Jobs

[Paxtonloudmouth]

I mean that is fine. That is how Capitalism works. It relies on there always being have and have nots. That is just the system. Now many will argue that it is still the best system we have available to us. However all that I have said is true. Problem is that people and this is totally understandable do not have time to dedicate to understanding how capitalism actually works. This is why those that seek to divide society are so successful.

Answer me this. If Capitalism requires us to spend within our means,why do banks allow us to have overdrafts in the first place ? Do they do it because they are nice people that think we deserve that I pad or season ticket ? Or is it perhaps that they know in the end the consumer buying things that their neither need or can afford keeps the wheels of the economy going ?

 

[Spursalot]

You get told you can only use £35 the next month and don't take the tinkle!

And then they still go over?


You can't just not give them electricity money if they go over month after month. And if they don't have Luxury Items money then there isn't really anything you can threaten to punish them with either.

 

[Paxtonloudmouth]

Plus if jobs are so vital for the economy,under a capitalist system? Is it because any decent economist knows that unnecessary jobs hold back the economy. So they private sector will take the slack right ? However the private sector is there to make as much profit for there company as possible. Employing as little a workforce as the company practically can,will mean less of a cost in wages and thus more of a profit. So explain to me just why it helps the private companies to employ more people than it ever did before ? Unless the Government are creating jobs for them,and thus we are back at our initial problem.

 

[Richie]

Point out where I am wrong,without making yourself look totally ignorant of economic theory.

While I'm certainly no expert, I have taken a strong interest in macroeconomic theory in the last few years and have had many discussions with my economist friends on the benefits of Keynesian vs Austrian economics.

You're argument is misunderstanding basic supply and demand. Prices (inlcuding wages i.e. the price of labour) is set based on supply and demand. You are claiming that high unemployment means lower wages, but unfortunately with the minimum wage that is not true. In the lowest skilled jobs, high unemployment has no effect on wages due to the minimum wage. This is why the majority of economists do not support the minimum wage.

If there was no minimum wage you would be correct, wages would be much closer linked to employment, but that doesn't mean that we need unemployment any more than we need an excess of any commodity. The price would rise and fall with supply and demand, and with falling supply people would earn higher wages. I'm confused as to why you think this would be a bad thing.

The most ridiculous of your ideas is that we need people on welfare. Welfare is out of the goodness of peoples hearts, because almost all believe that in a civilised society you shouldn't have people starving or freezing to death. You claim we need those on welfare, as if it is better for the economy for them to get money from the government (via taxes) than in work. This isn't adding any value to an economy, it is merely shifting money from one person to another. By contrast, if they were employed by a company which is making profit, they are adding value to the economy.

You seem to look at profit as a bad thing. Everyone thinks of companies making profit as these evil corporations that are leeches to society. However, the truth of the matter is that a company makes profit because it produces goods and services that people choose to buy. It is that choice which adds value, and it is why redistribution of capital through taxation does not add value because taxes are collected through force (i.e. pay or go to jail).

However, even more important than profit is loss. While profit is an indicator that a company is adding value to the economy, loss is an indicator that a company is removing value from the economy. Here is (Nobel Prize winning) Milton Freidman explaining the point far better than myself.

[video=youtube;j9CTo8aqYRE]http://www.youtube.com/watch?v=j9CTo8aqYRE[/video]

 

[Paxtonloudmouth]

Ok Richie. First of all I did not say high unemployment I said some. Morgan agrees with me on this point. In fact he spent a lot of his career arguing for it. I am not against profit at all. I am not a communist. I just arguing how the capitalist works. It is and always will be a system of the have and the have nots. You however have made the mistake in taking the ought from the is in my analysis.

 

[Paxtonloudmouth]

At a time of high unemployment such as we find ourselves,we do need people on the dole to have money. Do you think it would really help the economy if we had millions of families with no money to spend at all ?

 

[Richie]

At a time of high unemployment such as we find ourselves,we do need people on the dole to have money. Do you think it would really help the economy if we had millions of families with no money to spend at all ?

Ethically I completely agree we need to give people money to survive. Economically I'm not so sure, as that money would be spent/invested by those who have it taxed away from them instead of welfare recipients.

Redistribution of wealth through taxation cannot add value to the economy because it is a redistribution through force.

 

[Paxtonloudmouth]

This whole problems roots can be traced back to the Luddite movement. What if companies could make all they needed with five people using machines. Rather than paying 500 people to do the work manually. Under a system of profit it makes sense that the option with less employment is the only course to take.

As for the rich spending more. Well the rich have far more options where they spend their money. That why it makes me laugh when people use the argument if you tax the rich they will spend their money elsewhere. The rich are already doing it. Which is fair enough,that is how the system is. Why not.

Welfare is hardly making these people millionaires. They can still not afford to spend their money in the US. Welfare however does give recipients just enough money to buy that Ipad or widescreen TV that they don't really need.

 

[Paxtonloudmouth]

I agree Richie it is just patching up the system with band aids. However that is what we are constantly doing. That is because the capitalist system has major defects. However it appears the best we have. That is why we put up with it.

Though I totally agree with you on injury time.

 

[Spursalot]

High unemployment does mean lower wages though.


Granted there is a minimum wage, which means there is a lower limit, but there are far more people on the minimum wage than there would be if there was lower unemployment.



Because there are more people willing to do the job for less money, because they need the money.


You say the price of labour is based on supply and demand, well it is in ways. Currently there is far too much supply and far too little demand, so the price goes down.


Though this in no way says the economy needs high unemployment...

 

[scaramanga]

This whole problems roots can be traced back to the Luddite movement. What if companies could make all they needed with five people using machines. Rather than paying 500 people to do the work manually. Under a system of profit it makes sense that the option with less employment is the only course to take.

There's a massive flaw in that model in both this instance and the one you mentioned at the top of the page.

You are making the assumption that there's no room or desire for growth in the fictional companies. I've dealt with and worked for a lot of businesses and I have yet to find one that simply wants to keep the status quo - everyone wants to expand, everyone wants to increase profits. If a company dumps 20 staff to buy some machines that can do the same work, the owners/shareholders don't take all that profit and go swanning around the world on yachts, they reinvest it - possibly to buy more of the same machines. This creates work for those who build the machines, those who operate the machines, those who install/repair/maintain them etc.

 

[spitshine]

You get told you can only use £35 the next month and don't take the tinkle!

Yes easy to say but one of the problems in the country is people are not disciplined enough and think they will still get bailed out every time. why? Because they always do get bailed out one way or another and they would be a at a complete loss when limits are enforced.

 

[Paxtonloudmouth]

There's a massive flaw in that model in both this instance and the one you mentioned at the top of the page.

You are making the assumption that there's no room or desire for growth in the fictional companies. I've dealt with and worked for a lot of businesses and I have yet to find one that simply wants to keep the status quo - everyone wants to expand, everyone wants to increase profits. If a company dumps 20 staff to buy some machines that can do the same work, the owners/shareholders don't take all that profit and go swanning around the world on yachts, they reinvest it - possibly to buy more of the same machines. This creates work for those who build the machines, those who operate the machines, those who install/repair/maintain them etc.

Still a far smaller workforce. Employment still goes down. Wages are a huge outlay. Why not think of ways to employ as little people as possible. There has to be profit in that.

Plus the desire for growth also opens up the opportunity for failure. When this happens who looses their jobs first ?

 

[scaramanga]

Still a far smaller workforce. Employment still goes down. Wages are a huge outlay. Why not think of ways to employ as little people as possible. There has to be profit in that.

That assumes a closed economy. We're in a global economy which won't reach saturation for most products/services in our lifetimes or that of our children.

One of the biggest problems this country has when it comes to labour is the constant failure of our labour force to recognise that the market we're in is global. Our factories are stuffed full of Polish labourers who couldn't earn a decent living at home so they looked for better elsewhere. Remove the culture of something for nothing and you'd find that people will seek better lives in other places in the same way the hard-working immigrants in our factories have.

Plus the desire for growth also opens up the desire for failure. When this happens who looses their jobs first ?

Quite honestly I don't know what you're talking about here. A desire for failure? Sorry, you'll have to expand on that for me.

 

[Paxtonloudmouth]

That assumes a closed economy. We're in a global economy which won't reach saturation for most products/services in our lifetimes or that of our children.

One of the biggest problems this country has when it comes to labour is the constant failure of our labour force to recognise that the market we're in is global. Our factories are stuffed full of Polish labourers who couldn't earn a decent living at home so they looked for better elsewhere. Remove the culture of something for nothing and you'd find that people will seek better lives in other places in the same way the hard-working immigrants in our factories have.



Quite honestly I don't know what you're talking about here. A desire for failure? Sorry, you'll have to expand on that for me.

First of all that first point is fine. However most people do not see the economy as global even if that is the truth of the matter. Hence why Government still gets slated for something that is often out of their hands. The culture should however never be one of exploitation. Work for work sake is stupid. You have a job because that job is necessary and you are good at it.

Second point,the confusion is all down to me. I meant to say that the search for infinite growth leads to the opportunity for failure rather than desire. Will edit now. Hope that makes my point clearer.

 

[Richie]

First of all that first point is fine. However most people do not see the economy as global even if that is the truth of the matter. Hence why Government still gets slated for something that is often out of their hands. The culture should however never be one of exploitation. Work for work sake is stupid. You have a job because that job is necessary and you are good at it.

Second point,the confusion is all down to me. I meant to say that the search for infinite growth leads to the opportunity for failure rather than desire. Will edit now. Hope that makes my point clearer.

If you accept that work for works sake is stupid (which many Keynsian economists would disagree with these days) then how can welfare be good for the economy? If we accept that the government paying someone to dig a hold and fill it back up again every day is a waste and bad for the economy, how can welfare be a good thing when it's effectively the identical system just without the job?

 

[Paxtonloudmouth]

If you accept that work for works sake is stupid (which many Keynsian economists would disagree with these days) then how can welfare be good for the economy? If we accept that the government paying someone to dig a hold and fill it back up again every day is a waste and bad for the economy, how can welfare be a good thing when it's effectively the identical system just without the job?

I am saying that the economy relies on peoples spending money. Welfare is neither good nor bad. I am not seeing this in moral terms. The fact is an economy relies on people spending money. If millions of people have no money,the economy dies. Yes it is a band aid,but that is how capitalism works one band aid to the next. Hence why there will always be boom and bust within the system.

We should work only to get a decent standard of living. That is why people work in the first place. How many people would do their job for free? If work is no longer offering a decent standard of living then yes it is stupid in my opinion. Now the debate is obviously over what is a decent standard of living. In fact that is always the important political debate in my opinion.

 

[Richie]

I am saying that the economy relies on peoples spending money. Welfare is neither good nor bad. I am not seeing this in moral terms. The fact is an economy relies on people spending money. If millions of people have no money,the economy dies. Yes it is a band aid,but that is how capitalism works one band aid to the next. Hence why there will always be boom and bust within the system.

This is just not true, because you're looking at only one side of it. The economy doesn't need millions to have welfare at all. Welfare is simply a redistribution of the wealth, it doesn't create wealth. If it isn't going to those millions of welfare recipients, it is staying in the pockets of those who work and they spend and invest it.

For example, let's say every jobless welfare recipient left the country for whatever reason. The economy wouldn't collapse, we would be able to lower taxes on working people and they would get to spend that same money instead of it going to those on welfare.

 

[Paxtonloudmouth]

Yes we could lower taxes of course. However we have not done that. We need people spending as much as they can. My argument is this. We need and even free market Morgan agree we need a certain number of people who are unemployed. We still need them to spend money,just to keep the cash flow going. Obviously not too many,that would be foolish but some. Also we tax not to boost the economy but to provide services,these would cost the same as they do now. Of course the economy does not need millions on welfare. That is the shameful position it has now. However it does need some unemployed people do have money. If the unemployed at the moment had no money at all at this moment in time. That would lead to millions of households not spending any money in this country.

 

[spitshine]

The only effective way to help in this situation, unfortunately, is birth control.