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Comment by dba7dba | Hacker News Reader

The irony and tragedy of modern capitalism.

Everyone wants to get paid, but no one wants to pay.

Since ones in power have more control, the top end up keep getting paid more, while the lower ends keep getting paid less.

One example would be equity firms.

They buy a firm with borrowed money, and in order to pay back the loan, interest on the loan, AND make a profit, they apply the expensive knowledge learned from fancy MBA schools (that charge bucks) and lower cost and increase profit. And lowering cost always means paying less to employees. And increasing profit means charging more.

Little do the super rich realize, that soon enough there will be no middle class to buy their stuff/services. And eventually the rich/superrich can only sell stuff to each other, while us peasants watch on smartphones from our slums using youtube service and enduring all the ads since we can't afford the $20/month to hide the ads...

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Marriner Eccles, after whom the Federal Reserve building is named, said something very similar to your last paragraph. I need to dig up the quote.

Edit: Not the quote I was looking for, but maybe pithier: "The United States economy is like a poker game where the chips have become concentrated in fewer and fewer hands, and where the other fellows can stay in the game only by borrowing. When their credit runs out the game will stop." Beckoning Frontiers, Marriner Eccles

Edit: Here's the one I had in mind, written by Fed Chair Eccles in 1933:

"It is utterly impossible, as this country has demonstrated again and again, for the rich to save as much as they have been trying to save, and save anything that is worth saving. They can save idle factories and useless railroad coaches; they can save empty office buildings and closed banks; they can save paper evidences of foreign loans; but as a class they can not save anything that is worth saving, above and beyond the amount that is made profitable by the increase of consumer buying. It is for the interests of the well to do – to protect them from the results of their own folly – that we should take from them a sufficient amount of their surplus to enable consumers to consume and business to operate at a profit. This is not “soaking the rich”; it is saving the rich. Incidentally, it is the only way to assure them the serenity and security which they do not have at the present moment."

- https://www.nakedcapitalism.com/2011/09/marriner-eccles-on-t...

That quote reminds me of something Huey Long said not much after that (1935) after people were accusing his "Share our Wealth" program of being communist despite it having explicit protections for private property.

> "Communism? Hell no! ... This plan is the only defense this country's got against communism."

His was less of a "using poor people is helpful to the rich" argument than an "abusing the poor is going to create violent revolution", but both arguments stem from the same source. The cynic in me says that lines like these were easier to sell back when the idea of automating most of workforce wasn't quite so real. If the rich people of the future can get everything they need and want by owning technology - through patents, tech investments and physical technology for self-defense, why would they care if the rest of the country can play the poker game with them? If they have enough chips, why not just trade them among themselves forever? There will be nothing left to gain from letting other people buy-in significantly and there is no significant risk from refusing them.

I think Eccles refers to the 'violent revolution' argument with 'Incidentally, it is the only way to assure them the serenity and security which they do not have at the present moment.' I think (hopefully or cynically?) the answer to 'why would they care if the rest of the country can play the poker game with them?' is, to quote economist Mark Blyth, 'The Hamptons are not a defensible position.' IMO, it's a stable society that enables wealth, and wealth can't survive as an island in an unstable society.

> [...] they apply the expensive knowledge learned from fancy MBA schools (that charge bucks) and lower cost and increase profit. And lowering cost always means paying less to employees. And increasing profit means charging more.

A place I used to work brought in a new GM who, after nearly a year of attending meetings and taking notes without contributing anything of any perceivable value, made his grand proclamation of how he would build the company into a mega-profitable mega-corp:

He would reduce expenses (by screwing the employees).

And increase profit margins (by charging customers more).

And increase earnings (by making more sales).

Genius! No wonder he got paid the big bucks.

This, mind you, was at a company which built mining equipment. During the end of a massive slump in the ore market for the types of mines they serviced. At a time when the two major customers had both publicly announced 30%+ reductions in projected outlay for equipment.

And no, it didn't work.

That’s ice cold

If you like what I said, please click on subscribe, I mean, upvote my comment.

/sarcasm

Buy Bitcoin then if this is your prognosis.

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