Post-Scarcity Economics (2013)
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Supervisors earn more because, through the way the job market works, they can ask for more. That's all there is to it.
What exactly do you mean by "value"? Can you give some examples?
To add: I don't think there is a meaningful comparison of importance of two professions that depend on each other. It's like asking, which part of the car provides more value for the user? Is it the engine or the wheels?
Why a wage is what it is might be one of the most described, modeled and studied things out there. A simple explanation is that the supply of people that can do the managing is lower than the demand for it.
Clearly, the cases where managers earn less than the people they manage follow the same rule (i.e. sports coaches, movie directors, etc).
About the comparison: It depends, if you have a car without engine and a car without wheels, which one is easier for you to fix.
But I don't want an explanation of that fact, I have my own. I want an explanation, why some people (who are actually not in the management) think it is right. It is a moral question, not factual one.
I think you have to reveal what is the moral question you have about preventing that natural result, and I can try to answer why such a thing doesn't bother me at all.
You responded: "In general the supervisor or manager provides more value than an employee under his command."
I asked: "why do you think this is the case"
And I got the pretty much textbook economics reply. But I am not asking about what economists think, I wonder about what you think. Why do you, personally, think the work of the manager is more valuable? So I was wondering how you understand the value.
Based on your response, you seem to value scarcity of either positions or suitable candidates. So do you think the president should have the highest salary? There is only one. I am also not convinced that scarcity itself is "providing value".
In general I see people getting what people are willing to give them, even when its an 'unfair' situation (i.e. the son of the business man getting preferred treament).
The opposite, people getting what they have by taking it from people unwillingly, which I find aberrant, is seldom what happens in this scenario, and more what happens with proposed solutions around income inequality.
> In general I see people getting what people are willing to give them, even when its an 'unfair' situation (i.e. the son of the business man getting preferred treament).
> The opposite, people getting what they have by taking it from people unwillingly, which I find aberrant, is seldom what happens in this scenario, and more what happens with proposed solutions around income inequality.
Are you talking about taxes or ransom? I am all for progressive tax rates and as a poor person I do not support tax cuts for the wealthy (just wanted to clarify that). That being said, we need to fight income inequality just like we need to fight against "nature" in every other scenario. Someone talked about "information asymmetry" a while back. I think all companies should be required to make compensation (salary, bonus etc) information public for all employees and contractors. I don't see how we can get rid of income inequality as long as there is something "they" know that "we" don't.
Some people would ask what is the difference. Im not quite there, but sympathetic to the idea.
> I am all for progressive tax rates and as a poor person I do not support tax cuts for the wealthy (just wanted to clarify that)
This is a technically problematic issue that i think the public does not quite understand.
There is a concept called the statuatory incidence of taxes and the economic incidence of taxes. The first one is who signs the check to the government, the second one is who ends up paying for it. So if for example someone said that "now employers will pay 100% of the social security tax)", it might look to the untrained eye, that taxes are lowered on employees. But actually, it will reduce wages just as much, and in the end, the employee is still paying for it.
Progressive taxation has this debate in economics: the excess wealth of the rich always get invested, which increase competition for labor, which rises wages. (very classical economics). At the same time, when the government seizes that money, a huge chunk is eaten out by the machinery. For example, some goes to the military, some goes to the government machination, some goes to the collector.
Add to that, that now the wealthy will spend money to avoid the tax, which reduces the amount you will tax in comparison to what would have been spent or invested.
I'm not sure if it technically holds true, and this is a debate amongst economists, but the thinking that taxing the rich will help the poor is not as simple at its stated, and I strongly opposed the mentality of "that guy has to much, lets shoot him".
> I think all companies should be required to make compensation (salary, bonus etc) information public for all employees and contractors
I think its even easier for the IRS to do it, since they already collect that data, and it will also inform on the effective tax rates people are paying, leading to a more informed society. I am all up for public salaries, after all ,mine was already forcefully disclosed in the US as an immigrant, lets get the rest in.
Edit: In your car analogy, the management aren't the engine; they're the driver.
I don't think there's really any moral justification for managers earning more than their subordinates. It's all power and scarcity at play. Managers get more because there is less of them and they are in position to ask for more.
Everybody in this thread agrees that it is indeed the case. However, the mystery is why some people see it that way.
> managers (ideally) have deep domain expertise and knowledge of the company's operations
The point of the car analogy was that without workers, managers are nothing, just like car without wheels or engine is useless. In that situation, why would you say one is more important?
Except that this is not exactly true either. Some times it is, other times it isn't. Yet the salary relations never change.
I think the meta is for "intellectual"/"mental" workers you have to pay someone enough that they focus on the task they need to work on rather than spending mental cycles on how to afford to pay for rent or food or vaccines/formula for baby.
How much is enough for everybody? What if some people want more? Who decides exactly when something isn’t scarce anymore?
I’ve yet to see anything that convinced me that post scarcity is anything more that a recent buzzword because fundamentally...supply and demand can’t ever actually go away.
Once we can do the same with potable water, food, shelter, we'll be at a post-scarcity economy.
Who produces the food, water, shelter?
What are the required incentives for them to continue dedicating their scarce time to continuing to produce it?
What are the incentives or rewards for them to invest in the infrastructure, equipment, etc for them to create that?
Who maintains it and how are they compensated for doing so? What benefit do they gain for committing their time to the endeavor while everyone else enjoys the fruits?
Air is an example that actually fits this well. With air, distribution and production are handled by systems that don't require people to construct and maintain. All of those costs go away.
I don't see a point where post-scarcity is realistic until scarcity of time can be addressed.
What seems to be the real problem is that there is seemingly no good way from here to there. While there are incentives to make things more automated and more efficient, the money from that flows to the wrong places (and with it, power), and there are plenty of incentives for parasitic actors to inject themselves in between steps of any process to try and capture some percentage of the money flow.
Once the cost of production/storage/transmission of energy has gone down to effectively zero, everything else falls into place.
we'll be at a post-scarcity economy.
The alternative to this, where everyone has what they need to exist without submitting to one leader or another, is true Liberty, which rightly terrifies our ruling class.
I know this is a bit abstract, but I hope it makes sense.
Until all the necessities are 100% automated there are only two options to motivate people to produce those necessities: through force, or through self-interest. The list above is where they tried force. Maybe it's not a natural law that such a system has so far always failed, but it's not a mystery either.
What if every employee became a shareholder and reaped rewards for such, making companies employee owned and 'SHARING' everything.. ---it's a more privatized way of running socialism and imho works better...
I do think gov't should cover healthcare/education -- maybe require service in military, or local community initiatives for those who are pacifists/not fit enough to serve.
Employee owned companies / Worker Co-ops I think are the wave of the future, and the next big economic shift. I'm wanting to start a web dev / growth hacking company built around that principle, where even the janitor would be an employee-owner (that's an example, janitorial would probably be contracted out).
Good examples are Winco foods -- where some cashiers who started with them in the 80s/90s are worth > $1 million dollars and are still working in-store: i.e. haven't necessarily moved to any sort of 'exec' position. They've just received shares/stock to raise up their living standards substantially.
There is nothing stopping this from happening. You can start such a company now. Heck, you can start a communist commune within a free market system. It doesn't happen much because it doesn't work well enough. The classic corporate structure is far more common because it works.
Even if you took all the shares from the shareholders of an existing company and gave them to the employees you'd revert to inequality soon enough. How much are the new cashiers at Winco foods worth? How many of the old Winco foods employees are still rich? How many of the ones who got rich and stayed rich are still working as a cashier? How big is Winco foods compared to Walmart? Most people who have a million dollars don't want to work as a cashier, a few counterexamples notwithstanding. The basic principle of making employees invested in the success of the company is a good one, but the government shouldn't force that model. Let businesses apply that model where they think it works. Google gives stock to employees, great! Company X doesn't, also great.
> I do think gov't should cover healthcare/education
I agree, the government should finance this for people who can't afford it, but the government should not be running the hospitals or the schools for the same reason that the government should finance food for people who can't afford it, but they shouldn't run the supermarket.
> -- maybe require service in military, or local community initiatives for those who are pacifists/not fit enough to serve.
Why? The all-volunteer military works well. Compensate people for the job instead of forcing them to do it.
I don't think the improvements I hope for will resemble Capitalism (where Capital is controlled either by a dictator or an oligarchy of shareholders) or past implementations of Socialism, where the State controls Capital.
Iain Banks puts it nicely in his "A Few Notes on the Culture" essay [0]:
"Let me state here a personal conviction that appears, right now, to be profoundly unfashionable; which is that a planned economy can be more productive - and more morally desirable - than one left to market forces.
"The market is a good example of evolution in action; the try-everything-and-see-what- -works approach. This might provide a perfectly morally satisfactory resource-management system so long as there was absolutely no question of any sentient creature ever being treated purely as one of those resources. The market, for all its (profoundly inelegant) complexities, remains a crude and essentially blind system, and is - without the sort of drastic amendments liable to cripple the economic efficacy which is its greatest claimed asset - intrinsically incapable of distinguishing between simple non-use of matter resulting from processal superfluity and the acute, prolonged and wide-spread suffering of conscious beings.
"It is, arguably, in the elevation of this profoundly mechanistic (and in that sense perversely innocent) system to a position above all other moral, philosophical and political values and considerations that humankind displays most convincingly both its present intellectual [immaturity and] - through grossly pursued selfishness rather than the applied hatred of others - a kind of synthetic evil.
"Intelligence, which is capable of looking farther ahead than the next aggressive mutation, can set up long-term aims and work towards them; the same amount of raw invention that bursts in all directions from the market can be - to some degree - channelled and directed, so that while the market merely shines (and the feudal gutters), the planned lases, reaching out coherently and efficiently towards agreed-on goals. What is vital for such a scheme, however, and what was always missing in the planned economies of our world's experience, is the continual, intimate and decisive participation of the mass of the citizenry in determining these goals, and designing as well as implementing the plans which should lead towards them.
Of course, there is a place for serendipity and chance in any sensibly envisaged plan, and the degree to which this would affect the higher functions of a democratically designed economy would be one of the most important parameters to be set... but just as the information we have stored in our libraries and institutions has undeniably outgrown (if not outweighed) that resident in our genes, and just as we may, within a century of the invention of electronics, duplicate - through machine sentience - a process which evolution took billions of years to achieve, so we shall one day abandon the grossly targeted vagaries of the market for the precision creation of the planned economy."
Effectively, it is splitting of fruits of economic production into two portions. One portion is redistributed to everybody, and the other is subject of free competition. So you can get the best of both worlds, capitalism and socialism. If you want to compete for the other portion, you can. If you don't want to compete (and be dominated by people who do compete), you live on the basic income.
I'm at least glad that people are at least starting to understand that our economic system while better than it's predecessors by a mile, should be improved.
This kind of question is better answered piecemeal, like how do we get the homeless into one of the 4-5 empty homes per homeless person, or how do we avoid throwing away 40+% of the food we grow? Correcting horrific market failures like this is a wonderful way to start.
Even in Star Trek, there were scarce things that needed to be allocated. Not everyone got their own starship. But we consider this fictional economy a post-scarcity one, because food, clothing, shelter, healthcare and entertainment were basically free for everyone.
Today, it's quite cheap (relative to average incomes) to provide for basic needs if you define basic needs to food, a few sets of clothing and a heated place live. Problem is, we define that as being in deep poverty now. Now most people living in developed economies include things like 12 years of basic schooling, health care for most ailments, a dozen sets of clothing, reliable home heating, indoor plumbing, various in-home kitchen appliances, indoor plumbing, communications tools, some entertainment, the means to travel many miles every day, etc, etc as "basic needs". 100 years ago, at an absolute level anyway, this was an upper class level of wealth.
In other words, the bar constantly rises as society's overall wealth increases.
We'd have to either normalize suicide or prevent aging in order to get to a world where the demand for healthcare is basically met for everyone. Before we even get there, we've still got a lot of people whose healthcare costs are infinite with current technology.
The NHS is fantastic, it doesn't operate in a post-scarcity environment.
Isn't "post-scarcity" just taking the limit as supply reaches infinity, and thus just another term for "asymptotically cheap?" Do we really need a "fresh new" economic theory to talk about this?
That's indeed a fuzzy term right here. Can't come up with a better one, though. I'm thinking here of a life of an average person, though, not about outliers.
> Isn't "post-scarcity" just taking the limit as supply reaches infinity, and thus just another term for "asymptotically cheap?" Do we really need a "fresh new" economic theory to talk about this?
Maybe? Whether you call it "post-scarcity" or "most stuff is asymptotically cheap now", our current economic theories (and practice) don't handle near-free things well.
We've actually gone quite a long way down that road already. I wouldn't be surprised if in 100 years or so, most physical-world activity has stopped.
Once basic electricity, internet connectivity, food, etc. is provided automatically, and all work and leisure is conducted online, there's no barrier to stop anybody from having as much of any kind of information, software, leisure activity, etc. as they want.
I refer to it as "retreating to the virtual realm". Obviously it's not a popular idea at the moment, but I think it'll just happen gradually like it's done so far. Nobody will be forced into moving out of the physical realm, they'll just find that there's increasingly nothing to do as everything has moved to the virtual realm.
If you want a car, then at least in the Western world, you can buy one. It might not be a Ferrari, but when physical transportation is what you are after, it is definitely affordable.
So why do many people still work so hard? Because they don't just want things that are sufficient, they desire to have luxury goods, food or leisure. And how do you define luxury? It is something better than you have now, or even better, something better than what your neighbours/ friends or colleagues have.
This will not change, no matter how easily food and other basic goods become available. Because it is part of human nature to desire to have status, more than that, this is what is driving evolution for many other animals as well.
So a true post-scarcity will never exist. People will just invent new goods or services to go after in the future when today's iphones and sportscars have become affordable. Not because they need them, but for the simple fact that they are difficult to obtain.
1/6 of the families in NYC are food-insecure. ( http://www1.nyc.gov/assets/foodpolicy/downloads/pdf/2016-Foo... )
I think you’re confusing your position of privilege for how everyone else lives. That’s a mistake.
This assumes material wealth remain a source of status. If all things are easily aquired, then there is no reason to hold people with certain possesion in high regard. Instead knowing social codes and ability might become even more important. Perhaps the exception would be historical artifacts abd handmade things, asuming those could not be perfectly copied...
Let me make you a question. For how long will you still afford all that stuff if you simply quit working?
There's a staggeringly long list of things that are now post-scarcity because they're digital. Each item used to be a luxury available to few instead of a thing that scales to all.
So here's a new way to ask an old question: What's something that should be post-scarcity, but currently isn't?
Also, anything that costs nearly $0 at scale, but is sold at premium. Internet service. Cellular service.
Except the experience of viewing physical artwork is better than viewing a digital representation, in the same way that physically traveling to another country to experience the culture and atmosphere is better than simply seeing it in the 3D view of Google maps. The map is not the destination, and a PNG of a painting isn't a painting. It's only in science fiction that the physical and virtual worlds are indistinguishable.
Notwithstanding the value that also exists in the rarity of physical artwork itself, and in collecting it because it's not infinitely reproducible.
For instance, the U.S. burns 30% of its corn crop to produce ethanol, which would never happen in a market system, but it happens because of a government mandate.
Your vision also assumes every human wants to, or can, be a knowledge worker. A lot of people can only function as manual laborers.
The problem is it is not being distributed fairly.
If demand is the problem, as stated in the article, would a basic-income, providing extra income and arguably more free time for consumers usher in a new "Golden Age" of growth as we have seen post-WWII?
I don't know how to change this realistically. It probably needs some change in moral attitudes so it's just not accepted by society that certainly people claim all the gains for themselves instead off spreading them out. Child labor used to be prevalent but in most Western societies it's not ok anymore even if there is profit to be made. So maybe this will happen to income inequality too.
What do you mean? Have you considered the relationship between income and the "rate the economy grows"?
funneling all gains to the business owners
Yes, the accumulation of capital gains should rightly go to the owners of capital.
Republicans seem hell bent to accelerate the trend towards more income concentration at the top with their tax plans.
Those at the bottom of the income spectrum pay virtually no taxes, so yes, tax cuts should be directed towards those that actually pay taxes (upper-middle and upper income earners), and who are, arguably, more skilled in deploying capital in ways which are productive.
I don't know how to change this realistically.
Income inequality will not be resolved through transfer payments or redistribution - it will be solved through job skills training and growth in labor production.
To put it simply: no poor person has ever gotten me a job.
I have considered that. In my view wages of the middle class should grow at the same rate the top incomes grow. To me that would indicate a healthy and long term sustainable economy.
What does this mean? What do you mean should and who is in the "top"? By should, you mean we should peg "middle-class" wages to some index that will track the growth of "the top" - thereby forcing privately owned business owners to pay what the government tells them to? And what if they can't, they just have to close up shop? Can they fire workers?
I think you need to consider more deeply the implications of you ideas, and concepts such as what people, governments, or institutions "should" be forced to do.
Also, the "top" earners in the USA don't generate labor income, they accumulate capital. If you want to piggyback off their efforts to steer capital in a more productive manner, thereby growing it, you can open up a online brokerage account and buy some shares of any publicly traded company you want.
Not sure the algorithm would be... but it needs to be tied directly to # employed and average salary to encourage growth, and discourage greed at the top.
Some CEO's do almost fraudulent things -- but get a golden parachute when they leave, this behavior needs to stop too. If a CEO fucks up - fire them, without any severance.
Over the last 30 years the average salary of top management has grown a lot while the salaries of most other works have stagnated. If a company is successful the salaries of all employees should grow at the same rate. The CEO is already making more money so he is already rewarded more for his role.
if everyone has more money but there is no cap on the top, things will just get more expensive, and then more basic income will be provided, and the cycle will continue..
not necessarily a fan or a detractor of any/all of these things, but just chiming in.
The more you think about it, the more it doesn't make sense. Should a disabled veteran receive the same amount of basic income as a billionaire heir? Should a single mother of three working at Walmart receive the same total basic income as three Google employees?
A well managed welfare state is a much better option than basic income, in my opinion.
A homeless person in the US today has universally better prospects than 99% of the population a thousand years ago; better than all of them in many ways. It’s impossible to starve in a first world country. Even the poorest of the poor are jacked into the global communication network. Necessary survival goods are non-scarce. Are we satisfied? No, we want more. As productive capacity increases, our definition of non-scarcity becomes more and more demanding. I don’t see why this would stop if the only commodity left was mass-energy.