and look at practical solutions." So I sat in a lot of meetings and wasted a lot of time listening to dipshits like Systemic Disorder who really didn't understand the first thing about economics, but the whole group would nod their head like this guy had the answers, mostly because of the echo-chamber of baseless anti-capitalism. I swear to God, you can walk into any grass-roots activist meeting in Portland and go on a nonsensical rant about Capitalism for at least 15 minutes before someone will challenge you. I remember at one Freedom Socialist meeting I went to, some old man talked about how "we" in capitalist-America are "Slaves to the entrepreneurial class!" In this guy's world, you're a slave master, @Eric, because you want to innovate.

After enough of these experiences I decided that I am going to raise the BS flag when I see fit, because when stupid ideas are passed around ignorant people, the idea doesn't improve. Just look at Occupy, that is the perfect example of groupthink failure.

Like any marketplace, the value of it is based upon what we invest into it, thousands of ideas should be contributed, and those ideas must be challenged, then we can find ideas that actually do work based upon our own personal reasoning. The opposite of this is diehards like @Dude or @Systemic Disorder who are subscribing to some preconceived idea and don't want to confront it. Look at @Dude's posts and the BS he's trying to peddle as arguments.

When you climb to the top, you'll realize that the only thing to do IS cocaine off a beautiful girl's ass while paragliding a jetski next to Alec Baldwin. I'll see you there my friend!