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Read the rules in the OP before posting, please.In order to ensure that this thread continues to meet TL standards and follows the proper guidelines, we will be enforcing the rules in the OP more strictly. Be sure to give them a re-read to refresh your memory! The vast majority of you are contributing in a healthy way, keep it up! NOTE: When providing a source, explain why you feel it is relevant and what purpose it adds to the discussion if it's not obvious. Also take note that unsubstantiated tweets/posts meant only to rekindle old arguments can result in a mod action. |
On January 23 2014 15:41 Roe wrote:Show nested quote +On January 23 2014 15:25 JonnyBNoHo wrote:On January 23 2014 15:22 Roe wrote:On January 23 2014 15:15 JonnyBNoHo wrote:On January 23 2014 15:08 Roe wrote:On January 23 2014 15:02 JonnyBNoHo wrote:On January 23 2014 14:20 Roe wrote:On January 23 2014 14:01 Danglars wrote:On January 23 2014 13:48 Roe wrote:On January 23 2014 13:34 JonnyBNoHo wrote:[quote] Directors aren't really owners at all - they're fiduciaries who act on behalf of shareholders (the legal owners) and in accordance with corporate bylaws. I'm not sure what you mean by "control the value" but shareholders exert control over the corporation by controlling who sits on the board and the board controls the executive team that runs it (at least in theory, in reality many boards are somewhat impotent, which is somewhat fitting because they tend to all be old men  ). But anyways, shareholders are the residual claimants - meaning they're the last to get paid (if at all). It makes sense to give them ownership authority since it would be all too easy to otherwise simply not pay the residual claimant... which would make the whole endeavor a non-starter. Another way to look at it is that there is only one class of owner - the shareholders. But there are many people affected by the corporation - the stakeholders. You're not sure what it means to control the value of a company? Aren't you supposed to be a business man of some sort? Listen Johnny, I'm not interested in defending the status quo. I've spent the past page or so arguing against that. But to help you out, why does a shareholder have ownership of a company? If you keep confusing activities and people that create value within a company with who has control over various decisions, you're going to confuse everyone here and maybe even yourself. I'll try to convey to you, Roe, exactly why your thoughts are very much aligned with a Marxist ideal. Why your average Joe would presume you read and agreed with him. Marx wrote the most famous book with your argument, alleging that this economy exploits the labor class, the little guy that is the real cause of their profits and created value. The employer is just laying claim to them and he is heavily criticized. I'm trying to simplify since you say you have never read him. When you say, No it's not. It's a simple fact that by removing the working class of a company you have no company, you have no income, you have virtually no value. They are the ones who in actuality make the money. The directors have somehow gotten the power to steal that value from the workers and redistribute it themselves. , a casual observer really might think you're quoting Das Kapital chapter and verse. That's all. Well don't get me wrong, the "little guy" isn't the sole cause of profits/produce, of course the directors and management form an integral part of the company. But the current system heavily favours and entrenches the upper levels. I see why some would take my arguments as Marxist, but I don't intend them to (or at least I didn't just come back from book club reading das kapital). Marx (from your interpretation at least) has a good empirical point here; the worker is the one directly interacting with the market, and is the closest one in the company to the transfer of money from, say, the customer, to said company. Thus, he has control, in fact the greatest amount of control, in whether or not that money gets into the company. Since he controls the flow of value to the company, he has that responsibility and deserves proper recognition for it, and proportional power in the company. I do think there's a good point that you can't deny here (and it's worth some rambling thoughts) - that your basic assumption that the market dictates what companies do - actually hinges on the fact that workers are the baseline of production for the company. In fact, if you took this notion to heart, you would bring the system closer to that market dictating ideal! But instead for some strange reason you rely on the notion that the market dictates what directors do, who are so far removed from the process. As I briefly mentioned earlier, it would be better if all members of the syndicate (err I mean company!  ) could vote on who manages, directs, executes, etc.. And it would be mostly a worker driven process, workers electing workers to become managers, etc... But they need this in legislation because it is their property rights at stake. Yes, I believe their property to be taken away as if they were taxed - except the taxman is in front of the cashier intercepting their income and delivers it to the king (or a group of Oligarchs) who later distributes it as he wishes. And don't get me wrong again, I'm not arguing for everyone making the same wage, or management making less than workers. Sounds like fantasizing about what *could be* ... How are you going to have a company without traditional equity? What fills that void? You can't remove something without describing the replacement! I'm sorry, by traditional equity what exactly do you mean? (so we can get our definitions in line) It may seem like fantasy, but you seem to be deeply entrenched in the system, so any change is bound to cause shivers up your spine. Well, at least I don't see the fantastical aspect of it.. Capital contribution that represents the residual claimant. Why should that change? If they don't have ownership rights, they have no means for ensuring payback. I don't remember arguing they shouldn't have ownership rights
So they're going to have shared rights? So a German corporation?
Edit: what are you changing? You've gone on about workers being owners, and now it's shareholders will still be owners...
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From reading the responses here contributed by multiple individuals, it really appears Obama wasn't too far off when he said, "If you've got a business—you didn't build that. Somebody else made that happen." I mean the quote itself created controversy when it was received, but obviously here more people than not think the reality is pretty close to it. Nobody at the top built their business, it was the product of the bottom part because it depended so much on their labor.
On January 23 2014 14:20 Roe wrote:Show nested quote +On January 23 2014 14:01 Danglars wrote:On January 23 2014 13:48 Roe wrote:On January 23 2014 13:34 JonnyBNoHo wrote:On January 23 2014 13:11 Roe wrote:On January 23 2014 12:34 JonnyBNoHo wrote:On January 23 2014 12:25 Roe wrote:On January 23 2014 11:53 JonnyBNoHo wrote:On January 23 2014 11:40 Roe wrote:On January 23 2014 11:30 Cheren wrote:
[quote]
Pretty much yeah, workers are paid at market value for the most part. CEO pay has a lot more variables than supply/demand, there's cultural values of how much a CEO should be paid (the debate we're having right now), there's the personal charisma or connections of the CEO in question, and other intangibles.
[quote]
It's hard to objectively measure value added by any one employee no matter what level they're at in any company. People like you are going to say low level employees, and people like xDaunt are going to say CEOs and directors. It's a he-said/she-said argument. No it's not. It's a simple fact that by removing the working class of a company you have no company, you have no income, you have virtually no value. They are the ones who in actuality make the money. The directors have somehow gotten the power to steal that value from the workers and redistribute it themselves. This would be fine, in fact, if the workers had say in who taxed their income. But they do not have representation in exchange for their taxation Yeah, and if you get rid of the suppliers you have no income. And if you get rid of the equipment you have no income. And if you get rid of the customers you have no income. What does any of that have to do with ownership? So you agree that ownership is much more complex than dictatorship of the directors? No, and I have no idea why you are trying to reinvent what ownership means. Because the directors don't solely own the company edit: I'm using your definition of ownership aren't I? Just the people who own the company, which means they control the value of the company. Directors aren't really owners at all - they're fiduciaries who act on behalf of shareholders (the legal owners) and in accordance with corporate bylaws. I'm not sure what you mean by "control the value" but shareholders exert control over the corporation by controlling who sits on the board and the board controls the executive team that runs it (at least in theory, in reality many boards are somewhat impotent, which is somewhat fitting because they tend to all be old men ). But anyways, shareholders are the residual claimants - meaning they're the last to get paid (if at all). It makes sense to give them ownership authority since it would be all too easy to otherwise simply not pay the residual claimant... which would make the whole endeavor a non-starter. Another way to look at it is that there is only one class of owner - the shareholders. But there are many people affected by the corporation - the stakeholders. You're not sure what it means to control the value of a company? Aren't you supposed to be a business man of some sort? Listen Johnny, I'm not interested in defending the status quo. I've spent the past page or so arguing against that. But to help you out, why does a shareholder have ownership of a company? If you keep confusing activities and people that create value within a company with who has control over various decisions, you're going to confuse everyone here and maybe even yourself. I'll try to convey to you, Roe, exactly why your thoughts are very much aligned with a Marxist ideal. Why your average Joe would presume you read and agreed with him. Marx wrote the most famous book with your argument, alleging that this economy exploits the labor class, the little guy that is the real cause of their profits and created value. The employer is just laying claim to them and he is heavily criticized. I'm trying to simplify since you say you have never read him. When you say, No it's not. It's a simple fact that by removing the working class of a company you have no company, you have no income, you have virtually no value. They are the ones who in actuality make the money. The directors have somehow gotten the power to steal that value from the workers and redistribute it themselves. , a casual observer really might think you're quoting Das Kapital chapter and verse. That's all. Well don't get me wrong, the "little guy" isn't the sole cause of profits/produce, of course the directors and management form an integral part of the company. But the current system heavily favours and entrenches the upper levels. I see why some would take my arguments as Marxist, but I don't intend them to (or at least I didn't just come back from book club reading das kapital). Marx (from your interpretation at least) has a good empirical point here; the worker is the one directly interacting with the market, and is the closest one in the company to the transfer of money from, say, the customer, to said company. Thus, he has control, in fact the greatest amount of control, in whether or not that money gets into the company. Since he controls the flow of value to the company, he has that responsibility and deserves proper recognition for it, and proportional power in the company. I do think there's a good point that you can't deny here (and it's worth some rambling thoughts) - that your basic assumption that the market dictates what companies do - actually hinges on the fact that workers are the baseline of production for the company. In fact, if you took this notion to heart, you would bring the system closer to that market dictating ideal! But instead for some strange reason you rely on the notion that the market dictates what directors do, who are so far removed from the process. As I briefly mentioned earlier, it would be better if all members of the syndicate (err I mean company! ) could vote on who manages, directs, executes, etc.. And it would be mostly a worker driven process, workers electing workers to become managers, etc... But they need this in legislation because it is their property rights at stake. Yes, I believe their property to be taken away as if they were taxed - except the taxman is in front of the cashier intercepting their income and delivers it to the king (or a group of Oligarchs) who later distributes it as he wishes. And don't get me wrong again, I'm not arguing for everyone making the same wage, or management making less than workers. You don't hire the hamburger flippers for their acumen in managing stores in 6 states or two countries. The big three paragraphs are really economic fallacy from start to finish.
The worker has no privileged position from being closest (sometimes) to the actual transfer of products and services than anyone up the ladder. Simply because a particular company can't function without skill less labor does not give them control. So long as its available to be purchased from somebody willing to do the work, he has very little power and control. When you talk about his responsibility, I don't even know if you understand how laughable it is. Somebody who's responsible for manning a till at a store has responsibility over far less than another needing to focus billions of dollars to compete against his rivals.
Companies make money by selling what some other guy wants. That he employs others to help in that enterprise is no hinge to anything. It is nothing strange that good owners focus on competing in the market ... people that will buy their stuff.
You assert without justification that some kind of worker vote on who becomes their managers would be better than perhaps the shareholders through the board, or the board, or the company owner. It could very easily be the reverse--workers vote for the guy willing to spend their company into bankruptcy with lavish pay and benefits, and they all end out of a job. I wonder if you want to put forward any basis for some community elective process for company ownership, why it would be better.
Addendum: Ever read Animal Farm as well?
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On January 23 2014 15:55 Danglars wrote:
Addendum: Ever read Animal Farm as well?
RIP Boxer... 
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Danglars, you know enough that you shouldn't be misusing a quote like that from Obama. Cutting out a snippet of a larger statement to make it sound bad; nor using it to make fun of people.
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On January 23 2014 16:01 zlefin wrote:
Danglars, you know enough that you shouldn't be misusing a quote like that from Obama. Cutting out a snippet of a larger statement to make it sound bad; nor using it to make fun of people.
It just fits so perfectly well into the ideological narrative he has...
//edit: I am pretty sure even Obama would have his problems with the "definition" of ownership Roe tried to provide.
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Expect this to be the major news today:
Federal authorities in New Jersey have interviewed several witnesses who said the mayor of Hoboken told them in May about a state official’s threat to withhold hurricane recovery funds if the mayor did not support a development project favored by the governor, people briefed on the matter said on Wednesday.
The statements by the witnesses, two of whom are aides to the mayor, Dawn Zimmer, support the account she gave to federal prosecutors on Sunday, and the interviews suggest that prosecutors and the Federal Bureau of Investigation have moved swiftly to investigate her accusations.
The aides said she had told them about the threat by Lt. Gov. Kim Guadagno, shortly after it occurred, according to two people briefed on the matter.
Source
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how sad, I'm watching the oral arguments from 1/15/14 about the abortion clinic case; and even the justices are making some sloppy points. I wish I was the supreme court myself.
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On January 23 2014 08:52 JonnyBNoHo wrote:Show nested quote +On January 23 2014 08:34 WhiteDog wrote:On January 23 2014 08:19 JonnyBNoHo wrote:On January 23 2014 07:56 WhiteDog wrote:On January 23 2014 07:46 JonnyBNoHo wrote:On January 23 2014 07:33 WhiteDog wrote:On January 23 2014 07:23 JonnyBNoHo wrote:On January 23 2014 07:19 WhiteDog wrote:On January 23 2014 07:16 JonnyBNoHo wrote:On January 23 2014 07:01 WhiteDog wrote:
[quote]
How do you think they can make that much of a higher margin than they smaller competition ? Because the reduction in wages is more important than the reduction in prices... The simple fact that they buy in quantity doesn't entirely explain their success, nor the fact that the Walton familly is the richest familly in the US.
It's an industry that never innovate, never need to invest (except in building more store I guess). Not the kind of industry really useful for the community. Just like banks basically lol. Wal-Mart has a highly innovative and technologically advanced supply chain. If you aren't familiar with the company, you probably shouldn't be stating why they're profitable! Supply chain. Innovation is a little more than that you know, like research in health, or technologies, etc. I guess making sure you have your product quickly and in the most efficient manner can be seen as an improvement in a society that has completly lost any optimism towards "progress". Just like giving you the opportunity to buy 110 % of your revenu, like american banks did prior to 2007, can be seen as progress... I guess. Lol, what? Don't you understand there is a difference of value in finding out a new way to product, a new material, or a new product by opposition to a simple improvement in the efficiency of the supply chain ? Is it too hard for you to understand that a company like Wal-Mart will never invest in research like some producers do ? no... no no no... the "supply chains are too plebeian for me" line of argument is just... ignorant. Edit: what are you going to claim next? That lean manufacturing isn't a "real" innovation? I guess I'm ignorant then. I guess it's my ignorance that prevents me from witnessing the net increase in economic growth that Walmart great supply innovations permitted, or the real improvement of americans average conditions of living. Please man, you can do better. Lean manufacturing permits firms to reallocate their ressources. It is not the case for Walmart : what they gain in productivity just becomes more profit for the Walton familly - a money that does not trickle down. I guess young people like you will do everything they can to continue believe in their tales. You see no differences in having to invest in research for more energy efficient engine - like toyota have to right now - and thus invest every available ressource into that, and just investing in the supply chain with no outlet for excess ressources ? You probably shouldn't write so much about companies you don't know. Just sayin' Nice response. I guess being a dick is the way you found to emerge victorious in your fight for Walmart. And you shouldn't be condescending when you're basically the only one in the thread who kinda "defend" Wal Mart business model. All you did is spout ideological crap. You clearly don't know the company - you think they earn "high margins". You dismiss their supply chain, which is one of the most technologically advanced and innovative in the world. You dismiss the increase in purchasing power that lower prices bring to families with low and middle class incomes. And now you're just going to give me the "you're not in the popular crowd" response?
You re in the idiot crowd. You talk about ideology, like you have none.
I said Wal Mart makes high margin in comparaison to its smaller competition, how is that ideological idiot ? It s a fact, they makes around 25% - 27 in 2009 in 2006. I guess you don t know much about the subject... How much do you think a small retailer do ? Lol
User was warned for this post
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On January 23 2014 16:01 zlefin wrote:
Danglars, you know enough that you shouldn't be misusing a quote like that from Obama. Cutting out a snippet of a larger statement to make it sound bad; nor using it to make fun of people. The context doesn't make it look much prettier. The collective ass-covering made in its wake was one of the more humorous moments of the entire Obama campaign. Frankly, he meant it.
Heck, had he made his second term anything but confirming the essence of that quote, he might've stood a chance. And what have even the last three pages shown? Four or so people believing that the lower end workers' share in the success of the company should lead to ownership, control, various means of sharing the wealth in pay or somesuch. You don't build successful companies, it's society, it's the people that helped you along the way, it's the infrastructure writ large as a luxury gifted from government.
I'm getting way sidetracked since I was just expressing my surprise that this kind of message resounded so well. If you think Obama meant, you know, success, prosperity, and stick it to the rich, then there's quite a bit else you'll swallow.
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On January 23 2014 16:49 WhiteDog wrote:Show nested quote +On January 23 2014 08:52 JonnyBNoHo wrote:On January 23 2014 08:34 WhiteDog wrote:On January 23 2014 08:19 JonnyBNoHo wrote:On January 23 2014 07:56 WhiteDog wrote:On January 23 2014 07:46 JonnyBNoHo wrote:On January 23 2014 07:33 WhiteDog wrote:On January 23 2014 07:23 JonnyBNoHo wrote:On January 23 2014 07:19 WhiteDog wrote:On January 23 2014 07:16 JonnyBNoHo wrote:
[quote]
Wal-Mart has a highly innovative and technologically advanced supply chain. If you aren't familiar with the company, you probably shouldn't be stating why they're profitable! Supply chain. Innovation is a little more than that you know, like research in health, or technologies, etc. I guess making sure you have your product quickly and in the most efficient manner can be seen as an improvement in a society that has completly lost any optimism towards "progress". Just like giving you the opportunity to buy 110 % of your revenu, like american banks did prior to 2007, can be seen as progress... I guess. Lol, what? Don't you understand there is a difference of value in finding out a new way to product, a new material, or a new product by opposition to a simple improvement in the efficiency of the supply chain ? Is it too hard for you to understand that a company like Wal-Mart will never invest in research like some producers do ? no... no no no... the "supply chains are too plebeian for me" line of argument is just... ignorant. Edit: what are you going to claim next? That lean manufacturing isn't a "real" innovation? I guess I'm ignorant then. I guess it's my ignorance that prevents me from witnessing the net increase in economic growth that Walmart great supply innovations permitted, or the real improvement of americans average conditions of living. Please man, you can do better. Lean manufacturing permits firms to reallocate their ressources. It is not the case for Walmart : what they gain in productivity just becomes more profit for the Walton familly - a money that does not trickle down. I guess young people like you will do everything they can to continue believe in their tales. You see no differences in having to invest in research for more energy efficient engine - like toyota have to right now - and thus invest every available ressource into that, and just investing in the supply chain with no outlet for excess ressources ? You probably shouldn't write so much about companies you don't know. Just sayin' Nice response. I guess being a dick is the way you found to emerge victorious in your fight for Walmart. And you shouldn't be condescending when you're basically the only one in the thread who kinda "defend" Wal Mart business model. All you did is spout ideological crap. You clearly don't know the company - you think they earn "high margins". You dismiss their supply chain, which is one of the most technologically advanced and innovative in the world. You dismiss the increase in purchasing power that lower prices bring to families with low and middle class incomes. And now you're just going to give me the "you're not in the popular crowd" response? You re in the idiot crowd. You talk about ideology, like you have none. I said Wal Mart makes high margin in comparaison to its smaller competition, how is that ideological idiot ? It s a fact, they makes around 25% - 27 in 2009 in 2006. I guess you don t know much about the subject... How much do you think a small retailer do ? Lol User was warned for this post
A quick search reveals that small retailers almost universally have higher gross margins than walmart.
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Cayman Islands24199 Posts
walmart is more efficient at its served function tahn small retailers, but the real issue, which seemed to have been left on the ground, is that sometimes a bit of inefficiency is good, so you can achieve a better distributive result
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On January 23 2014 16:47 zlefin wrote:
how sad, I'm watching the oral arguments from 1/15/14 about the abortion clinic case; and even the justices are making some sloppy points. I wish I was the supreme court myself.
If only zlefin was in charge, the world would be a much better place. What I am getting from your posts from Egypt to here is that you seem to have an overly simplistic view on how politics and the world works.
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On January 23 2014 18:35 Crushinator wrote:Show nested quote +On January 23 2014 16:49 WhiteDog wrote:On January 23 2014 08:52 JonnyBNoHo wrote:On January 23 2014 08:34 WhiteDog wrote:On January 23 2014 08:19 JonnyBNoHo wrote:On January 23 2014 07:56 WhiteDog wrote:On January 23 2014 07:46 JonnyBNoHo wrote:On January 23 2014 07:33 WhiteDog wrote:On January 23 2014 07:23 JonnyBNoHo wrote:On January 23 2014 07:19 WhiteDog wrote:
[quote]
Supply chain. Innovation is a little more than that you know, like research in health, or technologies, etc. I guess making sure you have your product quickly and in the most efficient manner can be seen as an improvement in a society that has completly lost any optimism towards "progress".
Just like giving you the opportunity to buy 110 % of your revenu, like american banks did prior to 2007, can be seen as progress... I guess. Lol, what? Don't you understand there is a difference of value in finding out a new way to product, a new material, or a new product by opposition to a simple improvement in the efficiency of the supply chain ? Is it too hard for you to understand that a company like Wal-Mart will never invest in research like some producers do ? no... no no no... the "supply chains are too plebeian for me" line of argument is just... ignorant. Edit: what are you going to claim next? That lean manufacturing isn't a "real" innovation? I guess I'm ignorant then. I guess it's my ignorance that prevents me from witnessing the net increase in economic growth that Walmart great supply innovations permitted, or the real improvement of americans average conditions of living. Please man, you can do better. Lean manufacturing permits firms to reallocate their ressources. It is not the case for Walmart : what they gain in productivity just becomes more profit for the Walton familly - a money that does not trickle down. I guess young people like you will do everything they can to continue believe in their tales. You see no differences in having to invest in research for more energy efficient engine - like toyota have to right now - and thus invest every available ressource into that, and just investing in the supply chain with no outlet for excess ressources ? You probably shouldn't write so much about companies you don't know. Just sayin' Nice response. I guess being a dick is the way you found to emerge victorious in your fight for Walmart. And you shouldn't be condescending when you're basically the only one in the thread who kinda "defend" Wal Mart business model. All you did is spout ideological crap. You clearly don't know the company - you think they earn "high margins". You dismiss their supply chain, which is one of the most technologically advanced and innovative in the world. You dismiss the increase in purchasing power that lower prices bring to families with low and middle class incomes. And now you're just going to give me the "you're not in the popular crowd" response? You re in the idiot crowd. You talk about ideology, like you have none. I said Wal Mart makes high margin in comparaison to its smaller competition, how is that ideological idiot ? It s a fact, they makes around 25% - 27 in 2009 in 2006. I guess you don t know much about the subject... How much do you think a small retailer do ? Lol User was warned for this post A quick search reveals that small retailers almost universally have higher gross margins than walmart.
That s because you don t make the difference between margin on products and gross profit margin.... Use your brain a little...
http://www.trefis.com/stock/wmt/articles/204295/whats-impacting-wal-marts-gross-margins/2013-09-05
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On January 23 2014 15:23 xDaunt wrote:Show nested quote +On January 23 2014 15:18 corumjhaelen wrote:On January 23 2014 15:07 xDaunt wrote:On January 23 2014 14:47 corumjhaelen wrote:On January 23 2014 14:43 xDaunt wrote:On January 23 2014 14:37 ddrddrddrddr wrote:On January 23 2014 14:33 xDaunt wrote:On January 23 2014 14:21 corumjhaelen wrote:
Does someone has any proof highly paid executive produce more "value" (what is value in modern economics, I fear I have no idea) than basic workers ? 400 times more for a CEO ?
Plus don't ever read Smith or Ricardo guys, you wouldn't like it. Here is a really easy example: a sales executive who is able to secure a multi-hundred million dollar sales contracts is a worth a fuckton more to a company than a technician who helps build the product that is to be sold. Here's a really easy example, a sales executive that doesn't have anything to sell is worthless. Oh please. Technicians are easily replaceable. Ace sales people aren't. And that's the point. Executives aren't paid shitloads of money just because they have fancy titles. They have specific, scarce skills that are highly valuable -- many multiples more valuable than ordinary workers. But if they are valuable because of scarcity, maybe they're actually paid more than the value they produce ? Also I love your dismissal of "technicians" (who apparently have no diploma), and you're justification of high pay because of high added value because of high pay, it's obviously great logic and not at all ideology. Who would rationally pay more for a service than the value that would actually be realized from receiving the service? Obviously, no one would. "Obviously". You're still running in circles, can't you see it ? They're being paid a lot because they deserve to be paid a lot because they're paid a lot, plus an appeal to "economic common sense" that honestly makes no much sense. To take a common sense "example" if someone is in a position of monopoly, you might actually have to pay more his product than what its value is, and compensate that loss with margin elsewhere. Please tell me: who is going to pay $1,000.00 to receive a basic shoe shine? No one. The value isn't there. The same principles apply to labor dynamics. No employer is going to pay an employee more than the value of the employee's services to the employer. In fact, the employer will always pay the employee less than the value of his services so as to reap a surplus. This is obvious to anyone who has worked a day in the private sector.
Completely dumb and irrelevant example + restating the same thing over and over is not going to convince me. Show me a study were people show me labour markets behave as you say they do, I can hardly wait. There is no way to be sure before you recruit someone wether he's going to be worth the money you're paying him for instance, and even mainstream macroeconomist include many "frictions" in markets, including labor you know, so maybe you should rethink your not-even-general equilibrium position. Beliefs can be irrational and so on, and so on.
Also your appeal to "anyone who has worked in the private sector" is a bit pathetic to be honest. Like I have no idea of what happens in the private sector, and as though HR were acting in a perfectly rationnal way, information was perfect etc etc. Please.
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On January 23 2014 19:46 WhiteDog wrote:Show nested quote +On January 23 2014 18:35 Crushinator wrote:On January 23 2014 16:49 WhiteDog wrote:On January 23 2014 08:52 JonnyBNoHo wrote:On January 23 2014 08:34 WhiteDog wrote:On January 23 2014 08:19 JonnyBNoHo wrote:On January 23 2014 07:56 WhiteDog wrote:On January 23 2014 07:46 JonnyBNoHo wrote:On January 23 2014 07:33 WhiteDog wrote:On January 23 2014 07:23 JonnyBNoHo wrote:
[quote]
Lol, what? Don't you understand there is a difference of value in finding out a new way to product, a new material, or a new product by opposition to a simple improvement in the efficiency of the supply chain ? Is it too hard for you to understand that a company like Wal-Mart will never invest in research like some producers do ? no... no no no... the "supply chains are too plebeian for me" line of argument is just... ignorant. Edit: what are you going to claim next? That lean manufacturing isn't a "real" innovation? I guess I'm ignorant then. I guess it's my ignorance that prevents me from witnessing the net increase in economic growth that Walmart great supply innovations permitted, or the real improvement of americans average conditions of living. Please man, you can do better. Lean manufacturing permits firms to reallocate their ressources. It is not the case for Walmart : what they gain in productivity just becomes more profit for the Walton familly - a money that does not trickle down. I guess young people like you will do everything they can to continue believe in their tales. You see no differences in having to invest in research for more energy efficient engine - like toyota have to right now - and thus invest every available ressource into that, and just investing in the supply chain with no outlet for excess ressources ? You probably shouldn't write so much about companies you don't know. Just sayin' Nice response. I guess being a dick is the way you found to emerge victorious in your fight for Walmart. And you shouldn't be condescending when you're basically the only one in the thread who kinda "defend" Wal Mart business model. All you did is spout ideological crap. You clearly don't know the company - you think they earn "high margins". You dismiss their supply chain, which is one of the most technologically advanced and innovative in the world. You dismiss the increase in purchasing power that lower prices bring to families with low and middle class incomes. And now you're just going to give me the "you're not in the popular crowd" response? You re in the idiot crowd. You talk about ideology, like you have none. I said Wal Mart makes high margin in comparaison to its smaller competition, how is that ideological idiot ? It s a fact, they makes around 25% - 27 in 2009 in 2006. I guess you don t know much about the subject... How much do you think a small retailer do ? Lol User was warned for this post A quick search reveals that small retailers almost universally have higher gross margins than walmart. That s because you don t make the difference between margin on products and gross profit margin.... Use your brain a little... http://www.trefis.com/stock/wmt/articles/204295/whats-impacting-wal-marts-gross-margins/2013-09-05
There is no difference between gross margin and gross profit magin, they are the same thing.
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On January 23 2014 20:42 corumjhaelen wrote:Show nested quote +On January 23 2014 15:23 xDaunt wrote:On January 23 2014 15:18 corumjhaelen wrote:On January 23 2014 15:07 xDaunt wrote:On January 23 2014 14:47 corumjhaelen wrote:On January 23 2014 14:43 xDaunt wrote:On January 23 2014 14:37 ddrddrddrddr wrote:On January 23 2014 14:33 xDaunt wrote:On January 23 2014 14:21 corumjhaelen wrote:
Does someone has any proof highly paid executive produce more "value" (what is value in modern economics, I fear I have no idea) than basic workers ? 400 times more for a CEO ?
Plus don't ever read Smith or Ricardo guys, you wouldn't like it. Here is a really easy example: a sales executive who is able to secure a multi-hundred million dollar sales contracts is a worth a fuckton more to a company than a technician who helps build the product that is to be sold. Here's a really easy example, a sales executive that doesn't have anything to sell is worthless. Oh please. Technicians are easily replaceable. Ace sales people aren't. And that's the point. Executives aren't paid shitloads of money just because they have fancy titles. They have specific, scarce skills that are highly valuable -- many multiples more valuable than ordinary workers. But if they are valuable because of scarcity, maybe they're actually paid more than the value they produce ? Also I love your dismissal of "technicians" (who apparently have no diploma), and you're justification of high pay because of high added value because of high pay, it's obviously great logic and not at all ideology. Who would rationally pay more for a service than the value that would actually be realized from receiving the service? Obviously, no one would. "Obviously". You're still running in circles, can't you see it ? They're being paid a lot because they deserve to be paid a lot because they're paid a lot, plus an appeal to "economic common sense" that honestly makes no much sense. To take a common sense "example" if someone is in a position of monopoly, you might actually have to pay more his product than what its value is, and compensate that loss with margin elsewhere. Please tell me: who is going to pay $1,000.00 to receive a basic shoe shine? No one. The value isn't there. The same principles apply to labor dynamics. No employer is going to pay an employee more than the value of the employee's services to the employer. In fact, the employer will always pay the employee less than the value of his services so as to reap a surplus. This is obvious to anyone who has worked a day in the private sector. Completely dumb and irrelevant example + restating the same thing over and over is not going to convince me. Show me a study were people show me labour markets behave as you say they do, I can hardly wait. There is no way to be sure before you recruit someone wether he's going to be worth the money you're paying him for instance, and even mainstream macroeconomist include many "frictions" in markets, including labor you know, so maybe you should rethink your not-even-general equilibrium position. Beliefs can be irrational and so on, and so on. Also your appeal to "anyone who has worked in the private sector" is a bit pathetic to be honest. Like I have no idea of what happens in the private sector, and as though HR were acting in a perfectly rationnal way, information was perfect etc etc. Please.
Well no shit. But companies have a very good expectation of the worker should be worth to the company, and pay him accordingly at the time of employment. If the worker does not meet those expectations, he's probably going to be fired.
Also, thank you for pointing out the obvious that companies sometimes act irrationally. With the undo emphasis that you're placing on the more fringe behaviors of employers, you must wonder how any company is ever able to get anything done.
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Norway28674 Posts
So like, hypothetical for xDaunt and Jonny. Is there a breaking point for where salaries become so uneven that it's just downright bad for society and requires political change? I mean, let's base ourselves on some graphs indicating that average ceo:worker pay basically went from 20:1 in 1980 to 200:1 in 2010. Then lets say it increases to 2000:1 in 2040 and 20000:1 in 2070. is that still okay or good? Or is it irrelevant until it gets that far, is it impossible for the market to ever actually screw up? Basically, I can understand that we have different ideas of where a just distribution is - I think even 20:1 is too much and makes no real motivational difference from 10:1, anything beyond that is just wasteful imo, but that's irrelevant. What is relevant is if you can actually envision a roof, a level of income/wealth disparity which is "too much"?
Like what if every low level worker in america requires government benefits in addition to their paycheck to survive, is that good? Or is it bad, but interfering with the market is worse, or is it "neutral"?
Personally I think it's really bad when people who actually work need additional government benefits because there's something emancipating about simply managing on your own. Quality of life is much higher if your salary is $40k and that's that, than if your salary is $20k and you get $20k government benefits (and you're doing the same job in both scenarios), and I think it's thus much wiser to have the redistribution happen through the paycheck than through food stamps and other programs that make you politically dependent and make you feel incapable of managing on your own without government assistance..
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I don't know if it was in this or another tread that someone linked a Video but some Professor had a ted talk about his studies which basically said:
People in more equal countries/communities tend to be happier on average, this affects the poor a lot more but even the rich people are a bit happier in a more equal Society.
A fun extra "fact" is that it doesn't seem to matter how "rich" the people on average actually were when compared between diffrent countries/societys, it only matters how big the spread is in the same country/community.
It also didn't matter how "equality" was created... Scandinavia was high up in "happyness" (high taxes) and so was Japan (a culture that does not show income inequality as clearly as others and iirc not that big of a diffrence in earnings to start with).
The US sits at rock bottom in these studies, followed by the UK... Anglosaxon neoliberalism... Its awesome at generating huge numbers but poor at actually helping its citizens :p.
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On January 24 2014 00:10 xDaunt wrote:Show nested quote +On January 23 2014 20:42 corumjhaelen wrote:On January 23 2014 15:23 xDaunt wrote:On January 23 2014 15:18 corumjhaelen wrote:On January 23 2014 15:07 xDaunt wrote:On January 23 2014 14:47 corumjhaelen wrote:On January 23 2014 14:43 xDaunt wrote:On January 23 2014 14:37 ddrddrddrddr wrote:On January 23 2014 14:33 xDaunt wrote:On January 23 2014 14:21 corumjhaelen wrote:
Does someone has any proof highly paid executive produce more "value" (what is value in modern economics, I fear I have no idea) than basic workers ? 400 times more for a CEO ?
Plus don't ever read Smith or Ricardo guys, you wouldn't like it. Here is a really easy example: a sales executive who is able to secure a multi-hundred million dollar sales contracts is a worth a fuckton more to a company than a technician who helps build the product that is to be sold. Here's a really easy example, a sales executive that doesn't have anything to sell is worthless. Oh please. Technicians are easily replaceable. Ace sales people aren't. And that's the point. Executives aren't paid shitloads of money just because they have fancy titles. They have specific, scarce skills that are highly valuable -- many multiples more valuable than ordinary workers. But if they are valuable because of scarcity, maybe they're actually paid more than the value they produce ? Also I love your dismissal of "technicians" (who apparently have no diploma), and you're justification of high pay because of high added value because of high pay, it's obviously great logic and not at all ideology. Who would rationally pay more for a service than the value that would actually be realized from receiving the service? Obviously, no one would. "Obviously". You're still running in circles, can't you see it ? They're being paid a lot because they deserve to be paid a lot because they're paid a lot, plus an appeal to "economic common sense" that honestly makes no much sense. To take a common sense "example" if someone is in a position of monopoly, you might actually have to pay more his product than what its value is, and compensate that loss with margin elsewhere. Please tell me: who is going to pay $1,000.00 to receive a basic shoe shine? No one. The value isn't there. The same principles apply to labor dynamics. No employer is going to pay an employee more than the value of the employee's services to the employer. In fact, the employer will always pay the employee less than the value of his services so as to reap a surplus. This is obvious to anyone who has worked a day in the private sector. Completely dumb and irrelevant example + restating the same thing over and over is not going to convince me. Show me a study were people show me labour markets behave as you say they do, I can hardly wait. There is no way to be sure before you recruit someone wether he's going to be worth the money you're paying him for instance, and even mainstream macroeconomist include many "frictions" in markets, including labor you know, so maybe you should rethink your not-even-general equilibrium position. Beliefs can be irrational and so on, and so on. Also your appeal to "anyone who has worked in the private sector" is a bit pathetic to be honest. Like I have no idea of what happens in the private sector, and as though HR were acting in a perfectly rationnal way, information was perfect etc etc. Please. Well no shit. But companies have a very good expectation of the worker should be worth to the company, and pay him accordingly at the time of employment. If the worker does not meet those expectations, he's probably going to be fired. Also, thank you for pointing out the obvious that companies sometimes act irrationally. With the undo emphasis that you're placing on the more fringe behaviors of employers, you must wonder how any company is ever able to get anything done.
From you, I'll take that as a good beginning.
Blind faith is such a beautiful thing, but I think Jesus Christ was more worthy of it than markets and rationnality.
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On January 23 2014 15:44 JonnyBNoHo wrote:Show nested quote +On January 23 2014 15:41 Roe wrote:On January 23 2014 15:25 JonnyBNoHo wrote:On January 23 2014 15:22 Roe wrote:On January 23 2014 15:15 JonnyBNoHo wrote:On January 23 2014 15:08 Roe wrote:On January 23 2014 15:02 JonnyBNoHo wrote:On January 23 2014 14:20 Roe wrote:On January 23 2014 14:01 Danglars wrote:On January 23 2014 13:48 Roe wrote:
[quote]
You're not sure what it means to control the value of a company? Aren't you supposed to be a business man of some sort? Listen Johnny, I'm not interested in defending the status quo. I've spent the past page or so arguing against that.
But to help you out, why does a shareholder have ownership of a company? If you keep confusing activities and people that create value within a company with who has control over various decisions, you're going to confuse everyone here and maybe even yourself. I'll try to convey to you, Roe, exactly why your thoughts are very much aligned with a Marxist ideal. Why your average Joe would presume you read and agreed with him. Marx wrote the most famous book with your argument, alleging that this economy exploits the labor class, the little guy that is the real cause of their profits and created value. The employer is just laying claim to them and he is heavily criticized. I'm trying to simplify since you say you have never read him. When you say, No it's not. It's a simple fact that by removing the working class of a company you have no company, you have no income, you have virtually no value. They are the ones who in actuality make the money. The directors have somehow gotten the power to steal that value from the workers and redistribute it themselves. , a casual observer really might think you're quoting Das Kapital chapter and verse. That's all. Well don't get me wrong, the "little guy" isn't the sole cause of profits/produce, of course the directors and management form an integral part of the company. But the current system heavily favours and entrenches the upper levels. I see why some would take my arguments as Marxist, but I don't intend them to (or at least I didn't just come back from book club reading das kapital). Marx (from your interpretation at least) has a good empirical point here; the worker is the one directly interacting with the market, and is the closest one in the company to the transfer of money from, say, the customer, to said company. Thus, he has control, in fact the greatest amount of control, in whether or not that money gets into the company. Since he controls the flow of value to the company, he has that responsibility and deserves proper recognition for it, and proportional power in the company. I do think there's a good point that you can't deny here (and it's worth some rambling thoughts) - that your basic assumption that the market dictates what companies do - actually hinges on the fact that workers are the baseline of production for the company. In fact, if you took this notion to heart, you would bring the system closer to that market dictating ideal! But instead for some strange reason you rely on the notion that the market dictates what directors do, who are so far removed from the process. As I briefly mentioned earlier, it would be better if all members of the syndicate (err I mean company! ) could vote on who manages, directs, executes, etc.. And it would be mostly a worker driven process, workers electing workers to become managers, etc... But they need this in legislation because it is their property rights at stake. Yes, I believe their property to be taken away as if they were taxed - except the taxman is in front of the cashier intercepting their income and delivers it to the king (or a group of Oligarchs) who later distributes it as he wishes. And don't get me wrong again, I'm not arguing for everyone making the same wage, or management making less than workers. Sounds like fantasizing about what *could be* ... How are you going to have a company without traditional equity? What fills that void? You can't remove something without describing the replacement! I'm sorry, by traditional equity what exactly do you mean? (so we can get our definitions in line) It may seem like fantasy, but you seem to be deeply entrenched in the system, so any change is bound to cause shivers up your spine. Well, at least I don't see the fantastical aspect of it.. Capital contribution that represents the residual claimant. Why should that change? If they don't have ownership rights, they have no means for ensuring payback. I don't remember arguing they shouldn't have ownership rights So they're going to have shared rights? So a German corporation? Edit: what are you changing? You've gone on about workers being owners, and now it's shareholders will still be owners...
It's just so confusing! It has to be either black or white...it's...it's just too confusing, give me my excel sheets
On January 23 2014 15:55 Danglars wrote:From reading the responses here contributed by multiple individuals, it really appears Obama wasn't too far off when he said, "If you've got a business—you didn't build that. Somebody else made that happen." I mean the quote itself created controversy when it was received, but obviously here more people than not think the reality is pretty close to it. Nobody at the top built their business, it was the product of the bottom part because it depended so much on their labor. Show nested quote +On January 23 2014 14:20 Roe wrote:On January 23 2014 14:01 Danglars wrote:On January 23 2014 13:48 Roe wrote:On January 23 2014 13:34 JonnyBNoHo wrote:On January 23 2014 13:11 Roe wrote:On January 23 2014 12:34 JonnyBNoHo wrote:On January 23 2014 12:25 Roe wrote:On January 23 2014 11:53 JonnyBNoHo wrote:On January 23 2014 11:40 Roe wrote:[quote] No it's not. It's a simple fact that by removing the working class of a company you have no company, you have no income, you have virtually no value. They are the ones who in actuality make the money. The directors have somehow gotten the power to steal that value from the workers and redistribute it themselves. This would be fine, in fact, if the workers had say in who taxed their income. But they do not have representation in exchange for their taxation Yeah, and if you get rid of the suppliers you have no income. And if you get rid of the equipment you have no income. And if you get rid of the customers you have no income. What does any of that have to do with ownership? So you agree that ownership is much more complex than dictatorship of the directors? No, and I have no idea why you are trying to reinvent what ownership means. Because the directors don't solely own the company edit: I'm using your definition of ownership aren't I? Just the people who own the company, which means they control the value of the company. Directors aren't really owners at all - they're fiduciaries who act on behalf of shareholders (the legal owners) and in accordance with corporate bylaws. I'm not sure what you mean by "control the value" but shareholders exert control over the corporation by controlling who sits on the board and the board controls the executive team that runs it (at least in theory, in reality many boards are somewhat impotent, which is somewhat fitting because they tend to all be old men ). But anyways, shareholders are the residual claimants - meaning they're the last to get paid (if at all). It makes sense to give them ownership authority since it would be all too easy to otherwise simply not pay the residual claimant... which would make the whole endeavor a non-starter. Another way to look at it is that there is only one class of owner - the shareholders. But there are many people affected by the corporation - the stakeholders. You're not sure what it means to control the value of a company? Aren't you supposed to be a business man of some sort? Listen Johnny, I'm not interested in defending the status quo. I've spent the past page or so arguing against that. But to help you out, why does a shareholder have ownership of a company? If you keep confusing activities and people that create value within a company with who has control over various decisions, you're going to confuse everyone here and maybe even yourself. I'll try to convey to you, Roe, exactly why your thoughts are very much aligned with a Marxist ideal. Why your average Joe would presume you read and agreed with him. Marx wrote the most famous book with your argument, alleging that this economy exploits the labor class, the little guy that is the real cause of their profits and created value. The employer is just laying claim to them and he is heavily criticized. I'm trying to simplify since you say you have never read him. When you say, No it's not. It's a simple fact that by removing the working class of a company you have no company, you have no income, you have virtually no value. They are the ones who in actuality make the money. The directors have somehow gotten the power to steal that value from the workers and redistribute it themselves. , a casual observer really might think you're quoting Das Kapital chapter and verse. That's all. Well don't get me wrong, the "little guy" isn't the sole cause of profits/produce, of course the directors and management form an integral part of the company. But the current system heavily favours and entrenches the upper levels. I see why some would take my arguments as Marxist, but I don't intend them to (or at least I didn't just come back from book club reading das kapital). Marx (from your interpretation at least) has a good empirical point here; the worker is the one directly interacting with the market, and is the closest one in the company to the transfer of money from, say, the customer, to said company. Thus, he has control, in fact the greatest amount of control, in whether or not that money gets into the company. Since he controls the flow of value to the company, he has that responsibility and deserves proper recognition for it, and proportional power in the company. I do think there's a good point that you can't deny here (and it's worth some rambling thoughts) - that your basic assumption that the market dictates what companies do - actually hinges on the fact that workers are the baseline of production for the company. In fact, if you took this notion to heart, you would bring the system closer to that market dictating ideal! But instead for some strange reason you rely on the notion that the market dictates what directors do, who are so far removed from the process. As I briefly mentioned earlier, it would be better if all members of the syndicate (err I mean company! ) could vote on who manages, directs, executes, etc.. And it would be mostly a worker driven process, workers electing workers to become managers, etc... But they need this in legislation because it is their property rights at stake. Yes, I believe their property to be taken away as if they were taxed - except the taxman is in front of the cashier intercepting their income and delivers it to the king (or a group of Oligarchs) who later distributes it as he wishes. And don't get me wrong again, I'm not arguing for everyone making the same wage, or management making less than workers. You don't hire the hamburger flippers for their acumen in managing stores in 6 states or two countries. The big three paragraphs are really economic fallacy from start to finish. The worker has no privileged position from being closest (sometimes) to the actual transfer of products and services than anyone up the ladder. Simply because a particular company can't function without skill less labor does not give them control. So long as its available to be purchased from somebody willing to do the work, he has very little power and control. When you talk about his responsibility, I don't even know if you understand how laughable it is. Somebody who's responsible for manning a till at a store has responsibility over far less than another needing to focus billions of dollars to compete against his rivals. Companies make money by selling what some other guy wants. That he employs others to help in that enterprise is no hinge to anything. It is nothing strange that good owners focus on competing in the market ... people that will buy their stuff. You assert without justification that some kind of worker vote on who becomes their managers would be better than perhaps the shareholders through the board, or the board, or the company owner. It could very easily be the reverse--workers vote for the guy willing to spend their company into bankruptcy with lavish pay and benefits, and they all end out of a job. I wonder if you want to put forward any basis for some community elective process for company ownership, why it would be better. Addendum: Ever read Animal Farm as well?
So you're just going to keep spewing ideology at me instead of giving empirical reasoning...ok. I'm done talking to a brick wall.
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EPT
