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The Stock Market vs. the Labor Market

theatlantic.com

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Re: The Stock Market vs. the Labor Market

#71

Post by sergiosgc »

sageikosa wrote: post #28
sergiosgc wrote: post #20

Don't look at inequality from a justice perspective. Justice is a moral definition, and highly volatile, so the discussion would be endless. Look at it from a society efficiency point of view. From an efficiency point of view, some inequality is interesting. You need to aggregate some capital for investments to occur, you need rich people for high risk investments to be possible. However, as in most systems, there is…

> Herein lies the problem with the job creators argument. It is not fundamentally wrong, but it is wrong for the current level of inequality. We are past the optimum and, for society and the economy to gain efficiency, inequality must be reduced. Are you suggesting we get rid of the unemployed? That would certainly increase "society efficiency", I think (not sure how we measure that again). But if we want to reduce s…

I suggested nothing of the sort. Your comment is a perfect example of the need to discuss inequality outside of the moral framework.

Just for reference, in terms of efficiency, you'd want every available worker producing added value. Unless your definition of "get rid" is deport or kill, having unemployment worsens efficiency.

Re: The Stock Market vs. the Labor Market

#72

Post by sergiosgc »

boomlinde wrote: post #40
sergiosgc wrote: post #20

Don't look at inequality from a justice perspective. Justice is a moral definition, and highly volatile, so the discussion would be endless. Look at it from a society efficiency point of view. From an efficiency point of view, some inequality is interesting. You need to aggregate some capital for investments to occur, you need rich people for high risk investments to be possible. However, as in most systems, there is…

> You need to aggregate some capital for investments to occur, you need rich people for high risk investments to be possible. No, you need economic capital for high risk investments to occur. However that capital is distributed is really besides the point. From an efficiency point of view, high risk investments probably shouldn't exist at all. In a production model where goods and services are produced based on what…

1) The risk profile of small investors and large investors is different. Large investors, due to the fact that the utility curve of money is not linear, are more prone to risky investments with a part of their portfolio.

2) High risk investments are needed to get out of local maxima. One easy example is electric cars. They're obviously inefficient today, because oil based transportation is a local maximum for the utility of cars. In twenty years? Probably gasoline powered automobiles will be a minority of sales. Another easy example: private space exploration (spaceX, Virgin Galactic and such). Hardly profitable today, probably very profitable in a few decades.

Re: The Stock Market vs. the Labor Market

#73

Post by SkyMarshal »

boomlinde wrote: post #12
civilian wrote: post #3

Yup. Using humans to get stuff done isn't our only option anymore, so a difference between the stock market and labor market isn't surprising. I live in a liberal area and I'm facebook friends with a lot of Burners (people who have gone to burning man). I see a ton of image macros and posts where people are implying that it's a moral wrong that businesses are doing well while we have high unemployment. :-/ For me, on…

What is morally wrong is the idea that everyone should have a job in a society where it's so obviously unnecessary for everyone to work, and where the level of productivity is in fact detrimental to the people and their environment in the long term. What I'm saying is that we should get rid of the idea of not having a wage job at all as inherently less respectable than working with anything and introduce a guaranteed…

The problem with that is it incentivizes more and more people to just stop working, and instead become dependent on the guaranteed income, government, and the fewer and fewer who create the wealth necessary to fund that guaranteed income. Someone has to pay for it, and they will extract a price in power.

Ultimately you end up with a large portion of the populace dependent, and hence politically powerless, undermining democracy and our republic.

The real answer is, as usual, the harder one - continually improving education and access to education for the lower and middle segments, breaking cycles of poverty (and violence where applicable), eradicating Learned Helplessness [1], building better tools that enable more people to adapt to a new environment where machines have supplanted humans for some tasks but not all (FOSS and 3D printing being particularly interesting here).

It's a hard, imperfect task that will never be finished, but better than making the entire world completely dependent on a few.

[1]: https://en.wikipedia.org/wiki/Learned_helplessness

Re: The Stock Market vs. the Labor Market

#74

Post by amish »

I think the only way this system can start to equalize itself is if people start to learn how to live off the land again. Once we have self-sustaining (properly nourished, educated, etc) commmunities who can live without currency (animal kingdom has done it since it existed) the system will finally be able to balance itself.

Once people realize currency is a man-made thing, and is not necessary to live fruitful, productive, enriched lives (the one real hurdle left is energy self-sufficiency), the system will finally be able to balance itself.

The fact that more and more startups are learning to self-govern is more reason to be optimistic that the social constructs that rule our worlds today are going to be a thing of the past. Hopefully sooner than later.

Re: The Stock Market vs. the Labor Market

#75

Post by yummyfajitas »

quinnchr wrote: post #64
yummyfajitas wrote: post #60

Earlier quoted context omitted.

The system rewards luck and pedigree more than it rewards effort and hard work. What evidence do you have for this?

www.census.gov/compendia/statab/2012/tables/12s0691.pdf What's your explanation for the income distribution among different races? White people are just harder working? What evidence do you have that effort and hard work are rewarded more than luck and pedigree?

The data does indeed suggest white men work one hour/day more than black men (women work about the same). Your theory seems to have some merit, though I'd love to see more than just one data point.

http://www.bls.gov/news.release/atus.t03.htm

Another data point - poor people work very little (by choice).

http://www.bls.gov/cps/cpswp2009.pdf

Re: The Stock Market vs. the Labor Market

#76

Post by trhtrsh »

bjhoops1 wrote: post #49
yummyfajitas wrote: post #44

Earlier quoted context omitted.

How so?

Suppose a society in which a few families owned and controlled essentially all wealth. I don't imagine that society could be said to be egalitarian or equitable no matter what laws or "rights" its citizens had, do you?

yummyfajitas certainly does. Check his extensive posting history on this topic.

Re: The Stock Market vs. the Labor Market

#77

Post by trhtrsh »

rayiner wrote: post #23
youngerdryas wrote: post #2

From the comments: "The focus and concern shouldn't be how much the top 1% are making, it should be how much the 99% are making, especially the bottom 50%. I dont really care how much money Bill Gates and Donald Trump are making. Their income has absolutely no effect at all on my income, what I'm most concerned about is how much money I'm making. The economy is not a zero sum game, where if the rich make a trillion m…

The economy is also not a theoretical abstraction. Wealth disparity has rippling effects throughout society. If it's Pareto efficient that the super rich make 10x more and ordinary people make 1% more, it can still be sociologically undesirable. What you see is an economy replete with goods and services, but by and large one in which the people getting rich neither make, consume, nor develop the technology to make th…

Once you concede that it might be Pareto efficient, you've already lost. In the real world that's never the case. No one is (a) so spiteful that they will scuttle their supposed productivity because they are limited to $X Billion instead of $X+Y Billion, and (b) so important that no one will produce eqivalent value in their absence.

Re: The Stock Market vs. the Labor Market

#78

Post by trhtrsh »

jordan0day wrote: post #56
vinhboy wrote: post #24

Earlier quoted context omitted.

"Trade only happens if its mutually beneficial for BOTH parties" That is not true. People often trade out of need, and a lot of time, desperation. It is not mutually beneficial. That notion is so wrong I am not sure how to begin refuting it.

Mutually beneficial does not mean "perfect". Lots of trade may be unfair , especially in hindsight, but at the time the trade occurred, each party sees benefit in the trade. Otherwise, why would they trade?

because they are forced into a series of incremental trades that are not globally optimal across a lifetim, and cannot do things like borrow now and pay back later at mutually profitable rates, due to lender uncertainty.

Re: The Stock Market vs. the Labor Market

#79

Post by trhtrsh »

amish wrote: post #74

I think the only way this system can start to equalize itself is if people start to learn how to live off the land again. Once we have self-sustaining (properly nourished, educated, etc) commmunities who can live without currency (animal kingdom has done it since it existed) the system will finally be able to balance itself. Once people realize currency is a man-made thing, and is not necessary to live fruitful, prod…

Living off the land in a small unit is an incredibly inefficient way to produce value.

Re: The Stock Market vs. the Labor Market

#80

Post by amish »

trhtrsh wrote: post #79
amish wrote: post #74

I think the only way this system can start to equalize itself is if people start to learn how to live off the land again. Once we have self-sustaining (properly nourished, educated, etc) commmunities who can live without currency (animal kingdom has done it since it existed) the system will finally be able to balance itself. Once people realize currency is a man-made thing, and is not necessary to live fruitful, prod…

Living off the land in a small unit is an incredibly inefficient way to produce value.

I wouldn't advocate the use of antiquated technologies to accomplish this. The idea here is currency-free communities who live just as efficiently as currency-rich communities. But you have to start somewhere. What are the tools you need to build in order to build the tools to build the tools that build the tools, etc. that you need in order to live as efficiently as we do today.

Sure it wouldn't be as easy for many, but imagine a line below which folks who live in a currency-dependent economy would actually be better off to leave it. As more and more people fall below that line, the alternative way of life becomes more viable to sustain itself.

The thing that the wealthiest folks don't seem to realize is it's in their best interest to ensure the little guy has money. When a significant percentage of the population loses incentive to accumulate wealth you lose value on a global scale.

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