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Source: (consider it) Thread: The social-progressive mindset
Russ
Old salt
# 120

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So then the question arises as to how we trade-off between a fixed return and a share of the profits.

quote:
Originally posted by Dafyd:
The simple calculation suggested what the premium for risk was. Now you're saying that the premium ought to be higher than the simple calculation? Do the workers not get a premium for risk (given that if the business goes bust they won't get paid)?

The business going bust is bad news for everyone. Labour may not get wages for the week/month in which that happens. Land may not get rent for that week/month but will still own the freehold. Government may get no rates for that week/month. And capital will not only not receive interest but may well not get back the amount loaned.

Suppose that over a certain period of time the bank could get a 10% return on capital by depositing with another bank. And that over the same period there's a 50% chance of the business going bust and the bank not getting anything back.

To get an expected payback of 110% of the principal (i.e. return of the principal and 10% interest) the business has to offer an average payback if it survives of 220% (return of capital plus 120% interest).

And only the largest investors with the deepest pockets will be indifferent between those two outcomes with the same expected return. A small investor - such as someone investing their pension - can be expected to be at least partly risk-averse.

It is the extra - some value above and beyond the 120% - that would be just enough to make a risk-averse investor indifferent between investing in the business and leaving the money safe in a deposit account - that constitutes the premium for risk.

quote:


You haven't answered my question:
So if anti-competitive practices have set the going rate, which is on your account fair, you would force them away from the fair going rate to make society better in your view?

The going rate is only fair on the assumption of a competitive market. Nobody thinks that anything and everything a monopolist can get away with is fair.

Which is why I could be persuaded that any particular going rate under the present system is unfairly high or low. But only if you can point to a specific anti-competitive practice.

--------------------
Wish everyone well; the enemy is not people, the enemy is wrong ideas

Posts: 3032 | From: rural Ireland | Registered: May 2001  |  IP: Logged
Crœsos
Shipmate
# 238

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quote:
Originally posted by Russ:
quote:
Originally posted by Croesos
There doesn't really seem to be a "philosophical basis" to argue that investors deserve a "fair reward" but that labor should be compensated without any assessment of fairness.

What I'm suggesting to you is first that we all have some notion of "fairness". That of course we want to see applied to all the contributors to the business.

But then when you think about what "fair" means, it means something like "the going rate". So that if you employ a dozen people to pick grapes in your vineyard, then the expectation is that they all get paid the same (whether that's the same rate per hour or the same rate per tonne of grapes picked) unless there's some good reason why not.

If you're paid the going rate then you're not being singled out for special treatment (either specially good or specially bad).

So it's "unfair" if investors receive different returns on different investments? Socialism for the investor class!

quote:
Originally posted by Russ:
quote:
And I'm still waiting for your explanation for why property owners should receive preferential tax treatment from the state relative to laborers.
I thought we'd covered that. The suggestion is not that any person gets preferential treatment. But that a man might reasonably expect to pay less tax on the income that his capital earns than on the income that he earns [through labor]. Because:

a) the additional government services that he consumes by lending his capital at interest are minor compared with the government services he consumes anyway (with his capital under the mattress). Regulation of the money market being but a tiny fraction of the cost of running a successful State.

There seem to be two really big fallacies at work here. The first is that taxation is (or at least should be) proportional to government services "consumed". No tax system I'm aware of functions in this way. Most are proportional to income, both as a general yardstick of fairness and for purely pragmatic reasons.

The other dubious assumption is that someone engaged in paid labor is "consuming" a lot more government services than someone who is not, which seems a dubious assumption at best. Moreover, someone who has a well-paid job is consuming vastly more government services than someone who works a poorly-paid job. Neither of these assumptions seems at all obvious.

quote:
Originally posted by Russ:
b) his capital has been saved from after-tax income, so that to tax what he does with it after that is a form of double jeopardy.

Interestingly that "double jeopardy" seems to involve one and only one kind of income. For some reason a worker receiving wages from a company that has already been taxed doesn't count as "double jeopardy". When that worker hires a landscaping company to mow his lawn he's paying for that service out of his after-tax income, but the landscaper still has to pay tax on the money received despite it being already taxed when it was paid to the worker who hired him.

Most tax systems are based on the idea of levying tax whenever money changes hands (income, sales, inheritance, whatever) but for some reason when money changes hands because someone is making money by already having money, that's different somehow!

quote:
Originally posted by Russ:
c) his capital is his pension fund and that saving and investing in this way is something government should encourage everyone to do.

Again, not necessarily. Not all capital is retirement savings, and not all retirement savings are income-generating capital. You're trying to extrapolate from a very specific instance (government should encourage everyone to save for retirement) to a general case which is not at all the same thing (therefore any form of income derived from owning stuff should receive preferential tax treatment, relative to income derived from actually working).

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Humani nil a me alienum puto

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Crœsos
Shipmate
# 238

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quote:
Originally posted by Russ:
Suppose that over a certain period of time the bank could get a 10% return on capital by depositing with another bank. And that over the same period there's a 50% chance of the business going bust and the bank not getting anything back.

I'm not sure pointing out that giving coin-flip odds of losing everything is a bad investment constitutes any great insight.

quote:
Originally posted by Russ:
The going rate is only fair on the assumption of a competitive market. Nobody thinks that anything and everything a monopolist can get away with is fair.

Why is the competitiveness of all markets a reasonable default assumption to make? It seems to be the one you're implicitly claiming, but I see no particular reason to assume it to be the case.

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Humani nil a me alienum puto

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Leorning Cniht
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# 17564

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quote:
Originally posted by Crœsos:
Again, not necessarily. Not all capital is retirement savings, and not all retirement savings are income-generating capital.

And, of course, a government wishing to encourage saving for retirement can create any number of tax-advantaged retirement plan vehicles to do so. And that way, if it wants to encourage you to save up to a certain level, it can do so.
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balaam

Making an ass of myself
# 4543

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quote:
Originally posted by Leorning Cniht:
a government wishing to encourage saving for retirement can create any number of tax-advantaged retirement plan vehicles to do so. And that way, if it wants to encourage you to save up to a certain level, it can do so.

Only if your income is high enough to enable you to save.

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Fearfully and wonderfully mad
Love the dinner, hate the din.
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Crœsos
Shipmate
# 238

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quote:
Originally posted by Leorning Cniht:
quote:
Originally posted by Crœsos:
Again, not necessarily. Not all capital is retirement savings, and not all retirement savings are income-generating capital.

And, of course, a government wishing to encourage saving for retirement can create any number of tax-advantaged retirement plan vehicles to do so. And that way, if it wants to encourage you to save up to a certain level, it can do so.
Russ is conflating two different things, income derived from specific activities (labor vs. investment) and income devoted to specific purposes (current expenses vs. retirement savings). Since I've pointed this out before I can only assume that this rhetorical sleight of hand is deliberate on his part. Russ seems to be arguing that since investment income is sometimes used for retirement, it should receive privileged tax treatment regardless of whether it is actually used for that purpose (e.g. you deserve a favorable tax rate even if you're spending the money you made on credit default swaps on hookers and blow).

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Humani nil a me alienum puto

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Doc Tor
Deepest Red
# 9748

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quote:
Originally posted by Crœsos:
hookers and blow

Ironically, prostitution and illicit drugs are notoriously difficult to tax.

--------------------
Forward the New Republic

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Dafyd
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# 5549

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quote:
Originally posted by Russ:
quote:
Originally posted by Dafyd:
The simple calculation suggested what the premium for risk was. Now you're saying that the premium ought to be higher than the simple calculation? Do the workers not get a premium for risk (given that if the business goes bust they won't get paid)?

The business going bust is bad news for everyone. Labour may not get wages for the week/month in which that happens. Land may not get rent for that week/month but will still own the freehold. Government may get no rates for that week/month. And capital will not only not receive interest but may well not get back the amount loaned.

Suppose that over a certain period of time the bank could get a 10% return on capital by depositing with another bank. And that over the same period there's a 50% chance of the business going bust and the bank not getting anything back.

To get an expected payback of 110% of the principal (i.e. return of the principal and 10% interest) the business has to offer an average payback if it survives of 220% (return of capital plus 120% interest).

So far you're following my logic.

quote:
And only the largest investors with the deepest pockets will be indifferent between those two outcomes with the same expected return. A small investor - such as someone investing their pension - can be expected to be at least partly risk-averse.

It is the extra - some value above and beyond the 120% - that would be just enough to make a risk-averse investor indifferent between investing in the business and leaving the money safe in a deposit account - that constitutes the premium for risk.

So you're advocating a lower level of interest for investors that are more wealthy? And a higher level for less wealthy investors?

In practice the risk premium that you're advocating gets taken up by the wealthier investors, who on your account would be investing anyway.

The question however still arises: if the risk premium applies because some people don't have as deep pockets as others, the risk premium should really apply to labour, who on the simple model don't have any depth in their pockets at all. If they don't earn money they have to dig into their savings/ property / starve. Clearly therefore the risk premium for labour should be even larger than it is for investors.
There's a bit of a failure to follow through on your argument here.

quote:
The going rate is only fair on the assumption of a competitive market. Nobody thinks that anything and everything a monopolist can get away with is fair.

Which is why I could be persuaded that any particular going rate under the present system is unfairly high or low. But only if you can point to a specific anti-competitive practice.

You're eliding a competitive market and an absence of specific anti-compettive practices. There are more ways in which a market can be non-competitive than merely specific anti-competitive practices.

Any natural monopoly is a monopoly without needing any particular anti-competitive practice.

On Schumpeter's model, any innovation is a temporary monopoly and thus a temporary abolition of a competitive market. But you wouldn't say that an innovation is itself a specific anti-competitive practice. You might not call the results unfair until they turn into rentierism. (Although the transition would be ill-defined.)

Would you count loss-leading practices as anti-competitive practices for example? A large business can drive smaller businesses out of business by loss-leading practices on staples, offering lower loss-making introductory prices, and so on. Are those anti-competitive on your view?
Driving out small businesses results if not in monopoly, then in an approach to monopoly: call it paucopoly, and similarly paucopsony, where there are only a few buyers of goods or labour.
Typically, of course, more employers offer multiple jobs than employees can do multiple jobs. The labour market therefore is skewed to a greater or less extent in the direction of a paucopsony. It is therefore always imperfectly competitive.

In addition for a market to be genuinely competitive all parties must have the option of withdrawing from the market if the price is too high/low.
As noted, the fact that people typically need jobs more urgently than the employer needs the labour, means that labour does not have the option of withdrawing from the market. Therefore the market is not truly competitive.

--------------------
we remain, thanks to original sin, much in love with talking about, rather than with, one another. Rowan Williams

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Soror Magna
Shipmate
# 9881

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quote:
Originally posted by Dafyd:
... In addition for a market to be genuinely competitive all parties must have the option of withdrawing from the market if the price is too high/low.
As noted, the fact that people typically need jobs more urgently than the employer needs the labour, means that labour does not have the option of withdrawing from the market. Therefore the market is not truly competitive.

And there are certain markets that no rational actor would consider withdrawing from: food, water, housing, medical care ...

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"You come with me to room 1013 over at the hospital, I'll show you America. Terminal, crazy and mean." -- Tony Kushner, "Angels in America"

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Dafyd
Shipmate
# 5549

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quote:
Originally posted by Soror Magna:
quote:
Originally posted by Dafyd:
... In addition for a market to be genuinely competitive all parties must have the option of withdrawing from the market if the price is too high/low.

And there are certain markets that no rational actor would consider withdrawing from: food, water, housing, medical care ...
In the case of food and water, the effect is mitigated. Most of us given the chance consume more than we need to avoid starvation. So we're able to withdraw from the market for the extra food and water. That means the price for food and water is generally fairly affordable.
The housing and medical care markets on the other hand can easily get to the point where prices rise without control.

--------------------
we remain, thanks to original sin, much in love with talking about, rather than with, one another. Rowan Williams

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Jane R
Shipmate
# 331

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Actually I think you'll find that the price for domestic water and sewarage services is strictly regulated because it's supplied by companies holding a regional monopoly.

Either that, or the people at Ofwat are being paid an awful lot of money to play Candy Crush all day.

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lilBuddha
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# 14333

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In order to truly talk about a "free market" one must define what that actually means.
Free meaning truly free is generally only a concept held by people who have no clue how markets work.
On the business side, free market means only the government support and intervention which benefits their particular industry or company. They do not want a truly free market and often lobby against market freedoms which might allow others to compete with them more easily.
However, the general public contains people who have bought the myth that free market means beneficial competition.

Free market is like anarchy: Only the truly crazy want the real thing, but there is benefit in marketing the concept to the ignorant.

--------------------
So goodnight moon, I want the sun
If it's not here soon, I might be done
No it won't be too soon 'til I say goodnight moon

- A. N. Parsley, D. Mcvinni

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Leorning Cniht
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# 17564

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quote:
Originally posted by lilBuddha:

Free market is like anarchy: Only the truly crazy want the real thing, but there is benefit in marketing the concept to the ignorant.

"Free" is a good philosophical starting point, from where you can explore what freedoms you need to remove and why.

In particular, pure free markets don't work with asymmetric information or asymmetric power, so we have to have some rules. Such as, for example, when you advertise a "large loaf of bread", it has to be bread, and of at least the size known as "large".

Free markets don't work with monopolies, so we have regulated industries and/or state ownership for things where multiple competing operators doesn't make sense, and laws to try to prevent anti-competitive monopolies in other arenas.

And, as Dafyd mentioned, our society is structured such that labour needs work more then employers need labour, so we have a raft of employment law to attempt to prevent exploitation of that asymmetry.

But that doesn't mean that "free" isn't a useful concept. We should be able to go through each and every regulation or law, and explain what asymmetry this rule is designed to rectify, and why this particular rule is the minimal necessary constraint.

(And yes, you're right to point out that nobody ever invokes the free market to argue that the subsidy they are getting is a problem...)

[ 24. October 2017, 17:20: Message edited by: Leorning Cniht ]

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lilBuddha
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Free is a useful concept if everyone is honest and sufficiently educated.

--------------------
So goodnight moon, I want the sun
If it's not here soon, I might be done
No it won't be too soon 'til I say goodnight moon

- A. N. Parsley, D. Mcvinni

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Russ
Old salt
# 120

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quote:
Originally posted by Dafyd:
So you're advocating a lower level of interest for investors that are more wealthy? And a higher level for less wealthy investors?

I think the logic is that a high-risk business (and what start-up isn't ?) Would have to pay a higher rate of interest in order to attract finance from small investors, yes.

(until you get into a crowdfunding model with large numbers of investors putting in small amounts of money that they can easily afford to lose, which is another way to get around risk-aversion).

It's not so much that I advocate it. More that this is my understanding of how the way that the economy works to give rise to a "going rate".

I think that the difference between us relates to the ethical proposition that an individual is treating another person fairly if they agree to trade at the going rate.

Seems like you disagree with that proposition. Without wishing to commit to any very clear alternative notion of what a fair rate would be.

And thus I'm - rightly or wrongly - suspecting you of being a partisan who would approve any notion provided it confirms your prejudice that recompense for labour should be higher.

I've suggested that the proposition is only conditionally true, with the condition being to do with a competitive market.

Not a free market, because there's no guarantee that an unconstrained market doesn't end up as monopoly.

quote:
if the risk premium applies because some people don't have as deep pockets as others, the risk premium should really apply to labour, who on the simple model don't have any depth in their pockets at all. If they don't earn money they have to dig into their savings/ property / starve. Clearly therefore the risk premium for labour should be even larger than it is for investors.

Yes, risk premium applies to labour also. If people with the skills you need can get a job with the local authority at a lower salary but with a high level of job security, you may have to offer a premium to entice them to work for your high-risk start-up company.

That doesn't mean a higher risk premium than investors, because the worker can get another job more easily than the investor can acquire capital to replace what he has lost.

At one point I thought you were putting forward the idea that fairness is paying the entrepreneur a fixed going-rate salary and then dividing the excess profit between all the contributors in some way.

But you seem to agree that in a competitive market there's no excess profit. Unless it's a temporary-monopoly profit due to innovation. Which is the contribution og the entrepreneur...

quote:

In addition for a market to be genuinely competitive all parties must have the option of withdrawing from the market if the price is too high/low.

No, I don't think that's true. If government passes a law saying that everyone has to have exactly one widget, then that makes the demand curve horizontal (or vertical, depending which way you plot it). It doesn't alter the supply curve - businesses can still compete to provide the requisite number of widgets.

--------------------
Wish everyone well; the enemy is not people, the enemy is wrong ideas

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Crœsos
Shipmate
# 238

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quote:
Originally posted by Russ:
I think that the difference between us relates to the ethical proposition that an individual is treating another person fairly if they agree to trade at the going rate.

Seems like you disagree with that proposition. Without wishing to commit to any very clear alternative notion of what a fair rate would be.

And thus I'm - rightly or wrongly - suspecting you of being a partisan who would approve any notion provided it confirms your prejudice that recompense for labour should be higher.

I've suggested that the proposition is only conditionally true, with the condition being to do with a competitive market.

Not a free market, because there's no guarantee that an unconstrained market doesn't end up as monopoly.

Your caveat would seem to make your basic proposition of dubious utility, at best. The obvious corollary of your suggestion is that if a market is not competitive, then no transaction can be considered "fair". While I can admire the purity of that statement, it would seem to be an almost useless standard for a lot of economic situations.

On the other hand, it does seem to tolerate a lot of perversions of the term "fair". The market for minimum wage labor in the U.S. would seem to be "competitive", at least in the economic sense of the term. There aren't a lot of monopolies (or even regional monopolies) for minimum wage labor and there seem to be a lot fewer constraints on supply than on other types of labor. The "going rate" for American minimum wage labor would also seem to include a lot of wage theft. Given your definition of terms, we're supposed to consider wage theft "fair" because it's part of the "going rate" for minimum wage labor, whereas countering wage theft would be unfair because it's a subversion of the going rate in that (presumably competitive) market.

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Humani nil a me alienum puto

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Dafyd
Shipmate
# 5549

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quote:
Originally posted by Russ:
I think that the difference between us relates to the ethical proposition that an individual is treating another person fairly if they agree to trade at the going rate.

Seems like you disagree with that proposition. Without wishing to commit to any very clear alternative notion of what a fair rate would be.

That's because I don't think there is any such thing as a fair rate, at least not under the present economic arrangements.
Neither do you. If two people agree to trade at all, then by definition the rate at which they trade is the going rate. And therefore it is meaningless to say it is greater or less than the fair rate.
However, you don't want to say that. You want to use the word 'fair' to claim the moral high ground for your position, although it empties the word of any meaning.
You belated said you only mean the word to apply to a competitive market. But you don't seem to be willing to accept that any features of any existing markets make them any less than competitive.

It's worth commenting here upon a feature of this conversation.
Edmund Burke, the apologist for English conservatism, attacked the French Revolutionaries for trying to arrange society in accordance with their abstract notions of what was just and right, regardless of the human costs. Whereas he favoured a politics of only righting specific wrongs as cautiously as possible, not on the basis of any general theory, but because they were obvious wrongs.
Now it's possible to be a Burkean progressivist. I'd say most modern progressivists are. That is, we'd share Burke's belief that you have to react to specific wrongs rather than trying to measure them against some predetermined theory of what is and isn't wrong.
Contrariwise, you appear to be an anti-Burkean conservative. That is, you're continually insisting that nobody changes anything unless they have a general theory, while being prepared to deny or justify almost any human cost under the status quo in terms of your general abstract theory. Thereby you're jettisoning the baby of Burkean conservatism while keeping the bathwater.

quote:
And thus I'm - rightly or wrongly - suspecting you of being a partisan who would approve any notion provided it confirms your prejudice that recompense for labour should be higher.
You do go on about other people's partisan sympathies don't you? A bit like Trump talking about fake news every time he's caught out in a lie?
There's no 'thus' about it. You started out with the project of suspecting that. You want to believe social-progressives are partisans because you don't want to admit that you are.
You've come up with no evidence for your supposition except for straw men. Whereas it does seem to me you've provided plenty of evidence for the contrary supposition. (For example, your misuse of the word 'fair'.)

quote:
That doesn't mean a higher risk premium than investors, because the worker can get another job more easily than the investor can acquire capital to replace what he has lost.
That would only be the case in a market with full employment. So you'd think wages and salaries ought to be lower in markets with full employment, because employers wouldn't have to pay the risk premium.
But that's not what happens to the going rate under full employment.

quote:
At one point I thought you were putting forward the idea that fairness is paying the entrepreneur a fixed going-rate salary and then dividing the excess profit between all the contributors in some way.
If you view the business as a collective enterprise creating wealth then that would be fair. It's not how businesses are run in our economic system, which makes the word 'fair' of dubious application. Certainly there's no grounds for arguing that progressives want workers paid more than is fair.

quote:
But you seem to agree that in a competitive market there's no excess profit. Unless it's a temporary-monopoly profit due to innovation. Which is the contribution og the entrepreneur...
Hang on a moment. I thought you said that the contribution of the entrepreneur was the initiative (which needn't be innovative or create a temporary monopoly) rather than the ideas/innovation. Perhaps you should get your position on entrepreneurs straight before you start ascribing a partisan position to other people?
Empirically speaking a lot of companies seem to be making a lot of profit without any significant innovation going on.
Either: a) we can take this as evidence that this isn't a perfectly competitive market, and therefore your talk of the going rate for labour being fair in a competitive market is irrelevant to the economic system we actually live in.
Or b) someone with partisan sympathies in favour of the employers or against the employees could insist that the going rate for labour is fair, and therefore the market must be competitive and therefore the profits must be due to innovation even where there isn't any obvious innovation going on.

quote:
quote:

In addition for a market to be genuinely competitive all parties must have the option of withdrawing from the market if the price is too high/low.

No, I don't think that's true. If government passes a law saying that everyone has to have exactly one widget, then that makes the demand curve horizontal (or vertical, depending which way you plot it). It doesn't alter the supply curve - businesses can still compete to provide the requisite number of widgets.
Any move to reduce the price of widgets in a competitive market will require a consequent overproduction of widgets which will not sell. (The business that cuts their prices will have to order in more widgets in order to sell them at the reduced price to maintain their profit level; the other businesses won't have cut their widget production accordingly.) This will increase the production cost of each individual widget, making cutting the price of widgets less rewarding than it might initially appear. Each business has to factor in the cost of having unsold widgets on their hands when their competitors also lower prices. Thus, the equilibrium rate will stay above the optimal point by at least the cost of the excess production needed to lower it.

--------------------
we remain, thanks to original sin, much in love with talking about, rather than with, one another. Rowan Williams

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Russ
Old salt
# 120

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quote:
Originally posted by Dafyd:
I don't think there is any such thing as a fair rate, at least not under the present economic arrangements.

You mean that there isn't a rate that would be fair ? That the whole notion of a man selling his labour is wrong ?

quote:

If two people agree to trade at all, then by definition the rate at which they trade is the going rate. And therefore it is meaningless to say it is greater or less than the fair rate.
However, you don't want to say that. You want to use the word 'fair' to claim the moral high ground for your position, although it empties the word of any meaning.

You could take the view that if two people agree to trade at all then they should stand by that agreement, end of story. That anything you can agree is necessarily therefore a fair price, that there's no such thing as exploitation.

I don't take that view. I think there is such a thing as abuse of monopoly power (local or otherwise ). I see economic theory as giving some sort of equilibrium-based explanation of where prices come from. And see deliberately paying less than that medium-term going rate - because one knows that the particular individual has no other short-term option - as an abusive act. I take it that that's what people mean by "exploitation".

But I'm also suggesting that there is no other source of data on what a "fair price" is other than that experience of a properly-functioning market. (In which, for example you have to pay more for scarce skills than for capabilities that everybody has).

quote:
But you don't seem to be willing to accept that any features of any existing markets make them any less than competitive.
Not so - I'm perfectly prepared to listen to any diagnosis you put forward that explains what anti-competitive practices or natural monopolies exist in particular industries and how these lead to lower wages than would apply in a competitive market. So far that argument seems to amount to "some firms are reporting profits".

quote:
I'd say most modern progressivists are. That is, we'd share Burke's belief that you have to react to specific wrongs rather than trying to measure them against some predetermined theory of what is and isn't wrong.
People who have a prejudice justify that prejudice with the words "it's obvious". If you see an "obvious" specific wrong affecting those you sympathize with and want to put it right, but can't put forward any general principle that applies equally to those you don't sympathize with, it's not very convincing to those who don't share your sympathies.

quote:
If you view the business as a collective enterprise creating wealth then that would be fair.
Whereas if you view a small business as the creation of an enterprising individual who contracts with others to provide labour, capital & land at agreed prices...

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Wish everyone well; the enemy is not people, the enemy is wrong ideas

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Soror Magna
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quote:
Originally posted by Russ:
... Whereas if you view a small business as the creation of an enterprising individual who contracts with others to provide labour, capital & land at agreed prices...

So how is that enterprising individual any different from, say, the CEO of a corporation which contracts with others for labour, capital and land at agreed prices and gets a handsome salary and stock options? They're both doing the same work, just at a different scale. Or how about an enterprising individual who buys an existing small business? Is s/he an entrepreneur or not?


And BTW, "s/he's risking their own money" is not the correct answer. Neither is "one is a corporation, the other is a person", since corporations are people and small businesses also incorporate.


The worship of the entrepreneur is a political myth that is used by people who are decidedly NOT entrepreneurs to obtain financial advantages - non-entrepreneurs like huge multi-national corporations, greedy day traders and real estate flippers, and franchise chains that DESTROY small independent businesses.

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"You come with me to room 1013 over at the hospital, I'll show you America. Terminal, crazy and mean." -- Tony Kushner, "Angels in America"

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quote:
Originally posted by Soror Magna:
So how is that enterprising individual any different from, say, the CEO of a corporation which contracts with others for labour, capital and land at agreed prices and gets a handsome salary and stock options?

From personal experience, a lot. A CEO isn't in business, a CEO is a tool of a large entity, doesn't risk her or his own money, doesn't take risks which jeopardize family and basic life. Small business people starting out have to put themselves on the line, like take loans out against their home, risk losing everything financial, and they work in terror that it will all be for naught. May I say in definite terms: no-one understands small business until you have to make a payroll and you do it out of your personal funds because people who owe you haven't paid their bills, and you wonder if they ever will. CEOs do not have this. Ever.

quote:
Soror Magna:
They're both doing the same work, just at a different scale.

This is only true if you compare quantities of money. Nothing is the same when the business is small, you know everyone, and feel responsible for them, to pay them, so their lives can go on normally. One is intensely personal because it has to be, the other, not except if people desire to.

quote:
Soror Magna:
Or how about an enterprising individual who buys an existing small business? Is s/he an entrepreneur or not?

This person may be the same as a small business person if they buy an existing business and take the personal risks in buying. If someone buys a business and it's just an acquisition for them, with none of the fire created because of the intense stress and risks involved, they start to resemble the large business, where CEOs are hired guns and no-one has a personal stake in it.

quote:
Soror Magna:
And BTW, "s/he's risking their own money" is not the correct answer. Neither is "one is a corporation, the other is a person", since corporations are people and small businesses also incorporate.

And BTW, it is obvious you haven't any experience with running a small business because your statement at the start of this paragraph demonstrates it. That small businesses incorporate does not not make them similar to large corporations except that the words used are similar. Entirely, utterly different, except perhaps in the minds of those who haven't experience.

Small businesses benefit from incorporating when they have made enough money that they need to retain some money within the company so they can avoid things like I mentioned above: making a payroll out of personal monies. Money in a small business corporation can be deferred for taxation to weather the inevitable ups and downs, to take time off for holidays (though you also work during holidays, touching base, so things keep going), to weather times of illness and disability, and to save some money to stave off the terror of business failure when someone undercuts and takes business from you. It also cushions through the times of needing to redirect and develop new ideas, maintain those employees until implemented etc.

I could go on and on. My history is of working in gov't for 6 years until a recession where the political know-it-alls and their MBA assistants decided they knew what to do. Then 35 years of small business.It is risk and many people aren't cut out to handle the uncertainty, the gambles required and the very long hours.

Posts: 11078 | From: Treaty 6 territory in the nonexistant Province of Buffalo, Canada ↄ⃝' | Registered: Mar 2010  |  IP: Logged
Dafyd
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quote:
Originally posted by Russ:
quote:
Originally posted by Dafyd:
I don't think there is any such thing as a fair rate, at least not under the present economic arrangements.

You mean that there isn't a rate that would be fair ? That the whole notion of a man selling his labour is wrong ?
I mean the question isn't applicable. The going rate is clearly not determined by moral considerations - it is the outcome of a number of self-interested actors pursuing their reasonable self-interest; therefore, you cannot assert than any particular rate is sanctioned by the weight of morality.

quote:
quote:

If two people agree to trade at all, then by definition the rate at which they trade is the going rate. And therefore it is meaningless to say it is greater or less than the fair rate.
However, you don't want to say that. You want to use the word 'fair' to claim the moral high ground for your position, although it empties the word of any meaning.

You could take the view that if two people agree to trade at all then they should stand by that agreement, end of story. That anything you can agree is necessarily therefore a fair price, that there's no such thing as exploitation.

I don't take that view. I think there is such a thing as abuse of monopoly power (local or otherwise ). I see economic theory as giving some sort of equilibrium-based explanation of where prices come from. And see deliberately paying less than that medium-term going rate - because one knows that the particular individual has no other short-term option - as an abusive act. I take it that that's what people mean by "exploitation".

Interesting. How do you think the going rate ever changes? Since you think it's morally wrong to deviate from it?
Presumably you don't buy stuff that's on a three for two offer because legally it's only on offer if it's at less than the going rate?

The equilibrium rate can't be defined in advance of it actually happening. As you admit below, there's no source of data on the equilibrium rate other than what is the current equilibrium under the present market conditions.

Say there's only one baker in the village. Is the baker obliged to work out whether she's charging more for her bread than she would be able to had the village room for two bakers? How could she possibly work that out?

quote:
But I'm also suggesting that there is no other source of data on what a "fair price" is other than that experience of a properly-functioning market. (In which, for example you have to pay more for scarce skills than for capabilities that everybody has).
That's circular, isn't it? Because you can only know if something isn't fair if you have experience of it being fair; and you can only have experience of something being fair if it actually happens.

quote:
quote:
But you don't seem to be willing to accept that any features of any existing markets make them any less than competitive.
Not so - I'm perfectly prepared to listen to any diagnosis you put forward that explains what anti-competitive practices or natural monopolies exist in particular industries and how these lead to lower wages than would apply in a competitive market.
I'm not seeing any evidence for that. So far that argument seems to amount to "some firms are reporting profits".

QED

quote:
quote:
I'd say most modern progressivists are. That is, we'd share Burke's belief that you have to react to specific wrongs rather than trying to measure them against some predetermined theory of what is and isn't wrong.
People who have a prejudice justify that prejudice with the words "it's obvious". If you see an "obvious" specific wrong affecting those you sympathize with and want to put it right, but can't put forward any general principle that applies equally to those you don't sympathize with, it's not very convincing to those who don't share your sympathies.
Are you saying you don't share those sympathies? That there's a class of people with whom you won't sympathise?

This goes back to the previous point. You didn't need to be able to predict where the equilibrium price would lie in order to say that a monopoly practice is raising prices improperly. You just objected to monopolies generally. Not presumably because you have a particular lack of sympathy for people running monopolies.


quote:
quote:
If you view the business as a collective enterprise creating wealth then that would be fair.
Whereas if you view a small business as the creation of an enterprising individual who contracts with others to provide labour, capital & land at agreed prices...
Then you're comparing apples and oranges.
But what about large businesses? Why talk about small businesses all the time? It's as if you want to engage people's sympathies. Rather than discussing general principles.

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we remain, thanks to original sin, much in love with talking about, rather than with, one another. Rowan Williams

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lilBuddha
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quote:
Originally posted by no prophet's flag is set so...:
A CEO isn't in business, a CEO is a tool of a large entity, doesn't risk her or his own money, doesn't take risks which jeopardize family and basic life.

CEO is a title and people with that title can have many different levels of personal investment and risk.
quote:

Small business people starting out have to put themselves on the line, like take loans out against their home, risk losing everything financial, and they work in terror that it will all be for naught.

Some small businesses start this way. Some are inherited, some are started using mum and dad's money, some start out as hobbies or side hustles and evolve into a full-time business... There is no one model and, I think, that was Soror Magna's basic idea. Russ appear to be using the mythical interpretation of small business to push views that are more suited to the interestes of large corporations.
quote:

May I say in definite terms: no-one understands small business until you have to make a payroll and you do it out of your personal funds because people who owe you haven't paid their bills, and you wonder if they ever will.

I think it more accurate that no one fully understands unless they have lived it. But I will reiterate: this is only one small business experience.

quote:

CEOs do not have this. Ever.

Pretty damn sure this is not true. The majority of CEOs, yes. All of them? Nope.


quote:

quote:
Soror Magna:
Or how about an enterprising individual who buys an existing small business? Is s/he an entrepreneur or not?

This person may be the same as a small business person if they buy an existing business and take the personal risks in buying.

Small business is a category defined by scope. Typically number of employees and £/$ turnover.* Not by risk factor or philosophy.

If Bill Gates and Warren Buffet start selling bicycles made by themselves in a garage, they would qualify as a small business. They might need to cordon off personal wealth from the business assets, but they would still be a small business.

*And what qualifies can be pretty much a scam created by big business lobbying. In America, 1500 can be a small business. And that can be expanded by work around.
In the UK, it is 50 employees and a balance sheet of £3 million.
Not what is typically though of when "small" business is invoked.

--------------------
So goodnight moon, I want the sun
If it's not here soon, I might be done
No it won't be too soon 'til I say goodnight moon

- A. N. Parsley, D. Mcvinni

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no prophet's flag is set so...

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We define usually "small business" here as less than 10 employees when we talk about it, though 71% are owner/operator without other employees. No-one is a CEO of themselves or maybe they all are. This is the size of most of them (88%). The gov't uses the figure of 50 or less employees in their statistics to be consistent with the feds. 98% of businesses here are 50 workers or less. Boring Saskatchewan link re PDF Gov't report of small business.
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lilBuddha
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quote:
Originally posted by no prophet's flag is set so...:
We define usually "small business" here as less than 10 employees when we talk about it,

And this is part of the problem.
Governments talk about protecting small business whilst legislating for large businesses. In part, because small businesses do not get them elected.
Small business owners, and those who support that idea, get conned into thinking the legislation benefits small businesses when it either doesn't, of does so as an accident, but still is preferential to large business.
Either way, the myth of the entrepreneur is part of the reason small businesses struggle.

99% of Saskatchewan businesses are small businesses, yet they produce only 31% of the GDP and 26% of the payroll jobs. Why should government care?

--------------------
So goodnight moon, I want the sun
If it's not here soon, I might be done
No it won't be too soon 'til I say goodnight moon

- A. N. Parsley, D. Mcvinni

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Crœsos
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# 238

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So a carpenter who hires himself out to a homeowner is an "entrepreneur" and deserves special treatment from the state, but a carpenter who hires himself out to another carpenter belongs to an inferior class and should have his earnings taxed at a higher rate than the "entrepreneurial" carpenter? That would seem to require a more detailed explanation than any that's been offered so far.

[ 28. October 2017, 13:14: Message edited by: Crœsos ]

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Humani nil a me alienum puto

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no prophet's flag is set so...

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quote:
Originally posted by Crœsos:
So a carpenter who hires himself out to a homeowner is an "entrepreneur" and deserves special treatment from the state, but a carpenter who hires himself out to another carpenter belongs to an inferior class and should have his earnings taxed at a higher rate than the "entrepreneurial" carpenter? That would seem to require a more detailed explanation than any that's been offered so far.

If I hire you I pay you an hourly rate, submit tax on your wages every 2 weeks, pay workers compensation premiums on payroll in case you're injuried, pay out of work insurance premiums, and here Canada pension plan premiums. I also supply the building materials, tools, truck to haul everything to job sites, rent the hoists, lifts and cranes etc used in construction.

I would probably prefer to sub contract wiclth you so you are responsible for your own small contacting business and you have to handle all of the administrative and financial things but most seem to prefer to be an employee. Because of the above.

I am not a carpenter but know a few. Majority are involved in construction.

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sanc
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Oh the hoops with which entrepreneurs have to go through to put up a business. In some way I think of these scenario as some kind of hazing. The entrepreneur having been hazed, offload all that frustrations on the workers. Here, earn your wages the hard way just as I've jumped through lots of hoops so you could all work.

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It stereotyping to think business people want and enjoy exploiting others. Offensive to those of us who provide good employment, good wages, take an active interest in the community. I have seen no data which indicates either assholes decide to go into business or business turns people into assholes.
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lilBuddha
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quote:
Originally posted by no prophet's flag is set so...:
It stereotyping to think business people want and enjoy exploiting others. Offensive to those of us who provide good employment, good wages, take an active interest in the community. I have seen no data which indicates either assholes decide to go into business or business turns people into assholes.

Who said anything like this?

--------------------
So goodnight moon, I want the sun
If it's not here soon, I might be done
No it won't be too soon 'til I say goodnight moon

- A. N. Parsley, D. Mcvinni

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Russ
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# 120

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quote:
Originally posted by Dafyd:
I mean the question isn't applicable. The going rate is clearly not determined by moral considerations - it is the outcome of a number of self-interested actors pursuing their reasonable self-interest; therefore, you cannot assert than any particular rate is sanctioned by the weight of morality.

So in your view low pay isn't a moral issue and there's no such thing as exploitation ?

That may be a perfectly tenable point of view, but I question whether it's representative of social progressivism...

quote:
How do you think the going rate ever changes?
The obvious example is technology. With self-driving cars being prototyped, the prospects for the wage rate of taxi drivers aren't good.

quote:
Say there's only one baker in the village. Is the baker obliged to work out whether she's charging more for her bread than she would be able to had the village room for two bakers? How could she possibly work that out?
It may be prudent to price her bread at a level which doesn't immediately suggest that more competition would be a good idea...

But I thought your main concern was the wages she pays her employee the assistant baker.

Theory suggests that if the wages she pays are significantly below the going rate in the bakeries in neighbouring villages, then he's probably not going to stay long - as soon as he hears of a vacancy elsewhere he'll be applying for it.

There may be reasons why that isn't the case. Maybe his eyesight is so bad that he can't drive. Maybe he's her nephew and is under pressure from the family not to let his aunt down.

Seems to me that in that sort of case you can argue that he's being exploited.

Maybe he isn't - maybe there's an understanding that he'll inherit the business when she dies. But whether or not he's being unfairly treated seems to me a meaningful discussion to have. But only because there's a population of assistant bakers in neighbouring villages to act as a point of reference.

quote:
But what about large businesses? Why talk about small businesses all the time? It's as if you want to engage people's sympathies. Rather than discussing general principles.
If people make decisions on sympathy rather than reason, then engaging their sympathies seems logical. Who's going to sympathize with Universal Megacorp ?

Considering the case when the employer is your neighbour and the employee is also your neighbour - the human-scale business - is an attenpt to bypass differential sympathies and focus on general principles.

Once we have a coherent and unbiased view of small business, we can then ask whether there's a reason that the same principles don't apply to large businesses.

Does size matter ?

--------------------
Wish everyone well; the enemy is not people, the enemy is wrong ideas

Posts: 3032 | From: rural Ireland | Registered: May 2001  |  IP: Logged
Soror Magna
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quote:
Originally posted by Russ:
... If people make decisions on sympathy rather than reason, then engaging their sympathies seems logical. Who's going to sympathize with Universal Megacorp ?

Considering the case when the employer is your neighbour and the employee is also your neighbour - the human-scale business - is an attenpt to bypass differential sympathies and focus on general principles....

Baloney. It's an attempt to transfer neighbourly sympathies to entities that are most definitely not neighbours and rarely, if ever, behave as neighbours should.

Let's say that one of your hypothetical neighbours becomes very wealthy and decides to move out of the neighbourhood (not necessarily the employer; maybe the employee wins the lottery!) She's not your neighbour any more. Why should she benefit from or be restrained by your neighbourhood's rules? What if her new neighbourhood has its own "general principles" and ... they're not the same as your neighbourhood's "general principles"?

If your neighbourhood has "general principles" of a minimum wage, hours of work, or health and safety, do those apply outside your neighbourhood?

And other than the fact that you want to label them "general principles", why should those "general principles for neighbourhood economic transactions" also be applied to economic relations between any of your neighbours and Ginormous Megacorp? Is Megacorp going to let me borrow their circular saw or pick up my mail when I'm away like a neighbour would? Because that's what neighbours do. Megacorp won't, and thus doesn't deserve whatever sympathy I have for my neighbours.

The generality of "general principles for neighbourhood economic transactions" is limited by the fact that most of the economic actors in our lives ARE NOT the economic, social or political equivalent of your neighbours and it is naive or disingenuous to pretend otherwise.

--------------------
"You come with me to room 1013 over at the hospital, I'll show you America. Terminal, crazy and mean." -- Tony Kushner, "Angels in America"

Posts: 5376 | From: Caprica City | Registered: Jul 2005  |  IP: Logged
Dafyd
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quote:
Originally posted by Russ:
quote:
Originally posted by Dafyd:
I mean the question isn't applicable. The going rate is clearly not determined by moral considerations - it is the outcome of a number of self-interested actors pursuing their reasonable self-interest; therefore, you cannot assert than any particular rate is sanctioned by the weight of morality.

So in your view low pay isn't a moral issue and there's no such thing as exploitation ?
I think inequality is a moral issue. And I think hardship and deprivation are moral issues. I don't fetishise any particular rate of pay as such.

You don't need to compare a particular rate with a morally correct rate to identify exploitation, any more than you need to know what lifespan a person would have reached to decide that killing them was murder.

quote:
quote:
How do you think the going rate ever changes?
The obvious example is technology. With self-driving cars being prototyped, the prospects for the wage rate of taxi drivers aren't good.
How do you set the going rate for self-driving cars when there isn't a going rate yet?

But how does it change in general? Technology can't be the only answer. For example, is there a moral obligation on someone who owns commercial property to charge rent at the same going rate on the high street as on a commercial property on a side street?
Or if the going rate is different on the two places, how are they supposed to find out?
Is there a moral obligation on employers in Brighton to pay the same going rate as in London? Or on employees to accept the same in London as in Brighton? Or if the going rates are different how do they each find out which one they qualify under?

quote:
quote:
Say there's only one baker in the village. Is the baker obliged to work out whether she's charging more for her bread than she would be able to had the village room for two bakers? How could she possibly work that out?
It may be prudent to price her bread at a level which doesn't immediately suggest that more competition would be a good idea...
That would be a prudential reason. But you were saying that there's a moral obligation upon her not to charge more than the going rate, whatever that is.

quote:
But I thought your main concern was the wages she pays her employee the assistant baker.
Not for present purposes it isn't.
Do you think wages are a special case?

quote:
Theory suggests that if the wages she pays are significantly below the going rate in the bakeries in neighbouring villages, then he's probably not going to stay long - as soon as he hears of a vacancy elsewhere he'll be applying for it.

There may be reasons why that isn't the case. Maybe his eyesight is so bad that he can't drive. Maybe he's her nephew and is under pressure from the family not to let his aunt down.

Seems to me that in that sort of case you can argue that he's being exploited.

Maybe he isn't - maybe there's an understanding that he'll inherit the business when she dies. But whether or not he's being unfairly treated seems to me a meaningful discussion to have. But only because there's a population of assistant bakers in neighbouring villages to act as a point of reference.

Actually it seems to me that it's because you can point to some reason - his eyesight is bad or he's subject to family pressure - why he's being exploited. You haven't said anything at all about the bakers' assistants in the next village along. Maybe they're being paid more because they're half an hour's train ride closer to the big city.

But assuming the kinds of practices you instance and similar count as exploitation, do you think it's possible that the workforce in the next village are all being exploited? Or do the practices become ok if all the employers are doing them?

quote:
quote:
But what about large businesses? Why talk about small businesses all the time? It's as if you want to engage people's sympathies. Rather than discussing general principles.
If people make decisions on sympathy rather than reason, then engaging their sympathies seems logical. Who's going to sympathize with Universal Megacorp ?
That's a big 'if'. You seem to be assuming it as a premise.
In any case, if you follow Adam Smith for instance, decisions ought to be made based on sympathy, as long as one sympathises with everyone involved. You can't make a decision based on reason can only ever be the servant of the passions, as Smith's friend Hume said. Presumably you think Adam Smith was wrong?

One can't sympathise with Universal Megacorp, because Universal Megacorp isn't a person and doesn't have feelings. But one could surely sympathise with the managers and shareholders of Universal Megacorp. Unless you think that nobody could possibly sympathise with them? Why would you think that?

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we remain, thanks to original sin, much in love with talking about, rather than with, one another. Rowan Williams

Posts: 10376 | From: Edinburgh | Registered: Feb 2004  |  IP: Logged
Russ
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quote:
Originally posted by Soror Magna:

If your neighbourhood has "general principles" of a minimum wage, hours of work, or health and safety, do those apply outside your neighbourhood?

I take it you mean something like "Am I, in Caprica City, necessarily being exploited if I'm working for longer hours at a lower rate of pay at a higher risk of accident than the norms which apply in rural Ireland ?"

And my answer is No. Your community has no obligation to abide by my community's standards, and vice versa.

I'm suggesting that it follows from that that whilst an individual worker in your community (or mine) may be exploited, it's meaningless to suggest that all of them are. Because there's no objective standard against which the norm in a community can be unfavourably compared.

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Wish everyone well; the enemy is not people, the enemy is wrong ideas

Posts: 3032 | From: rural Ireland | Registered: May 2001  |  IP: Logged
Crœsos
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# 238

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quote:
Originally posted by Russ:
quote:
Say there's only one baker in the village. Is the baker obliged to work out whether she's charging more for her bread than she would be able to had the village room for two bakers? How could she possibly work that out?
It may be prudent to price her bread at a level which doesn't immediately suggest that more competition would be a good idea...

But I thought your main concern was the wages she pays her employee the assistant baker.

Theory suggests that if the wages she pays are significantly below the going rate in the bakeries in neighbouring villages, then he's probably not going to stay long - as soon as he hears of a vacancy elsewhere he'll be applying for it.

There may be reasons why that isn't the case. Maybe his eyesight is so bad that he can't drive. Maybe he's her nephew and is under pressure from the family not to let his aunt down.

Seems to me that in that sort of case you can argue that he's being exploited.

Maybe he isn't - maybe there's an understanding that he'll inherit the business when she dies. But whether or not he's being unfairly treated seems to me a meaningful discussion to have. But only because there's a population of assistant bakers in neighbouring villages to act as a point of reference.

Maybe there are reasons not directly related to work that an assistant baker doesn't feel like making their spouse quit their job, yank their kids out of the local school, abandon their elderly parents, and pay the expenses associated to moving to a new town where they know no one in order to make that extra dollar an hour. Assuming everyone belongs to species Homo economicus seems to ignore a lot of the ways people really act in favor of a philosophically-derived abstraction.

quote:
Originally posted by Russ:
If people make decisions on sympathy rather than reason, then engaging their sympathies seems logical. Who's going to sympathize with Universal Megacorp ?

You, obviously.

quote:
Originally posted by Dafyd:
quote:
quote:
Originally posted by Dafyd:
How do you think the going rate ever changes?

Originally posted by Russ:
The obvious example is technology. With self-driving cars being prototyped, the prospects for the wage rate of taxi drivers aren't good.

How do you set the going rate for self-driving cars when there isn't a going rate yet?

But how does it change in general? Technology can't be the only answer.

To take Russ' suggested example, the real (i.e. inflation adjusted) wages of American truck drivers have been declining for years. There are no self-driving trucks yet, nor is America outsourcing its truck driving needs to cheaper foreign truck drivers. It does seem to be closely correlated to declines in unionization of American truck drivers, but that doesn't really sort well with the Homo economicus model of utility maximization.

quote:
Originally posted by Russ:
I take it you mean something like "Am I, in Caprica City, necessarily being exploited if I'm working for longer hours at a lower rate of pay at a higher risk of accident than the norms which apply in rural Ireland ?"

And my answer is No. Your community has no obligation to abide by my community's standards, and vice versa.

I'm suggesting that it follows from that that whilst an individual worker in your community (or mine) may be exploited, it's meaningless to suggest that all of them are. Because there's no objective standard against which the norm in a community can be unfavourably compared.

For whatever reason a lot of these arguments seem to end up sounding a lot like antebellum Southerners defending their Peculiar Institution, much of which boiled down to "Why don't you Yankees mind your own business?"


[Minor code correction - Eliab]

[ 30. October 2017, 12:56: Message edited by: Eliab ]

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Humani nil a me alienum puto

Posts: 10443 | From: Sardis, Lydia | Registered: May 2001  |  IP: Logged
Dafyd
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# 5549

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quote:
Originally posted by Russ:
I'm suggesting that it follows from that that whilst an individual worker in your community (or mine) may be exploited, it's meaningless to suggest that all of them are. Because there's no objective standard against which the norm in a community can be unfavourably compared.

That leads to some counterintuitive results. It's also at odds with your position that monopolies are definitely wrong.

Suppose we have a situation in which thirty per cent of the agricultural workforce are subject to restrictions and so are limited in how they can hire themselves out. That presumably means those thirty per cent are being exploited. (We'll pass over the question of whether or not the thirty per cent have a depressing effect on the wages of the remaining seventy per cent. Apparently that's not an objective standard.) But if one hundred per cent of the labour force are subject to travel restrictions then they're not being exploited. In fact, if ninety per cent of the workforce are subject to travel restrictions then the free workers are exploiting their employers. That seems counterintuitive.

In fact it's even more counterintuitive than that. Suppose forty nine per cent of the workforce are subject to travel restrictions and fifty one per cent are not. The forty nine per cent are exploited and the fifty one aren't. Now the government at the behest of one of the employers passes travel restrictions on another two per cent of the workforce. Now not only are the forty nine per cent not being exploited any more, but the remaining forty nine per cent who are free have suddenly started to exploit their employers.
Gosh.

I'll note that another corrolary of Russ' position is that one can't say that the workforce as a whole is getting paid more than is fair. If the workers' union has negotiated pension rights that make it hard for the employers to invest because they have to set aside money for the pensions, then there's no way for Russ to say that's too burdensome on the employers.

As regards monopolies: Russ thinks that monopolies are wrong. He thinks there is an objective standard: namely the price that would obtain under a situation of free competition. But that objective standard is purely notional. It doesn't exist in any way, because what exists is the monopoly. So presumably if it still counts as an objective standard (despite not existing), then it's perfectly possible for there to be an objective standard in the case of the workforce - thus allowing us to say that an entire workforce is being exploited.

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we remain, thanks to original sin, much in love with talking about, rather than with, one another. Rowan Williams

Posts: 10376 | From: Edinburgh | Registered: Feb 2004  |  IP: Logged
mr cheesy
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# 3330

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quote:
Originally posted by Russ:
I take it you mean something like "Am I, in Caprica City, necessarily being exploited if I'm working for longer hours at a lower rate of pay at a higher risk of accident than the norms which apply in rural Ireland ?"

And my answer is No. Your community has no obligation to abide by my community's standards, and vice versa.

I think there objective standards. There absolutely are.

One can't morally just shrug when people are doing things that will kill them and say "meh, who cares, they're just living in x country with their own standards as to risk of accident".

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arse

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Soror Magna
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# 9881

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quote:
Originally posted by Russ:
quote:
Originally posted by Soror Magna:

If your neighbourhood has "general principles" of a minimum wage, hours of work, or health and safety, do those apply outside your neighbourhood?

I take it you mean something like "Am I, in Caprica City, necessarily being exploited if I'm working for longer hours at a lower rate of pay at a higher risk of accident than the norms which apply in rural Ireland ?"

And my answer is No. Your community has no obligation to abide by my community's standards, and vice versa....

Well, you assumed that was what I meant. It's equally possible that I meant, "How can my family's Laundromat business compete with the Magdalen Laundries when we have to pay rent, wages, taxes, benefits and pension contributions but they don't?"

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"You come with me to room 1013 over at the hospital, I'll show you America. Terminal, crazy and mean." -- Tony Kushner, "Angels in America"

Posts: 5376 | From: Caprica City | Registered: Jul 2005  |  IP: Logged
Russ
Old salt
# 120

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quote:
Originally posted by Dafyd:
Suppose forty nine per cent of the workforce are subject to travel restrictions and fifty one per cent are not. The forty nine per cent are exploited and the fifty one aren't. Now the government at the behest of one of the employers passes travel restrictions on another two per cent of the workforce. Now not only are the forty nine per cent not being exploited any more, but the remaining forty nine per cent who are free have suddenly started to exploit their employers.

Nowhere have I said anything about a 50% threshold. Rather my thesis is that the going rate in a competitive market is the only benchmark. Regardless of percentages.

The point is that those who have travel restrictions imposed on them are at risk of being exploited by a local monopoly.

quote:
If the workers' union has negotiated pension rights that make it hard for the employers to invest because they have to set aside money for the pensions, then there's no way for Russ to say that's too burdensome on the employers.
No, a local monopoly is still a local monopoly when it's the workers doing it instead of the employers.

quote:
As regards monopolies: Russ thinks that monopolies are wrong.
I think that exploitation and abuse of monopoly power are more or less the same thing. Now a non-profit-maximising monopolist may choose not to pay less or charge more than the competitive-market rate. But don't hold your breath...

So where there are natural monopolies or inescapable barriers-to-entry, there's an argument for government regulation.

quote:
He thinks there is an objective standard: namely the price that would obtain under a situation of free competition. But that objective standard is purely notional. It doesn't exist in any way, because what exists is the monopoly. So presumably if it still counts as an objective standard (despite not existing), then it's perfectly possible for there to be an objective standard in the case of the workforce - thus allowing us to say that an entire workforce is being exploited.
In the case where monopoly exists, the competitive-market rate is not observable but it is definable. And data on production costs and market response to price rises can be collected to allow economists to estimate where that equilibrium would be.

Your undefined "objective standard" seems like an exercise in wish-fulfillment. The amount I'd like to be paid is...

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Wish everyone well; the enemy is not people, the enemy is wrong ideas

Posts: 3032 | From: rural Ireland | Registered: May 2001  |  IP: Logged
Dafyd
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# 5549

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quote:
Originally posted by Russ:
Rather my thesis is that the going rate in a competitive market is the only benchmark.

So where there is no competitive market there is no benchmark.

quote:
No, a local monopoly is still a local monopoly when it's the workers doing it instead of the employers.
Only if there's a competitive market in the same community. Otherwise, you have no benchmark apparently.
You have also excluded competitive markets in other communities as a benchmark. (Quite how you tell when a competitive market is in the same community you have not said. Is a coffee shop in a station concourse the same community as a coffee shop in a side street?)
The point is that the going rate in any market is simply where the relative negotiating power of the parties concerned put it. Land prices vary across a community; labour rates will vary across the community. You can't separate out particular types of negotiating advantage and then declare that the remainder has some kind of moral authority.

quote:
I think that exploitation and abuse of monopoly power are more or less the same thing.
Either the going rate in a competitive market is your benchmark and abuse of monopoly power takes you away from that benchmark and is therefore exploitation, or else abuse of monopoly power is exploitation and you don't need to invoke a benchmark going rate.
Either position has its problems. The second position either leaves you open to the suggestion that there are other sources of exploitation, or else is only defensible at the price of vacuity; the first has all the problems we've raised so far.

quote:
In the case where monopoly exists, the competitive-market rate is not observable but it is definable. And data on production costs and market response to price rises can be collected to allow economists to estimate where that equilibrium would be.

Your undefined "objective standard" seems like an exercise in wish-fulfillment. The amount I'd like to be paid is...

I don't share your confidence in the ability of economists to accurately estimate where prices would be under differing economic constraints. Even if economics were an exact science, the number of variables upon which the demand and supply depend is so high, and so many of them might be affected by the monopoly, that talk of an calculable standard in the absence of the monopoly is wishful thinking.

If you can estimate where an equilibrium wage rate would be in the absence of a powerful union enforcing a monopoly on labour, you can estimate where it would be in the absence of other conditions. Or contrariwise if you haven't got a benchmark in the one case you haven't got that benchmark in the other.

[ 31. October 2017, 22:12: Message edited by: Dafyd ]

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we remain, thanks to original sin, much in love with talking about, rather than with, one another. Rowan Williams

Posts: 10376 | From: Edinburgh | Registered: Feb 2004  |  IP: Logged
Eliab
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# 9153

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quote:
Originally posted by Russ:
I'm suggesting that it follows from that that whilst an individual worker in your community (or mine) may be exploited, it's meaningless to suggest that all of them are. Because there's no objective standard against which the norm in a community can be unfavourably compared.

You seem to have drifted quite a long way from your initial thesis that there is such a thing as a definable "social-progressive mindset" "that is hostile to Traditional Christianity".

You now seem to be arguing against a "mindset" which is broad enough to include (at least) a range of political and economic views from the Centre-Right to the Far-Left, and which might well be hostile to your own blend of free-market cultural relativism, but is not so hostile to Traditional Christianity that that it excludes mainstream adherents of several Christian traditions.

Even if you convince me that your views on economics and exploitation are right, you seem to have pretty comprehensively lost the argument that the opposition to your position is motivated by definable, anti-Christian and socially progressive principles, which can usefully be grouped together as a defined "mindset".

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"Perhaps there is poetic beauty in the abstract ideas of justice or fairness, but I doubt if many lawyers are moved by it"

Richard Dawkins

Posts: 4590 | From: Hampton, Middlesex, UK | Registered: Mar 2005  |  IP: Logged
Soror Magna
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And I had to bring up Magdalen laundries ... [Hot and Hormonal]

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"You come with me to room 1013 over at the hospital, I'll show you America. Terminal, crazy and mean." -- Tony Kushner, "Angels in America"

Posts: 5376 | From: Caprica City | Registered: Jul 2005  |  IP: Logged
Crœsos
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# 238

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quote:
Originally posted by Soror Magna:
And I had to bring up Magdalen laundries ... [Hot and Hormonal]

It's been brought up before in this thread.

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Humani nil a me alienum puto

Posts: 10443 | From: Sardis, Lydia | Registered: May 2001  |  IP: Logged
Russ
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# 120

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quote:
Originally posted by Eliab:
You seem to have drifted quite a long way from your initial thesis that there is such a thing as a definable "social-progressive mindset" "that is hostile to Traditional Christianity".

I've drifted, yes, into arguing economics with Dafyd.

quote:
You now seem to be arguing against a "mindset" which is broad enough to include (at least) a range of political and economic views from the Centre-Right to the Far-Left, and which might well be hostile to your own blend of free-market cultural relativism, but is not so hostile to Traditional Christianity that that it excludes mainstream adherents of several Christian traditions.
I wouldn't claim that anyone who disagrees with me on economics (competitive market rather than free market) or relativism is necessarily a social progressive - not convinced that my economic ideas and Dafyd's necessarily map very well to traditional and progressive.

quote:
Even if you convince me that your views on economics and exploitation are right, you seem to have pretty comprehensively lost the argument that the opposition to your position is motivated by definable, anti-Christian and socially progressive principles, which can usefully be grouped together as a defined "mindset".
If you think any clear conclusion about what social progressivism is has been reached, please do say what it is.

I don't see s-p as anti-Christian, (although it's definitely anti-tradition). Is it perhaps a bastard child of Marxism and Christianity, that believes in loving oppressed classes of neighbours ?

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Wish everyone well; the enemy is not people, the enemy is wrong ideas

Posts: 3032 | From: rural Ireland | Registered: May 2001  |  IP: Logged
Martin60
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# 368

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Like Jesus you mean?

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Love wins

Posts: 16899 | From: Never Dobunni after all. Corieltauvi after all. Just moved to the capital. | Registered: Jun 2001  |  IP: Logged
Russ
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quote:
Originally posted by Martin60:
Like Jesus you mean?

Did Jesus think of people in terms of classes, and restrict his love to those classes he defined as oppressed ?

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Wish everyone well; the enemy is not people, the enemy is wrong ideas

Posts: 3032 | From: rural Ireland | Registered: May 2001  |  IP: Logged
Dafyd
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# 5549

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quote:
Originally posted by Russ:
Did Jesus think of people in terms of classes, and restrict his love to those classes he defined as oppressed ?

The Spirit of the Lord is upon me because he has anointed me to bring good news to the poor. He has sent me to proclaim release to the captives, and recovery of sight to the blind, to let the oppressed go free...
Luke 4:18

Then (Jesus) looked up at his disciples and said:
Blessed are you who are poor, for yours is the kingdom of God.
Blessed are you who are hungry now, for you will be filled.
Blessed are you who weep now, for you will laugh.
(Luke 6:20-21)
But woe to you who are rich, for you have received your consolation.
Woe to you who are full now, for you will be hungry.
Woe to you who are laughing now, for you will mourn and weep.
(Luke 6:24-25)
So what do you think Russ? Do you think Jesus is restricting his love to those he defines as oppressed?

I would say he wasn't restricting his love to the oppressed myself. No more do social-progressives restrict their love to the oppressed.

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we remain, thanks to original sin, much in love with talking about, rather than with, one another. Rowan Williams

Posts: 10376 | From: Edinburgh | Registered: Feb 2004  |  IP: Logged
Martin60
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Perfect Dafyd. Well, perfect Jesus. Russ?

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Love wins

Posts: 16899 | From: Never Dobunni after all. Corieltauvi after all. Just moved to the capital. | Registered: Jun 2001  |  IP: Logged
orfeo

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# 13878

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quote:
Originally posted by Crœsos:
There seem to be two really big fallacies at work here. The first is that taxation is (or at least should be) proportional to government services "consumed". No tax system I'm aware of functions in this way. Most are proportional to income, both as a general yardstick of fairness and for purely pragmatic reasons.

I just thought I'd pick up on this because it interested me.

Australian court decisions on this are probably quite similar to those elsewhere, but I can only directly comment on Australian law and say...

Not only is it wrong to think that tax is linked to services consumed, under Australian law the entire point of a tax is that it ISN'T linked. If it's linked to services consumed it's not a tax, it's a fee for service.

I know this because the distinction between taxes and other kinds of payment is absolutely fundamental to Australian constitutional law and in my job we constantly have to ensure that we know what is a tax and what isn't.

Now, I'm sure that it's possible to construct a governmental system that relies far more on fees for services. But the entire point of taxation is to not require a link between particular payments and particular services. The only "service" you're paying for with a tax is the entire system of governance that underpins society.

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Technology has brought us all closer together. Turns out a lot of the people you meet as a result are complete idiots.

Posts: 18052 | From: Under | Registered: Jul 2008  |  IP: Logged
orfeo

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# 13878

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quote:
Originally posted by Russ:
quote:
Originally posted by Martin60:
Like Jesus you mean?

Did Jesus think of people in terms of classes, and restrict his love to those classes he defined as oppressed ?
Rather than being another person who quotes the Bible at you, I suggest you go and read the parable of the lost sheep if you're troubled by the notion that God might not behave towards everyone equally.

Or the parable of the Prodigal Son.

Or the parable about the workers in the vineyard.

I'm quite sure that if I spent more than 30 seconds on the question, I could find other places where the Bible offends your notions of formal equality. But 30 seconds was sufficient.

I might add, though, that you really should stop thinking of God's love as a zero sum game. The fact that God bestows more love and blessings onto one group of people who are in particular need of it does not mean he loves you less than he otherwise would have. There is not a set quota of love available. Just like they say with rights, it's not pie.

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Technology has brought us all closer together. Turns out a lot of the people you meet as a result are complete idiots.

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mr cheesy
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# 3330

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I think God has a preferential option for the poor and doesn't really give much of a shit about the rich - whether or not they think they are worthy because they run small businesses.

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arse

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