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Comment by rayiner | Hacker News Reader

You're making a couple of assumptions:

1) The value of employees can be measured individually. Say you've got 100 assembly line workers. What's the value of losing an assembly line worker? Almost nothing. What's the value of losing all the assembly line workers, divided by 100? Pretty big number! In the U.S. we tend to define "value generated by an employee" in terms of "marginal cost of replacing the worker" but that's arbitrary.

2) That renumeration should be tied to value generated by the individual employee.

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2) You're saying remove the supply of part of the equation? By this logic my iphone should cost $100,000 because it generated that much value for me. Or I should've paid my accountant closer to 50k instead of the 1k I paid him because that's how much the penalties would've been.

I'm saying that its an arbitrary choice for a society to allow companies to base compensation on supply and demand. As soon as you institute law to keep laborers from occupying factories and taking them over, everything subsequent is arbitrary and can be chosen to achieve whatever social goals you want. Supply and demand is not some law of nature. Its a phenomenon that emerges in particular legal regimes.

Supply and demand is a economic model that exists in ALL economies that have finite resources and free exchange. The only ways to overcome supply and demand in the long run (as even the law of gravity can be overcome in the short run), is to either limit free exchange by force or have access to unlimited resources.

Assembly line workers aren't only replaceable with other identical workers though. As the marginal cost of a worker increases, so do the attractiveness of alternatives like automation. If that bill passed, it would have been very bad for the Swiss economy, as it would have driven away businesses (and therefore jobs) in droves. You simply couldn't stay in Switzerland and be competitive globally.

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