Marxism discussion thread

[Explorer]

@will_shred - Why did you ignore the rest of my questions? They deal with ehat happens when a worker invests the profits of his own labors in creating a company, and what then happens starting with when he hires a single employee.

I suspect the reason you avoided answering them is that there comes a point where your answers will reduce down to silliness, but am hoping you'll surprise me.

 

[Explorer]

If an employer has a worker who creates substantial capital improvements in a property, does the employee now own part of the property?

If so, that means any contractor and his crew now own part of a house on which they did work, whether drywalling, plumbing, or AC/heating repair.

Your car? The garage crew can now file a lien on it.

Why don't these classes of worker get a share of what they put effort into?

And... if the workers contracted and *agreed* to do the work without being invested in ownership, why are the workers being denied the right to enter into employment contracts like adults?

This whole argument is illogical.

 

[AngstRiddenDreams]

Wolff is talking about profit distribution. Not product distribution.
You seemed to have missed that.
The idea is that an owner of a company doesn't deserve orders of magnitude more in percentage of total profit than a worker.

 

[Explorer]

The idea is that an owner of a company doesn't deserve orders of magnitude more in percentage of total profit than a worker.

So... a potential employee is forbidden to enter into such an employment situation? How does that work?

And, what penalty must a bad employee pay to the employer and other employees for dragging down profits?

 

[AngstRiddenDreams]

I don't know and I won't pretend to. Maybe look into that aspect yourself.

As far as bad employees, no one is proposing you are immune to firing in this system.

It seems that you are trying to coax a response of potential regulation. Which is something that could be talked about.

 

[Explorer]

No. I just think it's interesting to see a mandatory system of profit sharing being proposed (Marxism), and suspect that it hasn't been well thought out except as a way to justify seizing someone's property.

That's why I'm asking pointed questions, the same way I ask questions of those libertarians who argue that police and firefighters should only serve those who can afford them.

 

[AngstRiddenDreams]

As seizing the means of production is a tenant of Marx's thoughts, I can't understand why else it would be a related component.

 

[oc616]

I'll take a leaf from Jordan Peterson here (although I disagree vastly with his perception of the left in general). Take bonuses for sales or management companies. The psychology behind those bonuses is quite literally not the money itself or how large they are, at least not until you hit chairman/director status, but instead it is about status. "Did I earn more than this asshole next to me" is about as deep as it goes, because it reflects on your stance and influence on your company, and by extension boosts your general happiness with being able to impact your environment (humans love feedback on their actions, after all).

Now with this in mind, and to address the often cited criticism of "desire to seize someone else's property", those who see it that way and seek to achieve it only desire the idea of it and what it represents, not the literal financial gain. Its less about improving their stability as far as spending power goes, more about how it confirms their power and importance in whatever situation they may be in. Now let me apply this logic to the owner of a business instead, what conclusion could be drawn if the Marxist theory is applied? You're losing a portion of that control, that power. Its a perspective that is obvious in all the counter arguments and presentation of the individuals doing so, the defensive responses, almost like they're under attack. A lesser monkey is trying to take 3 of your 20 berries because they only have 3, this will not stand! You scavenged those berries yourself, they didn't work as hard as you otherwise they'd have the same berries being a completely different monkey with different wiring, experiences and opportunities.

That's what it comes down to. A dehumanisation of an external factor threatening to take something from you to benefit itself. Where the flaw in this decision making presents itself is in civilisation, we are not lonely monkeys on the brink of starving. We all have smart phones or something approximating access to a wider network of people, we exist and depend on collectives such as workers regardless of however much power and wealth you acquire, any profits or products made will be affected by the abilities and comfort of those you use generating them. It is unbelievably naive to have such a selfish mentality when you accept those 3 facts of the modern world. The companies that have grown fast, regardless of how they've been run since hands changed in the tech world (Google, Amazon etc) all provided healthy shares to their workers. What happened since then is an industry becoming adapted to the old models, which is where we start to see struggles in sites like Twitter who have increased growth, but making loses. To me that looks like a previously self sustaining, almost entirely new enterprise being forced to integrate with how our IRL business is done and being worse off for it.

 

[vilk]

Hey what do you guys think about salary caps? Or wealth caps?

I know it seems almost like too basic of an idea. "You can only get/have this much money, and anything else you get goes in the bucket". Where should we set it? Idk man. What about like 10 million. But that's sorta arbitrary unless you set it too high or too low.

People will be like "Then no one will bother with trying! It takes away the motivation!" Ch'yeah right. You think a person who makes 5 million lives much like someone who makes 25k? There's your motivation, right there.

Also, if we go with the "wealth cap" idea instead of the salary cap idea, it would encourage rich folks to spend their money instead of hoarding it, and then maybe the infamously errant trickle down effect will no longer be a debunked myth?

 

[Drew]

Okay. All of the employees of any large company quit. Does the owner owning the company create profit or was it the presence of workers accomplishing things?
What you're explaining is redundant, owners owning profit because they own the business. Yes, that is how things are functioning. We're opposing that.

You also seem to believe that you know what the experience of all business owners is like.

To me your argument sounds like "that can't be because that isn't how things are right now"

@ Adam and drew, capitalism is a necessary step for communism according to Marx so you're not wrong

Well, let's look at the flip side of that - the owner of the large company decides he doesn't want to do it anymore, sells all his inventory and equipment to various people all over the country, breaks up his operation, and tells the workers that he's not going to need them anymore. Do the workers still create profit, or was it the presence of capital accomplishing things?

I think it's pretty clear that both capital AND labor are required as part of the "means of production," and that both need to receive a share of the profits, since both are choosing to contribute their respective part to the business. There is absolutely fair grounds to debate that the breakdown between the return on capital and the return on labor is currently out of whack, and I wouldn't even totally disagree with you (though I think that may have a lot to do with quantitative easing at the moment). However, I don't think you can argue that there should be NO return on capital and that capital is not an important part of the production process, because if you assume no return on capital and all the return accruing to labor, then you need to find another source of capital.

Hey what do you guys think about salary caps? Or wealth caps?

I know it seems almost like too basic of an idea. "You can only get/have this much money, and anything else you get goes in the bucket". Where should we set it? Idk man. What about like 10 million. But that's sorta arbitrary unless you set it too high or too low.

People will be like "Then no one will bother with trying! It takes away the motivation!" Ch'yeah right. You think a person who makes 5 million lives much like someone who makes 25k? There's your motivation, right there.

Also, if we go with the "wealth cap" idea instead of the salary cap idea, it would encourage rich folks to spend their money instead of hoarding it, and then maybe the infamously errant trickle down effect will no longer be a debunked myth?

I don't know if I agree with the concept of a salary cap - I don't think I like the idea of a situation where more work equates to the same reward = but I have zero problem with additional progressive tax brackets. Our current tax structure in the US has a top marginal rate of 39.6% for filers over $470k, plus the 3.8% ACA investment income surcharge. I think you could keep upping it from there - say, 45% over 1 million, 50% over 5, etc, and still leave a positive relationship between work and income, which (IMO) solves the "it takes away the motivation!" problem.

 

[tedtan]

Okay. All of the employees of any large company quit. Does the owner owning the company create profit or was it the presence of workers accomplishing things?

I was planning on posting what Drew posted, but he beat me to it. I was also going to post an example of a contractor doing work on my house taking an equity position in my house, but Explorer beat me to that. And their points are quite valid.

I don't disagree that workers should be fairly compensated for their efforts, but stealing someone else's property is the wrong way to accomplish that.

What you're explaining is redundant, owners owning profit because they own the business. Yes, that is how things are functioning. We're opposing that.

I get that, but the question was quite basic, so I responded in kind.

You also seem to believe that you know what the experience of all business owners is like.

No, but I do know that there are only around 6,000 or so publicly traded companies in the US (listed in the US, there are more foreign companies present) whereas there are over 30 million small businesses in the US.

Do you really think that a successful restaraunteur pays his chefs $35k/year and then pays himself $10.5 million/year? What about a doctor who pays his nurses $85k/year - does he then proceed to pay himself $25.5 million/year? If so, where does all that money come from?

This same line of thinking hods for all the mechanics, bakers, barbers, guitar shop owners, independent luthiers and pedal builders, delis, dentists, attorneys, tour guides, translators, etc.

Your 300 times number just doesn't hold up in the VAST majority of cases.

To me your argument sounds like "that can't be because that isn't how things are right now"

It isn't how things work now. That doesn't mean that things can't be made to work that way in the future, but you'll have a hell of an uphill climb trying to sell that in the US (uphill climb as in summiting Everest).

 

[Drew]

Wolff is talking about profit distribution. Not product distribution.
You seemed to have missed that.
The idea is that an owner of a company doesn't deserve orders of magnitude more in percentage of total profit than a worker.

The bolded part is, IMO, the interesting part of this discussion, as some of the other arguments being made either don't really make sense (the difference between product and profit distribution is simply what's left after you account for costs when you sell the product - they're actually fairly equivalent, since the product is definitionally something that has been made for the intent of selling for a profit), or are straight-up highway robbery (seizing the means of production - again, by extension, you're doing away with private ownership of property, which gets you back to product vs profit ownership - what good is profit, if you can't actually own the car you buy with it, since technically the car can be the meanns of production for another enterprise? Or, the bread you buy with the profit to feed your family could be the means for production for a sandwich making enterprise? You need to start making some arbitrary distinctions quickly).

So, what then IS the appropriate percentage between the two? 50-50? If a company has capital from one person and employs labor from 50, then do you divide it 51 ways? Or divide it in half, split the 50% to labor 50 ways, and the 50% to capital one way? What if it's an extremely capital-intensive and risky enterprise, though, compared to a low-risk 50-person workforce with little necessary capital provided by one person, should the people providing capital be compensated the same?

The root of that problem is you need some way to equate one unit of capital to one unit of labor, whatever those units are, so you can equate capital and labor.

The capitalist approach is, "hey, they're both what we call 'scarce resources,' meaning there's a finite supply of each to go around, so let's let the market figure out how to equate them, by letting people provide labor in the places they want and provide capital in the places they want, and let supply and demand figure out what the "price" or proportional share of the profits is, for each. Capital will then go to where it's most lucrative, labor will go to where it's most rewarded, and we're saved the trouble of coming up with an arbitrary way of equating the two."

That's the world we're in today. At the moment, as it's a world in the middle of a technical revolution and with risk appetites low in the wake of a massive recession, it appears the demand for capital is higher than the demand for labor, as a greater proportion of the profits are accruing to capital than they are to labor. However, we're finally seeing some signs of labor market tightening, so in theory demand for labor should begin to exceed supply, and more of the percentage of profits will need to be allocated to labor to attract necessary labor. I don't think it's at all a coincidence that you're seeing a lot more interest in communism and socialism in the decade following a recession where demand for labor has been abnormally low.

I also think we need to include the social/governmental side of this - a greater share of profits going to capital isn't necessarily itself a problem, provided we have ample re-distributive policies (i.e - progressive taxation, social safety net programs, programs like small business loans to help get workers access to capital of their own on favorable terms, government supported training and education programs, etc) to ensure that any imbalance between the two still allows a good quality of life for those supplying labor. And I think we've largely hit that point - some of the horrors of the Industrial Revolution should tell you just how far we as a society have come.

But, if you really want to debate this stuff, I think the bolded section is the crux of the debate - if not a marketplace, then what is the ideal mechanism for determining the split between the share of profits accruing to labor vs that accruing to capital?

 

[AngstRiddenDreams]

I'm at work so I can't elaborate deeply Drew but there is a distinction between personal and private property that you are missing or unaware of.
The abolishment of private property only refers to things that are directly involved as means of production, such as a lathe at a mill. Labor is not a means of production as far as I understand. However capital necessary to facilitate manufacturing is.
Not your house, car, or personal belongings.
It is my understanding that the mechanism is need. "From each according to his ability, to each according to his need"

@tedtan as I replied to Explorer. We're talking about distrubution of profit, not product. As it currently stands you don't sell a car, get money and keep partial ownership.
While you could have shared ownership among a car people produce, it wouldn't make sense to sell it for money under that scenario.

I understand how capitalism can be looked as a good in determining value. But the trade off as seen by Marx is that the employee/employer relationship is that of exploitation and coercion.
Like I said I'll elaborate later tonight when I have more time.
I should note that I don't believe we are at a point where we can achieve communism which is why I advocate for a transition into socialist democracy.
It's not going to happen overnight.

 

[Drew]

I'm at work so I can't elaborate deeply Drew but there is a distinction between personal and private property that you are missing or unaware of.
The abolishment of private property only refers to things that are directly involved as means of production, such as a lathe at a mill.
Not your house, car, or personal belongings.
It is my understanding that the mechanism is need. "From each according to his ability, to each according to his need"

So, what about a cab company? A car is a personal belonging, but if the state wanted to start a state-run cab company, shouldn't it be seizing the means of production - i.e, necessary cars?

I understand how capitalism can be looked as a good in determining value. But the trade off as seen by Marx is that the employee/employer relationship is that of exploitation and coercion.

I think a major problem with Marx's observation here is that he was writing in the time of the Industrial Revolution, and 1840s Germany is a very different place than pretty much any capitalist economy today. Workers at a manufacturing factory in the 1830s might as well have been slaves - in the "company store" model, arguably they were - whereas workers at, say, a Ford factory in Kentucky or at a marketing firm in Seattle have a very different and much more equal relationship with their bosses today. This is arguably even more the case when you start to add in the degrees of separation of something like a publicly traded company, where the whole employee/employer relationship you're railing against falls apart, considering the "employer" isn't those highly paid rich CEOs you're complaining about, but the shareholders.

Marx wrote in a very different era than the United States in 2017, and I don't know if his arguments about the exploitation of the working class really holds up so well in the developed world in the early 21st century.

 

[AngstRiddenDreams]

Then the state would purchase cars. It's not going to steal your car and appropriate it for profit.
I'd say that income inequality is evidence that the curren situation is applicable. This is something Marx believed would happen.
As far as rallying against shareholders goes, yeah that's kind of what Wolff is saying. Let the employees become the shareholders.
I'll get back to the rest later.

 

[Drew]

Then the state would purchase cars. It's not going to steal your car and appropriate it for profit.
I'd say that income inequality is evidence that the curren situation is applicable. This is something Marx believed would happen.
As far as rallying against shareholders goes, yeah that's kind of what Wolff is saying. Let the employees become the shareholders.
I'll get back to the rest later.

But that's still problematic - where does the state get the capital to buy cars? And why not buy factories rather than seizing them?

So, would Wolff be happy if we just had more widespread ESOP plans? From a financial planning standpoint, perversely, you're actually far better off NOT having a concentrated position in your company's stock; if the company takes a turn for the worse and goes bankrupt, then not only do you lose your job, you also lose a lot of your savings. I'm not convinced that just granting company stock to employees is necessarily an improvement, since the economically rational thing to do it would be to sell it and diversify, at which point you're back to 3rd party ownership.

 

[AngstRiddenDreams]

But that's still problematic - where does the state get the capital to buy cars? And why not buy factories rather than seizing them?

So, would Wolff be happy if we just had more widespread ESOP plans?

On the capital note, taxes? But also I'm not sure anyone is proposing the federal government becoming the owner of businesses like that.

You'll have to define ESOP plans to me.

Owning shares in your company stock doesn't have to be your only form of savings.
Also I think you're critiques on this are still largely contingent on the idea of how it relates to paper money, which is something Marx wants abolished.

 

[tedtan]

Employee Stock Option/Ownership Plans

 

[Drew]

Oh, sorry dude. I should have explained. You can probably tell, but I work in the financial industry and we loooove our jargon.

It doesn't have to be your only form of savings, but if you're doing away with private shareholders and distributing equity amongst the employees, then clearly it's going to be a disproportional share of their savings. You pretty much HAVE to diversify at that point, and over and above that if that equity investment isn't liquid - meaning, if you can't easily convert your shares to cash if you need to - then it's going to be worth considerably less for it (there's typically a large liquidity discount for private company valuations relative to their public peers, upwards of 20%) so you still need the presence of an efficient secondary market.

Anyway, this is all besides the point, in that employee-owned companies are still consistent with a capitalist allocation of resources. You're just advocating a specific type of company, rather than doing away with companies all together in favor of the state.

Also, taxes are levied on profits, which means two things: 1) you're now advocating a 3-way split between labor, capital, and the government for profits, and 2) you're essentially setting the return on capital bar at more than 100%. Profit is basically capital returned to the investor minus capital initially invested. If you're not generating larger profits than you are investing capital, by a pretty hefty margin, there simply won't be enough profit to create the required amount of capital to invest via taxation. It's basically a perpetual motion problem, and is ironically one of the critiques of capitalism being levied here, that you need to have access to capital to generate returns on capital, so capitalism causes profits to accrue to the existing holders of capital.

Still - you're engaging in a much more robust conversation than will shred, so this could be a very interesting conversation.

 

[AngstRiddenDreams]

Yes that could be true depending on company size and amount of capital at disposal.
I suppose my argument back to that would be, if the alternative is then not having stock in the company at all then even if the stock becomes worthless they are in no different of a situation than if they had not owned any stock whatsoever.
Also, are you saying that under a private shareholder situation there isn't a need to diversify?
Unless I'm missing something obvious or you're assuming that these stocks come at the expense of the monetary compensation they received before the co-op model.
It seems strange to me that most people associate socialism/communism with governmental control of businesses, as one of Marx's thoughts was that in the utopia there is no government.
I understand the historical perspective of how communist governments have been authoritarian and controlling, but that's on them.

Also you never checked out my track jerk you might dig the vocal version