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Tags socialism , worker cooperatives

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Old 28th September 2017, 12:10 AM   #281
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Originally Posted by lupus_in_fabula View Post
Why the ridiculous comparison?
I pointed out something essential, which you failed to mention at all: The total output or surplus is not an interesting figure. The efficiency ratio of production is.

Originally Posted by lupus_in_fabula View Post
On a societal level it's not more effective to increase the number of ACME factories compared to increasing the magnitude as in production capacity of any single ACME factory.
Here you assume that the large factories are being managed effecively, and small companies not. Mismanagement of funds can make any size of a company to be ineffective, so it needs to be measured case-by-case. Nothing can be assumed.

Originally Posted by lupus_in_fabula View Post
Manufacturing often show increasing returns to scale.
If the factory is being managed responsibly, without internal corruption or laziness or lack of professional skill among the workers.

Originally Posted by lupus_in_fabula View Post
You cannot calculate the efficiency of material consumption in production unless you actually calculate the involved physical quantities.
Efficiency of production is currently budgeted with a money-based calculation in nearly every company of the world, so it is hardly true that it "cannot" be done. Monetary valuation of raw materials is based on the ease of finding the material, and the cost of collecting, pre-processing and transporting it. Sounds like you plan to count raw materials in grams rather than in a unit that takes into account these factors. If that is the case, you simply will not know how efficient your production is. You create a blind spot for yourself, which will sink your GDP (because things don't tend to get optimized accidentally, so your economy will contain unoptimized, unnecessarily costy sectors). The costs of processing raw materials will affect the GDP, _someone_ has to do all that work, even if you omit them from your factory budget. So a factory manager would make a production budget which includes the labour costs of the factory itself only, omitting labour costs needed for production and transportation of the raw materials.

Originally Posted by lupus_in_fabula View Post
we calculate physical quantities
How many different raw materials are there? If also each different plant such as sugar cane and banana tree is an independent physical quantity unit, you will have a helluva complex calculation to make, and you will be literally "comparing apples with pears" only to find out that you cannot compare them with each other. And in the end, you probably will not come to a conclusion any more useful than people come today by using money as the easy one-size-fits all unit.

Originally Posted by lupus_in_fabula View Post
money is not scarce on the societal level
Money _must be_ scarce, equally scarce as the amount of physical products and services that it is valued to be exchangeable for. Otherwise people cannot get the products and services that the money was promised to be worth. It is called "inflation". You didn't just suggest that in your system, the government can just print more money if it runs out of it?

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Old 28th September 2017, 01:09 AM   #282
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Originally Posted by JJM 777
I pointed out something essential, which you failed to mention at all: The total output or surplus is not an interesting figure. The efficiency ratio of production is.
Of course total output is essential. If we need X amount of ACME to supply the yearly minimum needed for building and maintaining public infrastructure like bridges, docks, schools, military, roads etc., etc., we need enough output to actually do so. That is important in a mixed economy, and even more so in a planned one. That is also, in fact, what was done in early planned economies where focus was on rapid industrialization.

Originally Posted by JJM 777
Here you assume that the large factories are being managed effecively, and small companies not. Mismanagement of funds can make any size of a company to be ineffective, so it needs to be measured case-by-case. Nothing can be assumed.

If the factory is being managed responsibly, without internal corruption or laziness or lack of professional skill among the workers.
No and no. Every single one of those million 1-person factories needs to have the same basic infrastructure built and maintained (i.e., fixed capital formation) in order to produce the required quantity society demands. That is a massive waste of physical resources. Hint: one mega factory or a few of them together would still not be one million times larger than a million 1-person factories combined.

Originally Posted by JJM 777
Efficiency of production is currently budgeted with a money-based calculation in nearly every company of the world, so it is hardly true that it "cannot" be done. Monetary valuation of raw materials is based on the ease of finding the material, and the cost of collecting, pre-processing and transporting it. Sounds like you plan to count raw materials in grams rather than in a unit that takes into account these factors. If that is the case, you simply will not know how efficient your production is. You create a blind spot for yourself, which will sink your GDP (because things don't tend to get optimized accidentally, so your economy will contain unoptimized, unnecessarily costy sectors). The costs of processing raw materials will affect the GDP, _someone_ has to do all that work, even if you omit them from your factory budget. So a factory manager would make a production budget which includes the labour costs of the factory itself only, omitting labour costs needed for production and transportation of the raw materials.
In capitalism they do both, always.

Originally Posted by JJM 777
How many different raw materials are there? If also each different plant such as sugar cane and banana tree is an independent physical quantity unit, you will have a helluva complex calculation to make, and you will be literally "comparing apples with pears" only to find out that you cannot compare them with each other. And in the end, you probably will not come to a conclusion any more useful than people come today by using money as the easy one-size-fits all unit.
Many… but every industry knows what their output level is, and every industry knows what they require as inputs. So even though there's aggregation involved when making sectoral input-output matrices that is how it's done. If a steel factory (blast furnace) has an order to produce 1 000kg of crude steel, it must know how much iron ore, coal, limestone etc. is required to actually produce 1 000kg of crude steel… whatever the price of them.

Originally Posted by JJM 777
Money _must be_ scarce, equally scarce as the amount of physical products and services that it is valued to be exchangeable for. Otherwise people cannot get the products and services that the money was promised to be worth. It is called "inflation". You didn't just suggest that in your system, the government can just print more money if it runs out of it?
Money is never scarce when looking at society as a whole. As a unit of account the notion of scarcity does not even make any sense. As a means of payment it's created as a bookkeeping entry. That is true both for the private as well as the public sector. Money doesn't even need to be a circulating instrument if we wish so. The real constraints are physical.
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Old 28th September 2017, 03:55 AM   #283
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Originally Posted by lupus
Hint: one mega factory or a few of them together would still not be one million times larger than a million 1-person factories combined.
Should read: one mega factory (or a few large ones) would still not be one million times larger than a 1-person factory.
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Old 28th September 2017, 04:36 AM   #284
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Originally Posted by lupus_in_fabula View Post
Of course total output is essential.
Okay, but so is economic effectiveness of reaching the total output.

Originally Posted by lupus_in_fabula View Post
Every single one of those million 1-person factories needs to have the same basic infrastructure built and maintained (...) That is a massive waste of physical resources.
Depends on the industry. If the industry is making computer programs, remote work from home reduces not only the need for office space, but also the need for commuting between home and work. Anything that doesn't make much noise or smell, and doesn't need very large machinery, might qualify for this aspect.

Originally Posted by lupus_in_fabula View Post
If a steel factory (blast furnace) has an order to produce 1 000kg of crude steel, it must know how much iron ore, coal, limestone etc. is required to actually produce 1 000kg of crude steel… whatever the price of them.
True, but that does not justify counting the raw materials merely by their weight or volume, as if no human labour were involved in making them. Because it is involved.

Originally Posted by lupus_in_fabula View Post
Money is never scarce when looking at society as a whole. As a unit of account the notion of scarcity does not even make any sense.
I give you the benefit of doubt that in your vocabulary, "scarcity" is necessarily a small amount of something. I offer another term, "finiteness", which means the same as scarcity, but feels more abundant. The value of money is in the physical goods and services that we get in exchange for it, whenever we want. If too much money exists in the society, and people try to buy more than exists, it disturbs the distribution of work output, some people get goods into their possession and some others not. Then people will be willing to pay a bit higher prices to ensure being the first ones in queue, knowing that the last ones in queue will be left empty-handed. This phenomenon, called inflation, devalues the money to again have the same total purchasing power, "value", as it had before too much money was printed. You cannot create more value for money by simply printing more of it. If you do so, the money in circulation simply gets devalued back to the same total value that it had before you printed your new extra money.
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Old 29th September 2017, 01:30 AM   #285
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Originally Posted by JJM 777
I give you the benefit of doubt that in your vocabulary, "scarcity" is necessarily a small amount of something. I offer another term, "finiteness", which means the same as scarcity, but feels more abundant. The value of money is in the physical goods and services that we get in exchange for it, whenever we want. If too much money exists in the society, and people try to buy more than exists, it disturbs the distribution of work output, some people get goods into their possession and some others not. Then people will be willing to pay a bit higher prices to ensure being the first ones in queue, knowing that the last ones in queue will be left empty-handed. This phenomenon, called inflation, devalues the money to again have the same total purchasing power, "value", as it had before too much money was printed. You cannot create more value for money by simply printing more of it. If you do so, the money in circulation simply gets devalued back to the same total value that it had before you printed your new extra money.
Well, now we're talking about a monetary economy, thus you would intuitively associate inflation with a quantity of money as a circulating means of exchange. In some respect that may be true, but there's not a simple linear relationship between money and price or direction of causality in play here. It might become linear after we reach the limits of [1] growth capacity utilization, [2] labor supply and [3] profitability (if we assume capitalism)... given distribution of monetary income isn't too skewed.
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Old 29th September 2017, 02:14 AM   #286
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If we multiply people's salaries today, without raising the prices of anything, it will not take many days for the market to collapse into the problem of the first ones in queue having taken all the biggest and best things, and the last ones in queue wanting the same but getting nothing, and soon realizing that the money in their hands has lost its value, as they cannot buy anything with it, nothing remains to be bought.

If the production side has been thoroughly discussed, distribution side has not. Advocates of a moneyless economy may fantasize of a world where everything is simply free. No price tag on anything. No cashier in the shop. Just take what you want, and walk out. This would face the same problem as an economy where too much money was printed: People go to the shops to take the biggest and most luxurious televisions and cars, and "buy" the nicest 300 sqm villa outside of city center, with a large and spacious garden. The next ones in queue will have to be contented with second best, but maybe they will take two or three of them, to compensate for not getting the best ones that already went out of stock. Two or three Porsches per person, to compensate for the injustice of not having gotten a Lamborghini. Wait, why only two or three? Rich and famous people can have 10 or 20 luxury cars in their equally many garages. So I take 7 Porsches please, in 7 different colours, one for each day of the week.

The last ones in queue will get nothing.

So, how would you organize distribution, to guarantee that the society will not collapse into such a chaos? Or would they become "better persons", the "new man of Communism", who "don't have reactionary desires"?
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Old 29th September 2017, 03:10 AM   #287
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I would not organize anything. I'm merely trying to get you to understand Marx's analysis on his own terms.

Haven't we just been through the basic notion of understanding Marx's point of view; as a method of understanding any mode of production being congruent with the organizational principles in society, including distribution (and vice versa)?

What if salaries doubled? Are you talking about a capitalistic system now or something else (utopian communism)? For if we assume the means of production being collectively owned, hence, for simplicity, the whole national product would be distributed among the workers … There would still have to be some kind of systematic relationship with individual provision regarding what one brings to the national product and thus has the right to take from the social stock. Whatever the measurement it would be based on, it applies both to input as well as output.

Who would multiply salaries in capitalism -- probably the owners of the means of production as a distinct group from workers. Who would multiply "salaries" in utopian communism -- ? Does the notion of raising "salaries" ceteris paribus even make sense in utopian communism?
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Old 29th September 2017, 02:16 PM   #288
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Originally Posted by lupus_in_fabula View Post
I'm merely trying to get you to understand Marx's analysis on his own terms.
You said that Marx wanted to write 6 volumes, but managed only one before he died. So his writings are not the complete picture of what was to come. Others need to complete the picture.

Originally Posted by lupus_in_fabula View Post
What if salaries doubled?
Then inflation will be 50%. Unless we have more to share between ourselves. If workers become owners, and profits are cut to zero, and this economic wiggling space is used for raising the salaries, then the salaries can rise significantly without inflation, even if GDP doesn't grow, as the GDP gets reorganized so that former capital income gets converted into salaries. As you also theorize yourself.

Originally Posted by lupus_in_fabula View Post
Are you talking about a capitalistic system now or something else (utopian communism)?
I talk about a better world, but preferably a realistically possible one, rather than obviously utopian.

Originally Posted by lupus_in_fabula View Post
There would still have to be some kind of systematic relationship with individual provision regarding what one brings to the national product and thus has the right to take from the social stock.
I agree to some extent, but Marx doesn't. In the Lasalle critique he calls such a right "a bourgeoisie right", and expects it to be used during the first step towards Communism, but not after that.

I agree to the extent that everyone (who is fit to work) should have the same hourly salary, so a person can adjust his income up or down by working longer or shorter working weeks.

Originally Posted by lupus_in_fabula View Post
Who would multiply "salaries" in utopian communism -- ?
A good question, and contains many good sub-questions. Salaries are not equal to begin with, so "multiplying them" would not increase the economic equality of individuals much. Before you casually suggest that workers would certainly equalize the salaries, I want to remind you that workers are provenly selfish to the bone, what comes to the size of their salaries. A unified labour movement does not exist, which would demand equalization of the now extremely varying salaries. Instead, a fractioned labour movement exists where each profession's guild fights to maximize their own salaries. In my country public sector medical doctors went on strike, to demand a rise in their already exorbitant wages. If the right to go on strike exists, I smell the chance that certain crucially necessary professions would see a chance to put the thumscrews on the future Communist society to raise their salaries above the others. Such as medical doctors, for example.

Leftist thinkers traditionally demonize rich investors as the incarnation of despicable selfishness. What I see in the world around us, is workers who are generally equally selfish as investors. I don't see a moral difference between a worker and an investor, both of them try to maximize their own personal benefits with any bargaining position that they may have, be it strong or weak. Rich investors are more powerful and successful in this bargaining. Poverty of the poor and wealth of the rich is a technical detail, not a moral virtue.

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Old 1st October 2017, 07:32 AM   #289
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Originally Posted by JJM 777
You said that Marx wanted to write 6 volumes, but managed only one before he died. So his writings are not the complete picture of what was to come. Others need to complete the picture.
Not sure what he even had in the pipeline, but I think the emphasis would have been on the actual rather than utopian.

Originally Posted by JJM 777
Then inflation will be 50%. Unless we have more to share between ourselves. If workers become owners, and profits are cut to zero, and this economic wiggling space is used for raising the salaries, then the salaries can rise significantly without inflation, even if GDP doesn't grow, as the GDP gets reorganized so that former capital income gets converted into salaries. As you also theorize yourself.
Why 50%? … How do you know what part of pay rise goes to buying new consumer products (also signaling a potential demand for increase in capacity utilization), paying bills for already bought products, reducing overall debt or leveraging new debt or something else? So we can't simply throw out a number like 50% without assessing the particular context involved.

Originally Posted by JJM 777
I agree to some extent, but Marx doesn't. In the Lasalle critique he calls such a right "a bourgeoisie right", and expects it to be used during the first step towards Communism, but not after that.

I agree to the extent that everyone (who is fit to work) should have the same hourly salary, so a person can adjust his income up or down by working longer or shorter working weeks.
Yeah, if we're referring to later stages of communism (deeper into utopia), I think a direct relationship between individual productive ability and consumption need will break down further (maybe we should even distinguish need from want here?). I think it's already the case – for example remuneration in the financial industry has drifted far away from any proportional input to national product in the sense of real output. Furthermore, if production becomes highly robotized so that most manufacturing and other tasks is performed by advanced machinery (dated labor one could say), we would still require another way of distributing individual rights to the common stock than wages. Obviously the implicit assumption seems to be that if there's an abundance of produce, then that will gradually also dampen the human impulse to accumulate useless/needless stuff.

Originally Posted by JJM 777
A good question, and contains many good sub-questions. Salaries are not equal to begin with, so "multiplying them" would not increase the economic equality of individuals much. Before you casually suggest that workers would certainly equalize the salaries, I want to remind you that workers are provenly selfish to the bone, what comes to the size of their salaries. A unified labour movement does not exist, which would demand equalization of the now extremely varying salaries. Instead, a fractioned labour movement exists where each profession's guild fights to maximize their own salaries. In my country public sector medical doctors went on strike, to demand a rise in their already exorbitant wages. If the right to go on strike exists, I smell the chance that certain crucially necessary professions would see a chance to put the thumscrews on the future Communist society to raise their salaries above the others. Such as medical doctors, for example.
Would there even be salaries in utopian communism? I guess it depends on how far we want to go into utopian fantasy. There's not much we can say with confidence about how it would turn out -- although I suspect, just like Marx, that how it would turn out would be very much dependent on how the conditions of productions turns out to be.

Originally Posted by JJM 777
Leftist thinkers traditionally demonize rich investors as the incarnation of despicable selfishness. What I see in the world around us, is workers who are generally equally selfish as investors. I don't see a moral difference between a worker and an investor, both of them try to maximize their own personal benefits with any bargaining position that they may have, be it strong or weak. Rich investors are more powerful and successful in this bargaining. Poverty of the poor and wealth of the rich is a technical detail, not a moral virtue.
The assumption of individual utility maximization is just an assumption. When put to empirical test, it often fails or implies a more nuanced picture about human behavior. Here you just seem to assert that workers are generally equally selfish as investors… without any definitions or evidence. How exactly do you know they are equally selfish rather than more or less?
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Old 1st October 2017, 11:58 PM   #290
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Originally Posted by lupus_in_fabula View Post
Not sure what he even had in the pipeline, but I think the emphasis would have been on the actual rather than utopian.
I don't share this feeling, but the issue remains forever undecided.

Originally Posted by lupus_in_fabula View Post
Why 50%?
It maybe wouldn't be exactly 50%, nor overnight. But the big picture is that if the world remains the same as it is today, but people have twice more money in pocket, they have more purchasing power than products and services exist to be given in exchange for their money. It leads to inflation or long queues in front of empty shops.

Originally Posted by lupus_in_fabula View Post
Yeah, if we're referring to later stages of communism (deeper into utopia)
Did Marx so emphasize that it is "utopia", rather than an inevitable or at least very probable future, or do you take the liberty to choose what of Marx is the real stuff, and what in his works is not worth taking seriously?

Originally Posted by lupus_in_fabula View Post
a direct relationship between individual productive ability and consumption need will break down further (maybe we should even distinguish need from want here?).
Originally Posted by lupus_in_fabula View Post
Would there even be salaries in utopian communism?
From each according to ability, to each according to needs. There is no correlation between input and output, except possibly the expectation of working full time. A realistic way to describe these "needs" could be a universal income (the same sum paid to every adult) plus social benefits to cover the costs of any economic extra "needs" compared to a childless healthy single adult, ranging from health care costs to having children of varying ages, which raise the costs of living significantly. I believe that Marx had something like this in mind. Food might simply be free, if eaten personally. Not free to be thrown away. Men eat more than women, and people doing heavy physical work (or engaging in sports activities) eat more than office workers.

Personally I want to preserve some incentives for creativity and diligence. At least by rewarding work per hour, so everyone can make the personal decision to value free time more than material well-being, or work more and earn more. I am worried about what would happen to GDP when there is no direct causative relation between a person's diligence at work and his standard of living. The GDP declines, because _someone_ does not work diligently enough, but the people who perceive this problem, have no incentive to work more diligently even themselves, because that would be a drop that disappears in the ocean, and wouldn't help even their own personal standard of living. That would be the sad opposite of "the American dream", where nobody can achieve anything with personal effort, everyone is doomed to the standard of living that the great ever lazier masses bother to produce. As painful as it may be philosophically and ideologically, I want to avoid such a situation, and it requires giving people some liberties of gaining some extra personal well-being with extra personal effort.

Marx didn't focus on this aspect much. He was more optimistic, some say even utopian.

Originally Posted by lupus_in_fabula View Post
if there's an abundance of produce, then that will gradually also dampen the human impulse to accumulate useless/needless stuff.
I don't think that this aspect is a realistic one. Even if robots produced everything, the raw materials and space are limited on the planet. Everyone cannot have a condo house with a large garden near city center, it is mathematically impossible. Rich people can have them, and a private jet, and a Ferrari or Lamborghini. And ten housemaids and massagists. The total amount of existing goods and services, divided by the human population, will inevitably be less than humans are willing and able to dream of getting. Thus no distribution or rationing at all will never be a satisfactory solution.

Originally Posted by lupus_in_fabula View Post
Here you just seem to assert that workers are generally equally selfish as investors… without any definitions or evidence. How exactly do you know they are equally selfish rather than more or less?
It would be impossible to quantify anyone's selfishness more precisely than "politically supports equality" vs. "politically supports inequality". What I already said afore as proof is the fact that workers have not formed a single union that would defend everyone's salaries equally. Try to suggest that, and they will say no. Instead each profession has formed its own union to defend maximal benefits for themselves only. This is my proof for the sefishness of workers. Ask high-earning professions to bring down their salaries so the lowest salaries can be raised, they will say no, because they are selfish. High-paid workers are equally reluctant to compromise their personal standard of living as investors are.

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Old 2nd October 2017, 01:47 AM   #291
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Originally Posted by JJM 777
It maybe wouldn't be exactly 50%, nor overnight. But the big picture is that if the world remains the same as it is today, but people have twice more money in pocket, they have more purchasing power than products and services exist to be given in exchange for their money. It leads to inflation or long queues in front of empty shops.
That's a big if. Considering such multiplication of wages would mainly come from owners of the means of production paying them: there would be quite a dramatic fall in profits… leading to reduced credit standards for businesses, repayments of business loans and investments… both increasing the likelihood of bankruptcies and banking crises… leading to…? Even deflation might be a possible consequence. I.e., a ceteris paribus argument only gives us a trivial, and often a quite inapt, conclusion.

Originally Posted by JJM 777
Did Marx so emphasize that it is "utopia", rather than an inevitable or at least very probable future, or do you take the liberty to choose what of Marx is the real stuff, and what in his works is not worth taking seriously?
Well, certainly not inevitable.

To me this sounds like utopia (Marx), emphasis mine: "In a higher phase of communist society, after the enslaving subordination of the individual to the division of labor, and therewith also the antithesis between mental and physical labor, has vanished; after labor has become not only a means of life but life's prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly -- only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!"

Originally Posted by JJM 777
I don't think that this aspect is a realistic one. Even if robots produced everything, the raw materials and space are limited on the planet. Everyone cannot have a condo house with a large garden near city center, it is mathematically impossible. Rich people can have them, and a private jet, and a Ferrari or Lamborghini. And ten housemaids and massagists. The total amount of existing goods and services, divided by the human population, will inevitably be less than humans are willing and able to dream of getting. Thus no distribution or rationing at all will never be a satisfactory solution.
I see this as a contradiction. If everything is produced by robots and those are collectively owned, then it seems to me that it would mean a greater emphasis of public spaces where individuals don't own the land they occupy. And even though you might want a mansion, Ferrari or a private jet, good luck trying to convince everyone else you actually need one.

Originally Posted by JJM 777
It would be impossible to quantify anyone's selfishness more precisely than "politically supports equality" vs. "politically supports inequality". What I already said afore as proof is the fact that workers have not formed a single union that would defend everyone's salaries equally. Try to suggest that, and they will say no. Instead each profession has formed its own union to defend maximal benefits for themselves only. This is my proof for the sefishness of workers. Ask high-earning professions to bring down their salaries so the lowest salaries can be raised, they will say no, because they are selfish. High-paid workers are equally reluctant to compromise their personal standard of living as investors are.
Isn't investing also risk-taking, so in fact investors may not be equally reluctant to compromise their personal standard of living – they might be less reluctant as they are willing to actually lose their investment in a bad bet. A high-paid financial worker might be more willing to risk other's money, yet keeping his salary and potential windfall. Yes, unions seldom look after anyone else than their members, which if driven to extreme, will lead to their detriment. However, we don't know how the situation would be if there would only be one union representing all wage labor?
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Old 3rd October 2017, 03:45 AM   #292
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Originally Posted by lupus_in_fabula View Post
such multiplication of wages would mainly come from owners of the means of production paying them
50% is a big assumption. Would be nice to have some hard data, but my perception is that salaries would rise very moderately, percents rather than tens of percents, if the above-average part of personal consumption of the bourgeoisie were distributed to everyone equally as higher salary.

The bourgeoisie are less numerous than workers, and majority of them don't live in remarkable personal luxury. Their perceived "wealth" is mostly tied in value of the means of production -- which is not convertible into salaries. It is not convertible into anything. Its ownership can be distributed on paper, but that's quite much all that could happen.

It was some 2 years ago that I tried my best calculating these things, with hopelessly insufficient data to work with, and I came to the conclusion that the personal above-average standard of living of bourgeoisie is a drop in the ocean, neutralizing that would not bring much equality between a high-paid worker and a low-paid worker. The vast majority of economic inequality in the world is inequality within the working class, not inequality between the bourgeoisie and working class. Eliminating the bourgeoisie would not much affect the problem of inequality, it would still exist.

These mathematical considerations somewhat revolutionized the way how I look at the Leftist movement. I no longer see rich investors as the main problem, and the great masses of working class as the easy solution. I see selfishness of the working class as the main problem above everything else, the nearly total absence of a collective political pursuit of salary equality within the working class.

Originally Posted by lupus_in_fabula View Post
there would be quite a dramatic fall in profits… (...) increasing the likelihood of bankruptcies and banking crises
If the stock value of all means of production were distributed to everyone equally, as exchangeable stock with monetary value, many people would immediately sell their stock, they would want to spend their wealth for nice living, not for "owning a factory somewhere".

Changing the current way of the world in any way which increases the risk of production not being managed responsibly, including reserving funds for future renovation and expansion needs of production, is not worth doing.

Originally Posted by lupus_in_fabula View Post
To me this sounds like utopia (Marx)
What to me is utopistic in that quote, is using "bourgeoisie" as some kind of a selfish problem that needs to go away, and "individual" is somehow a solution to the problem of selfishness and inequality. Marx does not discuss here the possibility of those "individuals" trying to secure a maximally high standard of living for themselves personally. He assumes that the problems of inequality are gone when the bourgeoisie is gone. I strongly doubt that.


Originally Posted by lupus_in_fabula View Post
even though you might want a mansion, Ferrari or a private jet, good luck trying to convince everyone else you actually need one.
So apparently you agree that things cannot simply be free, take as much as you want: distribution must be somehow limited per person.

Originally Posted by lupus_in_fabula View Post
Isn't investing also risk-taking
Small-scale investments into uncertain new technologies is very risky. But at a large enough scale, the risks are predictable statistically, so a high enough profit rate will solve the problem. Stable business sectors such as energy etc. are relatively riskless, and among the most profitable. Just ask the Saudis.

High-earning workers are the safest players of all: they enjoy practically the standard of living of bourgeoisie, with full protection of salary and employment safety, etc.

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Old 3rd October 2017, 05:24 AM   #293
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Originally Posted by JJM 777
What to me is utopistic in that quote, is using "bourgeoisie" as some kind of a selfish problem that needs to go away, and "individual" is somehow a solution to the problem of selfishness and inequality. Marx does not discuss here the possibility of those "individuals" trying to secure a maximally high standard of living for themselves personally. He assumes that the problems of inequality are gone when the bourgeoisie is gone. I strongly doubt that.
I read the quote as setting up criteria for what must happen before, what he calls a "bourgeois right", can even in principle be transcended by something of a "communist right". Here the notion of bourgeois right to the common stock is relative to ability. But of course, such ability might not necessarily pertain to the ability to produce (as in working hard). It can also pertain to the ability to extract from the common stock (based on privilege, ownership, salary, societal position, etc.).

Hence Marx defines (vaguely) the criteria that must be fulfilled before there's any sense in talking about right to extract from the common stock based on need rather than ability.

Originally Posted by JJM 777
So apparently you agree that things cannot simply be free, take as much as you want: distribution must be somehow limited per person.
Yes, cannot be free in the sense of want, but it can be free in the sense of need… depending on how we define need (say: some basic standard of living in regards to nutrition, housing, medical care, schooling, free time, etc.). I don't think a Ferrari or a private jet qualifies as that kind of need – regardless of individual want.

Originally Posted by JJM 777
Small-scale investments into uncertain new technologies is very risky. But at a large enough scale, the risks are predictable statistically, so a high enough profit rate will solve the problem. Stable business sectors such as energy etc. are relatively riskless, and among the most profitable. Just ask the Saudis.

High-earning workers are the safest players of all: they enjoy practically the standard of living of bourgeoisie, with full protection of salary and employment safety, etc.
Usually it's here where the state comes in and often provide for risky basic research until something comes out from such research that private business can turn into profit. Prime example: the components making up the iPhone.

Yes, I agree that there's a huge disparity between wage classes in terms of remuneration. But of course, pay in the higher echelons is still dependent on the owners actually having the ability to pay (doctors on public payroll do not even come close to the higher-end managerial pay in some of the private sector enterprises).
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Old 4th October 2017, 12:26 AM   #294
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Originally Posted by Jerrymander View Post
It has been proposed in libertarian socialist and anarchist circles that industry and factories should be completely worker owned and any leaders of a company should be elected by them. Can it work? Could it eventually work in the future?
Yes, let's bring all the downsides of the democracy in the business world as well. You won't get any benefits because you can freely work where you work anyway and because the leaders of a company are replaced by the owners anyway. You get all the downsides of a flawed political system and none of its upsides. What could possibly go wrong?

Can it work? Sure it can, for sufficiently low values of what you still count as "work". The world wouldn't collapse, but most people would be worse off than they are.

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Old 4th October 2017, 12:58 AM   #295
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Originally Posted by lupus_in_fabula View Post
pay in the higher echelons is still dependent on the owners actually having the ability to pay
No matter what the size of the cake (national GDP) is, it gets sliced between professions based on their relative bargaining position in labour movement lobbying, whose extreme form is a strike.

If one company "cannot afford to pay", they will have difficulties recruiting and keeping employees, and then they will be out of the business activity. If all companies generally refuse to pay, then we will see a public national-scale fight of egos, in the form of strikes. When people start dying for treatable causes, they will agree to the salary demands of medical doctors.

I have given a thought to this problem, as I perceive it to be the main problem in a Leftist society. Even more so in a free world where also Capitalist societies exist, which can (and currently do) attract highly skilled workers from poorer or lower-paying countries. There is a massive exodus of medical doctors from poorer countries to wealthiest countries. The traditional response of Communist states was building an iron fence at the border, and shooting anyone who tries to escape the Communist country. To prevent the crucially necessary medical doctors etc. seeking a wealthier personal life in high-salary countries.

The path of such repression of individual freedoms is a path that should be abandoned. But still the problem is real, and needs to be addressed. If a Leftist country equalizes people's salaries (at least to some remarkable extent, even if not perfectly), it immediately creates the problem of highly educated workers being tempted to move into countries where they will get a higher salary.

My solution is to use an obligatory student loan and employment contract for university students. The Leftist state pays free education, but in exchange for that, the student must sign a contract by which he is obliged to work in the profession for at least n years in the society, for the standardized salary. The student still has the option to flee into the West after he graduates, no iron curtain is necessary. But in that case, a debt follows him, which he must pay from his high earnings in the West. This way the state gets back the money wasted into a student who never served the state with his state-funded professional skills. And moving out of the country loses some of its economic attractiveness, as the loan deal puts an economic burden on that option.

This would mean an end to the right to strike. As sacred as this right is in the philosophy of the labour movement, which falsely pretends it to be a weapon against tyranny of the bourgeoisie, it has no place in true Socialism, because there the bourgeoisie would not exist, and the only remaining purpose of this right would be what its main purpose always was: a weapon for workers to raise themselves above other workers in salary negotiations.

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Old 4th October 2017, 01:20 AM   #296
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Originally Posted by JJM 777 View Post
Then inflation will be 50%. Unless we have more to share between ourselves. If workers become owners, and profits are cut to zero, and this economic wiggling space is used for raising the salaries, then the salaries can rise significantly without inflation, even if GDP doesn't grow, as the GDP gets reorganized so that former capital income gets converted into salaries. As you also theorize yourself.
Inflation as measured how? If the doubled salaries come at the cost of shareholders as increased labor expense, then there wouldn't be as much "inflation" (based on a government sponsored consumer price index) as you think. Labor's gain in this case would be offset by shareholder's loss, so while workers will undoubtedly consume more, shareholders will consume less, and asset prices will fall.

If, on the other hand the doubled salaries were subsidized by money creation, then you *would* have inflation, because inflation is anywhere and everywhere a monetary phenomenon. This cannot be blamed on workers, but instead on money creators (central banks).

It's worth noting that in the first case consumer prices would likely rise because workers, who are typically poorer than shareholders, will generally consume more of their income, whereas wealthy shareholders will invest more. If money creation were measured holistically, shareholders would see asset price deflation relative to the gains in consumer prices as workers enjoyed more consumption.

Excessive consumer price inflation is viewed negatively, but asset price inflation (which benefits rich stockholders) is encouraged. The fact that this measure of regressive wealth distribution by central banks is ignored when assessing the cost of "inflation" is a heinous crime.

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Leftist thinkers traditionally demonize rich investors as the incarnation of despicable selfishness. What I see in the world around us, is workers who are generally equally selfish as investors. I don't see a moral difference between a worker and an investor, both of them try to maximize their own personal benefits with any bargaining position that they may have, be it strong or weak. Rich investors are more powerful and successful in this bargaining. Poverty of the poor and wealth of the rich is a technical detail, not a moral virtue.
This is true, and I think focusing on how to encourage and enable workers to become owners (by using a portion of their disposable income to purchase equity, should they be able) is more productive than indicting the whole of capitalism. The problem, however, is that the entire system of capital ownership is completely undermined by the fiat money system, whereby stock and bondholders are perpetually subsidized by the central bank's endless money. Due to asset price inflation, shareholders become vastly wealthy at the direct expense of workers and savers, and any money saved by workers buys less and less stock, just as it buys less and less house, or consumer goods.
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Old 4th October 2017, 04:45 AM   #297
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Originally Posted by JJM 777
I have given a thought to this problem, as I perceive it to be the main problem in a Leftist society. Even more so in a free world where also Capitalist societies exist, which can (and currently do) attract highly skilled workers from poorer or lower-paying countries. There is a massive exodus of medical doctors from poorer countries to wealthiest countries. The traditional response of Communist states was building an iron fence at the border, and shooting anyone who tries to escape the Communist country. To prevent the crucially necessary medical doctors etc. seeking a wealthier personal life in high-salary countries.
Well, we are now kind of looking at the issue from a 150-year hindsight perspective. At the time when Marx wrote, the situation in capitalistic societies was rather grim for the majority of the working classes. What Marx failed to anticipate was the ability for capitalism to reform and change, and by extension, to include much of the aspirations presented in, for example, The Communist Manifesto.

Marx and Engels in The German Ideology hinted also that for communism to be an empirical possibility, it would need to be implemented globally rather than locally: "Empirically, communism is only possible as the act of the dominant peoples 'all at once' and simultaneously…" So in this respect, i.e., if we look at communism as a utopia, there wouldn't be capitalist counterparts where doctors would flee to.

But then again, here communism is not even defined as a state of affairs in the way capitalism as the dominant mode of production is. Communism in this respect is defined as a movement which abolishes the more static paradigm from where it grows out of – just like capitalism was the movement that abolished feudalism until capitalism became, itself, the state of affairs.

Originally Posted by Marx & Engels, The German Ideology
Communism is for us not a state of affairs which is to be established, an ideal to which reality [will] have to adjust itself. We call communism the real movement which abolishes the present state of things. The conditions of this movement result from the premises now in existence.
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Old 5th October 2017, 04:09 AM   #298
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Originally Posted by JJM 777 View Post
No matter what the size of the cake (national GDP) is, it gets sliced between professions based on their relative bargaining position in labour movement lobbying
Interesting that you bring this up. Because earlier you claimed that the prices of resources determine, in an objective fashion, the relative difficulty of obtaining them. But if wages make up a good proportion of the price of a resource, which they do, then that doesn't seem quite true.

Quote:
whose extreme form is a strike.
Wut? No it isn't. A strike is like the mildest form. there's also sabotage, rigging the place with explosives and threatening to blow it up, burning the place down, or ultimately occupying and taking over the place.

What kind of a labour movement is it whose "extreme form" is a strike...
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Old 5th October 2017, 05:24 AM   #299
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Originally Posted by Tippit View Post
If, on the other hand the doubled salaries were subsidized by money creation, then you *would* have inflation
I was given a scenario where "salaries are raised by 50%", without explaining where the money would come from. I assumed that the money is simply printed and given directly to the workers. Not a very useful example to begin with, without theorizing where the money really would come from, and what would happen to everything else.

Originally Posted by Tippit View Post
how to encourage and enable workers to become owners (by using a portion of their disposable income to purchase equity, should they be able)
I see no other effective way to do this than simply having a law that having a job requires (and contains the right to) participating in the ownership side too. Now I get 65% of my gross income into bank account, the rest is taken by the state into various taxes. In that scenario, another tax on top of that would go to my stock ownership fund. A bit similarly, logically, as a part of my income goes to a pension fund, which will one day pay my pensions, if I live long enough to see that day. There is no direct causality between my pension taxes and any actual pension paid to me. Likewise, there needs be no direct causality between my production capacity ownership tax and my actual employer.

Just hope that the big guys up there will not one day do the same as the leaders of USSR did, converting all the most lucrative state companies into privatized property. I have not verified this story, but an actor (what a source for economic data!) once said in my local media that the property of USSR was privatized in a legally reasonable manner, by handing out ownership papers to all the people, generally. But the coup is what happened next: the big guys brought cash with truck into city centers, and bought the stock from the people. Nearly everyone sold happily, what do you need a piece of paper for, you cannot eat it or live in it. As soon as this purchasing process was over, the cash in people's hand got devalued big time, while the value of the stock skyrocketed. Sayonara, idiots.

Originally Posted by lupus_in_fabula View Post
What Marx failed to anticipate was the ability for capitalism to reform and change, and by extension, to include much of the aspirations presented in, for example, The Communist Manifesto.
Marx underestimated the intelligence of Capitalists. Not only Marx sees how the world functions, also Capitalists do. So they adapt their game plan to be suitable for the circumstances. Raise the salaries a bit, just enough to keep majority of the voting population happy. So it can continue forever, without the inevitable doomsday prophesized by Marx. I don't criticize Capitalism because it is doomed to fail. It is not. I criticize it because it sucks, in my personal opinon.

Originally Posted by lupus_in_fabula View Post
for communism to be an empirical possibility, it would need to be implemented globally rather than locally
In that sense, Communism is revolutionary, military, and totalitarian. As much as I despise all what USA has done in the past 100 years to destroy every root of Socialism in every possible country, Marx invited Capitalists into a duel until the death, where the winner will take it all. Of course Capitalists reacted the way they did, and still continue to react.

Declaring war on Capitalism in that manner is simply a suicide, a guarantee of getting first politically isolated and then crushed sooner or later. The only hope of a better world is pursuing it with the attitude of peaceful coexistence: "we will mind our own business, and the others can freely mind their own business".

Originally Posted by caveman1917 View Post
earlier you claimed that the prices of resources determine, in an objective fashion, the relative difficulty of obtaining them. But if wages make up a good proportion of the price of a resource, which they do, then that doesn't seem quite true.
Nothing is objective in economics. What you say above contains no problem: The price of abundant resources is roughly equal to the labour costs of producing and distributing them (plus some profit to investors, of course). Hmm, and that's quite much it. Nothing to add there.

Originally Posted by caveman1917 View Post
What kind of a labour movement is it whose "extreme form" is a strike...
In most countries, the typical one. See my comment afore about 100 years of Communist totalitarianism vs. USA: It is wise not to invite Capitalists into a duel without rules and laws. Very wise.

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Old 6th October 2017, 03:10 AM   #300
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Originally Posted by JJM 777 View Post
Nothing is objective in economics. What you say above contains no problem: The price of abundant resources is roughly equal to the labour costs of producing and distributing them (plus some profit to investors, of course). Hmm, and that's quite much it. Nothing to add there.
If two resources can have equal physical costs in obtaining them (ie equal inputs and labour) yet have different prices, then what good are the prices?

Quote:
In most countries, the typical one. See my comment afore about 100 years of Communist totalitarianism vs. USA: It is wise not to invite Capitalists into a duel without rules and laws. Very wise.
Oh I did see your comment, I just chose to ignore it.
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Old 6th October 2017, 04:33 AM   #301
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Originally Posted by JJM 777 View Post
I see no other effective way to do this than simply having a law that having a job requires (and contains the right to) participating in the ownership side too. Now I get 65% of my gross income into bank account, the rest is taken by the state into various taxes. In that scenario, another tax on top of that would go to my stock ownership fund. A bit similarly, logically, as a part of my income goes to a pension fund, which will one day pay my pensions, if I live long enough to see that day. There is no direct causality between my pension taxes and any actual pension paid to me. Likewise, there needs be no direct causality between my production capacity ownership tax and my actual employer.
I wouldn't support any laws that force workers to accept a portion of their compensation as shareholder equity. Remember, share ownership entails possible risks, as well as rewards. What happens to a substantial portion of that workers retirement when the company fails and the value of the shares goes to zero?

Another problem relates to private companies and small businesses. While employees can simply purchase shares in publicly trade companies that they work for, that is not the case with small businesses. An employee would have to make a special arrangement with the small business owner and possibly change corporate by-laws in order to accommodate this. The small business owner might not want to give up any equity in his business, or risk losing control of it. Laws which incentivize and make it easier for workers to become owners might help, but probably not. Every worker, at least in developed countries with mature capital markets, has the option of investing a fraction of their income in a variety of different investment vehicles. Lack of Education and financial innumeracy are probably the biggest culprits which prevent workers from taking that leap and becoming owners. In most cases they simply don't know how to value investments, and they are probably terrified of losing money that they cannot afford to lose. Financial literacy is abysmal in the United States, and is probably a big reason why more workers are not, in fact, owners.

There is a pension crisis brewing in the US. Changes in birth rates and lifespans, pension underfunding, as well as unsustainable promises (such as some public pensioners receiving 100% of their salary for life, after retiring very early) threaten to destroy the pension system. I think it is going to be a calamity. Puerto Rico, a US territory, is on the verge of defaulting on $70B in debt, and it has $49B in unpaid pensions. Personally I would abolish new pension agreements, as well as social security. This would result in more cash compensation for workers, both from the cash that would normally go to the pension, and from saving on payroll taxes used for SS. Then workers would be responsible for their own retirements, instead of delegating that responsibility to a corrupt and vulnerable system. There are going to be a lot of broken promises as a result of this crisis, one way or another.

Quote:

Just hope that the big guys up there will not one day do the same as the leaders of USSR did, converting all the most lucrative state companies into privatized property. I have not verified this story, but an actor (what a source for economic data!) once said in my local media that the property of USSR was privatized in a legally reasonable manner, by handing out ownership papers to all the people, generally. But the coup is what happened next: the big guys brought cash with truck into city centers, and bought the stock from the people. Nearly everyone sold happily, what do you need a piece of paper for, you cannot eat it or live in it. As soon as this purchasing process was over, the cash in people's hand got devalued big time, while the value of the stock skyrocketed. Sayonara, idiots.
You basically just described the fiat money scam, without the money creation part. The process of creating money out of thin air and monetizing capital assets is a crime which devalues savers and steals their purchasing power, while inflating the wealth of stock and bondholders unfairly. I believe this is the most important issue in the world, and it desperately needs to be understood by everyone. What is worse is that this immoral and unjust scam that makes the rich arbitrarily richer is blamed on capitalism, which has nothing to do with it.

Since I am a capitalist, I would rather see the means of production privately held than state held, however there is a process called "briberization" which is rampant in South America whereby corrupt politicians sell critical public assets (like water rights) to cronies at firesale prices where the general public cannot bid. This is obviously even worse than socialism, and I don't see any easy solution other than avoiding systems which unfairly concentrate massive amounts of wealth in a few hands to begin with. This is like what you described in the USSR, only the public never gets a chance to own the assets in the first place!

I contend that capitalism does not exist without honest money, and there is nowhere left in the world which has honest money. Fiat money renders the concept of ownership utterly meaningless. Witness the Swiss National Bank, largest shareholder of Facebook:

https://www.reuters.com/article/swis...-idUSL8N1B7383

It's also worth pointing out that the largest sovereign wealth fund in the world exists in oil-rich Norway, worth over $1T. Norway has been selling its oil in exchange for global equities since the 1990s. I often have to endure stories about how Norway is this undeniable socialist utopia. In reality, Norway's success is because they decided to invest in the US stock market, frontrunning the Federal Reserve System. The decision was a prudent one, giving them spectacular returns and propping up the Norwegian welfare state.

In a very real sense you could say that Norwegian workers, by virtue of the Norwegian sovereign wealth fund are truly "worker-owners". Unfortunately it's US stocks that they own and which have benefited them, not their own socialist "utopia".
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Old 7th October 2017, 01:41 PM   #302
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Originally Posted by caveman1917 View Post
If two resources can have equal physical costs in obtaining them (ie equal inputs and labour) yet have different prices, then what good are the prices?
Please explain your concern more precisely, with a real-life example.

Originally Posted by caveman1917 View Post
Oh I did see your comment, I just chose to ignore it.
That is not a recipe for a fruitful discussion.
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Old 11th October 2017, 01:09 AM   #303
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Originally Posted by JJM 777 View Post
This [student loans] would mean an end to the right to strike. As sacred as this right is in the philosophy of the labour movement, which falsely pretends it to be a weapon against tyranny of the bourgeoisie, it has no place in true Socialism, because there the bourgeoisie would not exist, and the only remaining purpose of this right would be what its main purpose always was: a weapon for workers to raise themselves above other workers in salary negotiations.
No. That is not the purpose of strikes, though it is on occasion the effect of strikes. The best weapon workers have is the custody they exercise over the means of production. They manipulate, even if they don't own, the tools and machines used in production, and they are present in, even if they don't own, the localities in which production takes place. A weapon of coercion deriving from this is for them to take these facilities out of use, thereby causing loss to the owners of the production unit, whoever these owners might be.

The only reason for removing strikes from the workers' repertoire of behaviour would be if they were themselves the owners, so strikes would be directed at the strikers themselves. That is what the Soviet government said was happening in 1920-1921 during the strikes in Petrograd which culminated in the Kronstadt rebellion. But the Soviet government was talking nonsense. The workers didn't own the means of production, and they were using the only weapon they had at their disposal to fight the abuses and repression they were suffering at the hands of the government.

The right to strike must be preserved. If a particular strike makes no sense, then the workers won't indulge in it. If they do feel a need for it, that means they have a real grievance, and a strike is one effective way of seeking redress.
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Old 11th October 2017, 04:36 AM   #304
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Originally Posted by JJM 777 View Post
... I my world, workers would be legally obligatory owners, salaries would be equalized, and the right to strike would not exist. If you don't like your profession, find another job. If you don't like any job, found a political party to address the problem, or emigrate to another country.
Your world appears to be a phantasm which could never exist, at least as a stable society. If you don't like any job, create a political party or emigrate to another country, eh?

So what would these other countries countries be like? And what would this country be like if people left other countries for these reasons, in order to come here? The ones who come here at present not only like, in general, to have jobs; they're even willing to do jobs that people here are less than ready to perform.
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Old 12th October 2017, 03:51 AM   #305
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Originally Posted by Craig B View Post
Your world appears to be a phantasm which could never exist, at least as a stable society.
I believe that it would be a perfectly possible and functionable thing. That doesn't mean that anyone will do it ever, though. There are many possible things that human societies will never do.

Originally Posted by Craig B View Post
If you don't like any job, create a political party or emigrate to another country, eh?
These are the available options now too, plus founding your own company. But founding a profitable company is not something that the average Joe has the courage and skill to do, so most people have exactly the options right now as you just listed above. So I don't see how this would change the ability of the society to exist, as there is hardly any difference.

Originally Posted by Craig B View Post
what would these other countries countries be like? And what would this country be like if people left other countries for these reasons, in order to come here? The ones who come here at present not only like, in general, to have jobs; they're even willing to do jobs that people here are less than ready to perform.
The "other" countries would be the 200+ countries as we know them today. Assuming that one of them would go my style of a way, to begin with.

People migrate between countries in search of a perceived better life. But this is not allowed to happen as much as there would be demand for it, richer countries make efforts to prevent willing comers from immigrating. So "my country" wouldn't need to be as attractive a place to migrate into as the richest countries are. It only needs to be more attractive than the worst countries, to get a steady influx of people who want to leave their own country, but fail to make it into (or get extradited from) their favourite country.

To be more attractive than the worst countries, I would need to offer a higher standard of living than the worst countries do. A tough contest against the GDP of Mali and Zimbabwe, but I believe I would have my chances. Simply not having a war or civil war in my country would immediately make my place more attractive than a dozen other countries around the planet. In fact, my opinion is that United Nations should run a proper state, and house the endless flow of refugees there, rather than in dismal camps in a desert.

Last edited by JJM 777; 12th October 2017 at 03:53 AM.
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Old Yesterday, 05:07 AM   #306
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Mod Warning Some 80 posts have been moved to the Fractional reserve vs gold reserve banking thread.
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Old Yesterday, 05:30 AM   #307
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Where were we?

Oh, the worker-owned production.
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