[ExI] anti-capitalist propaganda, was: retrainability of plebeians

Stathis Papaioannou stathisp at gmail.com
Thu May 14 01:41:48 UTC 2009

2009/5/12 painlord2k at libero.it <painlord2k at libero.it>:

> You are under the false assumption that all work is the same.
> Are you telling me that a surgeon work less than a nurse?
> It is like comparing orange and apples.
> Not all work is the same, as a surgeon is able to do a work the nurse is
> unable to do. There are less surgeon than nurses. To have a working surgeon
> you need to invest much more scarce resources than to have a working nurse.

The extra time training for the surgeon is reflected in the higher
pay. But there are limits: if a surgeon makes a hundred times as much
as a nurse, that is unfair. The market may grant the surgeon this
because there aren't a lot of surgeons. So ultimately, a person's work
is valued according to supply and demand. Maybe there is no better
way, but it does show that amount of work done, or productivity, is
not the ultimate arbiter of a person's worth. It is possible to do
very little work and get paid very handsomely for it, and figuring out
how to achieve this leverage is the goal of every capitalist.

>>> In your example about Mr. Buffett, you imply that the work done by him
>>> could
>>> be done by any plumber or farmer with a minimum training. If it was so,
>>> there would be many Warren Buffett and Mr. Buffett would not be so
>>> special
>>> or rich.
>> No, I think he was just lucky, as most studies of investors show that
>> they are no more likely to be successful in the future if they have
>> been successful in the past. But even if in fact he was successful
>> because he was smart or because he risked his capital, it doesn't
>> change the fact that he made a lot of money doing a little work a
>> *lot* less work than someone has to do to obtain the dole.
> If he is only a lucky man, you can just wait and he will lose his money.
> Capitalism is not gambling, albeit someone could think so if believe that
> capitalism is only what happen in a trade exchange.

The studies show that a professional investor's track record is no
predictor of future success. If you take 1000 investors, and look at
whether they did better or worse than the stock index, you will find
that after 1 year 500 have done better, after 2 years 250 have done
better, after 3 years 125 have done better, and so on. So after a few
years there will be a small number who appear to have a long run of
continuous success, but this is what you would expect from randomness
anyway. The reason for this is that the market factors in every bit of
information that affects share price, in proportion to its
significance and credibility. In general, no-one can beat the market
without special information not available to others. If you don't
believe this then you should immediately borrow as much money as you
can and follow the investment decisions of Buffett or other investors
with a long string of successes.

>> Very few wealthy people make their money purely through their own
>> efforts.
> Usually they do the most difficult and requested works; they use their
> wealth, organize and coordinate the jobs of others.
>> Your Robinson Crusoe story is an example of this, but the
>> usual capitalist way is if Crusoe could get several competitors to
>> gather food and give him a proportion of it while he sits back. For
>> example, he could set up a shop trading one type of food for another
>> and keeping a profit.
> This is called "economic coordination" or "economic specialization".
> This would be done only if it is more practical and efficient to do.
> The people hunting game and the people gathering berries could exchange the
> goods between themselves and cut out Mr.Robinson (as he is doing nothing
> useful for them, you suppose).
> But wait!
> Mr. Robinson (an ex-gathers of berries) invested his leisure time to build a
> storage room where the berries and the game could be stored for many days.
> Then he stored his hand-gathered berries there and started to exchange them
> for game.
> Now, all hunters and gathers know that Mr.Robinson have this place where
> they can go and exchange immediately berries for game. When a hunter want
> berries, he can immediately go to Mr. Robinson and obtain his berries in
> exchange of game. The same is true for the gatherers.
> Suppose, for simplicity, that the game/berries exchange rate is fixed
> between the two groups.
> Now, Mr. Robinson decide that he will keep 10% of the game and 10% of the
> berries he trade as payment for his services.
> You could say this is an unjust profit, I would argue that this is the price
> the gathers and the hunters can choose to pay to obtain, without delay,
> berries or game. It is 90% immediately or 100% with a delay (a day or a
> week, maybe).
>> Now, this takes *some* work, maybe even hard
>> work, and perhaps it helps the other hunters as well as the
>> shopkeeper, so that everyone is happier than if there had been no
>> shop. But the fact remains, if the shopkeeper makes a profit much
>> larger than that of the hunters, he is effectively sponging off their
>> work.
> If the shopkeeper is doing a too large profit, someone else could undercut
> him doing the same job at a lower price and profit nonetheless.
> Hunters and gathers could return to a direct exchange if they find the cost
> to use Mr.Robinson services too high.
> So, Mr.Robinson have to limits at the prices he can charge:
> 1) The people using the services must find them useful enough to be willing
> to pay for them
> 2) The profits he earn must not be so large to invite others to do compete
> with him; usually he will profit as much as possible, then competition will
> show up and he will need to lower his prices.
> 3) The foresighted profits must be higher than doing something else.
>> This was the Marxists' essential criticism of capitalism: they
>> valued hard work, and they thought that workers should be able to
>> profit in proportion to their labour.
> Are hard work and labour the same?
> If the capitalist is reaping too large profits, what prevent the workers to
> organize themselves, pool resources and become self-employed and keep the
> profits for themselves?
> The only answers are two:
> 1) They are unable or unwilling to do so
> 2) They are prevented to do so
> If you want all workers to share the profits of the enterprise, you must
> share even the costs and the losses and the risks.
> For example, the workers of a plant producing cars could be required to
> receive their wages only when the car are materially sold and the money
> collected. This could be days or weeks or months after the cars are produced
> and the work done. So, you would see their wages change continuously every
> months in a not easily predictable way.
> Or they could build cars and sell them to dealers that will resell them to
> customers, but this would imply the profits would be lower and the dealers
> could refrain from buy cars if their inventories are too high.
> If the factory work at a loss, there would not be any money to pay wages,
> obviously or the workers could be required to cover the losses.
> Do you like these arrangements?
> I find them extremely unworkable.
> Do you have any suggestion that don't imply the capitalist must suck lemons
> and risks, profits and losses are shared proportionally and  equally?
> And we have not covered how much pay people with different jobs.

I'm not saying the capitalist system is not useful for allocating
resources. But it does happen that some people, whether through luck,
intelligence, wealthy parents or whatever, are able to command a huge
proportion of the world's resources relative to other people who seem
to work just as hard. Capitalism is OK with the fact that a fashion
model earns hundreds of times as much as a theoretical physicist,
because that is what the market pays. "That is what the market pays"
is the ultimate criterion of productivity and worth, and therefore the
reason why someone drawing a subsistence welfare payment is morally in
the wrong. I don't agree with this, but I suspect we have come up
against basic ethical principles, and hence impasse.

Stathis Papaioannou

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