Negative Externalities

[BitterTea]

I find it curious though that some atoms, after a worker uses his labor to arrange them in some fashion so as to create a product, become more valuable after the employer takes it. Must be magic.

No. Two things. Something only has value when another is willing to trade for it. The product's value, from the time it leaves the worker's hands until it reaches the consumer's, is one hundred percent speculative. The reason that the worker chooses to work for his employer rather than himself is that his employer absorbs any difference in the speculative value of an object with the traded value. This is in addition to all of the time the employer spent building the company before the worker came around, and the risks involved in such.

No magic involved.

[MoonShadow]

Who is the potentate?  Who is imposing harm on whom?  Property owners?

In the pollution example, it is whomever pollutes, and thereby imposes harm on others, with impunity.

By any metric, governments are the largest polluters.  Yet they are universally exempt from damage claims.

[Gluskab]

A state is just an entity with the power to do so. A usurer will have to become a state himself or find another one to rely on to continue his usury.

Yeah, I guess it's useless to try to form a more voluntary system that might actually fix some of those issues states have conveniently entrenched over the centuries.  Might as well keep being right twice a day.

My labor is worth the product I produce by it, no more, no less.

This is nonsense.  Value is whatever someone is willing to bid for a given good or service.  Unless you're bearing all the risk and tying up your own capital, your labor is not worth the product you produce by it, and it really isn't their either, you're just bearing the other costs yourself in that scenario that the business owner would have otherwise.  Nothing has intrinsic value.  Value is the preference people show for certain goods or services.

That I'd have to flee my workplace, a second home really, to find fair compensation is an injury to my humanity. As if that's not bad enough, I'd have to flee my home because there are no engineering cooperatives nearby.

This is an entirely ridiculous and meaningless sentence.  If you can't or don't want to support yourself in self-employment, you have to find a job.  If you don't like the job you're at, you're at no obligation to stay there.

Can the demand be so great that people will break their EULAs, or will they have to enter into others by buying protection from strongmen?

What EULAs?  Stop making up ridiculous problems that wouldn't even happen if there was a fleet of caricature villain billionaires out there with unlimited funds and a psychopathic tendency to try to make other people's lives hard at any cost.

And these 'strongmen' are likely to be arbiters, insurance agents, and other mediators.

I never said that and I do not. I find it curious though that some atoms, after a worker uses his labor to arrange them in some fashion so as to create a product, become more valuable after the employer takes it. Must be magic.

Stop being disingenuous.  You understand perfectly well why matter in some shapes is worth more than others, and it's because people have preferences that bear out when they have to make choices of what to do with their limited time and resources.

[Gluskab]

Are people just signing up for this site because they think cryptography is cool or something?

[FatherMcGruder]

Please define "fair" in this context.

When neither side gains nor loses more than the other and they only trade what they have fairly gained.

No. Two things. Something only has value when another is willing to trade for it. The product's value, from the time it leaves the worker's hands until it reaches the consumer's, is one hundred percent speculative. The reason that the worker chooses to work for his employer rather than himself is that his employer absorbs any difference in the speculative value of an object with the traded value. This is in addition to all of the time the employer spent building the company before the worker came around, and the risks involved in such.

No magic involved.

If I make three widgets for a given amount of my labor, that amount of my labor clearly has a value of three widgets. Why would I give someone even one of those widgets to absorb risk that they can simply pass right back down to me in the form of layoffs or uncomfortable or unsafe working conditions? Even if that person built the workplace, a finite thing, he has no right to collect indefinitely on it.

By any metric, governments are the largest polluters.  Yet they are universally exempt from damage claims.

I'll agree with that, for the most part.

Yeah, I guess it's useless to try to form a more voluntary system that might actually fix some of those issues states have conveniently entrenched over the centuries.

I disagree, but I can't prevent you from consigning yourself to them.

Might as well keep being right twice a day.

I try.

This is nonsense.  Value is whatever someone is willing to bid for a given good or service.  Unless you're bearing all the risk and tying up your own capital, your labor is not worth the product you produce by it, and it really isn't their either, you're just bearing the other costs yourself in that scenario that the business owner would have otherwise.  Nothing has intrinsic value.  Value is the preference people show for certain goods or services.

See above.

This is an entirely ridiculous and meaningless sentence.  If you can't or don't want to support yourself in self-employment, you have to find a job.  If you don't like the job you're at, you're at no obligation to stay there.

The threat of losing one's home, among other things, is obligation enough.

What EULAs?  Stop making up ridiculous problems that wouldn't even happen if there was a fleet of caricature villain billionaires out there with unlimited funds and a psychopathic tendency to try to make other people's lives hard at any cost.

I established this concept earlier in the thread.

And these 'strongmen' are likely to be arbiters, insurance agents, and other mediators.

Don't forget the mob.

Stop being disingenuous.  You understand perfectly well why matter in some shapes is worth more than others, and it's because people have preferences that bear out when they have to make choices of what to do with their limited time and resources.

I'm not being disingenuous. The only reason an employer can sell the product of my labor for less than what he sells if for on the market is if he has the authority to exclude me from that market. He gets this authority from a state of some kind.

Are people just signing up for this site because they think cryptography is cool or something?

Why don't you start another thread with a poll?

[BitterTea]

I'm not being disingenuous. The only reason an employer can sell the product of my labor for less than what he sells if for on the market is if he has the authority to exclude me from that market. He gets this authority from a state of some kind.

There are many reasons why one individual would agree to be employed by another. Risk, up front costs, reputation, etc. As always, no state necessary.

[tomcollins]

I'm not being disingenuous. The only reason an employer can sell the product of my labor for less than what he sells if for on the market is if he has the authority to exclude me from that market. He gets this authority from a state of some kind.

There are many reasons why one individual would agree to be employed by another. Risk, up front costs, reputation, etc. As always, no state necessary.

I used to work independently and work being employed.  Working independently was nice, but if that business was not going well, I got no money.  Sometimes I even lost money.  When I go to work as an employee, I never lose money, even if my company does.  Having a steady paycheck is more valuable to some people than the possibility of making more, but having the money inconsistent (and sometimes not making any).  If you have a decent amount of savings, then it might be worth it.

[benjamindees]

There are many reasons why one individual would agree to be employed by another. Risk, up front costs, reputation, etc. As always, no state necessary.

Division of labor is conspicuously absent from your list.

When neither side gains nor loses more than the other and they only trade what they have fairly gained.

So, first of all, gains or loses more what?  Matter?  Energy?  Dollars?

Secondly, if you engage in trade, and you have no idea whether you are gaining or losing, how is anyone else supposed to know?

labor theory of value

Ho-boy....

[goatpig]

If an employer is not in his right to sell the production of his employees for more than he pays them, then exactly what incentive does he have in such a business to begin with? If he shouldn't make a profit, then he has no reason to run that business and he shall close it, rendering all his employee's effectively jobless. Which brings the simple question: is the employer needed for the employee's job to exist? If the employee is consenting to the conditions of the employer, then the answer is yes, and the employer is rightfully entitled to his profit. If the employee doesn't consent to the conditions, then he's either jobless, which is his own prerogative, or he's forced to labor anyways, in which case he is a slave and thus isn't relevant to this argument. As such, you're point is moot my good Father.

The discussion on air and water pollution is technically a discussion on commons, which I think are wrong.

[MoonShadow]

Please define "fair" in this context.

When neither side gains nor loses more than the other and they only trade what they have fairly gained.

Based on who's determination of value?  Yours?

[goatpig]

Please define "fair" in this context.

When neither side gains nor loses more than the other and they only trade what they have fairly gained.

Since all value is subjective, what you are saying is that as long as both parties agree, the trade fair. Did you just defeat you're own argument there?

[tomcollins]

There are many reasons why one individual would agree to be employed by another. Risk, up front costs, reputation, etc. As always, no state necessary.

Division of labor is conspicuously absent from your list.

When neither side gains nor loses more than the other and they only trade what they have fairly gained.

So, first of all, gains or loses more what?  Matter?  Energy?  Dollars?

Secondly, if you engage in trade, and you have no idea whether you are gaining or losing, how is anyone else supposed to know?

labor theory of value

Ho-boy....

You can divide labor when being self employed.  You hire out services to someone else outside of your skillset.  Or you form a co-op, which is just a really big form of self-employment.

[MoonShadow]

You can divide labor when being self employed.  You hire out services to someone else outside of your skillset.

That's just another form of employer/employee relationship.

  Or you form a co-op, which is just a really big form of self-employment.

And so is this.

[FatherMcGruder]

There are many reasons why one individual would agree to be employed by another. Risk, up front costs, reputation, etc. As always, no state necessary.

What's the real risk? Interest on loans, non-refundable permit fees? These are capitalist and governmental creations. Without them, in the event of failure you could recuperate most of your start-up costs by selling what you've purchased. If some individuals still find that too risky, they could join workers' cooperatives that already exist.

I used to work independently and work being employed.  Working independently was nice, but if that business was not going well, I got no money.  Sometimes I even lost money.  When I go to work as an employee, I never lose money, even if my company does.  Having a steady paycheck is more valuable to some people than the possibility of making more, but having the money inconsistent (and sometimes not making any).  If you have a decent amount of savings, then it might be worth it.

See my previous response. Workers may find security, as long as they're profitable enough, under the tutelage of an employer, but they'll find security and liberty in worker solidarity.

There are many reasons why one individual would agree to be employed by another. Risk, up front costs, reputation, etc. As always, no state necessary.

Division of labor is conspicuously absent from your list.

If workers desire managers to help with this task, they can democratically elect recall-able ones.

So, first of all, gains or loses more what?  Matter?  Energy?  Dollars?

It could be any of that.

Secondly, if you engage in trade, and you have no idea whether you are gaining or losing, how is anyone else supposed to know?

I happen to think that the market is useful for determining value, but not so much if you have an employer that excludes you from it.

labor theory of value

Ho-boy....

Pardon?

If an employer is not in his right to sell the production of his employees for more than he pays them, then exactly what incentive does he have in such a business to begin with? If he shouldn't make a profit, then he has no reason to run that business and he shall close it, rendering all his employee's effectively jobless. Which brings the simple question: is the employer needed for the employee's job to exist? If the employee is consenting to the conditions of the employer, then the answer is yes, and the employer is rightfully entitled to his profit. If the employee doesn't consent to the conditions, then he's either jobless, which is his own prerogative, or he's forced to labor anyways, in which case he is a slave and thus isn't relevant to this argument. As such, you're point is moot my good Father.

If the workers can take ownership of the means of production, they could create cooperatives and manage themselves. Some anarchists would prefer communes, collectives, syndicates, or solitary craftsmanship and that's fine, too. Unfortunately, the state prevents workers from taking ownership of that which they've already paid for in the difference between their wages and the sales prices of their products. So, it's not that the workers need employers to work. They don't. It's that employers need the state to employ.

The discussion on air and water pollution is technically a discussion on commons, which I think are wrong.

Yeah?

Based on who's determination of value?  Yours?

I happen to think that the market is good for determining value as long as everyone can participate in it without patronizing middlemen.

Since all value is subjective, what you are saying is that as long as both parties agree, the trade fair. Did you just defeat you're own argument there?

Nope. Value is subjective, but the market is useful, useful enough anyway, for determining it.

You can divide labor when being self employed.  You hire out services to someone else outside of your skillset.

That's just another form of employer/employee relationship.

Only if you boss them around and try to resell the product of their services for a profit.

  Or you form a co-op, which is just a really big form of self-employment.

And so is this.

Only when its members are employees, or find themselves subordinated in some other way, instead of partners, but then it's not much of a co-op.

[tomcollins]

You can divide labor when being self employed.  You hire out services to someone else outside of your skillset.

That's just another form of employer/employee relationship.

  Or you form a co-op, which is just a really big form of self-employment.

And so is this.

So what?

[thursday0451]

Don't have enough time to read whole thread, but here's my .02 BTC:

1) Make sure we're talking about non-pecuniary externalities, and make sure to define that. Because basically every market system operates on constant pecuniary externalities, its just that it often takes some work (and transparency!) to figure out why something costs what it does.

2) For the purposes of this thread all should read Coase's paper on externalities. Externalities are solved by markets when transaction costs are low. Thus, it would be more productive to talk about what externalities have high transaction costs, and then figure out how to lower those costs, or design some alternate system that is manages the problem ethically and equitably.

[goatpig]

If the workers can take ownership of the means of production, they could create cooperatives and manage themselves. Some anarchists would prefer communes, collectives, syndicates, or solitary craftsmanship and that's fine, too. Unfortunately, the state prevents workers from taking ownership of that which they've already paid for in the difference between their wages and the sales prices of their products. So, it's not that the workers need employers to work. They don't. It's that employers need the state to employ.

What you are describing here is communism, or any form of authoritarian government in general. What about free market? Do you pretend employers will disappear under such conditions? Your idea is that if person A needs my expensive gizmo to build his widgets and that in return of letting him use my gizmo, i get to buy widgets off of him for less than i resell them for, that this difference in price should eventually bestow him ownership of my gizmo. This is in contradiction with the principle of private property for I never chose to sell him the widget for that cumulated price difference; and note that no state was involved in this relationship. Now, are you implying private property is wrong, or that the state, keeping the man down from his "fair" reward is wrong is supporting private property?

Nope. Value is subjective, but the market is useful, useful enough anyway, for determining it.

The "market" as you call it is an indicator of the potential price a given item can fetch GIVEN a few conditions:

1. That you have access to that market place. If a 5870 sells for $180 in the US and you live in Europe where they are $250, no amount of bitching about evil middlemen at your local store will bring the price down to American standards.

2. That there is a demand for that particular good in said market place. A PS3 is worth $200 in the US. Now try and sell it for that much in Somalia.

Even then there's no guaranty you'll trade for the market's quote. You might sell cheaper, or buy higher, since yeah, it is only a quote, no one is there making sure your goods will fetch the price displayed on some random sign. Unless you are supporting the existence of a regulatory institution that will ensure you fetch the 'fair' price. Technically, government.

Baring the existence of government to fix prices across the charts, the value of any given item is subjective. Now I'll let you ponder whether you want to stick with the evil government keeping the man down from selling his own labor which also happens to be the righteous government making sure you can trade your goods for the "fair" price.

Yeah?

Just pointing that this particular argument is several centuries old, is part of most constitutions of nations all around the world, and that since you are so attached to what is "fair", that it might be "fair" of you to research what mankind think is "fair" in that situation before you go around talking about some imaginary end user license agreement.

[elewton]

...The discussion on air and water pollution is technically a discussion on commons, which I think are wrong.

I'm interested in hearing more about this.
There exists a significant proportion of the population who, despite the wishes of the rest, will fill the air with smog and the waters with run-off for a cent on the dollar.
If unrestrained, some people will burn the Earth to a husk to get the golden egg before others do.

State-sponsored force has been the only agency so far by which any modicum of forward-thinking can be imposed on the market.  Without it, fridges would still be pumping out CFCs, car fuel would contain lead, agricultural run-off would destroy a large proportion of marine ecosystems and the powerful would restructure the economy to impoverish and undereducate the powerless in order the reinstate feudalism.

I'm fond of social libertarianism, but I can't imagine how fiscal libertarians see the world; they honestly seem as naive to human nature as communists.

[goatpig]

...The discussion on air and water pollution is technically a discussion on commons, which I think are wrong.

I'm interested in hearing more about this.
There exists a significant proportion of the population who, despite the wishes of the rest, will fill the air with smog and the waters with run-off for a cent on the dollar.
If unrestrained, some people will burn the Earth to a husk to get the golden egg before others do.

State-sponsored force has been the only agency so far by which any modicum of forward-thinking can be imposed on the market.  Without it, fridges would still be pumping out CFCs, car fuel would contain lead, agricultural run-off would destroy a large proportion of marine ecosystems.

The problem with commons is that they belong to the "public", thus effectively to the state, and as such are administered by the state. As some people mentioned it results in several problems: Not only is the government the biggest polluter, they setup arbitrary pollution limits that are not respected by big corporations, and the same governmental restrictions allows these groups to pollute in complete impunity. Some of the governmental regulations are also completely misguided, like limiting levels of carbon dioxide, which is not only pointless but pretty much gives license to people to emit any other highly polluting gases as long as they keep their CO² level down, while being marked as "green".

The problem comes down to a few simple fundamentals. Under the rule of commons, essential commodities such as land, air, water cannot be made your private property, they are managed by a corruptible and corrupted entity, and you are forbidden by that same entity to defend these resources against the polluters. In a free market scenario, that responsibility would be yours. In this case, consumers would need to stop buying bad products such as leaded fuel and CFC based refrigerators, but you can certainly expect that I, in an attempt to keep my land, air and water clean, will sue those who don't. Keep in mind that the great majority of polluting substances that have been banned by the government have been so thanks to consumer pressure, not governmental impulse.

the powerful would restructure the economy to impoverish and undereducate the powerless in order the reinstate feudalism

That's corporatism, the opposite of a free market.

I'm fond of social libertarianism, but I can't imagine how fiscal libertarians see the world; they honestly seem as naive to human nature as communists.

You can't achieve social freedom without economical freedom. Communists don't have the luxury of being naive, since their concept is contradictory by nature.

[benjamindees]

1) Make sure we're talking about non-pecuniary externalities, and make sure to define that. Because basically every market system operates on constant pecuniary externalities, its just that it often takes some work (and transparency!) to figure out why something costs what it does.

Thank you for pointing this out.  And, yes, for the purposes of this thread I think it's important to make the connection between pecuniary and non-pecuniary externalities.

Pecuniary externalities are not obviously harmful.  But they eventually translate into material externalities which are very easily recognized as such.  So I think it is important for promoters of Bitcoin to make the logical connection between the two and to point out how pecuniary externalities are in fact harmful.