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Why Garbagemen Should Earn More Than Bankers

How more and more people are making money without contributing anything of value

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By Rutger Bregman

Thick fog envelops City Hall Park at daybreak on February 2, 1968. Seven thousand New York City sanitation workers stand crowded together, their mood rebellious. Union spokesman John DeLury addresses the multitude from the roof of a truck. When he announces that the mayor has refused further concessions, the crowd’s anger threatens to boil over. As the first rotten eggs sail overhead, DeLury realizes the time for compromise is over. It’s time to take the illegal route, the path prohibited to sanitation workers for the simple reason that the job they do is too important.

It’s time to strike.

The next day, trash goes uncollected throughout the Big Apple. Nearly all the city’s garbage crews have stayed home. “We’ve never had prestige, and it never bothered me before,” one garbageman is quoted in a local newspaper. “But it does now. People treat us like dirt.”

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When the mayor goes out to survey the situation two days later, the city is already knee-deep in refuse, with another 10,000 tons added every day. A rank stench begins to percolate through the city’s streets, and rats have been sighted in even the swankiest parts of town. In the space of just a few days, one of the world’s most iconic cities has started to look like a slum. And for the first time since the polio epidemic of 1931, city authorities declare a state of emergency.

Still the mayor refuses to budge. He has the local press on his side, which portrays the strikers as greedy narcissists. It takes a week before the realization begins to kick in: The garbagemen are actually going to win. “New York is helpless before them,” the editors of The New York Times despair. “This greatest of cities must surrender or see itself sink in filth.” Nine days into the strike, when the trash has piled up to 100,000 tons, the sanitation workers get their way. “The moral of the story,” Time Magazine later reported, “is that it pays to strike.”

Rich without Lifting a Finger

Perhaps, but not in every profession.

Imagine, for instance, that all of Washington’s 100,000 lobbyists were to go on strike tomorrow. Or that every tax accountant in Manhattan decided to stay home. It seems unlikely the mayor would announce a state of emergency. In fact, it’s unlikely that either of these scenarios would do much damage. A strike by, say, social media consultants, telemarketers, or high-frequency traders might never even make the news at all.

When it comes to garbage collectors, though, it’s different. Any way you look at it, they do a job we can’t do without. And the harsh truth is that an increasing number of people do jobs that we can do just fine without. Were they to suddenly stop working the world wouldn’t get any poorer, uglier, or in any way worse. Take the slick Wall Street traders who line their pockets at the expense of another retirement fund. Take the shrewd lawyers who can draw a corporate lawsuit out until the end of days. Or take the brilliant ad writer who pens the slogan of the year and puts the competition right out of business.

Instead of creating wealth, these jobs mostly just shift it around.

Of course, there’s no clear line between who creates wealth and who shifts it. Lots of jobs do both. There’s no denying that the financial sector can contribute to our wealth and grease the wheels of other sectors in the process. Banks can help to spread risks and back people with bright ideas. And yet, these days, banks have become so big that much of what they do is merely shuffle wealth around, or even destroy it. Instead of growing the pie, the explosive expansion of the banking sector has increased the share it serves itself.

Or take the legal profession. It goes without saying that the rule of law is necessary for a country to prosper. But now that the U.S. has 17 times the number of lawyers per capita as Japan, does that make American rule of law 17 times as effective? Or Americans 17 times as protected? Far from it. Some law firms even make a practice of buying up patents for products they have no intention of producing, purely to enable them to sue people for copyright infringement.

Bizarrely, it’s precisely the jobs that shift money around – creating next to nothing of tangible value – that net the best salaries. It’s a fascinating, paradoxical state of affairs. How is it possible that all those agents of prosperity – the teachers, the police officers, the nurses – are paid so poorly, while the unimportant, superfluous, and even destructive shifters do so well?

When Idleness was Still a Birthright

Maybe history can shed some light on this conundrum.

Up until a few centuries ago, almost everybody worked in agriculture. That left an affluent upper class free to loaf around, live off their private assets, and wage war – all hobbies that don’t create wealth but at best shift it about, or at worst destroy it. Any blue-blooded noble was proud of this lifestyle, which gave the happy few the hereditary right to line their pockets at the expense of others. Work? That was for peasants.

In those days, before the Industrial Revolution, a farmers’ strike would have paralyzed the entire economy. These days, all the graphs, diagrams, and pie charts suggest that everything has changed. As a portion of the economy, agriculture seems marginal. Indeed, the U.S. financial sector is seven times as large as its agricultural sector.

So, does this mean that if farmers were to stage a strike, it would put us in less of a bind than a boycott by bankers? (No, quite the reverse.) And, besides, hasn’t agricultural production actually soared in recent decades? (Certainly.) Well then, aren’t farmers earning more than ever? (Sadly, no.)

You see, in a market economy, things work precisely the other way around. The larger the supply, the lower the price. And there’s the rub. Over the last few decades, the supply of food has skyrocketed. In 2010, American cows produced twice as much milk as they did in 1970. Over that same period, the productivity of wheat has also doubled, and that of tomatoes has tripled. The better agriculture has become, the less we’re willing to pay for it. These days, the food on our plates has become dirt cheap.

This is what economic progress is all about. As our farms and factories grew more efficient, they accounted for a shrinking share of our economy. And the more productive agriculture and manufacturing became, the fewer people they employed. At the same time, this shift generated more work in the service sector. Yet before we could get ourselves a job in this new world of consultants, chefs, accountants, programmers, advisors, brokers, doctors, and lawyers, we first had to earn the proper credentials.

This development has generated immense wealth.

Ironically, however, it has also created a system in which an increasing number of people can earn money without contributing anything of tangible value to society. Call it the paradox of progress: Here in the Land of Plenty, the richer and the smarter we get, the more expendable we become.

When Bankers Struck

“CLOSURE OF BANKS.”

On May 4, 1970, this notice ran in the Irish Independent. After lengthy but fruitless negotiations over wages that had failed to keep pace with inflation, Ireland’s bank employees decided to go on strike.

Overnight, 85% of the country’s reserves were locked down. With all indications suggesting that the strike could last a while, businesses across Ireland began to hoard cash. Two weeks into the strike, The Irish Times reported that half of the country’s 7,000 bankers had already booked flights to London in search of other work.

At the outset, pundits predicted that life in Ireland would come to a standstill. First, cash supplies would dry up, then trade would stagnate, and finally unemployment would explode. “Imagine all the veins in your body suddenly shrinking and collapsing,” one economist described the prevailing fear, “and you might begin to see how economists conceive of banking shutdowns.” Heading into the summer of 1970, Ireland braced itself for the worst.

And then something odd happened. Or more accurately, nothing much happened at all.

In July, the The Times of England reported that the “figures and trends which are available indicate that the dispute has not had an adverse effect on the economy so far.” A few months later, the Central Bank of Ireland drew up the final balance. “The Irish economy continued to function for a reasonably long period of time with its main clearing banks closed for business,” it concluded. Not only that, the economy had continued to grow.

In the end, the strike would last a whole six months – 20 times as long as the New York City sanitation workers’ strike. But whereas across the pond a state of emergency had been declared after just six days, Ireland was still going strong after six months without bankers. “The main reason I cannot recollect much about the bank strike,” an Irish journalist reflected in 2013, “was because it did not have a debilitating impact on daily life.”

But without bankers, what did they do for money?

Something quite simple: The Irish started issuing their own cash. After the bank closures, they continued writing checks to one another as usual, the only difference being that they could no longer be cashed at the bank. Instead, that other dealer in liquid assets – the Irish pub – stepped in to fill the void. At a time when the Irish still stopped for a pint at their local pub at least three times a week, everyone – and especially the bartender – had a pretty good idea who could be trusted. “The managers of these retail outlets and public houses had a high degree of information about their customers,” explains the economist Antoin Murphy. “One does not after all serve drink to someone for years without discovering something of his liquid resources.”

In no time, people forged a radically decentralized monetary system with the country’s 11,000 pubs as its key nodes and basic trust as its underlying mechanism. By the time the banks finally reopened in November, the Irish had printed an incredible £5 billion in homemade currency. Some checks had been issued by companies, others were scribbled on the backs of cigar boxes, or even on toilet paper. According to historians, the reason the Irish were able to manage so well without banks was all down to social cohesion.

So were there no problems at all?

No, of course there were problems. Take the guy who bought a racehorse on credit and then paid the debt with money he won when his horse came in first – basically, gambling with another person’s cash. It sounds an awful lot like what banks do now, but then on a smaller scale. And, during the strike, Irish companies had a harder time acquiring capital for big investments. Indeed, the very fact that people began do-it-yourself banking makes it patently clear that they couldn’t do without some kind of financial sector.

But what they could do perfectly well without was all the smoke and mirrors, all the risky speculation, the glittering skyscrapers, and the towering bonuses paid out of taxpayers’ pockets. “Maybe, just maybe,” the author and economist Umair Haque conjectures, “banks need people a lot more than people need banks.”

Another Form of Taxation

What a contrast with that other strike two years earlier and 3,000 miles away. Where New Yorkers had looked on in desperation as their city deteriorated into a garbage dump, the Irish became their own bankers. Where New York was staring into the abyss after just six days, in Ireland things were still going swimmingly even after six months.

Let’s get one thing straight, however. Making money without creating anything of value is anything but easy. It takes talent, ambition, and brains. And the banking world is brimming with clever minds. “The genius of the great speculative investors is to see what others do not, or to see it earlier,” explains the economist Roger Bootle. “This is a skill. But so is the ability to stand on tiptoe, balancing on one leg, while holding a pot of tea above your head, without spillage.”

In other words, the fact that something is difficult does not automatically make it valuable.

In recent decades those clever minds have concocted all manner of complex financial products that don’t create wealth, but destroy it. These products are, essentially, like a tax on the rest of the population. Who do you think is paying for all those custom-tailored suits, mansions, and luxury yachts? If bankers aren’t generating the underlying value themselves, then it has to come from somewhere – or someone – else. The government isn’t the only one redistributing wealth. The financial sector does it, too, but without a democratic mandate.

The bottom line is that wealth can be concentrated somewhere, but that doesn’t also mean that’s where it’s being created. This is just as true for your former feudal landowner as it is for the current CEO of Goldman Sachs. The only difference is that bankers sometimes have a momentary lapse and imagine themselves the great creators of all this wealth. The lord who was proud to live off his peasants’ labor suffered no such delusions.

Bullshit Jobs

And to think that things could have been so different.

Nearly a century ago, economist John Maynard Keynes famously predicted that we would work fifteen-hour weeks by the year 2030. He thought that our wealth and prosperity would increase dramatically and that we would convert much of that wealth into leisure. Keynes was certainly not the only one to believe that it was just a matter of time before we solved the “economic problem.” Well into the 1970s, economists and sociologists forecasted that “the End of Work” was near.

In reality, that’s not at all what has happened. We’re plenty more prosperous, but we’re not exactly swimming in a sea of free time. Quite the reverse. We’re all working harder than ever. Many people explain these circumstances by assuming we use money we don’t have to buy stuff we don’t need to impress people we don’t like. In other words: we sacrificed our free time on the altar of consumerism.

But there’s one puzzle piece that doesn’t fit. Most people play no part in the production of iPhone cases in their panoply of colors, exotic shampoos containing botanical extracts, or Mocha Cookie Crumble Frappuccinos. Our addiction to consumption is enabled mostly by robots and Third World wage slaves. And although agricultural and manufacturing production capacity have grown exponentially over the past decades, employment in these industries has dropped. So is it really true that our overworked lifestyle all comes down to out-of-control consumerism?

David Graeber, an anthropologist at the London School of Economics, believes there’s something else going on. A few years ago he wrote a fascinating piece that pinned the blame not on the stuff we buy but on the work we do. It is titled, aptly, “On the Phenomenon of Bullshit Jobs.”

In Graeber’s analysis, innumerable people spend their entire working lives doing jobs they consider to be pointless, jobs like telemarketer, HR manager, social media strategist, PR advisor, and a whole host of administrative positions at hospitals, universities, and government offices. “Bullshit jobs,” Graeber calls them. They’re the jobs that even the people doing them admit are, in essence, superfluous.

When I first wrote an article about this phenomenon, it unleashed a small flood of confessions. “Personally, I’d prefer to do something that’s genuinely useful,” responded one stockbroker, “but I couldn’t handle the pay cut.” He also described his “amazingly talented former classmate with a Ph.D. in physics” who develops cancer detection technologies, and “earns so much less than me it’s depressing.” But of course, that your work happens to serve a weighty public interest and requires lots of talent, intelligence, and perseverance doesn’t automatically mean you’re raking in the cash.

Or vice versa. Is it any coincidence that the proliferation of well-paid bullshit jobs has coincided with a huge boom in higher education and an economy that revolves around knowledge? Remember, making money without creating anything of value isn’t easy. For starters, you have to memorize some very important-sounding but meaningless jargon. (Crucial when attending strategic trans-sector peer-to-peer meetings to brainstorm the value add-on co-creation in the network society.) Almost anybody can collect trash, but a career in banking is reserved for a select few.

In a world that’s getting ever richer, where cows produce more milk and robots produce more stuff, there’s more room for friends, family, community service, science, art, sports, and all the other things that make life worthwhile. But there’s also more room for bullshit. As long as we continue to be obsessed with work, work, and more work (even as useful activities are further automated or outsourced), the number of superfluous jobs will only continue to grow. Much like the number of managers in the developed world, which has grown over the last 30 years without making us a dime richer. On the contrary, studies show that countries with more managers are actually less productive and innovative. In a survey of 12,000 professionals by the Harvard Business Review, half said they felt their job had no “meaning and significance,” and an equal number were unable to relate to their company’s mission. Another recent poll revealed that as many as 37% of British workers think they have a bullshit job.

By no means are all these new service sector jobs pointless – far from it. Look at healthcare, education, fire services, and the police and you’ll find lots of people who go home every day knowing, despite their modest paychecks, they’ve made the world a better place. “It’s as if they are being told,” Graeber writes, “You get to have real jobs! And on top of that you have the nerve to also expect middle-class pensions and health care?”

There is Another Way

What makes all this especially shocking is that it’s happening in a capitalist system, a system founded on capitalist values like efficiency and productivity. While politicians endlessly stress the need to downsize government, they remain largely silent as the number of bullshit jobs goes right on growing. This results in scenarios where, on the one hand, governments cut back on useful jobs in sectors like healthcare, education, and infrastructure – resulting in unemployment – while on the other investing millions in the unemployment industry of training and surveillance whose effectiveness has long been disproven.

The modern marketplace is equally uninterested in usefulness, quality, and innovation. All that really matters is profit. Sometimes that leads to marvelous contributions, sometimes not. From telemarketers to tax consultants, there’s a rock-solid rationale for creating one bullshit job after another: You can net a fortune without ever producing a thing.

In this situation, inequality only exacerbates the problem. The more wealth is concentrated at the top, the greater the demand for corporate attorneys, lobbyists, and high-frequency traders. Demand doesn’t exist in a vacuum, after all; it’s the product of a constant negotiation, determined by a country’s laws and institutions, and, of course, by the people who control the purse strings.

Maybe this is also a clue as to why the innovations of the past 30 years – a time of spiraling inequality – haven’t quite lived up to our expectations. “We wanted flying cars, instead we got 140 characters,” mocks Peter Thiel, Silicon Valley’s resident intellectual. If the postwar era gave us fabulous inventions like the washing machine, the refrigerator, the space shuttle, and the pill, lately it’s been slightly improved iterations of the same phone we bought a couple years ago.

In fact, it has become increasingly profitable not to innovate. Imagine just how much progress we’ve missed out on because thousands of bright minds have frittered away their time dreaming up hypercomplex financial products that are ultimately only destructive. Or spent the best years of their lives duplicating existing pharmaceuticals in a way that’s infinitesimally different enough to warrant a new patent application by a brainy lawyer so a brilliant PR department can launch a brand-new marketing campaign for the not-so-brand-new drug.

Imagine that all this talent were to be invested not in shifting wealth around, but in creating it. Who knows, we might already have had jetpacks, built submarine cities, or cured cancer.

Friedrich Engels, a close friend of Karl Marx, described the “false consciousness” to which the working classes of his day – the “proletariat” – had fallen victim. According to Engels, the 19th-century factory worker didn’t rise up against the landed elite because his worldview was clouded by religion and nationalism. Maybe society is stuck in a comparable rut today, except this time at the very top of the pyramid. Maybe some of those people have had their vision clouded by all the zeros on their paychecks, the hefty bonuses, and the cushy retirement plans. Maybe a fat billfold triggers a similar false consciousness: the conviction that you’re producing something of great value because you earn so much.

Whatever the case, the way things are is not the way they have to be. Our economy, our taxes, and our universities can all be reinvented to make real innovation and creativity pay off. “We do not have to wait patiently for slow cultural change,” the maverick economist William Baumol challenged more than 20 years ago. We don’t have to wait until gambling with other people’s money is no longer profitable; until sanitation workers, police agents, and nurses earn a decent wage; and until math whizzes once again start dreaming of building colonies on Mars instead of starting their own hedge funds.

In the end, it’s not the market or technology that decides what has real value, but society. If we want this century to be one in which all of us get richer, then we’ll need to free ourselves of the dogma that all work is meaningful. And, while we’re at it, let’s also get rid of the fallacy that a higher salary is automatically a reflection of societal value.

Then we might realize that in terms of value creation, it just doesn’t pay to be a banker.

New York City, 50 Years Later

Half a century after the strike, the Big Apple seems to have learned its lesson. “Everyone in NYC wants to be garbage collector,” read a recent newspaper headline. These days, the people who pick up after the megacity earn an enviable salary. After five years on the payroll, they can take home as much as $70,000 plus overtime and perks. “They keep the city running,” a Sanitation Department spokesperson explained in the article. “If they were to stop working, however briefly, all of New York City would come to a standstill.”

The paper also interviewed a city sanitation worker. In 2006, Joseph Lerman, then 20, got a call from the city informing him he could report for duty as a collector. “I felt like I’d won the jackpot,” he recounts. Nowadays, Lerman gets up at 4 a.m. every morning to haul garbage bags for shifts of up to 12 hours. To his fellow New Yorkers, it’s only logical that he is well paid for his labors. “Honest,” the city spokesperson smiles, “these men and women aren’t known as the heroes of New York City for nothing.”

This essay is adapted from Utopia for Realists: The Case for a Universal Basic Income, Open Borders, and a 15-Hour Workweek by Rutger Bregman. Utopia for Realists originated on The Correspondent, the ad-free journalism platform that serves as an antidote to the daily news grind. The book is available on Amazon. Like Bregman on Facebook and follow him on Twitter @rcbregman.

Translated from Dutch by Elizabeth Manton.

2016 April 21


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  • X-7

    I see the part of the big pic as follows:
    Complexity has generated, and is generating new environs.
    Complexity is accelerating exponentially: Add 5.5 billion since 1916, many using vastly more powerful tech, extending human reach in-&-across geo eco bio cultural & tech networks, and across time.
    New environs.
    These increasingly complex environs are too complex 4: Humans using monetary code to calibrate relationship-value with sufficient reach, accuracy, speed & power.
    Exhibits A, B & C: Sky Ocean Species: Slaughtered
    Decidedly: Not Valuable
    New environs … need new code, cultural speciation.
    http://ow.ly/4mPz2m
    http://ow.ly/4mJQ2r

  • I once recall a tutor on a degree course I did say, “I have three degrees and I am completely useless. I simply cannot justify the money that I earn. Imagine what our lives would be like without the garbage collectors?”

  • veryvexed

    If your a butcher you take home meat, if your a teacher you take home pencils and paper and if your a banker etc you take home money?

  • Nick

    Patent infringement. Lawyers buy up patents to sue people for patent infringement, not copyright infringement. Do you need a lawyer?? 😉

  • delaxo

    Beautiful!

  • Edwin Chiu

    DUDE, that’s Greg Brown’s mural art in Palo Alto at High St. and Hamilton Ave., taken, altered, and with no credit to the artist. Greg Brown died in 2014. He went to Paly and was the husband of my art teacher Julie Brown. Grr. http://karihaugsdal.com/…/greg-brown-mural-garbage-man

    • Momo

      Your link didn’t work but I found this: http://www.anigami.com/jimwich/jimwich_archives/jwpicts_9_2001/GB_Murals/14_GB.html

      They removed the alien from the garbage can. Why wouldn’t they credit his art? That’s just despicable. It’s not public domain, geez. PAY FOR THE ART YOU USE, Evonomics, ya thieves.

      • robertmkadar

        Not the case. We have a strict policy on using creative commons imagery. We will add the credit. We got the image from Flickr and it is under creative commons with permission to modify.

    • robertmkadar

      Thanks. We will add the credit. We got the image from Flickr and it is under creative commons with permission to modify.

  • kootzie

    After a brief period of democratization and people retaining a larger portion of the wealth they create, a return to feudalism was engineered by the privateer/parasite class.
    Corporatism , the tail that wags the public-policy-dog, distorts the balance towards the sociopathic extractive-concentrative wealth aggregation machinery using externalization of risk and cost into the public all shielded by liability-limitation/evasion priviledges.

  • Tlirik

    Ridiculous. People are paid based on skill and demand, not perception of importance. ANYONE can collect garbage. VERY low skill, fairly low demand…but massive pool. The employment pool is basically the entire population of Earth. Pro sports? Highly specialized skill, high demand, EXTREMELY low pool…zero importance. If anyone should be paid more its teachers, just on principle. Most garbage collectors in my state/county make more than teachers. For what skillset? The ability to drive a truck and/or lift a garbage can (though most of it is automated now). Are you sure you understand how employment economics work? SJW bullshitters UNITE!!!

    • Vanadias

      That’s precisely the point of the piece: the market does not do a good job determining social value.

      In other words, it’s an indictment of the very idea of employment economics.

      • Derryl Hermanutz

        Exactly.

      • Jim Smith

        so you have no clue what you are talking about. Social value is irrelevant. The market is the best force in determining value. Paying a no skill person like a garbage collector the same a highly skilled person like a doctor is absurd. How can you be so misinformed?

        • jake

          High pay for sanitory workers is justified because of the great need to get the job done. The market did set the price for garbage collectors;hence how it was a low wage job and is now a high wage job.The strike showed that there was a low supply of willing garbage collector to work at the initial price.The city was forced to pay a good salary.That is supply and demand in a market.

          • Jim Smith

            No. I see you know zero about economics. Any idiot can be a sanitary worker. Simple supply and demand. No. the strike shows how unions distort the marketplace and limit competition. Remove the barriers of union membership and see what happens.

        • Vanadias

          That’s nice a collection of assertions, Jim.

          It’s good to know that you’ve likely spent thousands of hours thinking through the very concept of social value, uncovering the hidden logic of market dynamics and the assumptions that go into it, asking whether or not “skill” is merely a manufactured idea to solidify hierarchy, questioning the historical formation of the very founding of market society, wondering whether or not “possessive individualism” was an aberration or a norm in the growth of Atlantic Republicanism, figuring out the lines between bourgeois and socialist revolutionaries (and whether or not they’re hidden compatriots), thinking through the institutionalization of political economy from the 18th through the 21st centuries, wondering whether the German Ordoliberals were, in fact, behind the termination of the Keynesian consensus, interrogating the slow growth of governing metaphors for economics–the natural world, the healthy body, the physics model, the computer–over capital’s three hundred year lifespan, thinking about the lines between psychology and accumulation in the neoliberal paragon of the homo economicus, and generally questioning the affects of industry on cultural production.

          Really penetrating stuff.

          • Jim Smith

            i can cut and paste too, you stupid drone.

          • Vanadias

            You want me to explain all of my references? I will–and I’ll do it in detail if you like.

            You seem to believe that people are incapable of thinking for themselves– aided, of course, by deep reading of history and culture. You’re obviously revealing a lot more about yourself than the person you’re talking with.

            Also, @robertmkadar:disqus, how many times do we have to ask this guy to be respectful. I’m happy to have a conversation with someone who doesn’t share my opinion or intellectual positions. I’m not happy to be called a “stupid drone” just so someone can feel like they’ve won an argument.

  • Steven Critcher

    Thank you for this comprehensive article. I heard two news stories this week that I found disturbing. One was about how low gas prices are ultimately bad for the economy (!) The other proposed that although the real estate market seems to be rebounding, it cannot be considered as a recovery because most of the properties selling are under a million dollars. So, according to financial analysts, the only way our economy can be strong is if we pay inflated prices, with a devalued currency, for goods and services, so rich people can buy more houses. Bullshit, indeed.

  • Vanadias

    This is a wonderful essay and a necessary one. But I just want to add that much of it can be summed up by one of Marx’s most important diagnoses of the capitalism:

    Capitalism is a system that is based on the exchange value of objects–the price of a good within the market–rather than their use value, or what that object contributes to the flourishing of an individual or community. And this veneration of exchange value over use value is, in fact, one way to define capitalist ideology, a kind of glittering blindness that keeps people from seeing the contradictions and failures of the system itself.

    • Vanadias

      If you want to see this ideology on display, look no further than many of the other comments to this article.

      The commenters literally cannot think about value or the nature of value outside the frame of capitalist “laws” like supply and demand. They structure their very reality.

      But capital is not immutable, natural, or transcendent. It is a historical system of production. It can be changed, or overcome, if we want that.

    • Jim Smith

      yeah, communism works real well. You have a tiny elite rich class, and everyone else is a slave with pennies to their names. There is zero middle class.

      • Vanadias

        I was talking about Marxist philosophy. I said nothing about communism. Coincidentally, you said nothing about it, also: it is the social ownership of the means of production.

        But you have defined quite well our current condition under neoliberal capital, where there is increasingly a “tiny elite rich class” and “zero middle class.”

        • Jim Smith

          same thing. failed everywhere it has been tried. Capitalism has lifted more people out of poverty than any economic system _ever_. Period. Sorry, reality says you are a clueless drone. Thanks for playing.

          • Jim Smith

            it is call facts. sorry it does not align with your narrative. Please do provide references as to when and where communism and/or Marxism has ever worked. Ever. Venezuela? Cuba? please enlighten us….

    • @vanadias:disqus Please help me out because I am not well-read on Marxism. I think of ‘capitalism’ as ‘not eating the seeds’. In other words, capitalism is the action of conserving and then using the means of production. The alternative to capitalism by this way of thinking would be ‘consumerism’, that is consumption, (therefore destruction) of some or all of the seeds. Both capital creation and product consumption are necessary components of any sustainable society. What we, in the United States, often refer to as ‘capitalism’ is really the institution of ‘private ownership’. Ownership determines which person or collective entity (e.g. corporation, government or warlord) controls access to, use and disposition of a seed (or bag of seeds or other social asset). Alternatives to private ownership are social ownership — socialism and communism. In the US we are prone to conflate ‘communism’ with ‘dictatorship’ or ‘totalitarianism’ maintained by force because attempts at communal ownership in modern history have often resulted in the evolution of command societies. In earlier, simpler (sometimes called primitive or tribal) societies, communal ownership has persisted for thousands of years maintained by tradition with little exercise of violence.

      I don’t understand why capitalism and communism, at the theoretical level, are viewed as opposites or as incompatible. Can we not have high levels of capital formation leading to high productivity with communal ownership of both means and output?

      • Vanadias

        @liza_loop:disqus: Thanks for those comments. I actually agree with a lot of your first paragraph where you lay out ownership. This is, as I take it, the fundamental difference between a capitalist economy and an alternative: in capitalism, the means of production are owned by a small handful of people who, if left unchecked, will concentrate their power to rule in a variety of socioeconomic institutions. Many people might say that communism and capitalism are incompatible because of ownership–not, as you imply, because one rejects the formation of capital, or innovation, or even the freedom from domination. These can be features under both systems.

        But, as far as your first assertion about capital “conserving the seeds” of its production: Marx wrote that capitalism functions in precisely the opposite way. Because capital is compelled to grow, it must, in fact, ignore the damaging effects it has on the resources needed for that growth. A good example of this is capital’s relationship with the environment. In order to function, capital requires raw materials from the natural world, which it will accumulate to satisfy its requirements for growth. And yet, the people who live in that domain of capitalist production rely on the same resources to live (and they oftentimes do not even receive the benefit of the finished product, those resources that are now magically transformed by capital into a commodity). But who does the work? Who turns the engine of production? The very people whose resources are being depleted and polluted.

        This is called a contradiction. For Marx, contradiction was the central point of crisis that capital had to overcome in order to move forward. He saw that market economies do not, in fact, settle into a comfortable equilibrium for all involved: they involve painful–and oftentimes fatal–transitions for societies who are simply beholden to overcome the contradictions of production in order to keep things going. In this way, Marx turned the entire foundation of neoclassical economics on its head. He argued that the “natural equilibrium” of a self-regulating market is, in fact, an abstraction of a process involving living, breathing, human beings–many of whom will be hurt or simply erased by a system that they do not control.

        • Very interesting, thank you.

          I’d say there is an urgent need to revisit some of the pivotal economic and philosophical theorist that have influenced today’s voters (whether or not they know where their ideas came from). Simplistic analysis and popularity contests (often observed in online comment threads and US elections) don’t make for well-run railroads. Unfortunately, I’m sometimes tempted to adopt elitist positions after participating in these discussions. What can we do to raise the level of discourse?

          • Vanadias

            Agreed. And that’s why I think it’s absolutely pivotal that all people have access to a historical and cultural education as well as a technical and utilitarian one. And, hopefully, people won’t segregate their opinion to one cultural “camp.” I have done my best to read and take seriously arguments from scholars such as Friedrich von Hayek, Robert Nozick, and Deirdre McClosky. I simply don’t find them as convincing or rigorous as J.K. Galbraith, John Rawls, or Fred Jameson.

            I have no idea how to raise the level of discourse–people seem incredibly entrenched. But maybe your penultimate sentence is a clue to answering your question: the first step is to stop believing that any sort of intellectual engagement is “elitist,” and, hence, illegitimate.

          • robertmkadar

            Really appreciate the respectful and informative back and forth!

  • Stockdoc9999

    Workers are paid inversely with their ability to be replaced.

    If somebody else can step in and is willing to do your job for less money… you might really be getting overpaid.

    Commission salespeople, athletes entertainers etc. create revenues and get to share in them. They are worth what they earn. Civil servants and other unionized labor groups are among the most excessively compensated as they take common sense out of the pay equation.

    • Agreed. This article is collection of canards that are too numerous to refute well in a comment.

      However, the primary to response to the author’s contention that vast swaths of people are paid more than they are worth is the following: The people that are paying them and have skin in the game disagree. Just because you as an outsider, can’t see the value of someone’s job does not mean that it is of little value!

      Now the people paying such workers may be incorrect, but it is more likely that the author is wrong (in any given case) given he has less knowledge of the relevant industries and no skin in the game. Unfortunately it is not possible to know in what cases he might be right.

      Likewise employers may be paying certain people more because a poor system compels them to (e.g. lawyers employed to sort out the leviathan of legal strictures), but these are indications that those poor/inefficient parts of the system should be changed not that people should not be employed to ameliorate the effects of a bad system.

      • Swami

        I concur with Stock and DWA. Just because we are not familiar with the value of some financial expert, doesn’t mean those paying them aren’t aware of it. I am sure some people add zero value, and others detract value. In general these are people in rent seeking activities, and we would probably all be better off if they did something else.

  • shiftme

    Salary has nothing to do with societal value or societal worth. No one except the author thinks this way. No one thinks Kim K is more “valuable” than a doctor saving children’s lives. The author is just off base in this views.

    • TerminatriX

      LOL. At you, moralistic parrot.

      Imaginary scenario, both suffer a serious injury in a car crash. Which gets allocated more resources to save their life?

      That’s what ‘valuable’ means, not repeating tired phrases drilled into you at school to conceal the promising young people’s commitment to greed and upward mobility and lack of regard for anybody else.

      • Grog Humane

        If both arrived at the ER, they’d both get equal treatment. That’s what professional doctors in a professional ER would do; follow their oaths and save lives.

        Just because YOU would attend to the person who has more money and let the other die for the unforgivable crime of not being wealthy, doesn’t mean it reflects what real people and real professionals do.

        Your type of thinking is exactly what is wrong with this country and exactly the type of person the author described… worthless.

        • justathought

          true if they both arrived at the same E.R they would be treated equally ( one hopes) however being from different socioeconomic classes one has access to more expensive hospitals with higher paid doctors ( which one assumes equates to skill) and more sophisticated technology. I believe what the author is trying to say is that why is it that a person doing a job that doesn’t inherently better society receiving a pay that allows them access to the best medicine, but a teacher who is devoted to educating students (directly influencing society) receives a pay that does not afford them the same access to the best health care

          • TerminatriX

            yes.

        • TerminatriX

          For the record, I would not do that.

          but i would
          1) by and large be an exception
          2) not be delusional enough to assume i can just so treat people fairly without a fake pretext covering that up and not get screwed for ‘bad customer service’. Meaning – i would employ fake pretexts to do so.

          even so, doing my best, i would not be 100% sure i have the strength to totally negate the pressure and my fear from greater failure repercussions.

          I would bet a good fraction of your ‘real people’ mostly finds a way to rationalise away their compliance with society’s pressures – to the point they believe in their own fairy tale. Another fraction do what i would do, find fake rationalisations to act just. And then there’s the sincere people on both sides, the idealists and the Ayn Rand idiots.

          Are you sure my path is the worthless one?

      • shiftme

        Kim K gets allocated more resources because she has more resources, not because she’s more valuable. No one is giving Kim K anything for free because she is more valuable. She’s just very rich and have influential friends.

        • TerminatriX

          and you’re wrong. they will give things for free – for a multitude of reasons: publicity, fear, subservience, cronyism

    • Clinton Weir

      I don’t know what you’re talking about. I routinely pay $80 to see my doctor for less than 15 minutes, and I wouldn’t even consider paying $80 to see Kim Kardashian for an hour. Kim and other celebrities make money by providing a tiny amount of value to each of an enormous number of people all at once.

      Doctors, lawyers and other professionals make money by providing a relatively large amount of value to just one, or a few, people at a time.

      It’s simply incomparable.

      • Stephen Crowley

        They don’t provide value you fool, they generate revenue for themselves

        • Clinton Weir

          Nobody would pay them if they weren’t providing at least as much value as the payment they demand.

          • So by your reasoning when Bernie Madeoff earned all that money he was providing value.

            See the “just world fallacy” in wikipedia. The world is not fair and economics is not fair. If someone makes more money than someone else it could mean lots of things other than value to society.

          • Clinton Weir

            Are you suggesting that Kim Kardashian is orchestrating a fraud? That she accepts payment for appearing on a tv show, and then doesn’t appear?

            When a TV producer contracts with Kim Kardashian to appear on his show and agrees to cut her a check for doing so, he does so because he believes that her appearance will generate enough viewership, and thus ad revenue, to justify the expense. He may be wrong, there’s no doubt about that. But those results guide future decisions by that producer and others. If Kim Kardashian doesn’t attract eyeballs, Kim Kardashian will soon find herself unable to get checks for appearing on TV shows.

            This is all beside the point, however, which is that if Kim Kardashian attracts 100k viewers and gets paid $200k, it’s not the case that any one viewer values the experience in the amount of $200k. They might each value her appearance $2-3.

          • @clinton Weir,

            Did you look up the “just world fallacy” in wikipedia? here’s the link in case you didn’t get a chance. . .

            https://en.wikipedia.org/wiki/Just-world_hypothesis

            obviously, I’m suggesting that “perceived value” as used for determining immediate compensation by a single individual or organization is far different in many cases than “societal value” as determined in hindsight after the wisdom of experience and time has improved judgement.

          • Clinton Weir

            I reject the concept of societal value. There’s only subjective value. I don’t value Kim Kardashian, so I do not pay her (either attention or money). I do value my health, so I pay my doctor.

            Some people do care about Kim Kardashian, and they pay her (with their attention, which she monetizes, or with their money, assuming she has products to sell; not actually sure what does, but I read in this thread that she makes paid appearances on tv and in night clubs). I’d say most of those people, individually, do not pay her very much.

            But whether you care about Kim Kardashian or not, you probably are not going to pay my doctor, and I’m probably not going to pay yours.

            Anyway, to flesh out my point:
            A few weeks ago, I visited my doctor and the bill came out to about $5 per minute of his time, and that was fine because I valued that time by at LEAST $5 per minute. A couple years ago, I paid to see Jerry Seinfeld live, and the ticket price came out to about $1 per minute, and that was also fine because I valued that time by at LEAST $1 per minute.

            Nonetheless, Jerry collected the $1 per minute from about hundreds of people, and the doctor only collected it from 1 person (me), so the same argument applies – one could say that society values Jerry Seinfeld more than it values doctors, because we pay Jerry Seinfeld so much better than we pay doctors.

            But each audience member has HIS OWN doctor. If I value my doctor’s time more than I value Jerry Seinfeld’s, and every other Jerry Seinfeld fan values their doctor’s time more than Seinfeld’s, then how can we really conclude that we, as a society, value Seinfeld’s time more than we value our doctors’ time?

          • You seem stuck in the embrace of commercialism and unable to differentiate between the human value of things and the financial cost of things. Raising the price of something does not make it more valuable, it only makes it cost more. is that a concept you can understand? can you come up with some examples where the price of something is not the same as it’s value?

          • Clinton Weir

            Of course varying the price of a product does not vary its value*. But a person does not buy a product if the price of the product exceeds its value, so we know that the subjective value of a product (to the customer) is at least as much as the price they paid.

            Incidentally, the amount by which the value of a product exceeds its price is called consumer surplus.

            * Most of the time, anyway; there are some luxury goods that are good because they’re expensive.

          • @Clinton weir,

            There’s a contradiction made by marketing in a phrase you used. “luxury goods” or not good in any moral or religious or ethical sense. The “good” in “luxury goods” is a fine example of how marketing tries to redefine morality for profit.

            Speeking of “consumer surplus” it’s actually called economic surplus. https://en.wikipedia.org/wiki/Economic_surplus. consumer surplus is only one half of reality and the other half is “producer surplus”. . .

            Producer surplus or producers’ surplus is the amount that producers benefit by selling at a market price that is higher than the least that they would be willing to sell for; this is roughly equal to profit (since producers are not normally willing to sell at a loss, and are normally indifferent to selling at a breakeven price).

            in point of fact a retailer surplus is more of the problem than a producer surplus. A retailer will sell a good at the highest price possible and seeks only to make as much money as possible. if a natural disaster occurs and food or water is short so that only 99 out of 100 people have enough water to liver then the retailer of the water will sell each bottle for the highest price possible of “everything you have for the rest of your life” and call that fair and good for society. That’s been a problem with free markets since the dawn of time (see the biblical story of Cain and Abel). I guess you might say the story of Cain and Abel showed the free market functioning at its’ most efficient and frictionless unregulated best. The results of the Cain and Abel story are typical of what is supposed to happen in an unregulated free market. Is that the world you want to live in?

          • Clinton Weir

            Consumer surplus is the difference between what the consumer values the product and the price he has to pay to acquire it. That is what I said and that is accurate. If consumer surplus is negative (if the value of the product is less than the price) then the consumer does not buy the product.

            Nobody is talking about getting rid of regulation. I am talking about getting rid of you as the decider of what is good for me.

          • I never said I wanted to decide what’s good for you. You’re free to do whatever you want as long as its legal and fair and good for society.

          • Clinton Weir

            Good for society according to whom, exactly?

          • Good for society according to society. It’s not one person who decides what’s good for society, it’s a complicated process involving negotiation, force, wars, desire, love etc. There’s rules and some rules get broken and some don’t and it’s all very important and it’s all not very simple.

            BUT, it’s pretty clear that in a free market capitalist economy money is good according to money. One dollar equals one vote in market economy. Also there’s no such thing in the market economy as voting against something and you can only vote with dollars in favor of something. So in a free market economy there’s no such thing as being half bad, there’s only such a thing as being half good. A typical example is a product like a bullet that costs only fraction of a dollar to produce but will on average cost someone else many more dollars in damages. in an unregulated free market economy you can’t buy not being shot, you can only buy the freedom to shoot someone.

            So the free market is weird about what things it will allow you as an individual to buy and unfortunately most of the things that are good for society and groups are not available for purchase individually. You can’t go down to you auto dealership and buy a personal ticket on a mass transit system or better roads for just your car. Mass transit and roads are not for sale in a free market economic system to an individual. Also not for sale in a free market is clean air or a pollution free environment. The problem is that the free market assigns these things it can’t sell the value of zero good since they have no dollar value the individual can pay to get them on an individual basis.

          • Clinton Weir

            Money doesn’t make decisions – people do. Those with money decide to whom and how much they will pay it. When you make a financial decision, between option A and option B, you create a signal about which option you think is better for you. An economy consists of millions of people making decisions about what they think is better for them, and in the process, they decide what is best for everyone.

            What you’re saying is that, that process having played out, you disagree with the outcome. But your opinion is not more important than the outcome. Your opinion was already weighed into the outcome.

            Being shot or not being shot is not part of the economy. It’s not a transaction. It’s an action taken by one party against another party, against the second party’s free will. That belongs to the sphere of criminal justice, not economics.

            “Mass transit and roads are not for sale in a free market economic system to an individual.”
            You can build roads if you want – there’s nothing stopping you except your own lack of funds. More likely, you’ll get together with your fellow citizens to build roads and buses that everyone can use, which makes a lot more sense. What you want, as I said all along, is power – the ability to do things unilaterally that the society has expressed it does not want to do. It’s not going to happen – if you try to seize dictatorial power in this country you will be destroyed. Give it up.

          • You imagine I’m an aspiring dictator of the USA? Maybe you need to scale back your paranoia.

          • Clinton Weir

            PS If you want cleaner air, that’s not hard to do within the context of a market economy – just tax emissions and allocate the funds to building air purifying technology.

            Instituting such a tax is not something you can, or should be able to, do individually. It has to be done within the political system. Problem is, the political system doesn’t want to do it either, which is where we get back to you trying to seize more power than you are entitled to.

            You need to learn to accept that you are just one person, and you do not get the power to override the collective decisions of every other person.

          • er, where did you get the idea that I thought I was several people. I never mentioned anything about me being a collective or representing a group of people. Also, not sure what you mean about me trying to seize more power than I’m entitled to. I’m not trying to seize anything and by the way how exactly do you measure and decide how much power I’m entitled too? is that measured it watts? I think you maybe rad something different than I wrote because I didn’t even mention these things you are imagining about me.

          • Justin Showna

            Clinton, you’ve gotta be more ruthless. Do you really think markets are confined to economics? No. If communists sell an idea and enough people buy it *and* they’ve got the resources to do it, communism will be in vogue. Same thing with fascism, socialism, anything. If your laissez-faire ideology couldn’t outcompete them, that’s your own stupid fault, or it’s own, and if you’re too squeamish to understand what that competition entails, too bad. You’re like the taxi industry whining about Uber. Yawn. Get more competitive. The Market is politics is warfare through other means. A quick look at the world shows this as obvious, and I intend to come out on top regardless of how it pans out. Just because you’re not flexible enough to do so to means nothing, certainly not to me.

          • Clinton Weir

            If Communists win political power at the ballot box, so be it. If they try to seize political power at gunpoint, then they must be destroyed. They will never be able to seize political power at the ballot box (they don’t have enough votes) and they won’t win on the battlefield (they don’t have enough guns). So I’m on the right side of this one.

            It would take 2/3 of the House and Senate and 3/5 of the state legislatures to change the constitution, which would be necessary to institute communism. It will never happen.

            An alternative approach would be to win the White House and a simple majority in the Senate for a sufficiently long period of time to make the Supreme Court solidly Communist. Then, the SCOTUS could rewrite the Constitution by interpretation, case by case. This is a longer and harder approach. It will also never happen. There are zero members of Congress in favor of Communism.

          • Earthstar

            Whoa, super agro dude! Talking about getting rid of people? I think you need to do some serious looking for your heart. (hint: you may have sold it for some shitty economic theory)

          • Clinton Weir

            If Steve tries to restrict our freedom (e.g. so that we can only do things that are “good for society”), we should get rid of him just like we got rid of King George.

          • Earthstar

            You seem to see yourself as out side of and apart from any notion of society or social good. I’m not sure you have any real understanding of what it means to be human even. You’re mind is so tied up around notions of individual freedom, that you appear to be blind to our collective interdependence.

          • Clinton Weir

            An Economy is a system of interdependence. In free market economics, we each have a voice in determining the distribution of the national wealth, with the loudness of our voice being proportional to the magnitude of our contribution to the creation of national wealth. There are cases where someone manages to get a louder voice than they deserve, but it’s because someone else gave it to them, usually by overvaluing their contribution. But a person has every right to delegate his economic power to someone else if he wants.

            Capitalists who misestimate the magnitude of contributions tend to lose their voice. By overpaying underachievers, they give their economic power to undeserving workers. By underpaying overachievers they lose human capital to their competitors, who then reap the gains in economic power. Competitors also benefit when they overcharge, since they can take increased market share. By undercharging for their products, they lose wealth to their customers. Whatever their miscalculation of value, they are gradually squeezed out of the market.

            When communists like Steve talk about overturning the economic (or political) system to give themselves more votes than what they are entitled, then they must be put down. The system he describes, in which only transactions that benefit the society as a whole are allowed, would destroy almost all of the value-adding transactions that occur in the system.

          • Earthstar

            There’s little point in arguing with libertatrians.

          • Clinton Weir

            He’s no libertarian – far from it. Did you miss the part where he wants to make it illegal to conduct a transaction that is not beneficial to the society as a whole?

          • Clinton Weir

            “goods” (as in products and services) has nothing to do with “good” (as in not bad). I mean, come on, are you some kind of troll, or is English just not your first language? Either way, you’re wasting my time.

          • @clinton weir,

            Nope, I’m pretty good at english and writing and rhetoric and I’m even trained in argumentation, symbolic logic and have studied framing and advertising and copywriting professionally. Ps. although I can understand if you thought otherwise because I don’t bother to spell check and grammar check for an audience of one.

          • Clinton Weir

            “if a natural disaster occurs and food or water is short so that only 99 out of 100 people have enough water to liver then the retailer of the water will sell each bottle for the highest price possible of “everything you have for the rest of your life” and call that fair and good for society.”

            You’re describing permanent loss of freedom. The customer will not accept this price, because it would be “cheaper” to murder the shopkeeper and seize the water. The maximum possible penalty for murder is permanent loss of freedom, but since he might get a lesser penalty or no penalty at all, the expectation value of the actual penalty is lesser. So, a rational customer would choose murder rather than willing and permanent forfeiture of freedom.

            And the customer probably will not have to resort to murder – nonlethal force will probably be enough, and the penalty for nonlethal force is even less than that for murder.

          • @Clinton Weir,

            Yes, I agree with the scenario you describe. or maybe not. the salesman could simply hire 5 people with payment in water bottles for private security guards and order them as employees to limit people entering the store to one at a time and they have to be frisked and walk through a metal detector first before they have the priveledge of paying their entire lifetime savings and earnings for a bottle of water.

            The monetary price of a bottle of water would then be very high but would that change it’s value? More importantly is that the kind of society you want to live in. if so, I have a bottle of water to sell you and I just need to arrange some difficulties for you with you’re current water supply before I offer mine for sale to you. You will be free to not buy the water bottle and I won’t force you to do anything and you can’t force me not to cut off your water supply (I can pay a guy at the water company to turn off your water for cheep and another guy who owns the stairwell to your rental apartment to refuse you the right of passage since it’s his property and you only rent the apartment you can’t leave your apartment without trespassing on the apartment complex grounds which he’ll shoot you for trespassing on as is his right). so no one has to force anyone into anything or take anything away from you, it’s all just going to happen with a free market which you feel is fair and good right?

            I think we could also come up with examples slightly less exaggerated and more realistic that demonstrate the problem of an unregulated free-market economy. But using your reply example without changes the court costs and police costs would be far higher than a bottle of water under normal conditions so again this seems not good for society. This brings me back to my original point that the free market economy is a very poor way maximizing society or national good. Because something makes a profit does not make it “good”.

            Making money is not the same thing as “good”. Because someone is paid more in the labor market doesn’t mean they do a better job or a more important job. Someone making more money in the labor market means most likely that they’ve somehow rigged the economic system by creating a shortage and taking advantage of it. Suppose you could create the impression in employers of CEO’s that CEO’s were rare and there weren’t enough to go around. That would make the hiring cost of the CEO much higher than the actual value of the CEO. Or suppose the employer knows the employee can’t live without a job, then the employer can ask set the salary much much lower than the “value” of the employee. So, the higher paid employee isn’t better qualified or more valuable than the lower paid employee and Bankers make more money than garbage men.

          • Clinton Weir

            Can you point me to any time when I have suggested doing away with regulation? I still think you’re a troll.

          • “regulation” isn’t the important part of the argument to me. you can ignore it and take it out of my previous comment if the word “regulation ” is what’s bothering you.

            funny, I was thinking you were a troll.

          • Clinton Weir

            Okay, so it really is about this “making money doesn’t mean you did something good” nonsense. I don’t pay people who do not do good things for me. If you do, you’re the problem. If you treat money like it has no value, then it will have no value. If you treat it like it is valuable and pay it forward as a reward for those who did something good, then it will be a measure of the good that the person has done. It’s entirely up to us, the holders of the money, what money will mean.

            Case in point: I went to a dentist, he damaged my tooth. After a week, because I was still in pain, I went back, and he could not or would not fix the problem he caused. Later, he demanded payment for the two visits. I refused to pay him. He threatened me. I continued to refuse. He has sent the bill to collections (damaging my credit). I refuse to pay. If it comes to it, I’ll kill myself before paying him a penny for damaging my body. That’s called having principles.

            But sure, I suppose if I was less of a man, I might have paid him to go away. I don’t succumb to the sort of bullying tactics you seem to think are commonplace, and neither should you.

            Similarly, if you managed to succeed in your extortion plan, I’d die. Oh well, I always knew it would happen some day. Better that I die free and pass my wealth on to my family than let some POS like you have it.

          • I’m suggesting that a free market economy confuses “good” with “money”. They’re completely separate things. “fraud” has several meaning, but in a legalistic letter of the law economy it means only what you can be prosecuted for in a way that will result in a cost in money.

            Your math about Kim Kardashian is all fine but it misses the point. The point is that Money paid does not equal society good except by accident. A perfectly efficient free market does not exist. If a perfectly efficient free market did exist it would help only those with money and only in proportion to how much money each person could spend.

            A free market is good and fair towards money. It values every dollar equally.

          • Clinton Weir

            There is no societal good in any individual getting medical treatment (or not). There is only individual good. Society isn’t a separate entity that can value anything at all, whatsoever. Society is just an abstraction used by the rich and powerful to claim legitimacy so they can exercise their wealth and power.

          • um, thats an unexpected response. you’re saying that their is no society or societal good or else claiming the word society has been commandeered by the 1% and redefined exclusively for the benefit of the 1%. Am I understanding you correctly?

            I guess what I meant by “societal good” would include for example a statement like “there’s more societal good in spending money on kids in need so they can reach their full potential than there is societal good in spending money on giving rich kids an extra large selection of candy to eat”. or maybe “there’s more societal good done by garbage collectors than by bankers” as the article argues. Is there some other phrase besides “societal good” that you think I should be using to communicate the concept more clearly?

            I would say that you can definitely talk about good on a national or society level just like you can talk about money on a national or societal level. But don’t confuse what good for money with what’s good for society.

          • Clinton Weir

            I understand what you mean by societal good, but it does not exist. If a wealthy person wants to buy his children a large stockpile of candy rather than buying your kids a good education, he has every right, and no POS communist like you has any right to seize his assets in the name of the made up concept of “societal good”.

            There’s what’s good for me, which I define, and there’s what’s good for you, which you define, but neither of us has a right to define what’s good for us.

          • Sounds like a recipe for dying alone and unloved when someone a little richer or a little prettier than you than you decides you have what she wants. You have a very savage and merciless view of how the world work with no care for others and no such thing as the common good.

            I suppose with that attitude you don’t go to church or participate in any community activities either. It must be lonely and sad. The good news is that even after your shark eat shark world turns on you, the people who understand there’s more to life than getting ahead of others will be waiting for you to understand that too and they’ll accept you if you truly regret your self centered view of the world and learn to love your neighbor and community and others.

          • Clinton Weir

            I care enough for others to let them decide for themselves what’s good for them. Thinking there’s something wrong with the world at large simply because it does not reflect your personal values is egocentric and suggests a hunger for power.

            I don’t see how someone buying something from me causes me any harm. I have the choice whether to sell or not.

          • did you read the Cain and Abel story? it might help you understand how someone buying from you or selling to you can cause you or them harm. Cain and Abel both had the choice to sell or not.

          • Clinton Weir

            As an adult, I don’t read fairy tales. What is it that Cain bought from (or sold to) Abel, how did it harm Cain (or Abel) and why did the injured party choose to go through with the transaction if they knew it would cause them harm?

          • @Clinton Weir,

            It’s a christian bible story and pretty much common knowledge for most people in western civilization. are you serious about never hearing of the story of Cain and Abel? It’s kind of considered common knowledge for most english speakers and ranks somewhere below Jesus, but about as popular as Noah’s Arc and the flood in how often it comes up as references in literature and film. don’t take this as a criticism, but did you grow up under a rock?

            Anyway here’s a reference to the wikipedia. . .
            https://en.wikipedia.org/wiki/Cain_and_Abel

            You might consider it one of the first religious stories about the dangers of predatory capitalism for a society.

          • Clinton Weir

            Again, who was the buyer, who was the seller, what was transacted, and why did the injured party go through with the transaction to begin with?

            The link just talks about one guy murdering another. That… is not a transaction. I know you seem to have trouble understanding what a transaction is. Murder is not a transaction.

          • @Clinton Weir,

            I apologize for talking nonsense about the Cain and Abel story. I seem to have my Christian literature confused and only re-read the wikipedia entry just now to discover it wasn’t the story I remembered.

            I apparently conflated the Cain and Abel Story with the story of Jacob and Esau. https://en.wikipedia.org/wiki/Jacob_and_Esau

            To summarize wikipedia and save you time since you were good enough to look before I don’t want to burden you again due to my mistake. . . Basically the story is about how Esau has a bad week hunting and jacob the farmer with steady supply of food takes advantage of Esau’s desperation by charging his brother too much for a bowl of soup. Jacob prices the bowl at the cost of Esau’s birthright which is all of his inheritance from his father as the first born son. Esau agrees out of desperation and hunger and then has to trick their father into accepting the sale as legitimate which he does because their father is blind and old. His father would not normally have honored the agreement between his two sons so he had to be tricked which is sort of how business tricks the government into allowing predatory pricing in the marketplace. Anyway when his father finds out he was tricked he’s angry at jacob for taking unfair advantage of Esau and Later Esau attempts to punish jacob by throwing him in a pit with no food to force Jacob into selling the birthright back to him or else to die. But Jacobs mother takes pity on him and sets him free, but he still has to flee to another country to avoid jacobs justice and wrath. In this other country jacob is tricked because he’s desperate now and has no resources so he ends up a slave for 7 years. After working off the slavery he was tricked into (like he tried to trick his brother), jacob eventually becomes fairly successful and returns home with gifts for Esau to beg forgiveness in hopes Esau will not kill him.

            So the moral to the story is something about how you need to treat people fairly even when the the free market will allow you to take advantage.

          • Clinton Weir

            You can’t trade away your right to be born. What would that even mean? You were born and you can’t be unborn. This fairy tale is stupid.

          • Clinton Weir

            Anyway, the core point here – that Jacob charged Esau more than what you think is fair – is absolutely not a problem. Jacob and Esau know more about what the soup and the inheritance were worth at the time than we do, so our opinion of the value of the two assets is irrelevant. This is exactly was referring to when I pointed out that you were trying to fashion yourself a dictator – you want to get in between free people in a free exchange and override their preferences. That is dictatorship and it won’t be tolerated in this land.

            Where I find problems:
            1. Esau had no food and no money because he “had a bad week”. How does one end up in that situation in just one week? I have enough savings and credit to survive for over a decade.

            2. An expected inheritance is not an asset. Esau has no property in this exchange at all. Until the father actually dies, the property in question belongs to the father, and when the father dies, the property will transfer to whomever the father has chosen. Since Esau does not own the property, he can only trade a promise to transfer the property in the future, which means we’re talking about a contract, and a contract that will be worthless if the father decides to leave the assets to someone else.

            3. If the father did not know what he was supposedly agreeing to, then it’s not a binding contract. And for trying to defraud their father, the brothers would probably end up in prison.

            4. This didn’t happen – it’s a made up story. It’s a waste of emotion. Grow up.

            But, what I find really hilarious about this story is that if you took the soup out of it (so that Esau gave the inheritance to his brother) you would have zero problem with it. This is a peculiar flaw in the human mind – opinions about minimum wage exhibit the same flaw. Most people think it’s okay for organizations to pay $0 (we usually call these workers volunteers or interns) and it’s okay to pay the minimum wage, but anything in between is somehow immoral. Oookay.

          • Actually most business is in violation of the law if they have an unpaid intern. the law can be conceived as a contract between government and business and the public. Business is free to leave the county if it doesn’t like the laws and business does leave on location for another to find more lax laws that allow more predatory behavior or protects others.

            The core problem is that your starting with the assumption the transaction is fair and people have perfect information and working backwards to claim that everything in a free market economy is fair. But “fair” (in the moral sense) is not defined in the free market economy except as a very limited meaning saying it is an agreement entered into without immediate threat of violence and following the regulation in the marketplace. So it’s “fair (in the market economy definition of the word)” to lots of things that are not “Fair (in the moral sense of the word)”.

            ps. in the story of Esau and Jacob, the argument you are making was given some value by their father who did indead value Jacobs initiative and future thinking greed. Jacob did not receive the full blessing from his father to held back intending to give the first blessing to Esau. But the story also illustrates that economic trickery doesn’t usurp moral judgement. The french learned that in the french revolution and through out history people who have used economic trickery and contracts in ways that usurp the power of justice and fairness (in the moral sense) have a high risk of meeting a deserved bloody end. Economics and contracts can be used for good (moral) and bad (moral) reasons and ways. Economics and business doesn’t care if a contract is bad morally or good, but people do and your denial of a higher power than economics and contracts will be your undoing.

          • Clinton Weir

            “The core problem is that your starting with the assumption the transaction is fair and people have perfect information”

            No, I’m really not. If the transaction is not fair, or you do not have enough information, you should not go through with the transaction. If you go through a bad transaction, then you are deserving of the loss of economic power that decision entails. If you do not have a choice, then it’s not a free market transaction, it’s something else. Cases and situations where you can not choose to not be party to the transaction (like health care) need to be dealt with in the political system.

            Esau was free to enter the transaction or not. He supposedly had a large future inheritance that he could have borrowed against. He made a decision. Unless he was not competent to make that decision (due to mental disease, for example) he has no justifiable reason to seek recourse.

          • yes, you make a very long argument that basically says the transaction is fair because no one would enter into an unfair transaction. And then you conclude that therefore all transactions are fair.

            But here’s a good test. Can you even imagine a transaction that is fair (using the definition of the marketplace) and somehow not fair (using the moral definition). If you can’t then you’ve admitted you don’t recognize or accept any difference between the two.

          • Clinton Weir

            Not really, no. If it’s immoral, then it’s immoral in the marketplace. You don’t hang up your morals at the market’s door.

            Taking an action that is moral, amoral or immoral is still moral, amoral or immoral even if you get paid to do it, just like paying someone to take a moral, amoral or immoral action is itself moral, amoral or immoral, too.

            In the Jacob and Esau story, there’s nothing immoral about giving (or transferring ownership of) a bowl of soup to your brother, and there’s nothing immoral about promising to give (or transfer ownership of) an inheritance to your brother in the future. That’s a moral transaction. The only way the transaction, on the part of the soup-seller, could be seen as immoral, imo, is if there was really no other way for the buyer to acquire food before he died (and remember, you can live for weeks without food) and if dying was really a more severe consequence than giving up everything he owns to the very who’s trying to kill him (ie if he was extremely poor).

            As I said, other aspects of the story raise more concerns. There is something immoral about giving away something you don’t own, and there’s something immoral about deceiving your father (or anyone) into signing away their rights or property. It’s a theft of free will and dignity. Effectively, the story of Jacob and Esau appears to be about one brother paying the other brother to deceive his father into giving up his property rights (specifically his right to transfer ownership according to his own wishes). Both brothers are guilty of this. They should both be executed.

          • @Clinton Weir,

            I agree with what you say “If it’s immoral, then it’s immoral in the marketplace. You don’t hang up your morals at the market’s door.”

            So about this soup selling. The part that bothers you is the father was deceived. So deception is immoral. That’s good to know. As I understand the story the father was blind by the time he was to pass on the birthright and the process involved putting his hand on the head of each son and all the sons did was switch from one side to the other. The mother of the two sons was apparently in on it too and knew what was going on but didn’t object and even helped with the deception. The first born son was supposed to be on the right side, but they switched places so the father gave the birthright to the son on his right hand. After the father found out later he was upset but would not take back what he had done although apparently he could have legally and morally revoked his gift of the birthright at that time. It would have been dishonorable and immoral for the father to take back any birthright once it was bestowed even though it was within the father’s power.

            It’s also interesting in the story that Esau was perceived as having a moral failure because he undervalued his birthright at the time and overvalued the bowl of soup. In the story his brother Jacob did encourage Esau to undervalue the birthright and at first Esau asked for a bowl of lesser soup as brotherly loan to be paid back or a gift. But Jacob denied Esau the lesser soup as a loan and made an upsale. Jacob said there was no lesser soup for free or low price, but the only option was a better stew in exchange for the birthright.

            I understand you feel deception is immoral, but what about coercion. You indicated coercion to the point of death was immoral. Is making someone uncomfortable or rushing them into making a decision is moral in your opinion. How about if you tell them something bad is going to happen if they don’t have what your selling and you deceive them by exaggerating how bad it will be (think of advertising, is it moral if it leaves stuff out and exaggerates other stuff then does that count as deception? is Giving someone an addictive substance and then selling them that substance at a high price is moral? (think about sugar as well as heroin when considering addictive substances).

          • Clinton Weir

            It’s not merely that they deceived him. They used deception to forge his consent. The other cases you mention, the person still has the right to accept or reject the transaction.

            A counterexample would depend on agency – if I hire someone to advise me, then he has a contractual obligation to provide advice that he genuinely believes is beneficial to me. For example, if my doctor recommends or prescribes a drug that I do not need, and/or one that is harmful to me, that is wrong.

            On the other hand, if I am on the bus and a random guy next to me tells me how beneficial a drug is, that’s fine, even if he secretly works for a drug company. It’s fine for him to give a dishonest assessment of the drug. It is upon me to recognize the low value of his endorsement.

          • that’s weird IMO.

            So giving someone bad advice to deliberately deceive them in order to make a profit is ok unless money has been paid to that someone with the contractual obligation to give honest advice. So whenever I want to buy a car or something big I should first write up a contract and pay them and have them sign it saying they have to give me advice that’s beneficial to me. Otherwise, it’s morally ok for them to trick me or say things designed to help them take advantage of me in an agreement.

          • Clinton Weir

            When you buy a car, you should take it to a third party and pay them to do an inspection – any decent shop will perform this service, and it has saved my bacon multiple times. If the seller refuses, then they are hiding something. Don’t buy from them.

            That said, there’s a big difference between giving you advice and giving you information. It would be immoral and potentially actionable if they gave you false information about the car (e.g. that it had never been in an accident if it had) or if they showed you one car and actually sold you a different one.

          • @clinton weir,

            Yeah, that’s good advice for how to deal with a bad system, but My critique and the critique of the article is it’s a bad system of rules and rights that need to be changed. For a while there were lemon laws on the books about new cars that broke down more than they ran allowing buyers to get their money back and return the car. A guaranteed return policy and a takeback law would prevent a lot of dishonesty and problems in the market economy.

            Also, with a car your solution works sort of but not as good as a takeback policy when you think of supply and demand doesn’t it imply that returning that car would be no harm to the seller. They can easily sell it to someone else since it was a fair transaction at the equilibrium price. And if that car was not worth the price they sold it for then that was never a fair transaction even by supply and demand economic definition of fair.

            Finally, cars are kind of unique because they’re big ticket items easily assesed by a third party at a fraction of the cost of the sale transaction. That’s very unusual for market products and you can’t affordably hire someone to check if something you buy at target for $50 is shody. You definitely can’t hire someone to check if taking a job is a good decision because the companies use legal tricks to prevent the applicant from knowing about the company and what will be involved and the alternatives.

            Basically, it’s seems like you’ve used this car inspection to patch a failure in the free market system. That’s a patchwork solution to a failed system not a working system. That patch doesn’t work for most problems in a market economy.

            The claim made by free market ideology is that the free market should not be regulated and should be left to itself because then the free market will distribute resources to where they can to the most good. The central claim of free market capitalism is that it produces better results for a nation, but we see it failing repeatedly to produce better results for the people of the nation. What the free market capitalist systems seem to do reliable is produce better results for the people with the most money and prey on everyone else.

          • Clinton Weir

            If the car example is not representative of free market transactions in general then why did you bring it up?

            The problem of shoddy products is solved by the market with generous return policies and warranties. My credit card company even provides protection against theft.

            As for why you can’t force the seller to buy a product back from you if that’s not in the contract, you and the seller made an agreement: you said you consider the car to be more valuable than the money and they said they consider the money to be more valuable than the car. If they change their minds, should they be allowed to take the car back?

          • I brought up the car example because of the lemon laws which was a deviation from typical free market transactions and and example of fairly successful regulation of a market that resulted in the market definition of fair being adjusted to more closely match the moral definition of fair. the car example with the lemon law is a regulatory solution to the market failure that I felt was a step in the right direction and could be used in similar form for smaller and larger market transactions. Your visa credit card example is a good extension of the lemon law and I completely approve of it, but it should be a part of the market transaction by default not something purchased as patch available primarily to those with money.

            I think the reason why we should have the car buyer or the buyer of any product given more options for returning than the seller is because of information asymmetry. It’s very easy to know the value of a $100 bill so the seller knows exactly the what they are getting. It’s very hard to know the value of the “new digital widget deluxe” because the seller has used advertising to distort the perception of value of the product, to hide or distract from relevant negative information about the product. Also more mass produced commodity items (as well as labor contracts) the seller or party that does repeated transactions at a large scale has far more knowledge than the individual who buys one car or ikea shelf or widget every seven years and can’t benefit from learned experience. I guess I wouldn’t consider it necessary to give buyers the option to take back a purchase on a product they’ve bought over and over again repeatedly enough to have a complete understanding of the products value.

            I might note that in addition extending the $100 Bill example above that in cases where later the $100 bill is found to be a forgery then the seller who received the $100 bill is absolutely given the ability to take back the transaction and even more, there are strong legal penalties beyond a takeback/undo for the buyer who gives the forged $100 bill to the seller. So why is it not a case of seller beware and if they take a fake $100 bill it’s too late? This is clearly an unfair playing field with the buyer forced to provide a product (the $100 bill) of easily measured known value and further held accountable after the contractual exchange for any misunderstanding the seller had that the $100 bill was printed by the USA mint when it was actually perhaps not. The burden of ensuring the exchange is fair and mutually beneficial seems disproportionately more difficult and harder for the buyer due to the sellers deliberate actions to make it more difficult to discern the true value and yet the buyer is liable far more strictly for any misunderstanding or misrepresentations by either party. The buyer never profits from a misunderstand and the seller never loses profit from a misunderstanding. The worse that can happen to a seller is a return or take back if the misrepresentation or misunderstanding becomes an issue. But he Buyer is frequently left with significant loss of value if there is a difference between expected value before transaction and actual value after transaction. (I’m leaving out lawsuits from consideration here as they are outside the market system, but if you enter into a discussion of lawsuits against sellers then you need to equally include lawsuits against buyers for things like copyright infringement or simple prosecution for theft)

          • Clinton Weir

            The lengths you’ll go to just to avoid some personal responsibility, sheesh.

          • Maybe you should go back to you Ayne Rand novel?

          • Nicholas Croft

            To sum up. ‘value’ is subjective.

          • Clinton Weir

            Here’s another example of you talking out your arse: “… it should be a part of the market transaction by default not something purchased as patch available primarily to those with money …”

            My credit card purchase protection is free. My credit card is free, too – I have never paid a penny of fees or interest. If you get a decent card and you pay it off every month, then you don’t have to pay to use it.

            Furthermore, you mention shopping at Target. They, too, have a generous return policy. Almost every major retailer does. In fact, many stores have return policies that are so lax that they are easy to abuse.

            Incidentally, lemon laws generally only apply to vehicles that are sold WITH WARRANTIES. If a manufacturer decided to sell a car without a warranty, then the lemon laws would not apply. But if the car has a warranty, then a lemon law is redundant. The purpose is to set up a government agency of the government to help mediate claims between the consumer and the manufacturer. I’m not at all against the sort of laws that create or support market activity.

            “in cases where later the $100 bill is found to be a forgery then the seller who received the $100 bill is absolutely given the ability to take back the transaction”; Can you provide citation? I’ve heard of retailers rejecting currency out of concerns that it might be counterfeit, and I have heard of retailers calling in Secret Service in cases where they suspected counterfeiting (including an amusing story relating to a genuine $2 bill). But I have never heard any story about a retailer taking a counterfeit bill and later reclaiming the property, and I have heard stories about retailers realizing they had taken a counterfeit bill and having to eat the loss (though, I must admit, that may simply be because it would be too hard to find the person who passed the fake note and prove it was them).

            “seller never loses profit from a misunderstanding”; You’ve clearly never been on the merchant side of a transaction. They lose money all the time, especially to chargebacks. I’ve been on the losing end of a credit card chargeback, myself, when I sold an Apple Watch on eBay and the buyer claimed he didn’t receive it. Even after I provided evidence, the credit card company still processed the chargeback and PayPal demanded repayment from me. Being a seller is not without risk.

            “It’s very hard to know the value of the “new digital widget deluxe””
            Then don’t buy it?

          • you’re making excuses for an economic system?

          • Finance expert and author Helaine Olen is skeptical. “Which is easier?” Olen asked, “Educating and changing the financial practices of 300 million Americans or changing the financial frameworks surrounding them? The vast majority of Americans think that their financial advisor has a fiduciary responsibility to act in their best interest. As of right now, that’s not true. Instead of educating people about this, why not just make it a legal duty that financial professionals act on the behalf of consumers.”

            Lusardi agrees that increasing financial literacy alone is not enough. “Some things are better addressed through regulation,” says Lusardi. “If there are things that are clearly negative for consumers, then they don’t need to exist. But changing the financial framework is also not enough,” she says. “Financial literacy is an essential skill for thriving in today’s economy.”

            http://www.theatlantic.com/business/archive/2016/05/financial-literacy/480807/

          • Clinton Weir

            The vast majority of Americans don’t employ financial advisors to begin with, and aren’t investing enough money to make it make sense to do so.

            But certainly, if by some strange miscarriage of justice, financial advisors have won an exemption so that they do not have to look out for their clients’ best interest, we should fix that. If you hire a professional to work for you, they should work for you, not for someone else.

          • @Clinton Weir,

            My point is that we are not talking about “some strange miscarriage of justice” affecting only this one small eccentric part of the free market.

            We are talking about the real world american markets that repeatedly incentivize profit over justice and successfully distort even the free market concept of fair by use of lobbyist and regulations that enforce a market economy that puts profit over moral justice and a fair market routinely, pervasively and unjustly.

            I like the part of the quote most that says. . . “Which is easier?Educating and changing the financial practices of 300 million Americans or changing the financial frameworks surrounding them?” This is my central point that the financial frameworks are built to optimize profit by the most affluent first and justice a distant second. The financial frameworks must be changed because they currently charge the consumer with trying to navigate a minefield market framework gotcha’s such as needing to use the right credit card to get the right to return a defective product. The consumer should not be charged with the burden of taking extra precautions and steps routine basis in order to routinely get fair treatment by the market and financial frameworks.

          • Do you trust the Bloomberg website? They seem to agree with me on this subject.

            Hundreds of customer complaints against Adore Me and other subscription e-commerce businesses are stacking up at the Federal Trade Commission, according to records obtained by Bloomberg. They follow a pattern: Shoppers believe they’ve been tricked into signing up for recurring credit card charges, often for a relatively small amount that can be easily overlooked in a monthly bill. Then companies make it an exasperating hassle to quit and get a refund.

            “They present consumers with this incredible offer and they don’t simultaneously inform them of all the downsides,” says Bonnie Patten, executive director of Truth in Advertising, a consumer-rights watchdog.

            Allegations of deceitful subscriptions have dogged companies selling miracle supplements or questionable beauty products. But a rising crop of e-commerce startups combines similar tactics with legitimate goods—and legitimate investment. The founders of JustFab, a retailer backed by $249 million in venture capital, previously owned a weight-loss business called Sensa that was sued by the FTC for false advertising. Sensa and its chief executive, Adam Goldenberg, paid more than $26 million to consumers in a 2015 settlement.”

            http://www.bloomberg.com/features/2016-adore-me/
            .
            .
            .
            The microeconomic model of supply, and demand and you yourself say that the events described by bloomberg are impossible. The transactions are fair and the market economy works you argue defiantly. If the product were not worth what was charged then people would not buy it you insist.

          • Clinton Weir

            I’m not saying that I think the economy works. I’m saying that we’re not smart enough and we don’t have enough information to know if it works. I don’t even like the phrase “the economy works” because it implies the economy has some predefined function that it’s supposed to be performing, that there’s some specific metric that we can judge it against to assess its results. “The economy” is people voting with their time and energy what they think the economy should be.

            Individual opinions about the economy as a whole do not matter. If a hundred million people each pay Beyonce a buck, and every one of them has the opinion that she is overpaid, then obviously the action that each of them took (to pay her one dollar) matters more than their opinion that she is overpaid. As long as they had the option to not enter into a transaction (and we do have the option to enter into transactions with bankers or Beyonce) and as long as we have recourse in cases where we did not receive what was described in the transaction contract, then the outcome is the outcome.

            Where regulation should enter the discussion is to make sure that what people think they’re agreeing to is what they’re actually agreeing to, which is why the ACA became necessary – customers bought a product called “health insurance”, and they thought they knew what that meant, and it turned out, some of the time, that what they really got was vastly different.

          • I think the economy does have a predefined function and it used to be stated quite clearly in the opening pages of my 1980’s economics textbooks. the purpose of the economy is to distribute goods resources to where they can be used most effectively and are needed the most. So an economy that caused all the hats produced to end up on a small island full of people who never wore hats would be considered a failure. The russian economy was judged a failure by this same standard in the USA media as an argument for why the USSR should abandon communism. So the purpose of the economy is established historically and in the media and the press and in textbooks.

            So you’re really claiming that 100 million people claiming Beyonce is overpaid counts for nothing because 100 million people paid money to Beyonce? That’s almost exactly the argument that lost the court case in my citation of the bloomberg article. The flexibility and talent of your denial is impressive.

            Regulation should enter the discussion whenever the results produced by an idealized free market fail to match reality to a monetary discrepancy summed across the whole of society sufficient to warrant the resources for evaluating and improving or removing the existing regulation. Regulation is always a part of any transaction from regulations about what kind of and form of payment may be used to regulations about truth in advertising and product liability.

            It should make you re-consider you’re judgement to note that while you firmly argued against the opinions and views of the people in the bloomberg article example and said all that mattered was the dollar. . . you then in your last paragraph argue that a few people had different opinions about ACA. It seems like you invoke the free market and neoliberalism only when it benefits the interests of the 1% but ignore it when that benefits the 1%. Are you that much of a tool that you have fallen for their propaganda and repeat utterly self contradictory sayings they intended as insincere advertisements about the merits of business to promote pro-business regulations by manufacturing consent of people like you?

          • Clinton Weir

            Oh, there is a predefined mathematical function expressing what the economy should be doing? Where is it?

            What you wrote is a definition, not a function. “where they can be used most effectively” is subjective, so even if some people don’t like the way the resources were allocated, or even if ALL the people don’t, it can still be argued that the society as a whole has allocated the resources to their most effective use. If each movement of resources occurred because the owner entered into a

            “That’s almost exactly the argument that lost the court case in my citation of the bloomberg article.”; Nonsense – your argument is that those people were charged for services they did not intentionally subscribe to (ie they were robbed). The 100 million people in my narrative knowingly and intentionally paid Beyonce $1 each, presumably for the right to download and listen to one of her songs. If they are of the opinion that she should not have made $100 million for writing and publishing that song, then that opinion does not matter – what matters is their opinion that being able to download and listen to the song was worth $1 to them.

            And to be clear: nobody is suggesting any kind of fraud or theft is going on in the case of garbage men and their employers. Nobody is suggesting that the garbage men were not paid what they were promised, nor that their paychecks were smaller due to hidden fees. So your entire argument is not relevant to the discussion about whether garbage men are paid well enough.

            “results produced by an idealized free market”; You’re not describing a free market to begin with. You’re describing theft.

            I don’t see how forcing health insurance companies to actually pay the medical bills of their customers is good for any particular 1%. But, to be fair, there are a lot of aspects of the ACA and I am not suggesting that I like or support the ACA that we got. My point on this topic was that health care reform had become necessary because the system we had was broken. I think a single-payer system would have been better than the ACA that we actually passed.

            Health care would probably be a bad market to deregulate because it’s too often that the customer is incapable of making an informed decision. When you have a heart attack, you don’t have time to shop around for the best cardiologist, and when your doctor tells you a diagnosis and suggests a treatment, you generally don’t really have the ability to understand and assess his medical opinion.

          • Actually, lots of people are suggesting that garbage men are the victims of fraud in the form of a rigged economic system and the penalties for public servants going on strike and the economic regulation that favors easy replacement of garbage men, while making replacement of hedge fund managers very difficult. If Garbabe men kept their routes secret and their pay secret and were alowed to corner the market on Garbage collection and engage in the sort of practices that make wall street rich then they would probably be making more money. Mostly the practices that make wall street rich are lobbying for favorable regulation. Wall street doesn’t serve any actual need for the economy or the nation.

            Anyway, I agree with you about health care with the exception of mentioning that the word “deregulate” is used disingenuously in general. Regulation is always present in a market, it’s just a question of who and what the regulation enforces. Property rights are the most basic and common form of regulation, and that first regulation favors the accumulation of capital while minimizing and externalizing the cost of preventing people from simply using and benefiting from goods claimed by the business. However, there’s nothing “natural” about property rights and humans evolved in an economy that was more natural and less regulated so that any person acquiring vast wealth from others would be solely responsible for preventing others who might want to acquire that wealth for themselves. So it seems that the first and most common regulation is exclusively for the benefit of those who have more than they deserve. If they deserved a store full of goods then the measure of the word “deserved” would be their ability to stay awake all night and guard it and protect it without regulations limiting the freedom of others to own those goods and services.

            ————
            Anyway their is not mathematical function to determine what an economy should be doing, but that’s just because functions are fairly simple forms of math. There are instead simulations and economic theories (such as your beloved supply and demand graph). Some of them work better than others at predicting the future of an economy and some of them work better than others for discovering how to make the future better. It seems like maybe 1/4 of the economy actually doesn’t need much regulation other than the usual property rights enforcement that favors the business and is charged to the taxpaying consumer. It’s really easier to describe when the economy works well and that’s when there are few or no externalities, information is easily available about both the product and the market and is shared freely by all and common to all, There are a large number of suppliers of a widget and an equally large number of purchasers of a widget and it costs nothing or next to nothing to switch from being a widget consumer to being a widget producer. There’s a few more, but suffice it to say it’s rare for a market to function in a way that is predicted by supply and demand theory. Instead what usually happens is people try to understand market by assuming it works predictably based on the theory of supply and demand and measuring the equilibrium price. That’s what you’re doing. You’re saying the transactions are fair and a million people paid for Beyonce, so therefore society is best served by a million people paying for Beyonce tickets and therefore all is good and fair in the marketplace. The mistake, I’m accusing you of is irrational faith in a markets and business transactions. You believe the supply and demand model is valid for beyonce tickets but if you read any decent economist or any economic theory, you would know that Beyonce tickets are not what the supply and demand model claims to work for predicting or understanding. Beyonce tickets are not commodities and I can’t decide to enter the market and sell my own Beyonce tickets if I think the price is too high. I can make beyonce tickets for less than $1 each, so in theory I should quit my day job and follow the economic incentives to open up a business selling beyonce tickets. It’s just those pesky regulations that stop me from making a profit selling beyonce tickets for $1 each.

          • Clinton Weir

            “Wall street doesn’t serve any actual need for the economy or the nation.”; and you just lost the argument. Cheers.

          • So you think wall street makes jobs and that explains why they’ve captured an astonishing 300% increase in their share of the national profits while simultaneously decreasing the value of assets held by everyone else. With an argument like that you need to redefine the word “lost”. Cheers.

          • Clinton Weir

            See, you’re putting words in my mouth. You said Wall Street doesn’t serve any need, and I said that’s obviously wrong. You then attacked me for claiming (which I never did) that Wall Street does not serve some specific needs (presumably those you think it should serve). You’re not interested in having a serious discussion – you’re just trying to win points for “your side” and this is further evidenced by the fact that you keep trying to attack “my side” as if I have one..

            Wall Street serves a need that the economy has, and it is not reasonable to think otherwise, ergo you are not a reasonable person.

            You have a lot of growing up to do, sir.

          • @Clinton Weir

            you wrote. . .

            Wall Street serves a need that the economy has, and it is not reasonable to think otherwise, ergo you are not a reasonable person.
            You have a lot of growing up to do, sir.

          • Cheryl Delorfano

            All of you?!
            The banks take 4% of the 5% that you rightfully earn & keep for themselves!
            That means you only get 1%!
            From that5%!
            They’re getting a 77% under the table of stealing money from public!
            5major banks was already listed!

          • Notice that Esau later realized the price was not fair. He felt strongly enough about it to attempt to murder jacob. This could be a story about what happens without buyers remorse laws in a marketplace.

          • Clinton Weir

            Oh, Esau was a killer too? Well that changes everything. Clearly Esau was in the right all along. Do you even listen to yourself talk?

          • Esau and Jacobs father seemed to consider both brothers as behaving equally poorly towards the other.

          • Earthstar

            You come across as both a misanthrope and a fool. Do you not understand our interdependence? Or do you manufacture you own shelter, cheetos and pornography?

          • Clinton Weir

            I don’t understand your comment. Trusting people to know and do what’s in their best interest and distrusting people who want to override the decisions of individuals is misanthropic?

          • ari9999

            You say: “There is no societal good in any individual getting medical treatment (or not). There is only individual good.”

            IMO, a huge fallacy.

            I will use an economic frame of reference, though a full answer would range far beyond the economic.

            Individual medical impacts ripple across our economy, affecting society as a whole. The sooner people are healed, the less impacts there are on caregivers and typically the less monetary cost is involved.

            Many people lose their livelihood over unresolved medical issues.

            Sixty percent of US personal bankruptcies are triggered by medical issues. Sure, the obscenely bloated cost of US healthcare compared with the rest of the developed world is a major factor. So is lack of a single-payer public option, essentially “Medicare for all.”

            However, within the corrupt, rigged system we currently endure, getting medical care generally (repeat, generally) means lower total cost, quicker healing and overall better outcomes.

            Some 20 percent of patients report not taking medication because they cannot afford the drugs. This financially-driven patient noncompliance must inevitably increase the total net cost (including consequential costs) of their malady.

            I’m betting that studies validate this view; I haven’t looked into it.

            I observe that conservatives and neoliberals generally see individuals and nuclear families as isolated, rational economic units — a view increasingly debunked.

            IMO, that is why Sanders almost snagged the Dem presidential nomination against staggering odds. Literally up to the day they stopped tracking him — the last polls to include Sanders were published June 7 — he continued to outperform Clinton in nearly every voter survey matching each of them against the GOP. (Source: BernieWorks.com.)

            That was *after* many mainstream media had declared Clinton the presumptive nominee. In matchups against the GOP, people overwhelmingly preferred the candidate whose economic policies honored the fact that we are all connected and society would be better off if we were treated as such.

            Or, one might way, the hip bone’s connected to the thigh bone.

          • Clinton Weir

            It is shameful to obfuscate the harm done to real human beings by making up an abstract concept (“society”) and claiming it is absorbing the harm.

          • ari9999

            Didn’t Ayn Rand say something like this? Triumph of the individual?

          • Clinton Weir

            Why don’t you ask her? Why is it my responsibility to keep track of what some random person said to you?

        • @stephen_crowley:disqus Do you really think ad hominem barbs improve the level of this discussion?

          • robertmkadar

            If he continues, he’ll be booted.

          • @Liza Loop.

            I don’t think “ad hominem” means what you think it means. Stephen Crowley was simply criticizing the quality of a person based on the argument in this discussion. Ad hominem is when you criticize the veracity of an argument based on information about the person from outside the argument at hand.

          • And the utterance «you fool» is not information about the person from outside the argument?

          • @Daniel Ly,

            That’s right. Just calling someone names because of what they say doesn’t constitute an ad hominem argument. It’s just name calling or labeling. An ad hominem argument is a particular form of fallacy that’s more like saying “you lied about about your birth certificate so you’re lying when you say that 1+1=2”. obviously, it’s true that 1+1=2 whether someone lied in the past or not. So bringing up the person’s history is fallacious and irrelevant. The better test for if something is ad hominem is to ask if it’s relevant to a logical argument.

            see wikipedia for a better explanation with more detail. . . https://en.wikipedia.org/wiki/Ad_hominem

            p.s. Actually “ad hominem” is a specific term intended and defined for use in logical arguments and debates based on the rules of logic. Those don’t usually happen in online discussions where people are frequently not making a complex logic argument or debate according to the formal rules of logic and argumentation. Saying someone is making an “ad hominem barb” suggests wrongly that there’s some sort of logical reasoned debate going on. What we have online is rarely that logical or reasoned. It’s like if two people decide to wrestle in the middle of a tennis court and then claiming one of them kicked the ball is out of bounds so they lose the game. It doesn’t really apply once you ignore the other rules of tennis and decide to submission wrestle until one of you gives up.

          • As a summary: An argument is ad hominem if it misuses as a logical argument a trait of a person to discredit his assertions.

            However I see name calling as a variant of this. The logical argument is implied and very basic: «You are a ﹤insert insult here﹥. Therefore, your arguments are worthless. Therefore, shut up.» This means, name calling is a form of ad hominem. A crude one.

            By the way, thanks a lot for the link to the Wikipedia article. It has been an interesting read. Quote: «Ad hominem […] is a logical fallacy in which an argument is rebutted by attacking the character […] rather than attacking the substance of the argument itself.» (Some parts omitted, hopefully not in a distorting way.)

            This seems to support my argument. Name callling is an attack to the character. No need for a fine logic to discern ad hominem and name calling. However I wouldn’t say that a physical attack is an ad hominem, isn’t it?

            (Edit: fixed the angle brackets. They have been interpreted as an HTML element by Disqus.)

          • @Daniel Ly,

            Perhaps, I don’t disagree with what you are saying entirely.

            But I think in this case the comment was of the form “you are a BECAUSE your argument is worthless”.

            Name calling is sort of valid argumentation as a labeling or summary of a persons or argument. So it’s valid to say in an argument. “you say that 1+1=5 so you are a fool and we should not trust you at math.” But notice that wouldn’t disprove any other math in the argument it would just mean that you can’t “trust” the math and call for an investigation.

            I don’t think a physical attack is ad hominem, it’s actually more likely called censorship is the attack is designed to shut someone up and also called simply aggression or violence but those aren’t really considered part of argumentation or logic and so you have to go outside of the lexicon of rhetorical terms and logic. I think what I’m pointing to is that most discussions in alternet are not logical arguments of any form and are more like just hurling insults and making assertions without any sort of logical structure or dependency of statements. Someone claiming to be an “ad hominem” victim around here is most likely using the phrase in a metaphorical or analogous meaning which is just a pejorative sort of name calling itself.

          • Some insults are ad hominem. if someone says “you can’t do that because it would be against a law” and someone else says “yes I can because your ugly and your mother dresses you funny” then that would be an ad hominem argument.

      • shiftme

        Kim K appears/speeches are $80/minute. There are people who will pay that much for Kim K services. Kim K is more in demand than the doctor. But the doctor is more “valuable” than Kim K in his expertise.

        • Clinton Weir

          I would hazard a guess that the sorts of people who are paying Kim Kardashian $80 per minute do not value her appearance, as such. These are mostly TV shows (that want to broadcast the video to sell ad time) and entertainment venues (that want to create word-of-mouth marketing to increase attendance and, thus, revenue). They value the money they can make by capitalizing on the value that others place on a celebrity appearance.

          If I am a club owner, and I can pay Kim Kardashian $80 per minute to visit my club, and I can generate $100 per minute in marginal net revenue (gross profit) then I definitely want to do that. It doesn’t mean I value her appearance myself – I value the money I make off her appearance.

          The people paying Kim Kardashian see her as a mean to the end of making money, and each person who actually values Kim Kardashian’s appearance (those who tune in to the TV program or show up to the club or whatever) estimate its value to be a tiny fraction of what she actually earns. Whereas, when I pay for a doctor visit, I do so because I value the doctor visit itself.

          Long story short: No, the world is not mad – nobody is paying Kim Kardashian thousands of dollars per hour for the pleasure of her company.

          And some doctors can and do make enormous sums of money, too, by packaging their medical knowledge into a mass-market product. See, for example, Loveline starring Dr. Drew.

          • shiftme

            You’ve never heard of people paying celebrities $100K for a private wedding, private birthday, etc.? Happens all the time. Bottom line, you can ask 100 Americans who is more “valuable” to society, doctor or Kim K, and 80 would say the doctor. But Kim K makes more money. So we all pretty much agree that value and money don’t go hand and hand. You and the author have some weird value system associated with money. Status, the good life, etc. is related to money, but not one’s value.

          • Clinton Weir

            Sure, most Americans will say that Kim Kardashian is more valuable than a doctor, and that’s exactly what their behavior suggests. Way more than 80 out of 100 Americans will pay way more money to visit their doctor, over the course of a lifetime, than to visit Kim Kardashian.

            However, how much money will the average American pay for YOU to visit YOUR doctor? Probably pretty much zero, and that’s why Kim Kardashian can make more money than a doctor.

      • mankeeboi

        I think you’ve raised a very interesting point on how prices at the end of the day reflect their value to people.

        Perhaps the issue here is that people tend to perceive value in ways that don’t necessarily make sense and hence the demand for goods and services are skewed.

        • Clinton Weir

          Who are we to tell other people how they should assess value? In a Democracy, the people get the kind of government they deserve, and in a free market economy, the people get the standard of living they deserve. If that means we all starve, then so be it.

    • Jcnorheim

      I think the idea is that the mismatch between salary and societal value is something that should be discouraged (presumably by the government). Maybe this discouragement could take the form of, for example, financial transaction taxes.

      • I agree except, it’s a mistake to frame the situation as government having to do something to solve the problem. the reality is that government needs to stop doing the things that created the problem. Enforcing property protection for free for financial transactions is one way the government has spent resources causing the financial trade. Financial transactions don’t deserve government subsidized free use of the internet, or roads or law enforcement to prevent theft and graft between stock traders that hurt only stock traders. It’s only because of the generosity of government and people that the stock market exists and the government should make it clear that without government the public is free to come in and grab anything they see or want on the stock market and walk away with it and the only reason people allow the stock market to keep all that money to themselves is because of the law and the government, which the stock market needs to be paying more for.

    • The thread below conflates ‘survival value’ for individuals with ‘leisure value’ (sometimes called entertainment). We pay money for both kinds of value but the decision processes that drive payment are quite different. Although money exists in economies operating under subsistence conditions and under conditions of labor surplus, the functions of money, including the use of salary, are different in each.

      IMHO, the rich, complex, developed world would be well served by recognizing that the majority of our planet’s human population spends more of its mental energy figuring out how to survive and keep its children alive than whether to engage a particular entertainment celebrity or plastic surgeon. Occasionally we top-of-the-heap dwellers are faced with life-threatening decisions. Most of the time we are trying to stave off boredom or increase our social status by accumulation of wealth we cannot consume. We might be well served by investing more of our considerable intellectual resources in devising an economic mechanism to redistribute our wealth before the bulk of humanity decides to use force to do this for us.

      • Daniel Owen Blake

        Well you are right but your conclusion will never happen unfortunately

    • Xor

      Tell that to the libertarian/randian douchebags who do literally say that CEOs deserve their salaries because of the value they’re producing.

    • Daniel Owen Blake

      We live in neo liberal society where the political system favours wealth creators. That spurns inequality it’s like saying the rich can always be one step ahead and as long as middle class working class people can make money too everything Is fine. Deep down we all know no one is more valuable than another but do we really care as long as we get to cash our paychecks and make the same amount of money over and over again everything is ok we think we’re makin it !

  • shiftme

    The irony is this article doesn’t really contribute much to society. Some entertainment but that’s about it. In that sense, I agree garbagemen should be paid more than op-ed writers.

    • And you’re comment is worth even less then an op-ed writers. You’re really scraping the bottom of the barrel for producing value.

    • AnnaT

      That was kind of golden.

  • Jacky Liang

    There’s no doubt that garbage men are important, much like sanitation workers, janitors, etc. However, importance does not imply how much you’re paid or respected.. It’s the difficulty in the job that’s important. No offense, but everyone can be a garbageman or sanitation worker. But not everyone can be a banker (as much as I hate them) or executive or some high skill-level worker. Yes, their absence may not have AS big as an impact as the lack of a garbage man, but their absence means it will be very hard to find a replacement.

    • Clinton Weir

      The importance (or value) of your output defines an upper limit to your compensation. An employer who pays its workers more than they’re worth won’t remain an employer for long.

      Difficulty and unpleasantness of the work helps to define a lower limit. The larger the number of people who are able and willing to do the work, the lower the limit tends to be. An employee who gets paid more than the next guy in the unemployment line is asking for to do the same job won’t be an employee for long.

      Once the wage hits the floor, and the employer can no longer find qualified applicants willing to work cheaper, the wage must rise, until it reaches the ceiling, at which time the employer has to find a more efficient method of producing the desired value, and in the modern era, this usually means inventing technology that puts people out of work…

      Because of globalization, the floor of many low-skilled jobs is below what most Americans will accept, and this will persist at least until we run out of unemployed third world people.

      • Duncan Cairncross

        This is true for low level employees – but senior employees are selected from a tiny pool of talent
        There are a lot more people who could do these jobs – but are not considered because they are not “the right people”

        • Clinton Weir

          If they can’t get hired then they can’t do the job, and their willingness to do the job cheaply won’t factor into the market. You might not like the companies’ selection criteria for these senior positions, but when did reality ever care what we think?

          On the bright side, if you’re aware of all these people who are qualified for senior management positions, who nonetheless can not get senior management positions, you should be able to hire them on the cheap and make a lot of profit on their under-valued talents. As other businessmen follow your lead, these currently underpaid individuals’ services will be bid up until they are making what they deserve.

          • @Clinton Weir,

            Your first paragraph seems to be a form of the argument “might makes right” you’re saying that’s how it is. My response is that everything changes, although today you seem to be right, you will be wrong tomorrow.

            Your second paragraph is a form of the argument “the economic system is never wrong” Again, that’s a temporary and pointless argument of the “just world fallacy” type (wikipedia “just world fallacy” if you don’t know it).

          • Clinton Weir

            I don’t mean to suggest it’s right or wrong. The question was what will happen to a job’s wages when there’s an abundance of qualified individuals waiting in the wings to take that job. Who is or is not qualified for the job is decided by the employer, not by us. The employer might be wrong about who it hires, sure, but that’s irrelevant to the discussion.

            The second paragraph says that if you find unused talent, then use it.

          • @Clinton weir,

            It’s like your asking how will things move when there’s a northward wind. What’s heavy and what’s light. Whether something is nailed down or attached is decided by someone else not us. but the question of who nails things down or what’s attache to what is irrelevant to the discussion of how things move.

            Your second paragraph is like saying if the wind can blow somthing north then it will.

            ——————————————————-
            I think the argument about supply and demand economics determining wages is as pointless as an argument about the direction of the wind determining how trees move in a forest. I think once in a while with all other things being equal and a week tree about ready to fall down and it’s true that a northward wind will blow trees down and move them to the north. I think once in awhile with all other things being equal and perfect information and a perfectly efficient (never happens) labor market, then a wage for one particular person might match the value of that person.

            But realistically, in real life supply and demand microeconomics theory has very little to do with actual real wages. The first issue is that you have to distinguish between “who” is assessing the “perceived value” of a labor market and “value to whom, or what?” isn’t even addressed. The value of a man who can blow shit up is pretty high for a military or demolitions company HR staff, but not very high for a human rights advocacy company. What is the value to “society” of such a person? The claim of free market ideology is that somehow magically the free market knows the value to society and is the most efficient at directing resources to where they will do the most good for society. This fallacious claim about the free market knowing best is proven wrong repeatedly in real life.

            The free market is without morals and determine value based only on the amount of profit that can be extracted from others by engaging in some activity or production and sales tasks. Since money is a unit of measure of both “capital” and “good” in a free market ideology, it follows (wrongfully because of the premise that money is good) that people with more money are better than people with less money and people with no money are no good at all. certainly if people had any “value” they would be given money by the “just world” which uses the just and fair free market to determine who should get what.

            So the free market is incorrectly portrayed as good when in reality it’s just a thing like the wind that has very little to do with value in anything other than the free market. The free market definition of “value” is relevant only to the free market and could be disastrous for the planet or the people who work at a company or the city or the nation. what’s good for the free market is good for the free market only and is likely bad for people. Being qualified for a job means only that some person in HR at some particular company decided your qualified and it could be for lots of reasons that usually have nothing to do with society good.

            In point of fact, business HR does not even claim to hire people or pay them based on how valuable that person is to society.

          • Clinton Weir

            “… the argument about supply and demand economics determining wages is as pointless…”

            Then why do you keep trying to have it?

          • pointing out inconsistencies in the free market ideology is a way of planting the seeds of doubt that lead to questioning and a search for a better understanding of how wages are determined.

        • Jim Smith

          They are not the “right people” because they can not do the job. This fantasy that anyone can do any job is comical. Something my six year old would say.

          • carolannie

            This is the sort of thinking that makes businesses crash and fail

          • Duncan Cairncross

            Jim
            As an older person who has actually had some experience I would agree – it is not a case of “anybody can do any job” – but if 1% of people can do a specific job then in the USA 3 million people could do that job

            The skills required to be a senior executive or CEO are not particularly rare – an engineer has a job requiring much higher levels of skill and intelligence

      • NOT True. NOT even close. You’re just repeating free market ideology.

        The productivity of labor has doubled since 1960’s but the real adjusted income of labor has remained flat or gone down. It’s not the importance or value of your output that denies your compensation except in a very limited competitive situation where the employer salaries are kept artificially constant for purposes of calculating an equilibrium point. To be fair to you, the argument you are making does hold true for a single decision in certain special circumstances for a single company with two positions of various salaries and requirements assuming a lot of other things about information being free and all parties knowing their worth and the needs of the other parites in the negotiation. BUT that’s so far divorced from the real world typical scenarios because knowing the true value of an employee in a hiring decision is difficult and knowing the value to the employee of a job is difficult and real world salary negotiations are easily demonstrated to NOT produce the results imagined by a perfectly efficient free market model. Also, your argument and reasoning is invalid for a national equilibrium and you are confusing micro-economics with macro-economics. What works for one small company for one decision, does not necessarily work for a nation that includes people outside the company. Supply and demand micro-economics theory has very little to do with macro-economic wage levels of a nation or demographic.

        • Clinton Weir

          You’re arguing against a claim I did not make – that wages are proportional to productivity across all of time and space.

          My claim is that, at any given moment, a job’s wage will vary within a range, and the limits of that range are functions of a number of factors, including how much value the worker adds by his work and how difficult or unpleasant the job happens to be.

          Productivity is a factor when estimating the upper limit of the wage range, certainly, but just raising the upper limit of the wage range will not necessarily raise the wages observed in the real world.

          • @Clinton Weir,

            I’m arguing against a lot more than just “that wages are proportional to productivity across all of time and space”.

            I’m in agreement with you that a jobs wage will vary due to a large number of factors. I’m going further and saying that supply and demands and value determinations are one of the smaller and less relevant factors. There’s truth to the economic principles of supply and demand just as there is truth in the principle that a northward blowing wind will move things on the ground away from the south pole. But the wind turns out to be a very minor determining factor in which direction things on earth move and micro-economic supply and demand theory is a very minor determining factor in the wage a person makes.

    • Duncan Cairncross

      “But not everyone can be a banker (as much as I hate them) or executive”

      On what do you base this? – bankers and executives are “selected” from a very small pool that has selected itself as the “only people who can do these jobs”
      IMHO 50% of the population has the ability to do these jobs even if only 0.1% is in the “pool” to be selected for these positions

      • Jim Smith

        Sure they can. The piles of resumes and candidates I review for my openings says very different. In your fantasy world everyone can do anything. In the real world, the talent pool for people who have a clue is tight.

        • Never trust HR or business to be honest about the qualities of the applicants and candidates. Financially, someone in you’re position has a vested interest and moral hazard with any opinions on the qualifications of applicants in general. It’s always in the company’s financial interests to argue there are too few candidates and the candidates aren’t good enough.

          If you take your job as a HR personnel seriously and do you’re job correctly to maximize company profit, then the only answer consistent with your job duties is to say “no there’s not enough applicants. We need more applicants and better applicants”.

          It’s like asking a football coach if anyone can play football and if they have enough people trying out for the football team and if the people trying out for the football team are talented and good enough.

    • They don’t need a replacement, they need a reduction.

  • Sameen Farouk

    This reminds me of the joke about when the cannibals came to work in a company…

  • Thank you I enjoyed the article. As a farmer and now a business owner of many years Value to me is the only real way of making a profit so I can be in business tomorrow. JDS

    • seemed to me the article was arguing that in our real world USA there is a week or non-existent connection between producing societal value and being rewarded with personal profit.

  • Douglas Levene

    While it’s true that Japan has 17 times the per capita number of licensed lawyers, that statistic is highly misleading. In Japan only trial lawyers and prosecutors are licensed. That’s equivalent to what about 10% of American lawyers do. The people in Japan who are doing the work that 90% of American lawyers do (corporate, transactional, real estate) have undergraduate law degrees but are not admitted to the Bar. They have a lot of those folks just like we do in the US.

    • In a communist society there is zero unemployment. (because there is zero employment, the word employment doesn’t translate across economic systems).

      • Douglas Levene

        Not sure how that’s responsive to what I wrote, but you remind me of the common saying in the Soviet Union: “They pretend to pay us and we pretend to work.”

        • I’m generally agreeing with you and pointing out that law is so completely different in japan that comparing “lawyers” there to here is almost meaningless. For example there are a lot of people in america working in law or supporting lawyers without law degrees and the police enforcement budgets and incarceration rates are extremely different. So it’s more like comparing apples to cucumbers, then comparing apples to oranges. IMO.

          • Douglas Levene

            Agreed.

  • carolannie

    I am bemused by the argument that pay is a reward for the scarcity of your skills. There doesn’t seem to be any ability to recognize that the skills aren’t the issue. Great artists can either make paintings or destroy buildings with graffiti. No one would argue that their skills are not just as great in either instance. But somehow I think most people would prefer that their art not cover office windows, etc (I could even imagine that some artists might feel that blowing up a few buildings would be artistic also, although YMMV).

    The whole point of this article is that the skills are being misapplied and value is a real thing to measure, not the strenuous application of a narrow set of skills. The misapplication of their “superior” skills caused a depression (we are barely working our way out of it) and instead of being treated as the robber barons they were, the bankers got to keep their profits, bonuses etc. Being robbed by a banker is so much better than being robbed by a gunman, the absence of the threat makes their work worthy of superior pay.

  • I agree with this article’s critique of market economics theory and practice. It seems like a lot of economic theory is based on perfectly efficient markets that exist only in theory. We need a measure or indicator to tell us how far any given market is from the theoretical perfectly efficient market theory.

    or maybe there’s another better solution?

    • There is a complex literature on ‘gift economies’ that have alternative institutions for the exchange of goods and services beyond markets. Robert Heilbroner’s discussion of traditional, command and market economies in “The Making of Economic Society” provides a nice ground for talking about other solutions. We could debate whether they are “better” or not.

      My own position (at the moment) is that we need, and actually do practice, several of these solutions simultaneously today. We just don’t include within-family transactions and extra-family gifting when we talk money and economics. It’s time we looked at all of these transactions as they interact to permit survival and thriving on the individual and the communal levels. While we’re at it we could enlarge our system boundary to consider the ‘natural capital’ we depend on as well as the influence of human social hierarchies on our economic decisions.

      • @LIza Loop,

        That’s an interesting solution of including non market based economics into an economic models that seems to be currently only counting the financial capital monetary exchanges.

        There’s a lot of weird things that happen as a result of the simplifying assumptions of market economics. The way GDP and the Economic indicators reduce transactions as coming from some valueless and inexhaustible and unmeasurable world is suspiciously poor reasoning. If you cook dinner and clean house for your spouse it’s not counted as an economic transaction, but if you bill your spouse for the work then GDP increases and the stock market performs better and the nation gets richer?

  • philofra

    This article wonders why people in finance should make more money than garbage collectors, teachers or a host of other professions. Yes, why are bankers so prominent in the money chain?

    My thinking is that financiers, like lawyers, are at the head of the pack because they are the ones who are most responsible for creating and maintaining the civilization we live in. Without those two there would be little else.

  • alphamale11

    I suspect that those who feel that Kim K should earn more monetarily than the scruffy trash man is way to worthless to do either vocation. It helps to be there when reality grows in your face. Like Las Vegas in the late 60’s on where it was the jack of trades that could move from the Test Site, to cleaning the cooling towers at the power generation sites, to convention trade show assembling huge equipment, to 10×10 booths to laying carpet, to trash hauling to construction, all at one union hall, Teamsters 631. Health and welfare was taken care of, few people had banking even less had direct deposit, but there were bars and grocery stores that took care of those needs One of the biggest change was automatic deposit for paycheck. A quantum change in your life. And on top of that a pension, That the contributors were required to pay their monies to each quarter, with out fail.

  • Claudio Hess

    ,, sum this article with the one that warns that robots and computers are eating our jobs fast and faster, than you get a perfect combination for disaster!

  • shiftme

    It occurs to me, the author is just trying to be provocative with the garbage man vs banker debate, since bankers are the bad guys these days. How about a garbage man vs athlete debate. What value does a NBA player really provide to society? They would not be missed at all. Yet they are paid millions of dollars. She on stupid this comparison is?

    • Clinton Weir

      I don’t know why people think that any individual garbage man is so important. My garbage man does an important job and I am very appreciative, but if he needed to take a day off, oh well, the trash will wait. If he quit (or raised his price a little) and I had to hire another guy, oh well, he’s extremely easily and quickly replaceable.

      What’s important to society is the garbage collection industry as a whole, not any individual garbage collector, so it’s hard for any one garbage collector to negotiate. That’s what makes unionization so important – by putting forward their best negotiator, the group can push their total wages closer to the true value of the service provided, then distribute those wages more or less evenly across its members.

      As I have said elsewhere, the reason athletes get paid more than garbage men is because they serve a LOT more customers. I rarely watch sports, but when I do, I pay $0 for the privilege, but so many people do watch that their attention is worth a lot of money to advertisers, and somehow that means some basketball stars make millions of dollars per month. On the other hand, the average household in Chicago pays $35-40 per month for garbage collection. When you have millions of people each chipping in a few dollars of attention, it adds up.

  • AnnaT

    A couple of things:

    1. This has already been identified by others before, way before, so it doesn’t really constitute an ‘evolution’ of economics. The very classical Adam Smith pointed this out ages ago:

    “What are the rules which men naturally observe in exchanging them [goods] for money or for one another, I shall now proceed to examine. These rules determine what may be called the relative or exchangeable value of goods. The word VALUE, it is to be observed, has two different meanings, and sometimes expresses the utility of some particular object, and sometimes the power of purchasing other goods which the possession of that object conveys. The one may be called “value in use;” the other, “value in exchange.” The things which have the greatest value in use have frequently little or no value in exchange; on the contrary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water: but it will purchase scarcely anything; scarcely anything can be had in exchange for it. A diamond, on the contrary, has scarcely any use-value; but a very great quantity of other goods may frequently be had in exchange for it.[4]

    Furthermore, he explained the value in exchange as being determined by labor:

    The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it.”

    You could have found it by doing a basic search on the ‘paradox of value’: https://en.wikipedia.org/wiki/Paradox_of_value, a concept which any economist worth his salt (or most bright undergrad Econ students) would know.

    The entry also uses marginal utility, another concept which you would do well to get acquainted with, to explain the paradox of value:

    “it is not the total usefulness of diamonds or water that matters, but the usefulness of each unit of water or diamonds. It is true that the total utility of water to people is tremendous, because they need it to survive. However, since water is in such large supply in the world, the marginal utility of water is low. On the other hand, diamonds are in much lower supply. They are of such low supply that the usefulness of one additional diamond is greater than the usefulness of one additional glass of water, which is in abundant supply”

    2. If that hasn’t yet helped you clarify matters, think of it in terms of ‘the amount of money you make is proportional to the impact you have’, whereby we also measure ‘impact’ in monetary terms: if you are a garbageman who collects and moves around a few hundred (?) pounds of garbage/day, you get paid accordingly; if you are a social media expert whose marketing campaigns increased company sales from 200K to 300K/month, you get paid accordingly; if you are an investment banker who worked on the capitalization/IPO of a company worth 4.5 billion, you get paid accordingly. The same works if you are an entrepreneur who founded a 30 billion dollar company – you get paid accordingly.

    3. Just to drive the point home and make it clear: ‘impact’ and ‘value’ do not necessarily overlap. We do not have a measure or are hard-pressed to quantify ‘value in use’ (e.g. a glass of water to a hydrated office worker vs. a glass of water to a thirsty traveler lost in the desert). We can only quantify and express in comparable terms ‘value in exchange’ (e.g. the office worker would not pay a cent in exchange for a glass of water right now, while the traveler might give up all his savings to get it).

    This is what the market does: through the intersection of supply and demand, it sets the price at which the good or service can be exchanged. That is what prices are for and also part of the reason why money exists in the first place, to make prices comparable and exchanges easily possible.

    I am not saying that ‘value’ should be disregarded and ‘price’ heralded; certainly, intangible, immeasurable things such as quality of life, legacy, sustainability etc. are things we should take into account, but I AM saying that they are virtually impossible to quantify and express in the CURRENT price, especially at the societal level (see the whole debate about whether the GDP is a good indicator). Moving on to 4…

    4. ‘The market’ doesn’t care about things like ‘intrinsic value’, ‘societal value’, unless they are somehow (?) determinants of supply and demand, in which case they will be reflected in price. Your argument is that, somehow, the market should care about those things, but what you are really saying is that we, the actors in the market, should care. And, in reality, many of us, myself included, do care.

    However, the fact that many people care does not change anything in the aggregate, where the price is determined. Market conditions are something each individual takes into account when making an economic decision. Perhaps I am considering being a teacher in a public school, but am a) aware that the market salary for that position would have me living in financial worry and b) not so passionate about teaching that the non-financial utility I get from doing it can outweigh the dis-utility of my having to worry about money.

    That is a perfectly reasonable and reasoned decision for me as an individual and maybe even for society – maybe the stress and worry of public teaching would make me depressed or sick or unproductive and I would need medical care, time off from school and would affect those close to me through my own problems, which, if we quantified it, might amount to more than the value I am adding. Which brings me to 5…

    5. What is optimal at a microeconomic level is not necessarily optimal at the macroeconomic level.

    This is a crucial thing to understand and one which you seem to be missing.

    At the micro level, of an individual or even a firm, you are an open system and you do what is best for you, given whatever preferences and objectives you have.

    At the macro level, we are talking about a closed system where a ‘central planner’ would have you doing what is best for the economy, given the overall preferences and objectives the economy has, which may (ideally) or may not have been obtained as some (weighted) average of the individual ones.

    Therein lies the conflict: while I might want to be a plastic surgeon to make good money and have a comfortable life, ‘the planner’ might have me being a cardiologist in a public hospital, helping the thousands with heart disease while making a slightly-more-than-decent wage.

    At the end of the day, I’ll choose to be the surgeon. And, if money and comfort are important to me, there might not be a feasible/affordable incentive scheme that you, ‘the planner’, could devise to sway me from my path. And that’s OK. Which brings me to number 6…

    6. Your article has the implication that we all somehow have the duty to think about ‘value in use/societal value/whatever you want to call it’, as that is inherently better or…more valuable (haha). In other words, I should obviously prefer building rockets for mankind to being a corporate lawyer, as creating value as a rocket-builder is more useful and more noble than ‘shifting’ value as a lawyer.

    That is a very condescending and unsympathetic view, as, again, it disregards individual circumstances. Maybe I grew up in a very poor, uneducated family and decided at an early age to get an education and make sure I never have to feel hungry and financially insecure again. Maybe I liked law because I had a talent for debate and very much enjoyed the process of finding flaws in arguments. Maybe I’m the kind of corporate lawyer who refuses to do shady dealings for unethical clients (as quite a few are). Maybe I got married and have kids, pay my taxes, am providing for my family and ensuring that my kids can get an education and someday become rocket-scientists, thus promoting future value added by my children.

    No one can say that’s not ‘valuable’, if not more ‘valuable’ than a rocket scientist who uses his skills to build missiles and WMD’s because all he’s interested in is the intellectual challenge of creating them. Which brings me to number 7…

    7. There is really no such thing as ‘shifting’ value. Corporate lawyers delaying a deal are creating value for the law firm through more billable hours; financiers imagining complex derivatives are creating value for the people willing to pay for them, etc. Is this useful or even moral? No, but, again, that has to do with the above points.

    What you are referring to is the fact that that value is not reflected in fundamentals, i.e. something produced or created and that has an equivalent or a form in the real world. That is a valid concern, but, sadly, again, one that has to be relegated to the ‘as long as there’s a market for it’ section.

    There’s a market for cheese in a tube. Is that useful? No. Is it necessary? No. Do at least some people want it? Yes. While human needs may be finite, human wants are infinite – which is part of why we keep working so much to make things.

    8. I think I’ll stop here, since I, myself, am now rather bored. I would kindly and cordially advise you to acquire some more Econ knowledge and intuition before launching into attempts to (r)evolutionize it. There is a reason they call it the ‘dismal’ science, as it does not say things one generally likes to hear.

    Economics tells you what the optimal decision is, but it cannot tell you what your preferences and objectives should be. Those are, by default, subjective. You are confusing the realm of policy, which has to do with setting up our value-system and using it to choose our goals, with science, which has to do with figuring out the best way to reach those goals.

    No one can tell an individual or a nation what its value system should be, hence the struggle. And the uniqueness in paths.

  • yobro

    Great article. Few points though:
    1. The acceptable range of salaries we attribute to jobs is inequitable. We instinctively value manual labour less than “mental” labour. If it’s something you think you could easily do but rather not do (garbage man), you wouldn’t want to pay so much for it, notwithstanding the social utility of the work.
    2. I didn’t like the comparison of the rule of law and the concentration of lawyers in the US and in Japan. Note that Japan does not have an effective judicial review system (that’s already being kind to the system).

  • Cristiano Almeida

    Very bad, in thruth if the investors don’t invest the companies crashes and the jobs are lost. Let’s take the example of Brazil: with less money available to people the companies are breaking down and many workers are unneployed. Thus, there is still another problem: any one can take garbage from streets and take it to the appropriate places, but so few are capable of doing investiments and so on. That is a offer x demmand problem.

    • Clinton Weir

      There probably is a more efficient method of financing ventures than the banking system we have, as evidenced by the fact that government occasionally has to step in to rescue parts of the banking system (something that, by design, happens more often than you realize).

      Note: Often times the government that does the rescuing is The Federal Reserve, which is NOT “part” of the Federal Government, but is, itself, a kind of government.

  • tomamitai

    So, if the trash collectors just stopped picking up the garbage at banks and at the banker’s homes, the bankers would stop trashing the economy?

  • zec_afonso

    “A system in which an increasing
    number of people can earn money without contributing anything of
    tangible value to society” — sounds like the definition of capitalism.

    The boss needs us; we don’t need the boss.

  • The difficulty in creating a charge dispute system is the problem of business interests not being aligned with consumer interests. The business can and does profit at the expense of the consumer and there’s no away around that basic predatory relationship. I think you mean to say “in theory” not “in practice” because in practice as the bloomberg article pointed out clearly it did not seem to be possible for the company to create very easy charge dispute system. The multimillion dollar company found it impossible to create an easy charge dispute system. For all their millions of dollars they were only capable of producing a difficult to use and deceptive charge dispute system. I linked to the entire bloomberg article if you need to check the source on this.

    • Clinton Weir

      It’s very easy for a credit card company to implement a charge dispute system. Every single major credit card company offers a charge dispute system. Are you high?

      • the charge dispute system produced by the credit card company is mostly effective at disputing charges that might cost the credit card company money. You need to judge it based on disputing a charge when the result of the lodging a dispute will cost the credit card company money.

        • Clinton Weir

          We already talked about that – if I buy something with my credit card and it breaks or is stolen within a year, I can file a claim and the credit card company reimburses me. I went through that process a few weeks ago, and all I needed was a police report.

          You claimed (falsely) that this option is only available because I pay an extra fee (I don’t – I’ve never paid any money to my cc company at all, beyond reimbursing them for paying merchants on my behalf).

          That said, the charge dispute system is a free market solution to the problem of unscrupulous merchants. And the actions you describe refer to consumer requests for government intervention to restore, not restrict, the free market system.

          • Adore Me has taken a financial hit for these recent tweaks to its business model, with a 30 percent jump in refunds and a 15 percent drop in subscriptions. “The easier you make the refund process,” says Hermand-Waiche, “the more refunds happen.”

          • Clinton Weir

            Sure, and it is completely appropriate for the government to step in when the free market system is threatened by unscrupulous merchants.

            A free market system means that market participants are free, to accept or reject a transaction. When one participant restricts their counterparty’s ability to accept or reject their transactions, that is a reduction of the freedom in the market system, and it is prudent for government to act.

          • So it’s you’re idea that government should only be involved with the “free market system” in order to fix it when it breaks. Government for the free market with regulation of people by the free market.

          • Giving Birth Is Expensive As Heck — But Hospitals Won’t Quote You A Price.

            http://digg.com/video/birth-expense-hospital-insurance

          • Clinton Weir

            As an expectant parent, I have some data: the hospital did give us specific numbers about the costs of the birth. But there are some variables (e.g. whether the delivery is done by a midwife or an OB, whether you need a C-Section, etc), so there is no exact bottom-line number available.

            My annual out of pocket medical expenses are capped, so I have a really good idea what it will end up costing.

            But if the health care industry can not offer normal free market transactions (e.g. can not produce a price list) then it is a candidate for government regulation, and I think single payer will be the way to go when the political winds blow the right direction.

          • you said yourself earlier that “nothing is free” are you going back on that now saying you don’t have the pay the credit card company for something and they provide it for free? Check your math, the credit card companies are in business to make money and they’ll make sure to put their profits first.

          • Clinton Weir

            Reminder: I am responding to your claim that the purchase protection I get from my credit card costs me money, and should not be “something purchased as patch available primarily to those with money”

            I don’t recall saying that nothing is free. The credit card system is paid for by merchants and lenders (banks). Merchants pay the credit card company for the privilege of taking credit card payments, so they can sell more merchandise, and banks pay the credit card company for the privilege of extending convenient credit, so that the credit card company can charge interest.

            In the past, credit card companies forbid merchants from charging a fee for using a credit card. The rule has passed into history, but the custom remains, so most merchants do not charge a fee to accept a card, and I avoid those merchants that do charge such a fee.

            Banks charge interest, but only after the grace period. I always pay my balance off within the grace period so I never pay interest.

            There is no fee to carry or use the credit card, nor for the purchase protection, so it is accurate to say I have never paid a penny to my credit card company.

          • robertmkadar

            Thanks for the enthusiastic commenting but this is no longer relevant. Please take the convo to a new forum. Thanks.

          • Clinton Weir

            It’s a private server and you’re the moderator so whatever you want, but just to be clear, you are throwing away a user and potentially dozens of ad shows for a fraction of a penny of disk space and server time.

          • robertmkadar

            That’s fine. Take care.

          • @Clinton Weir,

            Just pointing out that someone is paying for it and making sure to clear up the confusion from you’re earlier statement “it’s free”. You actually mean it’s free to you and the cost is carried as a payment by merchants that is paid for by other customers. Basically this is what I already knew about credit cards and their profit model works by basically first being subsidized by merchants, and now it’s just a ritualized profit. But, I’m glad to hear you understand all this about how the financialization works. Now, from a supply and demand micro-economic model how does this payment system qualify as fair? I don’t think this strategy and pricing is fair even by the market definition of a fair transaction. It certainly doesn’t seem subject to the equilibrium price where supply equals demand theory since a credit card fee doesn’t come with a choice or option to use. I guess in theory you might argue stores should and could simply refuse all credit cards due to the fee’s but I hope you’re not silly enough to make such a ridiculous argument.

            PS. here’s some more failure of the market to consider the next time someone tries to sell you on the idea that anything done in the market place without theft is ok and somehow good for the individual or good for society. . .

            “Apple Stole My Music. No, Seriously.”
            https://blog.vellumatlanta.com/2016/05/04/apple-stole-my-music-no-seriously/

          • Clinton Weir

            Note: This is my last comment to you, because we’ve been asked to STFU by Comrade Robert M. Kadar. This guy: https://twitter.com/robertmkadar

            Yes, a store can choose not to accept credit cards. Many do, and most did in the past. There’s nothing wrong with a credit card company charging its customers for payment processing services.

  • orolee

    Another reason, would a banker do this —

    https://youtu.be/CCkHmy7KkJU

  • Victor Wilson Canessa

    Stupid article, written by somebody who has no concept of the idea of arbitrage, elimination of imperfections and frictions (arbitrage opportunities), and the value that brings to an economy. Reflects a Luddite view that only previous generations of work with dirty hands are valuable. Yesterday’s economy was too complex for this view, never mind today’s. Evonomics should reconsider changing its tag line to: Evonomics: The Next Devolution of Economics, Let’g Go Back Two or Three Generations!

  • Victor Wilson Canessa

    Oh yeah, nor does he understand the role of speculation in terms of increasing liquidity and what liquid markets might or might not mean for an economy. But after reading the brief blurb on his background, I understand why, he is a HISTORIAN, with his ideas and knowledge firmly rooted in the past.