Capitalism and the exploitation of labor

[coins4commies]

This style is susceptible to strawman so let me know where I am wrong in my assumptions.  Let me know where you disagree.  Let me know fi there is a “C” option.

If you subscribe to capitalism, it seems as though you would subscribe to one of these philosophies towards labor

A. People are paid wages according to the “fair” market value of their skill and the amount of value they add
B. People do not “deserve” fair wages because no one is forcing them to accept a job for an “unfair” wage.

If you subscribe to A, then you run into issues with the variable cost of labor.  Producing a Chevy Blazer, for example, requires the same labor in the US as it does in Mexico. Therefore, it also requires the same amount of skill.  Workers in each country add the exact same value to the operation.

American Chevy Blazer vs Mexican Chevy Blazer



GM workers make $2 an hour in Mexico while they make around ten times more in the US.  Why are Americans paid ten times more for the same exact work producing the same exact vehicle?  I have heard claims that people are paid more when their jobs involve more skill, more risk, or more difficulty, but none of those are true here.  

Well it would also be easy to think that the Mexican’s deserve less because everything costs less in Mexico but GM actually turns around and sells the cars to Mexicans at the full American price without subtracting 80% from the labor costs.  

If you answered A, and subscribe to market forces, then the Mexican’s are inherently owed ten times less for the same work and inversely, Mexicans inherently owe GM ten times more of the fruits of their labor than that of Americans.  

If you subscribe to B, you don’t believe the same work deserves the same pay to begin with and you think people have a choice, then you would seemingly be suggesting the Mexicans simply walk across the border and get the same job paying ten times more.  Well the Mexicans aren’t free to walk across the border and get the same job.  They are forced to work on their side of the border.  This is how capitalism uses borders to exploit labor.   How can you have a free market if labor cannot freely move?

Many people would also say “GM assumes all of the risk and is therefore entitled to run the company however they see fit.  If the cars don’t sell, they are stuck with the losses” but even that isn’t true.

December 19, 2008: President Bush approved a bailout plan and gave General Motors and Chrysler $13.4 billion in financing from TARP (Troubled Assets Relief Program) funds, as well as $4 billion to be "withdrawn later".

So we’re talking about socialized risk but no one socializes GM profits going forward.    How is GM assuming any risk when the government considers them "too big to fail"? The high paid executives not only assume no risk of failure, but seemingly get high payouts regardless of how negatively their incompetencies affect the work force and economy overall.  

 3 months later…

Rick Wagoner will leave his post as CEO of bailed-out General Motors with a $20 million retirement package, the company's financial filings show.
Under Wagoner's leadership, GM lost tens of billions of dollars, took billions in taxpayer-financed aid, and cut tens of thousands of jobs, including announced plans to cut 47,000 employees by the end of 2009.

I thought executives were paid for their skills and unique ability to "make the company go".  I thought they were paid more because they assumed all the risk.  Neither are true in this case.  The opposite is true.  Workers assumed all of the risk and the CEO took home all of the pay.  The public bailed the company out in order to keep the jobs which are now being shipped to Mexico.  


http://www.spokesman.com/stories/2019/jan/03/gm-now-top-automaker-in-mexico-as-it-idles-us-fact/

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[SaltySpitoon]

I'm personally for something of a middle ground, I don't think people need to be earning $50 trillion dollars per hour at the expense of their workers, but at the same time, I feel there needs to be a reward for those who innovate, take risks, and run businesses.

I follow the sentiment, but your example is a little misleading. Moving a business to another country is sometimes profitable if the labor costs are sufficiently large as a part of the business, if the local workforce is sufficiently skilled, and you can get around the legal red tape of having to import/export goods. The machinery still costs what it does, the electricity still costs what it does, R&D as well. The difference in labor costs are something like a spread across exchanges to put it in common Bitcoin user terms. Do I think that GM should take its 6% (a guess) margin increase at the expense of messing up a bunch of people's lives? It probably wouldn't if the management ever interacted with its workforce, and the CEO's main responsibility wasn't to make money for the shareholders.

I think the evil parts of capitalism come out when businesses gets too large and starts seeing their people as numbers. I mean sure there are a lot of shitty people out there fit to be heartless CEOs, but its a lot harder to screw over you at least see as an acquaintance, not a 0.000005% cost savings.

On the global labor market, things aren't globalized yet to the point where its fair to say that everyone's labor is worth the same amount of money. Just as there are different cost of living and standards of living wherever you live, the shifts can be even more dramatic moving to other countries. If your middle class is earning $500/month, there are few differences versus another middle class earning $1000 per month elsewhere. Put it in reverse, what if you suddenly started earning $500/month when you had been earning $5000 per month. If you have $50k in student loans and a $2k/month mortgage, that might put a damper on things.

[eddie13]

If you subscribe to capitalism, it seems as though you would subscribe to one of these philosophies towards labor

A. People are paid wages according to the “fair” market value of their skill and the amount of value they add
B. People do not “deserve” fair wages because no one is forcing them to accept a job for an “unfair” wage.

A. Absent any manipulation in a free market, people are paid economically competitive prices according to supply vs demand.
B. Under a free market people would compete for wages. They deserve or are entitled to nothing other than fair competition, what value they can provide in exchange for what compensation they are willing to settle for..

If you subscribe to A, then you run into issues with the variable cost of labor.  Producing a Chevy Blazer, for example, requires the same labor in the US as it does in Mexico. Therefore, it also requires the same amount of skill.  Workers in each country add the exact same value to the operation.

Neither the Mexican market nor the American market are completely free markets.

Also, just because the labor of putting cars together is happening the same in the USA and Mexico that does not mean that the technological development effort has been the same from the 2 countries.

GM workers make $2 an hour in Mexico while they make around ten times more in the US.  Why are Americans paid ten times more for the same exact work producing the same exact vehicle?  I have heard claims that people are paid more when their jobs involve more skill, more risk, or more difficulty, but none of those are true here.  

The American economy is much better and the markets are not completely free..

Well it would also be easy to think that the Mexican’s deserve less because everything costs less in Mexico but GM actually turns around and sells the cars to Mexicans at the full American price without subtracting 80% from the labor costs.  

In a free market a company should be able to charge whatever they want, whatever they think/bet will be competitive.

If you subscribe to B, you don’t believe the same work deserves the same pay to begin with and you think people have a choice, then you would seemingly be suggesting the Mexicans simply walk across the border and get the same job paying ten times more.  Well the Mexicans aren’t free to walk across the border and get the same job.  They are forced to work on their side of the border.  This is how capitalism uses borders to exploit labor.   How can you have a free market if labor cannot freely move?

Mexicans absolutely are not free to walk across the border due to our unfree market welfare state.
If their was no welfare state they would be free to come compete but would be allowed to absolutely fail if they cannot compete, or work for a very low wage.

Many people would also say “GM assumes all of the risk and is therefore entitled to run the company however they see fit.  If the cars don’t sell, they are stuck with the losses” but even that isn’t true.

December 19, 2008: President Bush approved a bailout plan and gave General Motors and Chrysler $13.4 billion in financing from TARP (Troubled Assets Relief Program) funds, as well as $4 billion to be "withdrawn later".

So we’re talking about socialized risk but no one socializes GM profits going forward.    How is GM assuming any risk when the government considers them "too big to fail"? The high paid executives not only assume no risk of failure, but seemingly get high payouts regardless of how negatively their incompetencies affect the work force and economy overall.  

 3 months later…

Rick Wagoner will leave his post as CEO of bailed-out General Motors with a $20 million retirement package, the company's financial filings show.
Under Wagoner's leadership, GM lost tens of billions of dollars, took billions in taxpayer-financed aid, and cut tens of thousands of jobs, including announced plans to cut 47,000 employees by the end of 2009.

I thought executives were paid for their skills and unique ability to "make the company go".  I thought they were paid more because they assumed all the risk.  Neither are true in this case.  The opposite is true.  Workers assumed all of the risk and the CEO took home all of the pay.  The public bailed the company out in order to keep the jobs which are now being shipped to Mexico.  

Problems caused by the welfare state which is equal to an unfree market..
In a free market GM would be allowed to fail if it couldn't compete..

In a completely free market their would be no welfare so no reason to restrict mexicans from coming to work.
In a completely free market their would be no minimum wage law.
In a completely free market their would be no welfare government bailouts for companies or people.

The reason their are so many differences across the US/Mexico boarder is neither market is free.
Absolute free market capitalism would solve all of these problems.

[KingScorpio]

If you subscribe to capitalism, it seems as though you would subscribe to one of these philosophies towards labor

A. People are paid wages according to the “fair” market value of their skill and the amount of value they add
B. People do not “deserve” fair wages because no one is forcing them to accept a job for an “unfair” wage.

A. Absent any manipulation in a free market, people are paid economically competitive prices according to supply vs demand.
B. Under a free market people would compete for wages. They deserve or are entitled to nothing other than fair competition, what value they can provide in exchange for what compensation they are willing to settle for..

If you subscribe to A, then you run into issues with the variable cost of labor.  Producing a Chevy Blazer, for example, requires the same labor in the US as it does in Mexico. Therefore, it also requires the same amount of skill.  Workers in each country add the exact same value to the operation.

Neither the Mexican market nor the American market are completely free markets.

Also, just because the labor of putting cars together is happening the same in the USA and Mexico that does not mean that the technological development effort has been the same from the 2 countries.

GM workers make $2 an hour in Mexico while they make around ten times more in the US.  Why are Americans paid ten times more for the same exact work producing the same exact vehicle?  I have heard claims that people are paid more when their jobs involve more skill, more risk, or more difficulty, but none of those are true here.  

The American economy is much better and the markets are not completely free..

Well it would also be easy to think that the Mexican’s deserve less because everything costs less in Mexico but GM actually turns around and sells the cars to Mexicans at the full American price without subtracting 80% from the labor costs.  

In a free market a company should be able to charge whatever they want, whatever they think/bet will be competitive.

If you subscribe to B, you don’t believe the same work deserves the same pay to begin with and you think people have a choice, then you would seemingly be suggesting the Mexicans simply walk across the border and get the same job paying ten times more.  Well the Mexicans aren’t free to walk across the border and get the same job.  They are forced to work on their side of the border.  This is how capitalism uses borders to exploit labor.   How can you have a free market if labor cannot freely move?

Mexicans absolutely are not free to walk across the border due to our unfree market welfare state.
If their was no welfare state they would be free to come compete but would be allowed to absolutely fail if they cannot compete, or work for a very low wage.

Many people would also say “GM assumes all of the risk and is therefore entitled to run the company however they see fit.  If the cars don’t sell, they are stuck with the losses” but even that isn’t true.

December 19, 2008: President Bush approved a bailout plan and gave General Motors and Chrysler $13.4 billion in financing from TARP (Troubled Assets Relief Program) funds, as well as $4 billion to be "withdrawn later".

So we’re talking about socialized risk but no one socializes GM profits going forward.    How is GM assuming any risk when the government considers them "too big to fail"? The high paid executives not only assume no risk of failure, but seemingly get high payouts regardless of how negatively their incompetencies affect the work force and economy overall.  

 3 months later…

Rick Wagoner will leave his post as CEO of bailed-out General Motors with a $20 million retirement package, the company's financial filings show.
Under Wagoner's leadership, GM lost tens of billions of dollars, took billions in taxpayer-financed aid, and cut tens of thousands of jobs, including announced plans to cut 47,000 employees by the end of 2009.

I thought executives were paid for their skills and unique ability to "make the company go".  I thought they were paid more because they assumed all the risk.  Neither are true in this case.  The opposite is true.  Workers assumed all of the risk and the CEO took home all of the pay.  The public bailed the company out in order to keep the jobs which are now being shipped to Mexico.  

Problems caused by the welfare state which is equal to an unfree market..
In a free market GM would be allowed to fail if it couldn't compete..

In a completely free market their would be no welfare so no reason to restrict mexicans from coming to work.
In a completely free market their would be no minimum wage law.
In a completely free market their would be no welfare government bailouts for companies or people.

The reason their are so many differences across the US/Mexico boarder is neither market is free.
Absolute free market capitalism would solve all of these problems.

then stop defining markets and nations then, so it will become the market dictated by something else.

[coins4commies]

Neither the Mexican market nor the American market are completely free markets.

This is inherently how capitalism works though.  Companies like GM accumulate capital and buy influence over the government to shift the market in their favor.  The mythological free market cannot exist under capitalism because capital buys influence.  A company who does not actively seek to all means of shifting the markets in their favor is bound to fail in a capitalist society.

I follow the sentiment, but your example is a little misleading. Moving a business to another country is sometimes profitable if the labor costs are sufficiently large as a part of the business, if the local workforce is sufficiently skilled, and you can get around the legal red tape of having to import/export goods. The machinery still costs what it does, the electricity still costs what it does, R&D as well. The difference in labor costs are something like a spread across exchanges to put it in common Bitcoin user terms. Do I think that GM should take its 6% (a guess) margin increase at the expense of messing up a bunch of people's lives? It probably wouldn't if the management ever interacted with its workforce, and the CEO's main responsibility wasn't to make money for the shareholders.

Labor costs are not based on the costs of doing business as you imply here.  Labor costs are based on market value.  Machinery and electricity costs could plummet but that would just lead to higher profits, not higher wages.    A company will pay its workers as little as they are willing to work for.  Any capitalist enterprise that pays its workers more than this market value is at risk of failure. 

I think the evil parts of capitalism come out when businesses gets too large and starts seeing their people as numbers. I mean sure there are a lot of shitty people out there fit to be heartless CEOs, but its a lot harder to screw over you at least see as an acquaintance, not a 0.000005% cost savings.

That isn't the "evil parts of capitalism" that is just capitalism.  Profit is the only goal.  The CEO's job is to maximize profits aka "Shareholder primacy".  Wages are only increased when they are below what people are willing to work for.    A CEO who is unnecessarily paying their workers a better wage at the expense of increased profits is not only bound to be fired, but could theoretically have litigation brought against him.

[KingScorpio]

you remember how second world war started?

labourers lift basically like money earning cattle robots in the british empire, they ate flour, there was no real middle class, all workers where basically doomed

thir financial illiteracy basically doomed their lives. and only the few happy ones that thought good placed them for that where the lucky and extremely rich capitalists.

[BADecker]

People voluntarily use the banking system most of the time.

The banking system needs taxes, because taxes are the measure of how much money the government can borrow from the banks. The anomaly is that the government (or anybody borrowing from a bank) doesn't really borrow. What they do is create new money. When they repay these fake loans, they are enriching the banks, and with the interest moneys.

In other words, the banks are taking up ownership of the whole world. That's about as far from fair wages you can get. It's a major exploitation of the laborers and everything else, as well.

This is what the development of Bitcoin was meant to start curbing.

[eddie13]

Neither the Mexican market nor the American market are completely free markets.

This is inherently how capitalism works though.  Companies like GM accumulate capital and buy influence over the government to shift the market in their favor.  The mythological free market cannot exist under capitalism because capital buys influence.  A company who does not actively seek to all means of shifting the markets in their favor is bound to fail in a capitalist society.

If the government has any influence over the market it is not a completely free market.
The problem you describe is caused by the market being less free due to government intervention, in a mixed economy, which is what you get when you try to compromise with socialists. In a true free market their would be no government influence to buy.

A true free market of voluntary exchange can only exist under capitalism and vice versa..

[dippididodaday]

... the banks are taking up ownership of the whole world...

It is well known that morality emerges out of repeated interactions. Repeatedly, especially after WWII, the bankers have "won" in their "play" with depositors / laborers and many a "deal" have been successfully made, so to speak, to the point where the massively dominant bankers now risk seriously fu*king up the game, if they do not allow the depositors to also have a couple successful "plays".

Depositors have sort of reached, (or are close to) a point of "no play", or "no deal", and this is seen across the globe. For those not awakened now, it will happen later, after critical mass in the awakening stage is reached.

Interestingly, the fundamental reason for this is found in the hardwired, neurophysiological circuit, where studies have shown that the dominant entities have to let the lesser entities "win" 30% of the time, or play is finished.

Bitcoin is the depositor's chance, to win the next round of "play", since the bankers' 70% win time, is over.

[BADecker]

... the banks are taking up ownership of the whole world...

It is well known that morality emerges out of repeated interactions. Repeatedly, especially after WWII, the bankers have "won" in their "play" with depositors / laborers and many a "deal" have been successfully made, so to speak, to the point where the massively dominant bankers now risk seriously fu*king up the game, if they do not allow the depositors to also have a couple successful "plays".

Depositors have sort of reached, (or are close to) a point of "no play", or "no deal", and this is seen across the globe. For those not awakened now, it will happen later, after critical mass in the awakening stage is reached.

Interestingly, the fundamental reason for this is found in the hardwired, neurophysiological circuit, where studies have shown that the dominant entities have to let the lesser entities "win" 30% of the time, or play is finished.

Bitcoin is the depositor's chance, to win the next round of "play", since the bankers' 70% win time, is over.

My point was to show what is going on, in simple terms. If people know, they might wake up so that they prepare, and are not hurt so badly when the whole thing crashes.

I don't understand what you mean when you say "that morality emerges out of repeated interactions." Morality is a relational thing that is based in the genes. It was caused in the setting up of the universe, and passed on through cause and effect.

Even Solomon of the Bible said over two thousand years ago, that the king is served by the land, and that a king without servants is in ruin. If kings don't treat their people fairly, the people will be gone or dead, and such won't benefit anybody.

This is proven out by the formation and updating of the Magna Carta in Britain over several hundred years. Some smart people British had to show some stupid British kings how to rule properly. The MC was the result.

It seems that rough times are coming. Bitcoin might be temporary salvation. The wealthy people know this, and they are working as hard as they can to somehow keep control of things.

[TECSHARE]

https://mises.org/library/progressive-attacks-capitalism-were-key-hitlers-success

[dippididodaday]

...the banks are taking up ownership of the whole world. That's about as far from fair wages you can get. It's a major exploitation of the laborers and everything else, as well.

People have an inborn sense when something is unfair, just like other animals. As I have mentioned, in the studies conducted, even though they were done on juvenile rats, is still applicable to humans, as we share most DNA patterns with other life forms and our nervous systems work similar to those of other animals: the hard-coded (neurophysiologically speaking) ratio of win-loose interactions is 70/30. The lesser juvenile rat would only initiate continued play with the dominant rat if he won 30% of the rough and tumble encounters. The moral of the story is, without the 70/30 "fairness rule" intact, the whole thing comes to a grinding halt.

The ongoing unfair wages and major exploitation, as you mentioned, slowly but surely altered the morale of the working class - they became demoralized to the point where they no longer will partake in the status quo. This is the point where the fabric of civilization begins to seriously tear apart. The repeated unfair interactions of the bankers and the laborers have led to the point of "demorality" - a stage of ever greater unwillingness to cooperate.

[Quickseller]

You are describing problems with globalism.

Your "a" assumption is flawed, and should be reworded:
"A. People are paid wages according to the “fair” market value of their skill with wages limited by the amount of value they add"

Companies will not pay more than a worker contributes but they will not pay an unnecessarily high wage. If a car company has a plant in Ohio, it needs to employ people in Ohio, and will need to pay a sufficiently high wage so that workers with sufficient skills will be willing to work for them, but so long as they have sufficient number of workers, will not pay so much that an abundance of qualified people are willing to work for them.

In general, the cost of living is much lower in Mexico (along with the standard of living), and as such, workers are willing to work for less than workers in the US are willing to work for.

[coins4commies]

You are describing problems with globalism.

Your "a" assumption is flawed, and should be reworded:
"A. People are paid wages according to the “fair” market value of their skill with wages limited by the amount of value they add"

Companies will not pay more than a worker contributes but they will not pay an unnecessarily high wage. If a car company has a plant in Ohio, it needs to employ people in Ohio, and will need to pay a sufficiently high wage so that workers with sufficient skills will be willing to work for them, but so long as they have sufficient number of workers, will not pay so much that an abundance of qualified people are willing to work for them.

In general, the cost of living is much lower in Mexico (along with the standard of living), and as such, workers are willing to work for less than workers in the US are willing to work for.

The cost of living is nowhere near 10x less so the Mexican workers are being ripped off even according to your explanation of differences in this post. 

If the government has any influence over the market it is not a completely free market.
The problem you describe is caused by the market being less free due to government intervention, in a mixed economy, which is what you get when you try to compromise with socialists. In a true free market their would be no government influence to buy.

A true free market of voluntary exchange can only exist under capitalism and vice versa..

If the power is decentralized and not in a government, it can be purchased even more easily.  Capitalists could buy people and buy up all of the smaller competition.   They could simply hire mercenaries to take out competition.  Somalia is a free market utopia.

[TECSHARE]

https://mises.org/library/progressive-attacks-capitalism-were-key-hitlers-success

Because we're Hitler obviously.

It's incredibly fun to see how you yell all the time how liberals aren't able to use arguments and just yell "NAZI" all the time, but on the same time you reach Godwin point in less than 3 posts in tons of threads. 

I would ask you to address any of the arguments made in the article, but we all know you didn't read it, and if you did you wouldn't understand it, and if you did you would ignore it. Much easier to make some quick meaningless quip than discuss facts.

[KingScorpio]

what you want is gentrification for labourers, not stopping the exploitation by capitalists.

many workers are forced to work, because they lack the financial literacy to find an alternative way.

[TECSHARE]

what you want is gentrification for labourers, not stopping the exploitation by capitalists.

many workers are forced to work, because they lack the financial literacy to find an alternative way.

Who's fault is that?

[KingScorpio]

what you want is gentrification for labourers, not stopping the exploitation by capitalists.

many workers are forced to work, because they lack the financial literacy to find an alternative way.

Who's fault is that?

that the workers dont print money like the capitalists? they think they can't

[TECSHARE]

what you want is gentrification for labourers, not stopping the exploitation by capitalists.

many workers are forced to work, because they lack the financial literacy to find an alternative way.

Who's fault is that?

that the workers dont print money like the capitalists? they think they can't

Asking a question in response to another question is not a retort.

[coins4commies]

what you want is gentrification for labourers, not stopping the exploitation by capitalists.

many workers are forced to work, because they lack the financial literacy to find an alternative way.

Who's fault is that?

that the workers dont print money like the capitalists? they think they can't

Asking a question in response to another question is not a retort.

Literacy requires capital.  Education requires capital.  Without capital, people would just be slaves to capitalists and literally wouldn't be able to move anywhere because all land would be owned.   This is why capitalism worked really well with free land and labor available for theft.   

The government holds capital on behalf of all people.  It is  the only thing keeping literally everything from being bought up and controled by capitalists.  The connundrum is that in a captialist economy, even the government is for sale.  What will they teach?  What will they build?  Which industries will they regulate and how?  All of those questions are answered by capital.