[ralfy]

Related:

https://en.wikipedia.org/wiki/Capitalis ... al_markets

That is, financial borrows and offers interest and lends and expects higher interest. Goods and services earns to pay for expenses, loans, and interest, and then lends at interest or increases production (especially given competition and growing demand). Labor produces more than what they are paid but are also ultimately the consumers of what they produce, which means they have to earn and borrow more to buy more.

The result is increasing credit, extraction of resources, consumption of goods and services, population, and environmental damage. Predicaments stemming from these include peak oil (and generally, a resource crunch) and global warming.

[evilgenius]

It is not a 'rigged' game. The only fault that exists in the system (in terms of employee employer relations) is when it comes to fair price discovery for labor.

Employers have striven to implement a system where workers negotiate as a group. Under this system an employee can only quit if they feel that they want higher pay, or other benefit (maybe they can squeal at review time, but that is not guaranteed in the structure of the system). Their quitting sends a market message to the employer, by means of a vacant position that needs to be filled. If they can't fill it, in this hypothetical case because the position does not pay enough, then the employer has to offer a higher wage to get people to offer their services. The original employee does not benefit from this action. The group that employee belongs to does benefit.

What unions do is to alter this arrangement. They do not change the fundamentals of it. The alteration they make is to set a firm base level that an employee can expect, as well as a pay rise structure which an average employee can theoretically embrace. They also proceed to negotiate other benefits for employees as a group, those that are deemed appropriate or desirable for the group as a whole. In short, they attempt to set a 'living wage'.

You can argue that the nature of the union as an agent also predisposes the negotiation to a type of inflation that relates to a tyranny of the lower half of the average receiving more than would be their due if the union did not have negotiating power. To do this, though, you would have to turn a blind eye to the plight of the upper half also being held to the average. If you determined to see the relationship, though, from the perspective of the employer you would want to ignore the upper half because you would always seek to take advantage of them in order to maximize return.

What the system does not do is to provide for employees to negotiate directly for their wage. It does not provide for them to charge as they see fit and therefore enter into a negotiation with their employer wherein the employer can come back and ask that the charge be reduced, which in turn results in a series of negotiations that results in price discovery. In short, employees cannot, like hairstylist or plumbers, simply increase their rates based upon their personal need to derive more wealth for themselves, neither can they implement such an increase in order to receive what they deem to be fair compensation based upon their perception of the value of their work. The current market for labor does not work that way.

The only way around this under the current system is to go to work for yourself. This act separates you from the whole and indicates you as an individual, per se. The only trouble with this is that the system has developed a foreskin to cover up a gap between the intention of self-employment and the reality for many individuals. Independent contracting has developed to at once isolate people outside of collective negotiation and deny them the ability to individually bargain for the price of their services. For millions of people now the costs are all on them, even many of the costs which ought to be on their employers, but the benefits are non-negotiable, or even dwindling given the current economic landscape.

[Quinny]

Seems pretty damn complicated. Why not a simply a living wage for all?

[ralfy]

@ralfy,

Thanks for noticing this post.

For the longest time it's been gnawing away at my craw.

That something was wrong. And yet I couldn't put my finger on it.

For example, why does the government condone lottery tickets?
Some poor sucker works all day digging a ditch (or whatever, any kind of "real" work) and then he takes all his hard earned money and blows it on lottery tickets (or on stocks in a Wall Street account, or on a 401K account, or on "real estate", as if they're ever going to allow him to get to the "Promised Land" and "retire" LOL). When that happens, he's worked for free. He's no better off than a Roman slave. Why does the government condone that? Answer: because that is exactly the outcome they want. It's a rigged game and they are the riggers.

So the double-entry money experiment (a thought game) shows a place where the game is deceptively rigged. By rights, when your boss hands you some Federal Reserve notes (or a bagful of magic chicken feathers --it really doesn't matter what the token is) as compensation for some real work that you personally did, he really has just generated a set of IOU's: one from society to you and the other from him to society.

But he never has to make good on his IOU's. Or even pay interest on them.
And if he is the "bank" (as if in a monopoly game), you still have to pay him interest. Your "debt" grows and grows (exponentially) while he sweeps his debts under the rug. It's a rigged game.

You can also look at this thread:

the-myth-of-the-money-multiplier-t67257.html

which refers to the "myth of the money multiplier."

[Pops]

Money is in the eye of the beholder, it's simply a thing with an agreed value.

When I grow a calf, I create value out of thin air because the value of the calf is more than the sum of the costs to grow it (hopefully, LOL).

I could trade that calf directly for access to the internet for example but that might be cumbersome so I trade it for FRNs or digital scratches on a virtual ledger and in turn trade them for access. No great mystery.

Do people make "money" in the process? Sure but people make $20 billion a year on halloween candy and Miley Cyrus costumes, too

[evilgenius]

Money's value is simply what the faith of the people determines it to be. The error in assuming a conspiracy comes from attempting to observe yourself as a representation of the people at large. No one person is an average person and yet the average person holds a container of value, money, to be worth a certain amount relative to other containers of value, which they also put value on. It is not a static enterprise.

Denial of this is simply a narcissistic exercise. You can do it all day, but in the end you will be the only one who is impressed.

The people whom so many today are so fond of calling 'banksters', cabalists and illuminati are simply better at evaluating what the average person values the various things at, and at what levels they will value them in future. While it may be true that in certain cases they have committed fraud, it would be outlandish to blame them for the crimes, routines, fixations and peccadilloes that all of us are collectively guilty of.

[evilgenius]

The other day I was listening to a Nobel Laureate of Economics speaking about some of the reasons why he had won the award. One thing he mentioned was how he and Robert Schiller had done a lot of work proving that markets actually do discover the correct price for a thing at the time of that pricing, irrespective of any questions regarding factors of trust or indemnity, which might affect the faith of the people and therefore alter the price if they could be factored in retroactively. I think your point lays along these lines. Are you suggesting that markets do not fully discover pricing, that there are other socially based factors that go into determining accurate pricing at the moment of discovery? Are you saying that there can be such a thing as latent or intrinsic value apart from the value that people give things via their activity in the markets?

[evilgenius]

I ask you that because I don't think, under the strictest sense, that there are. What I mean by the strictest sense is that all monetary transactions have this one point in common: they rely for the ultimate discovery of their value upon money itself. In short, there is but one voice that remains consistently present, that of money. The voices brought into play at the original moment of price discovery did have notions of various things that they attempted to relate to when they argued their part, made or accepted a bid, but in the aggregate those notions disappeared and all that was left to deal with the discovered price was money.

I think this is why Jesus said, "The love of money is the root of all evil." And again, "You cannot serve two masters, both God and money. You will either love the one and despise the other or despise the one and love the other." Money ought not to be mistaken for something that either has or is capable of having a conscience. It can act for us, when we individually or as a group choose for it to, when we give or agree to pay taxes, but that will always be seen as coming with a cost according to money itself.

[evilgenius]

It's not money. It's the love of money. In essence, a commitment to the way that money comes out on top - over and above any desire a person might have for a different outcome. Left alone the voice of money speaks only for what the markets have determined. It may or may not have anything to do with what is right, or what society wants. The extent of right or society's involvement would have been determined beforehand, by their involvement in the markets. The trouble is that right or society's involvement in the markets may not necessarily weigh in with equal importance or impact vis a vis that of special or combined interests. This is obvious in the markets related to political campaigning, for instance.