Gyroscopic Investing

Can't you see that if you have to pay each one of the cashiers more money, then you won't be able to hire as many cashiers?

Did you never take an economics course?  If Walmart has to raise its prices to pay its employees more money, guess what happens to the demand?  It goes down.  This is called the law of supply and demand.

Xan wrote:

jafs wrote:I'm really pretty sure that's not how it works.  W-M hires just enough people to cover the demand they have, they don't consider cashiers "revenue bringers".  And, it's only if they have or anticipate having increased demand that they hire more people.

That could be true, but it's not generally based on how much extra revenue the new cashier "brings in".  If they're not getting as much extra demand as they expected (for other reasons), then they'll undoubtedly cut some of the work force.

Then how do they decide how many cashiers and greeters they need, and what's the most they're willing to pay for them?

Have you ever hired anybody?  Because it sounds like the answer is no.

They hire as few as possible, and pay them as little as they can get away with paying them.

I'm sure it's not an exact science, and businesses make mistakes all the time one way or the other, and have to correct that over time.

stuper1 wrote: Did you never take an economics course?  If Walmart has to raise its prices to pay its employees more money, guess what happens to the demand?  It goes down.  This is called the law of supply and demand.

First, they don't have to raise prices, CEO's could take minimal pay cuts to increase pay scales at the bottom of the scale.

Next, according to the studies I've seen, raises in prices are far less than increases in minimum wages - an increase of 10% in wages translates to an increase of about 4% in prices.  This means that workers are better off with the increased wages, even with corresponding price increases.

And, if all businesses are paying higher minimum wages, that generally translates to increased demand across businesses.  McDonald's pays higher wages, and those employees can buy more at Wal-Mart, and vice-versa.

It seems to me we're generally just rehashing now, so I may stop responding soon.

Simonjester wrote:

jafs wrote: First, they don't have to raise prices, CEO's could take minimal pay cuts to increase pay scales at the bottom of the scale.
.

twentieth century motor company here we come...

jafs, you missed your chance.  If you wanted to live in a centrally planned economy, you should have moved to the USSR while it still existed.

jafs wrote:

stuper1 wrote: Did you never take an economics course?  If Walmart has to raise its prices to pay its employees more money, guess what happens to the demand?  It goes down.  This is called the law of supply and demand.

First, they don't have to raise prices, CEO's could take minimal pay cuts to increase pay scales at the bottom of the scale.

The problem here is that you are defending your proposal according to how you believe the world should work, not how it actually does. I think you and I both know that the CEO is not going to take that pay cut, as much as you want that to happen. I urge you to learn some basic economics--it doesn't have to be screwball Austrian economics that you don't like--just a mainstream, basic, Econ 101 type course like the kind you can find for free on Coursera. There is little reason to continue a discussion of this type when you don't accept the basics. We're not talking about ambiguous, complicated phenomena on which there is substantial disagreement in the field off economics. This is just basic supply and demand stuff here. It would be like two physicists arguing about what will happen to a ball dropped off a ledge when one of them only conditionally accepts the idea of gravity. It just doesn't work.

I liked the book "Economics in One Lesson" by Hazlitt.

Jafs, you probably think that you are arguing with a bunch of heartless people.  You are not.  We care about other people just as much as you do.  However, the answer to helping people doesn't come through government policy on wages, etc.  If you want to help people, then get off the couch and go volunteer at a school or something.

stuper1 wrote: Jafs, you probably think that you are arguing with a bunch of heartless people.  You are not.  We care about other people just as much as you do.  However, the answer to helping people doesn't come through government policy on wages, etc.  If you want to help people, then get off the couch and go volunteer at a school or something.

Ironically, many government forays into the private sector begin with the impulse to help people.  The problems arise when some of the people you want to help start acting like they don't understand that the government is only there to help.

Look at how communism started out.  It was just a bunch of idealists who thought that society ought to be oriented around the worker.  I have no idea how you get from that to Stalin's purges, but that's the way it actually went down.

Xan wrote:

jafs wrote:I'm really pretty sure that's not how it works.  W-M hires just enough people to cover the demand they have, they don't consider cashiers "revenue bringers".  And, it's only if they have or anticipate having increased demand that they hire more people.

That could be true, but it's not generally based on how much extra revenue the new cashier "brings in".  If they're not getting as much extra demand as they expected (for other reasons), then they'll undoubtedly cut some of the work force.

Then how do they decide how many cashiers and greeters they need, and what's the most they're willing to pay for them?

Have you ever hired anybody?  Because it sounds like the answer is no.

Yes, that's exactly what it sounds like, at least with his own money.

Which is one thing that all leftists seem to have in common...

stuper1 wrote: I liked the book "Economics in One Lesson" by Hazlitt.

Yes, but that is heartless logic! jafs works on feelings, just like Wesley Mouch and many of the other heroes of Atlas Shrugged!

IDrinkBloodLOL wrote:

Libertarian666 wrote:Yes, but that is heartless logic! jafs works on feelings, just like Wesley Mouch and many of the other heroes of Atlas Shrugged!

I've read AS 2.5 times. Great book, in my top 3 favorites.

Ayn Rand was brilliant, but apparently unaware that externalities exist.

If Randian superheroes buy all the forest in the country and make a killing strip mining it for resources, the transaction is not just land owner->Randian tycoon->wholesalers of metals, coal, petroleum etcetera. It also involves the people of the country, who have now lost the beauty of an ancient landscape untouched by man.

Similarly, if Randian superheroes import 10 gorillion foreigners of an entirely different racial and cultural background, the tycoons make a killing but cultural homogeneity is lost as an externality, and when it goes, so does social trust. This is not just because now we're surrounded by people who are different from us, which is bad in and of itself, but also because the people of America are now aware that the powers that be don't give a shit about them and will sell them out in a heartbeat to strangers. It feels like betrayal because it is.

A Randian superhero could become the largest producer of pornography, alcohol and cocaine in the country, evade all legal enforcement and become rich as an oil sheikh, but as an externality the moral nature of the country would suffer. What you facilitate, you get more of.

Rand's theories, and similarly all Libertarian theories of economics, actually collapse under their own logic if analyzed thoroughly.

The nonaggression principle as commonly interpreted has a short time horizon. Things like ecological and cultural destruction are not considered because they are subtle changes over decades, and they harm collective rather than individually held resources.

That harm is still there, however.

Externalities exist because there are governments to protect those causing them from retaliation by those to which the costs are transferred.

Read "A Spontaneous Order" (http://www.amazon.com/Spontaneous-Order ... 012DL2SQ2/) for a complete explanation and proof of this.

Pointedstick wrote:

jafs wrote:

stuper1 wrote: Did you never take an economics course?  If Walmart has to raise its prices to pay its employees more money, guess what happens to the demand?  It goes down.  This is called the law of supply and demand.

First, they don't have to raise prices, CEO's could take minimal pay cuts to increase pay scales at the bottom of the scale.

The problem here is that you are defending your proposal according to how you believe the world should work, not how it actually does. I think you and I both know that the CEO is not going to take that pay cut, as much as you want that to happen. I urge you to learn some basic economics--it doesn't have to be screwball Austrian economics that you don't like--just a mainstream, basic, Econ 101 type course like the kind you can find for free on Coursera. There is little reason to continue a discussion of this type when you don't accept the basics. We're not talking about ambiguous, complicated phenomena on which there is substantial disagreement in the field off economics. This is just basic supply and demand stuff here. It would be like two physicists arguing about what will happen to a ball dropped off a ledge when one of them only conditionally accepts the idea of gravity. It just doesn't work.

Of course they won't, unless they're forced to, but they could.  People who say "They'll have to raise prices" aren't exactly right about that.  Also, studies have shown a smaller increase in prices than the wage increase, which means that those at the bottom/middle will be better off, and demand will almost certainly increase at a variety of businesses.  It's generally understood/accepted that those at the lower end of the income scale spend a lot of their income, so new income will almost certainly be spent/circulate in the economy.

The question of the effect of minimum wage increases is not a settled issue by any means.  Economists disagree on the effects and the scope of them, often depending on their ideological views.  Many studies show minimal job losses and a lot of gains for those at the bottom/middle.

But I'll stop here - I find that the "friendly atmosphere" on here has a disturbing tendency to get hostile, which is unfortunate.

I've responded to virtually all of the questions/challenges by others, who often fail to respond to mine - that's a tiring dynamic.  If I keep posting on here, I'll probably wind up ignoring a fair amount of posts.

jafs wrote:If I keep posting on here, I'll probably wind up ignoring a fair amount of posts.

That's a good sign that maybe this isn't the community for you.

Pointedstick wrote:

jafs wrote:If I keep posting on here, I'll probably wind up ignoring a fair amount of posts.

That's a good sign that maybe this isn't the community for you.

Maybe not.

IDrinkBloodLOL wrote:

Libertarian666 wrote:Externalities exist because there are governments to protect those causing them from retaliation by those to which the costs are transferred.

So if I understand you correctly, in something closer to true AnCap, if Randian tycoons ruin the environment, the whole of society could file a gigantic class action suit against them?

Whoever is affected could do that; if that is the whole of society, then yes, they could all join.

IDrinkBloodLOL wrote:

Read "A Spontaneous Order" (http://www.amazon.com/Spontaneous-Order ... 012DL2SQ2/) for a complete explanation and proof of this.

I'm interested in this topic but I am busy and have a bit of a reading backlog already.

Could you give me a solid executive summary of the logic provided in the book?

I will consider it and try to see if it might not be true. I won't nitpick details, approach it with the intent of picking it full of holes, or commit a strawman by considering your summary to be a complete representation of the author's words. I'll try to be as intellectually honest about it as possible in the hope of learning something.

The basic idea of the book is that there are necessary truths regarding human action that are not tautological but can be used, once known, to derive non-obvious truths about society. They start with the action axiom, "Man acts", and show that this leads by inexorable steps to the conclusion that anarcho-capitalism is the only societal structure that does not lead to otherwise-avoidable conflict among the members of that society.

This approach was invented by an Austrian economist by the name of Hans-Hermann Hoppe, who named it "Argumentation Ethics." The idea is that you can derive a logically consistent framework for, well, basically everything, by building up a set of axioms that cannot possibly be refuted, because disagreeing with any one of them causes one to contradict oneself or a previously-accepted axiom upon which it rests. It's pretty brilliant, and terribly seductive to people who have logically-ordered minds. It's exactly the way they (we; guilty as charged, since I'm an engineer) want the world to work.

However, some of the conclusions that are generally reached using this approach are at odds with the way the world actually seems to work--as it is with basically every branch of economics, of course. When this is pointed out, proponents of the framework often blame the rest of the world for still having any government in it. It only works if there is no government to interfere, so any negative real-world result that is not predicted by the theory is the fault of government somewhere for messing things up--not altogether unlike the argument made by gun controllers that gun violence in Chicago is caused by guns flowing in from outside of Chicago--if there is any gun anywhere, Chicago is not safe! So it is with society. If there is any government anywhere, the ideal always-equilibrating free market private law society might not work!

There's a lot to like, but no theory explains everything, so you need to keep your eyes and mind open.

IDrinkBloodLOL wrote:

Libertarian666 wrote: The basic idea of the book is that there are necessary truths regarding human action that are not tautological but can be used, once known, to derive non-obvious truths about society. They start with the action axiom, "Man acts", and show that this leads by inexorable steps to the conclusion that anarcho-capitalism is the only societal structure that does not lead to otherwise-avoidable conflict among the members of that society.

Yeah, that sort of thing is what I was hoping you could give me a bit of detail on. I'm intrigued, please continue.

Since the purpose of a social norm such as a property norm, i.e., the social rule set regarding property, is to eliminate avoidable conflict, then the question is whether property norms are arbitrary or must conform to a certain paradigm.

The book shows that only original appropriation and voluntary exchange meet the criterion that a property norm must meet.

It also shows that government is by its nature a cause of conflict that can be avoided without government.

There are a number of other undeniable truths derived in the book, but I don't think I can provide the whole argument here, as that is what the book is for.

Pointedstick wrote: This approach was invented by an Austrian economist by the name of Hans-Hermann Hoppe, who named it "Argumentation Ethics." The idea is that you can derive a logically consistent framework for, well, basically everything, by building up a set of axioms that cannot possibly be refuted, because disagreeing with any one of them causes one to contradict oneself or a previously-accepted axiom upon which it rests. It's pretty brilliant, and terribly seductive to people who have logically-ordered minds. It's exactly the way they (we; guilty as charged, since I'm an engineer) want the world to work.

However, some of the conclusions that are generally reached using this approach are at odds with the way the world actually seems to work--as it is with basically every branch of economics, of course.

Can you name some of these?

Also, an axiom by definition is something that can be neither proven nor disproven, so all systems derived from them are taking some very basic foundational things "on faith", so to speak.

That's why/how we can have both Euclidean and non-Euclidean geometry.

MangoMan wrote:

jafs wrote:

Pointedstick wrote: That's a good sign that maybe this isn't the community for you.

Maybe not.

I disagree. I think you have been an asset to the forum and hope you stay around. I like learning different perspectives even if I disagree with the viewpoint, and learn again when someone responds with an opposing view. As long as the conversation remains civil, I don't see a problem.

Indeed. No friction gets you no where. A little friction allows you to move down the road. Too much friction however wears down your tires to nothing and then you're right back to not going anywhere again.

Thanks guys.

I understand the problems small business owners face, and welcome various ideas about how to help them out.  My comments are mostly about large multi-nation corporations, since I find them largely responsible for the trend we've been discussing.

jafs wrote: Thanks guys.

I understand the problems small business owners face, and welcome various ideas about how to help them out.  My comments are mostly about large multi-nation corporations, since I find them largely responsible for the trend we've been discussing.

With big multinational corporations, though, you still often find that they run their businesses a lot like a small business.

For example, I suspect that a Walmart manager pinches pennies much like a small business owner, especially when it comes to watching the hours that his/her employees work, and paying very close attention to what their overall labor costs are.

The bottom line is that I don't think that any of jafs' arguments based simply on "what is right" (aka what jafs thinks is right) are going to get any traction unless jafs is the one in power, which he's not.

It's important to remember, too, that however gentle and well-intentioned any redistribution scheme is, it's ultimately a discussion about whether we are going to use the coercive power of the state to implement a re-distribution scheme that someone thinks might work.

However you dress it up, the only power the state has is the implicit threat of violence if you resist its mandates.  I would rather see the state simply stop supporting corporate cost cutting strategies that put Americans out of work, as opposed to dictating to companies how much they can pay their employees.

What is sort of sad IMHO is that the boards of directors of large corporations have been so completely neutered by their executives.  It's the boards of directors who sign off on these obscene pay packages for executives.  I guess that the C-suite people have basically captured their boards of directors in the same way big money has captured the federal government, so maybe I shouldn't be surprised.

From a macro perspective, I think what we are seeing is the expected tomfoolery one would expect in an economy that is experiencing a long term structural contraction due to changing demographics.  When your mission is to grow revenue and profits no matter what the state of the macro-economy is, bad demographic shifts can turn a whole generation of otherwise capable executives into liars and thieves.

Simonjester wrote:

MediumTex wrote:
With big multinational corporations, though, you still often find that they run their businesses a lot like a small business.

For example, I suspect that a Walmart manager pinches pennies much like a small business owner, especially when it comes to watching the hours that his/her employees work, and paying very close attention to what their overall labor costs are.

.....they do.... managers are allocated man-hours to get the jobs done by corporate or regional manager, those hours are then are filled with available employees. This is all down to a pretty exact science, for example the amount of time it takes to unload a truck and get the product onto shelfs and into stock rooms is a known quantity, and it is expected to be basically the same throughout the chain, the number of shoppers and the daily sales for any given day (and the necessary size of staff to handle it) is also known, and daily sales get compared to and put up against the same day the previous year... labor costs are tracked to the penny and minute. They don't reinvent the wheel every week they write a work scheduled... they know whats coming..

None of my arguments will gain any traction unless enough people with power agree with them, or can be persuaded to do that.

It's very unlikely, given the vast influence of money and moneyed interests in politics these days.

But the same is true of most suggestions that have been made on here, it seems to me.  And, the argument that government is force, or backed up by force, would apply logically to any policies that were enacted.

jafs wrote:And, the argument that government is force, or backed up by force, would apply logically to any policies that were enacted.

Not exactly.

If the government simply stopped helping big corporate interests screw American workers, that wouldn't necessarily involve the threat of force.

When the government stops doing something, it doesn't involve the threat of force.  It's only when the government does something that the use of force comes into play.