Question for Libertarians

Note the capital “L.” I mean those who support the Libertarian Party, or Randites, or “Rational Anarchists” ala Heinlein, or, as Patrick says, those who want to sell the streets and privatize meat inspection.

This isn’t an effort at argument (though no doubt one will ensue), but a request for information. I’m wondering what the canonical answer is to the charge that without state control, nothing would prevent child labor, and similar abuses. It’s an obvious enough question that I’m sure it’s come up. If someone could run it down for me I’d appreciate it. Thanks.

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  1. Steve,
    I’m not actually a Libertarian, but I regularly read Reason and the like, so I’ll give it a shot. I think that most little-L libertarians assume the existence at least of courts, for contract enforcement and possibly punishment of obvious, violent crimes. Such a court system would probably deal at least coercive working conditions (i.e. slavery), and absent that, the workers, or their parents, would be free to leave and choose better work.

    As for non-coercive abuses, like child labor, unsafe working conditions, etc., I suppose the Libertarian answer is that it would be resolved (as with all things) by the Market. For example, if the public hears that Nike is using child labor, and there is public outcry, then Nike feels the heat, and so makes the business decision to stop using child labor. Problem solved! On the other hand, if most customers don’t really care that Nike is using child labor, then it’s not actually a problem, is it? Note that this answer doesn’t really even assume a court system, other than the court of public opinion.

    Of course, it’s also unpalatable to most people, which is probably why you don’t see more Libertarians out in the real world (the Internet is not the real world, of course).

  2. I’m not a Libertarian, so that technically excludes me from the poll, but it’s hard to resist responding anyhow, even if I can’t actually answer the question.

    Right-wing libertarianism is usually linked to some kind of laissez-faire economy. So in addition to your original question, I would go on to ask, what prevents cartels and various -opolies from forming to control prices and wages as they have done historically so many times?

    I think these are sort of the same question in that both these behaviors — worker abuses and -opoly market dominance — are generally prevented through government action, which is naturally anti-libertarian in principle.

    So I can’t anwer the question from the point of view of right-wing Libertarianism, and it’s hard to imagine there is any good answer, except of course for “well, we let government retain its trustbusting and labor protection powers”.

    As for a more leftist libertarianism, I suppose the answer would involve trade unions or “anarcho-syndicalist collectives” protecting workers’ rights through the force of their memberships.

    If you really want to restrict this discussion to actual card-carrying Libertarians, please feel free to delete this….

  3. I’m not registered as a Libertarian, and my thoughts may differ from the “canon” of libertarianism or objectivism, but I do identify myself as such, even though my thoughts are my own.

    To me, Chris (comment 1) has pretty much nailed it on the head with his second paragraph, but I want to add something to it. In a pure rational anarchy, the market *would* pressure business owners to curtail their use of child labor and improve working conditions, but there is the added factor of free will.

    Parents have the option of not sending their kids to work; if they do so, it is a decision that they make (as well as the decision of the employer to use them). In the case of poor working conditions, the workers have the option to leave for a better work environment.

    A common argument against this idea is that business owners would collude to all have poor working environments and set wages to force parents to send their kids to work, and it does have some validity.

    However, all it would take to stop this trend would be one competitor offering fair wages, better working conditions, and refusing to hire children. Not only would this operator draw more workers to his business, increasing production, but he could use it as a positive PR opportunity to ensure that the public buy his product. These two factors would net him a tidy profit, forcing his competition to either adapt or die out.

    That’s my theoretical take on it, however, I have come to accept that people are not necessarily rational, and that many of them don’t like to exercise free will, so I have accepted that a true rational anarchy cannot exist, except on a very small scale, such as in a “gulch.”

    I would personally like a system of taxation where you pay for the public services you believe in. I would pay for education and fire services, and even a small police force. However, if they weren’t behaving up to my standards, I would withdraw my funding. I would also be unable to participate in programs I’m not funding (welfare is the usual example).

    I’ve rambled on a bit, but that’s basically how I see it. The long shot of it is that I’m glad to sacrifice state services for the chance to be free of having my neighbors tell me what to do, especially when they’re doing it “for my own good.” If something is truly unbearable to the public, they will show what they think by spending money elsewhere.

  4. I actually am a libertarian, both small-l and party member (though I’m dubious about a lot of the party’s current candidates; if Obama gets the nomination I’m most likely going to vote for him). Not to offer argument on the point, but simply a source, see Robert Hessen’s “The Effects of the Industrial Revolution on Women and Children,” reprinted in Ayn Rand’s Capitalism: The Unknown Ideal—pages 110-113 of my paperback copy discusses children specifically. There are probably other sources, but this is as clear a statement as any and widely available.

  5. … It isn’t too hard to find support for children’s “right to work” within Libertarian Party writings… something of a controversy within the party.

    Of course, I’m not a Libertarian, but I may vote for the very reasonable George Phillies, my former professor, who may get the Libertarian nomination.

    I’m hoping for Zombie Debs, though…

  6. Now, I have to start by saying that many if not most Big-L Libertarians will agree that protecting people from being exploited is one of the “necessary evils” of government, and don’t support child labor.

    However, for a good explanation of the rationale for how it wouldn’t be a problem in Libertopia, I’d suggest reading Dr. Mary Ruwart’s “Healing Our World,” the older edition of which is available as a free e-book.

    Do a quick find on the phrase “child labor” and you find her arguments.

    Having talked to people who have cross-examined Dr. Ruwart extensively, even she will admit that she’s speaking in ideals, and the real world generally involves accepting the non-ideal solution that comes closest to the ideal. But her book is a good window to the philosophy, which doesn’t simply ignore the places where the philosophy is generally weak.

  7. Believe it or not, the answer is that the market will take care of it.

    If people don’t want companies to employ children or engage in similar abuses, they won’t buy those company’s products.

    Yes yes, it’s a completely idiotic answer that ignores the fundamental externalities of the situation. But Libertarians have this almost religious belief that all externalities can be encompassed in the point-of-sale purchasing decision.

  8. I think the history of efforts to stop child labor show that they’re only partially motivated by concern over the plight of child laborers. They’re at least as much an effort to reduce the supply of labor in order to raise wages.

    Although children are vulnerable to certain kinds of abuse, children who still live with their parents are also safer from abuse in certain ways. A 13-year-old may not have to social skills to deflect an inappropriate request from a boss–but at least he or she is in a better position to just quit and leave the job market than, say, a 19-year-old supporting a new family.

    Libertarians always point to the details of the rules and the boundary conditions. I remember eating at a family restaurant where a little girl (maybe 10 or 11) was working at the soda fountain. She was so short that she had to reach over her head to fill glasses, but seemed to be having a great time. If you want to ban sweatshops, but still let kids help out in their parent’s business, you have to write all sorts of detailed rules and then have some sort of court to try the boundary cases.

    Plus, just like with any other law banning consensual activity, it’s hard to catch criminal without corrupting the whole process–you start relying on snitches, no-knock raids, and so on. This has the effect of producing an underclass of people who are afraid to go to the police to report actual abuse, because just working was already against the law.

  9. I’m painfully outgrowing my libertarian tendencies, because of questions like this, though it leaves me kind of homeless–I have a lot of trouble accepting the price of socialism, and if I have to try to fit back into democrat/republican I might as well shoot myself. But I can’t stay where I am; if Ron Paul wants to be in my space then I’ve got to move, ’cause I’m sure not staying there.

    I’m not sure there is a correct libertarian answer to the question, but then there are few universally correct libertarian answers to most questions. The textbook one has already been given, “the market will prevent it,” though everyone who’s pointed it out acknowledges that it probably won’t.

    I’m of the view that, in the modern age, the capitalist, free market that is mandated by libertarianism can only function if property ownership is restricted to personal ownership–the existence of the limited liability corporation is deeply inimical to personal prosperity. That is, anyone who’s worked for a large corporation knows “human resources” is a pure euphemism for “our biggest expenditure, which we drop at every opportunity.”

    If limited liability corporations aren’t legal, and all ownership is personal, then there’s a possible answer to your question: an individual person attempting to run a child-labor factory is individually, criminally, liable.

    As for courts/laws/etc., libertarians aren’t anarchists. Their view on government is: where individuals cannot efficiently or effectively provide something for themselves, government is good and necessary. Where they can, it isn’t. For the rest, the spread on libertarian viewpoints is very wide, from tree-dwelling hippies to distant-right warmongers… their only pure point of agreement is that marajuana shouldn’t be illegal, and you’ll even find some libertarians who dispute that, though it’s not clear to me why you’d want to call yourself libertarian then.

    I’m rambling without a real answer, which is probably what you expected for this question…

  10. As a kid I was in favor of libertarianism too, but I too grew out of it. It’s just too inequitable for the liberty values to be worthwhile.

    I too am at a loss to suggest a good system. It’s clear to me that radical libertarianism is a very bad idea; and that communism assumes virtues which the human race does not yet possess — hence the frequent corruption of communist systems into mere tyrannies. But the middle-of-the-road systems like those of the US and Europe are clearly inadequate, and unsatisfactory, so what the hell….

    The only plausible solution to human economic and political problems that I have seen is that of Iain Banks’ Culture, where the combination of near-infinite wealth and compassionate machine administration of society allows extreme liberty at the same time as negating problems with wealth inequities. But by “plausible” I mean “plausible with those technological assumptions”, which is to say, not going to happen in the forseeable future.

  11. The FAQ at has page on the subject. That site is related to Capitalism magazine, which [according to Wikipedia] is pretty friendly with the Ayn Rand Institute. I’d expect that page to present a fairly representative view.

  12. Phillip Brewer @ 9: “I think the history of efforts to stop child labor show that they’re only partially motivated by concern over the plight of child laborers. They’re at least as much an effort to reduce the supply of labor in order to raise wages.”


  13. The canonical answer depends on which group you’re asking. You identified at least four different groups or subgroups and asked for a single canonical answer on a topic like this? Either the question is malicious or you’re being intellectually lazy.

    “Tell me what the canonical Socialist, or Marxist, or lazy union member answer is to…”
    Any question that began this way would be obviously poor, too, and for the same reasons.

  14. Miramon @ 11: the enemy of all socio-economic theories is scarcity. If you theorize an economy with near-zero scarcity (a.k.a. near-infinite wealth) then nearly any reasonable society/economy will thrive. Including hyper-corporate capitalism, pure socialism… heck, a feudal monarchy would do fine, if wanting=having.

    It certainly requires technology we don’t (quite) have yet, and the ever-so-minor problem of 2/3 of the world’s population being both grossly undereducated and unready, and most of the other 1/3 being at least one or the other.

    The challenge of all socio-economic systems that aren’t maliciously evil (and capitalism isn’t, whatever its sypmtoms; it is inherently indifferent) is to reach that state of near-infinite wealth, not to thrive once it’s there. Capitalism proposes to compete its way there, through the innovation inherent in market drive, hoping not to step on too many people on the way. Socialism proposes to cooperate its way there, on whatever remains after mankind’s needs are met, hoping that rational people can stop behaving like animal tribes.

    Part of my problem with socialism (at least in the form I keep reading about, through Steve’s links) is that I think capitalism’s method has a much better chance than socialism’s method–I’m much more ready to believe in nanotech/biomed reducing scarcity to near nothing (which would essentially eliminate class distinction–what is left to separate them?), than in human society becoming rational and abolishing class distinction before we eliminate the personal benefits inherent in wealth and power.

  15. I’m a registered Libertarian, but I can’t stand Ayn Rand (or, at least, her fans), I’m not an anarchist of any stripe (rational or otherwise), and I fully approve of community-owned streets and other public properties and joint efforts by the citizenry. Jim H. is quite right that the groups are not synonymous, and I don’t much care to be equated with them.
    I’m also with Chris B on LLCs — they are totally inimical to a Libertarian society.
    My personal answer to the question is a) preventing harm to citizens (meaning: people who live here and take part in this society) is one of the things which I approve of government doing; and b) an underaged child is not able to enter into a contract (which one does when one works for pay), and neither the child nor hir labor is the property of the parents, so the parents cannot legally bind a child into a work contract, as that would be a form of slavery, again one of the things I support having something resembling a government to prevent.

    I should also note that while I’m a registered Lib, I consider Libertarianism to be a kind of Utopianism. In the real world, barring a Charles Stross-esque Singularity which nearly eliminates scarcity (nod to Chris B. again) and probably some major changes to human psychology, Libertarianism is not practicable; instead, it is what I would personally choose as my ideal society to live in in a perfect world. As such, I will vote in such a way as to support my philosophies, and attempt to bring my government closer to my ideal, knowing that it will never actually become that ideal. I’m a registered Libertarian not because I necessarily agree with most Libs I’ve met, or because I always support the candidates, but because the Republicans and Democrats have both so far offended me that I cannot in good conscience support them with my membership.

  16. Chris B @ 16: Good, thoughtful remarks, deserving of some attention. My trouble is with your method. To wit, you are discussing “capitalism” and “socialism” as abstract forms, divorced from the historical conditions that gave them rise.

    More specifically, you bring up the idea of a post-scarcity society, which is, in my view, exactly the right thing to discuss. You say, “Capitalism proposes to compete its way there…Socialism proposes to cooperate its way there…” This formulation gives one the image of these two personified systems, operating in a vacum, going, “Okay, which one of us works better?”

    But capitalism arose at exactly the point that technology had outstripped feudal monarchy. By the early 17th century, the political system of the kingship, and the economic structure of peasants tied to land (which they were, economically, even after serfdom was abolished) that determined it, was holding back and strangling the emerging capitalist class.

    They didn’t compete independent of technology–the more advanced form overthrew the earlier form (which, in its day, had been an advance over previous forms). Capitalism was absolutely necessary in order for technology and the productive forces to develop. It is now strangling the development of those forces.

    Technology drives economy; economy drives politics. It is in this context that we understand todays wars over oil resources, the massive collapse of finance capital, &c.

    Secondarily, and here is where I have a real problem with your method, you quite artificially set up the problem as if it is: A) either we achieve post-scarcity, then make a good society, or B) we make a good society, then achieve post-scarcity. This is a sort formal, drawing room analysis that has nothing to do with living reality.

    Remember Orwell’s *1984*? There is a point where he uses the same method. “Until the proles become conscious, they cannot revolt. Until the proles revolt, they cannot becomes conscious.” The trouble is, every revolution in history has refuted that, because in a revolution(1), the “proles” have become conscious as part of the process of making the revolution.

    In the same way, it is exactly in the fight to create a post-scarcity society–and to do so before the economic forms so strangle technology that we fall backward into barbarism–that a new, saner society can (I hope) come into existence. And it will do so according to its own laws, not according to anyone’s prearranged schema of how a society “ought” to be.

    — –
    (1) I’m taking as a given here that what distinguishes a revolution from a coup d’etat or a palace revolution is the conscious role of the masses. I think I’m right to do so, but it is certainly debatable.

  17. Those….those…*bastards!*

    Steve, remember that when those guys are reducing labor and raising wages, they’re (a) taking money away from the children’s families directly, and (2) necessarily increasing the prices of the goods those families are buying. So the net effect is to transfer wealth from the families whose children might be working to the people who are working.

    Maybe it’s worthwhile. It’s very much like the argument against free trade agreements, that we shouldn’t allow lower-cost foreign manufactured good to come in and thereby put pressure on US wages. What people seem to never carry on with this is that if you’re doing something coercive to keep wages — and therefore costs — high, what you’re doing is taking money away from everyone who buys those goods in order to give it to the people you’re protecting.

    Since the “rich” can’t actually use all that much more of many of these things than poor people can — even Imelda Marcos only had a few thousand times more shoes than the average woman, even though the Marcoses had thousands or millions more in assets than the usual Filipino — this ends up necessarily being, in effect, a regressive tax that transfers wealth from the less well off to the more well off.

    This isn’t “Libertarian” or not, it’s arithmetic.

    So, before you worry about the Libertarian explanation, why don’t you tell us how much more a welfare mom ought to pay for shoes for her kids to ensure jobs are saved in the US?

  18. Charlie @ 19: Tell me you still don’t believe in the “wage-price spiral.” Even the bourgeois economists have abandoned that. Adam Smith answered that one in the 18th Century, and no one has yet shown him to be wrong. In brief, as Mr. Smith pointed out, commodities sell at their value, as determined by the amount of labor necessary to produce them. Raising wages transfers surplus value from the owner to the wage-laborer, and has no effect on prices; this is insured by competition.

    And as for “a” you appear to be saying that children ought to be permitted to be brutally exploited because otherwise their families will starve. I’ve said some nasty things about capitalism in my time, but you have me beat.

  19. Steve:

    “Raising wages transfers surplus value from the owner to the wage-laborer, and has no effect on prices; this is insured by competition.”

    That’s not always true in all industries. This might be the case in Perfect Competition (ie, farm laborers) or Monopolistic Competition (eg restaurant staff). But in where there is a Monopoly or colluding Oligopolies I would argue that yes indeed the owner has the power to maintain his/her surplus value but upping the price of their goods and services.

    I guess it all comes down to what you define as “competition”.

    Now to look up this Adam Smith and see what he says.

  20. Ok I just found out who Adam Smith was and I feel like a twit.

    My POV still stands.

  21. Steve@20:

    I don’t think Charlie@19 is talking about the “wage-price-spiral” at all.
    From what I gather he simply says that goods that are produced in companies that use child labour are cheaper than ones that are produced in companies that don’t.
    I don’t agree with his conclusions, but I don’t think his math is wrong here.

  22. Anybody who believes that if the Libertarian party gained power, it wouldn’t be corrupted by that power is fooling himself.

    That doesn’t mean that people with libertarian principles shouldn’t support those politicians that support their values. Sometimes the realistic goal should be a direction – more freedom as opposed to full anarchy.

    Few True Believers like this idea. Politics can be a religion instead of a tool, with Righteous people willing to do what it takes to show that they are right.

  23. Charley @ 19:

    The consequences of a fairly subtle regressive tax can be readily countered so long as income and other taxes are more significant.

    You may say that wages are the principal cost component for many businesses, but minimum wage floors don’t affect most businesses anyway, so their effect is relatively minor.

    Acording to wikipedia around 1.7 million US workers make the minimum wage or below, $5.85 / hour. Say they work 40 hours a week. So that’s $20.6 billion a year total minimum wage income. Even if you consider 100% of that to be “regressive taxes”, spread out over the total US economy that sum is quite negligible compared to a GDP of $13.8 trillion.

    In the case of the US at present, I don’t think the negative effects of the regressive tax you describe have any impact at all on prices or on inflation — I’m guessing minimum wages would have to be much higher for this effect to be noticeable at all.

    A much more significant impact of raising minimum wages is on marginally profitable businesses that can’t afford to pay higher salaries. It’s tempting to say “screw ’em” to those small business owners on behalf of the workers, but if they cease operations, the jobs may not be replaced by more successful businesses if the entire sector is marginally profitable.

  24. In brief, as Mr. Smith pointed out, commodities sell at their value, as determined by the amount of labor necessary to produce them.

    The labor theory of value? In the early 21st century? No serious economist has subscribed to that in generations; the marginal utility theory has long since replaced it. Citing Adam Smith on that point is about like citing Laplace in an argument about determinism, without paying attention to the rise of statistical mechanics in the 19th century and quantum mechanics in the 20th. Really, marginalist economics is not some eccentric libertarian speculation; it’s the mainstream theory.

    Out of historical curiosity, I took a look at David Ricardo’s book on “Political Economy” a while ago. That’s the classic rigorous exposition of the labor theory of value, worked out in much more detail than Smith’s exposition. And Ricardo said, in one of the early chapters, that the labor theory worked for many commodities, but did not work at all for commodities such as gold and silver, whose value was governed by other factors. (The marginalists explicitly identified those factors as scarcity, and showed a theoretical path to generalizing the “scarcity” explanation to all prices.) In other words, Ricardo was not putting forth the labor theory as a comprehensive theory, but as a workable approximation—which, speaking as a roleplaying game master, I find it to be, for producing a plausible looking imaginary world.

    In terms of intellectual history, you could look at the labor theory as an analog of the energy-focused science of the 19th century: It says that price depends on the energy that goes into a commodity, in the form of human labor. Whereas the marginalist theory is an analog of information-focused science: price is based on scarcity, scarcity is effectively low probability of finding a commodity, and information is the inverse of probability, so price reflects information content.

  25. “The labor theory of value? In the early 21st century? No serious economist has subscribed to that in generations; the marginal utility theory has long since replaced it”

    I cannot take seriously any economist who will pretend the marginal utility theory actually explains anything significant.

    Yes, it is, indeed, the mainstream theory. Shall we discuss other mainstream theories? It goes along with many other mainstream theories that find a question uncomfortable, and so decide they want to answer a different question instead and call their work finished. Sociologists are famous for this. Mainstream economists today set out to explain how capitalism is inherently stable, with a few minor bumps here and there, that tend to correct themselves. So–how’s that working out for them these days?

    Like Ricardo, Smith’s work was unfinished and incomplete, mostly because the data weren’t available at the time. But they both get credit for framing the question in the right terms.

    Ricardo’s work was brilliant for its time. His failure to understand the relationship between scarcity and labor intensity (taken statistically over the long run) is perfectly forgivable given when he was writing.

  26. Steve (#20): I haven’t noticed the amount of labor required to grow corn or pump oil to have increased in the past couple of years.

    Prices being held down by competition is a capitalist idea. (Socialist societies that try to hold down prices by fiat often end up lacking supply.)

  27. Seth @ 28: “Prices being held down by competition is a capitalist idea.” Um, I’d have called it a capitalist reality, not a capitalist idea, but okay.

  28. To get back to the original question, I suspect that a libertarian would reply that it is better that a child work than starve. To which skzb would doubtless reply something like, “Surely there is a better way to assure that the child not starve.” Of course there is but not in the flagrant free-market economy that the US taxpayer seems to prefer! Not with a president who will casually veto a proposal that some states wanted to provide medical insurance to children than said president wanted them to provide. Not in a country that seems poised to elect as president someone who intends to prosecute a trillion dollar war indefinitely. But I’d better stop before I get apoplectic.

  29. I find interesting the common presumption of perfect information that runs throughout this thread. People may well decide not to buy from Nike if Nike uses children whose life expectancy is under 15, but only if they know about it. There is a lot of stuff we don’t know. Same problem regardless of economic system. And I’m beginning with a presumption that people would prefer perfect knowledge — which I think is almost demonstrably false.

    One classical economist who hasn’t come up yet is our friend Mr. Malthus. While his scope was overly narrow even for the time in which he was writing, his ideas have reemerged in the notion of earth’s carrying capacity. Presuming an American notion of post-scarcity, we’re quite far from even being able to seriously imagine that — a matter of resources and technology.

    Scarcity and imperfect information (in both lack and precision) are here to stay for a loooong time. In such a context, there will ever be tendency to do what is most efficient by the standards of a society — and if that includes child labor, it’ gonna happen. More intrusive government gives a better chance of stopping it, while the inefficiencies that government’s structure generate pressure to use child labor anyway.

    I’m an anarchist, not libertarian or Libertarian (it’s that military thing). In this context, the answer to the question in ANY society cannot be given absent knowledge of that society’s moral values and its strength of belief in them. Even in times of tremedous food scarcity, we see most folks dying of starvation rather resorting to cannibalism.

    Food for though (pun intended).


  30. Child labor laws actually followed, rather than preceded, a general reduction in child labor and a change in attitudes about it. This came about due to a general rise in standard of living facilitated by free markets. The most child labor laws accomplished was some clean up duty.

    And harsh as it may sound, I don’t concede that child labor is an absolute evil. It beats starving to death, which has been a very real and present danger for families on the edge of subsistence until very recently in western nations and through the present in third world nations. And charity, welfare or outright socialism do not become realistic alternatives to starving to death until you can tap the wealth provided by free markets.

    I don’t think that if child labor laws were repealed in the US that parents or companies would be rushing to employ 9 year olds in factory work. You might get some more kids helping their parents, some more berry-picking during the summer, and generally more flexibility than regulation allows.

    So yes, the answer really is that ‘the market will solve it,’ just as the market solved it to begin with.

  31. I am not a libertarian of any stripe, nor do I play one on the Internet — I *may* be as much of a socialist as our host. However, I find it … baffling … that no-one has mentioned an outstanding correlate of child labor.

    Children who work — *really* work — do not go to school. In most cases, this lack is never made up. This is especially the case for girls, and there is *no* factor that can improve a society’s health and wealth like education for women.

    Eliminating restrictions on child labor would result in some families temporarily having more money, while tieing them more tightly into a cycle of poverty, ignorance, early childbearing, poverty, ignorance …

    But then, I have never known a libertarian who really *minded* poverty for other people.

  32. @skzb: “So–how’s that working out for them these days?”

    Actually, it’s working pretty well, when it’s allowed to work. But the US is not a pure capitalist society. Between government regulation, fiat currency, and government bailouts when things look like they might be going horribly wrong, it’s pretty darned far from pure capitalism.

    That’s not to say that all regulation should be repealed: pure capitalism provides a very strong incentive to engage in deceptive and exploitative practices. Society is supposed to provide the moral foundation to prevent that and government is generally accepted as a necessary evil to curb those abuses that occur despite the twin pressures of society and the market. Doesn’t always work in practice, for the same reason that communism doesn’t work: it is based on false assumptions about human nature and human behavior.

    My personal view is that the worst abuses are carried out by corporations. Corporations serve a very important role: they spread risk and allow the pooling of resources; that way people who might not be willing to risk their life savings on opening a family business might still be encouraged to assist in building wealth. The flaw in the system is that corporations are treated as legal persons; modifying the legal system to codify that the rights of corporations are always secondary to the rights of individuals would go a long way toward preventing the most egregious abuses of capitalism.

    In answer to the original question, one factor that I don’t think has been mentioned yet is the influence of non-governmental organizations, such as charities. In a libertarian society, individuals who oppose child labor would be welcome to form charities that work to abolish the practice, ideally through informing consumers and persuading employers. Only if those efforts fail should government even be considered as a potential solution.

  33. Doctor Science @34

    Well put, particularly with regard to gender. In the development field, it’s become common knowledge (backed by numerous multi-variate regression analyses). Another corollary of (women’s) education is reduction in family size — a very important thing for any nation, as population growth rates compound more quickly than do economic growth rates.

    This is so well documented, in fact, that in the Islamic Republic of Iran, women’s literacy rates are nearly on par with those of men, and approaching four times greater than the rate of women’s literacy under the Shah’s regime. (Can’t make a good example of a revolution to emulate with a population growth rate at 3.6% per year.)

    Reaching possible post-scarcity levels is easier in a stable population (by size); and the better-educated the population, the more able it will be for all sorts of endeavors. (Not to mention the million monkeys at a million keyboards effect.)

  34. Seriously, could someone please explain to me how the any aspect of the market had to do with stopping the immoral acts being committed by Enron? In whose economic interest was it to do so? Did any of those who were damaged by Enron and would want to stop it have the power to do so?

    While it’s true that economic and political systems are not in and of themselves moral agents, the people who work within them surely are. And the damage (to society as well as individual people) was done by such as Enron, immoral people, and by amoral people who simply decided to profit off the immoral acts, because there was so much opportunity to profit.

    The Enron executives were motivated at least as much by a desire to cause pain to their victims (listen to the tapes of them bragging about the small investors and employees whose financial security they’d destroyed) as to gain economic advantage themselves. How does a completely free capitalist economy deal with such people? How can pure capitalist theory explain why they were so successful even though their motives weren’t for pure profit?

    The question I always ask is this: is morality and some notion of equity important to the workings of a society, or is all that’s important in the long run that the economy run as efficiently as possible, because that will result in minimum inequity? My answer is that morality and equity are vital, they stem in large part from what humans and are how they evolved, and that there isn’t much evidence that the very highest economic efficiency is best for society in general, let alone the general run of individuals. There are a lot of claims that it’s true, but not much proof.

    If technology enables economics, why should we assume that we’ve discovered the perfect economic system already, when we know very well that technology has a long way to go in terms of developing new techiques to create, distribute, and use, the things we trade?

  35. Dr. Science, well put. We should all take a cue from your point, and talk more about what has happened and what effects we can discern from which causes in the real world (a hard thing to do, I know), and talk less about what some authoritative economist or political theorist has said.

    I think the key to this whole discussion is what Chris B. said above: “the enemy of all socio-economic theories is scarcity”. But scarcity is what we have, and will have for some time to come (2 generations minimum, probably more. even assuming we ever do achieve a post-scarcity economy). What we do in the meantime is important.

  36. If you’ll forgive my saying so, I think you’ve made a conceptual mis-step, one that’s not uncommon in people on the left dealing with libertarian ideas—though it took me a day or so of reflecting to pin down what I think it is.

    I imagine that you recognize, in the abstract, that libertarian is a radical point of view, one that calls for drastic social, economic, legal, and political changes in American institutions, to say nothing of those in the rest of the world. But when I point to marginalist economic theory as a foundation for libertarian ideas, you say, in effect, “Marginalist economic theory is an ideological justification for capitalism, capitalism is what we have now, and what we have now isn’t working, so both mainstream economics and libertarianism are wrong.” That is, you jump to interpreting libertarianism as a fundamentally conservative belief system, assuming that the changes that libertarians advocate would not make more than a trivial difference to the workings of American society, or perhaps even of Japanese or European society.

    Well, let’s turn that around. Assume that I am talking with a socialist—not wanting to assign political labels to you, I will not assume that this is you, but rather some hypothetical socialist fictional character, since I’m telling a story.

    Now, I might say to him, “Socialism is founded on the labor theory of value, which was the basis of Marxism, and Marxism was tried in the Soviet Union and elsewhere and led to mass murders and brutal repression.” He might protest, “The Soviet Union wasn’t a true socialist regime; it was a totalitarian regime justifying itself by a bastardized misrepresentation of socialist beliefs. Judge my by what I advocate, which is real socialism, not a flawed imitation of it.”

    Or, more subtly, suppose I said to him, as many libertarians would, “You advocate socialism. But we have socialism here in the United States, and it’s working really badly [insert examples of harmful effects of government programs or economic regulatory policies].” Undoubtedly he would protest that the American system is hardly socialism, but rather a mixed system with some elements of socialism interspersed with elements of capitalism. He would not be likely to accept a libertarian argument that socialists are defenders of the status quo (welfare, public education, progressive income tax, Social Security, government regulation of industry) and libertarians are radicals who want to change all that; he would want to claim that socialists are in favor of radical change based on consistent application of theoretical principles.

    But that’s exactly parallel to what any serious libertarian would say. Your approach fails to come to terms with libertarian thought in exactly the way that many libertarians fail to come to terms with socialist thought: it equates it to a defense of the status quo, and thus to mainstream ideas.

    My own view is that libertarianism and socialism are sibling movements; both reflect the same drive to apply a broad conceptual model to society and to change all institutions in accord with its principles—in other words, both are radicalisms. In fact, both grow out of the same original Enlightenment values, whereas fascism, for example, rejected them, and the American religious right seems increasingly bent on overturning them and undoing the Enlightenment (which is why I very often vote for Democrats as the “lesser evil”).

  37. The answer is… why is it a problem? If children choose to engage in labor in the coal mines, it’s not our place to restrict their freedom to do so. They’re getting fair value for their labor, or they wouldn’t engage in that work. And if you don’t like it, don’t buy the company’s products and that will instantly be communicated to company management who will instantly change their ways.

  38. William @ 39: Good, thoughtful post, for which I thank you.

    Disclaimer: Caleb @ 3 answered the question I’d asked. Of course, I knew an argument would start; a Red can’t mention the “L” word without an argument starting. But the point of the post was settled way back.

    Now, William, here is my disagreement with you: You say, in summary of my position, “Marginalist economic theory is an ideological justification for capitalism, capitalism is what we have now, and what we have now isn’t working, so both mainstream economics and libertarianism are wrong.”

    Not quite. That is a fair summary of my response to a specific point, to wit, Chris @ 16 (and props to both you and Chris, by the way, for the generally high level of discussion).

    In fact, insofar as I consider Libertarianism worth answering, my position is the same as my position toward liberal reformism: it fails to address the fundamental contradictions of capitalsim, which involves the tendency of the rate of profit to fall, the need to constantly expand in a world of limited resources and markets, and the domination of finance capital over production capital which brings with it artificially inflated profits, the fact that goods are produced socially but owned (before the market) individually, and that it is based on the nation-state yet depends on a global economy. Indeed, for the most part, Libertarian politices exacerbate these problems. While liberal reformers are busy (to use the hackneyed cliche) rearranging the deck chairs on the Titantic, Libertarian theorists favor knocking more holes in the bottom.

    Secondarily, where traditional anarchists favor destroying the State so that private property will whither away, a dubious strategy at best; Libertarian theorists imagine private property without a State to protect it–yet the State arose with private property, exists to defend private property, and will continue to exist as long as there is private property.

    Anon @ 40: Nice! But pull carefully; some of the wooden ones are only held on by straps.

  39. Charlie @ 19: Tell me you still don’t believe in the “wage-price spiral.” Even the bourgeois economists have abandoned that. Adam Smith answered that one in the 18th Century, and no one has yet shown him to be wrong. In brief, as Mr. Smith pointed out, commodities sell at their value, as determined by the amount of labor necessary to produce them. Raising wages transfers surplus value from the owner to the wage-laborer, and has no effect on prices; this is insured by competition.

    Nice dance, wrong song, Steve. Look, you claimed you wanted an explanation: I didn’t offer any political comment at all, just pointed out that kids who don’t work don’t bring in money. Thus the families that might have gotten that money, don’t. This is not deep. If there is a reason to not do “child labor”, it has to have some value that overwhelms this, or some side effect that counteracts it. I didn’t say there might not be good just reasons, just that, yes, if you don’t get money, you don’t have it.

    The notion, though, that raising wages has no effect on prices is so silly as to make me think you must have made a typo there. Raising wages (and other costs) drive prices upward; competition drives prices downward. Like pretty much everything else in the universe, the counteracting forces find an equilibrium. In “free trade” issues, the availability of goods from Somewhere Else that can have lower prices for whatever reason drive prices down; there’s your competition. If the costs can’t be driven down Over Here to match, people just stop making the goods over here. Ask around Detroit; this has happened before.

    If you, by some sort of compulsion, prevent the cheap stuff from Somewhere Else from getting here, then prices don’t drop as much because there is no competition from the cheap SomewhereElseican goods. If the prices don’t drop as much, they’re higher.

    Work it out, it doesn’t take higher math: if prices don’t go down, they stay high.

    People who would have bought the SomewhereElseican goods otherwise, can’t, and so they spend more for their mathoms than they would have. The extra money they spent goes to the sellers. The sellers give it to the employees getting the higher wages. Ergo, wealth is being transferred to the workers whose jobs would have been threatened from the people who would otherwise have not spent as much.

    This is not political. It’s basically thermodynamics: if you can’t get the prices and costs in equilibrium, there’s one other equilibration possible: you don’t make them at all. It’s not libertarian, it’s not socialist, it’s not Democrat, it’s not Republican. It’s just arithmetic.

    And as for “a” you appear to be saying that children ought to be permitted to be brutally exploited because otherwise their families will starve. I’ve said some nasty things about capitalism in my time, but you have me beat.

    Oh nagashegn, Steve. My Hungarian spelling is atrocious, but I’m sure you’ll get the drift. You’re making an unbelievable straw man here. Again, all I said was “if you don’t get the money you don’t have it.” The solution set isn’t “brutal exploitation of children or families starve” or thinking magically that somehow you can make addition and subtraction work differently because you want it to.

    And by the way, next time you want to start an argument, just say “I want to start an argument.” Truth is good for the soul.

  40. Anon @ 40 – This kind of argument seems to come from someone who lives on a totally different planet than I do. Or, at least, another country. The whole Libertarian movement always seems a uniquely American phenomenon to me.
    I’m not an economist, but from personal observation over a lot of years it seems to me that people generally don’t ‘choose’ to work in crappy jobs. They do it out of economic necessity. The same economic necessity that prevents the exploited from quitting their place of employment for something better. Where do they go when there is nothing better available? And as for the public putting pressure on companies to change their practices, how often has that actually happened. Most people simply don’t care enough to take action, unless it impacts them personally.
    I’d love to live in a world where all people cared about the welfare of their fellow human beings to be willing sacrifice their comforts for the oppressed and downtrodden, even in the short term, but I don’t.
    I think their needs to be strong incentives for wealth creation, while maintaining a safety net for those unable to support themselves. Too far in the direction of either pure laissez-faire capitalism or socialism seems to point to an inevitable slide into a third world standard of living for the majority of the population. YMMV.

  41. You’ve taken my post for a joke, and I admit that to many people it will seem that way.

    I swear to you however that I am accurately attempting to convey the Libertarian mindset and thought process. I have spoken extensively with many Libertarians and libertarians, and they have all given variations of that exact argument that I listed above. Libertarians fundamentally disagree with your premise that there are “child labor, and similar abuses”. If you don’t want your 8-year-old working in coal mines, don’t let him. If an 8-year-old is working in the coal mines, obviously he and his parents find it a good trade economically, labor for money, and the State should never interfere in free exchange of labor for money. Why should the State get involved?

    Child labor is simply not a problem that Libertarians agree exists. That IS the canonical answer.

    There are plenty of other problems that people disagree about the fundamental existence of. Some people think that other humans reading fantasy novels is a problem that needs to be dealt with by government action, and other people do not think any problem whatsoever exists. This is one of those cases. Libertarians do not see any problem whatsoever with people selling their labor for money, period, end of sentence.

  42. Anon, 8-year-olds are not people. They’re a special case. (For instance, they shouldn’t be able to sign long-term binding contracts.)

  43. Anon @ 44: My bad. I didn’t take your post as summarizing their position, but as stating your own–hence I assumed you were kidding. I’m following you now.

  44. “We support repeal of laws that impede the ability of any person to find employment, such as minimum wage laws, so-called “protective” labor legislation for women and children, & governmental restrictions on the establishment of private day-care centers. We deplore government-fostered forced retirement, which robs the elderly of the right to work. We oppose all government welfare, relief projects, and “aid to the poor” programs.”

    Source: National Platform of the Libertarian Party Jul 2, 2000

    Interestingly, this plank doesn’t appear in the 2006 platform. Will it appear in the 2008 platform? Their convention is in a couple of weeks so we’ll find out then.

  45. Hi Steve,

    Long time fan. Just wanted to chime in on the comment you made about capitalism being what we have now a few posts ago. In the U.S. at least we have a mixed economy, that is, part capitalism, part socialism. Government control and intervention in the econmoy is rife. Whether you think that’s good or bad, it’s not capitalism. It’s liek the myth of free-trade agreements, if you read one you’d realize they are anything but.

    PS I wish I were in Vegas to help you move!

    Best wishes,


  46. Hey, Ethan. Welcome aboard.

    Socialism isn’t measured by the amount of “government control and intervention” (which is also rather tricky to measure). The significant points are: Are individuals permitted to exploit (in the scientific, not the moral sense of the term) others for profit, and the degree of public ownership of production. In the US, in general, publicly owned production is confined to your local water works, and in some communities the power companies).

  47. Hi Steve,

    Sure! I’ll bow to your better understanding of exatly what socialism entails. For one thing, I think it’s very important to define terms before debating them, so that was my bad. So let me correct my statement to say what we have isn’t capitalism in that we have government controls on the economy through various means.

    I define capitalism in the laissez-faire sense. I do so because anything else to my mind isn’t capitalism and to brand it such let’s it be judged as capitaism when in it fact isn’t. Governemnt controls go far beyond public institutions such as water works. The governments policy of allowing certain monopolies and also of messing around in with the market by creating artificially high or low proces is another. I don’t think the current U.S. “capitalism” is sustainable.

    None of this answers your question on child labor. You asked libertarians what they think, and I wouldn’t quite fit that bill. I generally call myself an Objectivist, however I find most of the public stances taken by prominent Objectivists to be rather idiotic and not in line with the basics of the philosophy, no matter how well they should know it or claim to know it. Besides, most self-identified Objectivists are assholes, and I’m not. Alas!

    So, let me give you my opinion (TM) on child labor :-) Governemtn exiss to protect the right of the citizens. Chidren are citizens and for them to be employed in dangerous conditions would be illegal. Could they work “volutarily” in certain “safe” jobs? Sure, at some point. There is a slippery slope under there, but that discussion is a long and deep one. Bottom line: forced child labor and sweat shops are rotten and there are ways of preventing them and punishing them without violating free market and limited government principles.

    Blagh politics! I think we’ve all had enough of it after the last few years. :-)

  48. I don’t understand what “public ownership” means, Steve. When I own a filthy capitalist product (my car, for instance), I seem to get to direct its operation; I get dinged if that direction leads to problems. Simple. Incomplete, perhaps, but simple.

    [Hi, by the way; how are things?]

    This “public” label is hard for me to grasp, and always has been. When I do the visualize-word-by-word exercise from Chip Delaney’s Jewel-Hinged Jaw, it stays a big fuzzy orange-red blob, with an occasional superimposed flicker flash of stock footage of midday crowds traversing a New York City crosswalk.

    I have lived long enough that I can nod my head and pretend to understand, and I use the expression sometimes, but it’s nowhere near as clear cut as the labels “me”or “you” or “him” are, to me.

    It seems to me that if the “public” owns a thing, nobody does (tending toward tragedy-of-the-commons), or some clique owns it but pretends not to. That’s not necessarily an exclusive-or. Vide the rotten mess of Yellowstone Park, where both effects seem to be present simultaneously.

    Nossir, I don’t get it. Not at all sure the nominalization matches a referent. Seems kind of hallucinatory. But maybe most nouns are.

  49. You don’t get it because you don’t see a distinction between “property” and “possession.” Don’t worry about it; you aren’t alone. My next project is going to examine that very question, and if it were easy I’d have written it already.

  50. I’m not sure that’s all I don’t see. Independent of the distinction you hope to make clear, there’s still that word “public” giving me eyestrain in my imagination.

  51. Notwithstanding Ethan’s remarks above, in which he begins by defining an ideal system which can exist only in the mind, and then saying “this ain’t that” because reality doesn’t line with his abstractions, the question of “public” isn’t that difficult. We live in a capitalist society, which means commodities are produced socially and the profit is privately appropriated. Produced socially isn’t that tricky–can you point to an individual who made your last motorcycle? Profits privately appropriated is also straightforward: a corporation, by laws enforced by people with guns, is legally a person, and functions as one under capitalism.

    Public ownership simply means resolving that contradiction between tools that are worked socially and owned privately. Just as the waterworks are owned by a given society as a whole, for its mutual and joint benefit (it is in everyone’s interest that we not get plague from our drinking water), so, at a certain point in society’s development, will all goods be produced for common benefit.

  52. Essentially, when it (ownership) ceases to matter…? Due to abundance? Do I get your meaning? Is this a post-scarcity kind of deal here?

    Sorry, I just transferred here from a two-year college…

  53. Yes. Socialism requires sufficient technology for a post-scarcity society; communism assumes such a society.

  54. There will always be stuff that is scarce.

    By the standards of the 11th Century, we’re well past “post-scarcity”. By our own standards, we aren’t close.

    In 200 years, the world may well be what we would now consider post-scarcity. But they won’t.

    There will always be something that’s scarce. For instance, “Sitting in a comfy chair within 15′ of Steve while he plays music” is not something that can be widely available.

  55. Post scarcity does not refer to a state where nothing is scarce; it refers to a state where the necessities of life (you know, the things that society was invented to provide) are no longer scarce. We are not there yet. We have the technology to be.

  56. The necessities aren’t scarce. They aren’t distributed evenly.

    More than enough food is produced each year for everybody in the world.

    What people consider “necessities” grows with increasing wealth (of the individual, and of the society).

  57. Seth @ 59:
    “The necessities aren’t scarce. They aren’t distributed evenly.”

    Exactly my point.

    “More than enough food is produced each year for everybody in the world.”

    Exactly my other point.

    ‘What people consider “necessities” grows with increasing wealth (of the individual, and of the society).’

    Uh, so what is YOUR point?

  58. Let me make sure that I’m understanding where you’re coming from. Please learn me something if I’m wroing (sorry, I worked as a child so my education is lacking… ;) ).

    One definition of possession: exercising dominion over propery; having custody and control of property.

    Typically a public owned facility (waterworks to continue your example) while owned by the public, are not possessed by the public (unless you define the public to be the government which I don’t think you do – at the least this is not true in the U.S. currently).

    Do I get a cookie?

  59. If “post-scarcity” refers to sufficiency of necessities, and the list of necessities grows, then society doesn’t reach post-scarcity.

    Is the US a post-scarcity society? You would say that it isn’t. What would an 11th-century peasant say?

  60. Seth, if everyone has enough healthful food to eat, a clean, safe, and comfortable place to live, health care, and safety, then it qualifies. While the definition of “necessary” in the mind of the petty bourgeois may change with the times, society has never, actually, given two pins for the thinking of the petty bourgeois.

  61. >society has never, actually, given two pins
    >for the thinking of the petty bourgeois.

    I suppose it depends what you mean by the term. I’m not sure the 19th century definition has any relevance today. I don’t know if I can define the class, myself, but let’s find instances.

    Consider scientists and engineers, doctors, and other elite professionals. Highly productive members of society, but I think not proletarians. They are too rich. It’s true they are mostly employees, but I just don’t see how you can really be a proletarian if you have $500K in your retirement account…. But they’re not haute bourgeois, they don’t control companies themselves, and don’t live off of interest on inheritance. What’s left but petit?

    Same goes for many artists, writers, and musicians — at least the successful ones. And it’s the successful ones who are the famous ones, too, so they are hardly ignored by society.

    What class is most advertising directed at? What class causes the vast retail industry to shudder in fear each holiday season?

    Perhaps you want to expand the notion of the proletariat to include all productive employees and self-employed creative people, no matter how wealthy, so long as they don’t manipulate money or capital themselves as their primary means of support — those would be haute bourgeois.

    But then, who are the petit bourgeois who are left over?

    I certainly have no formal basis in Marxism to go on, so perhaps I am just missing a “rich proletarian” class or something in my conception of the system. But still, it seems to me that in the US, the intellectual and culture-producing class is in fact the petit bourgeois, and is also the primary “consuming” class from the point of view of retail, and so really they are paid more attention than any other class — and deservedly so.

  62. In traditional political economy, class is determined by relationship to production. The petty bourgeoisie consists, primarily, of small shopkeepers (insofar as they still exist) and so on. Those you call “professionals” are members of a privileged layer of the working class, which includes many people who do not directly contribute to production, but without whom production is impossible, or at least severely handicapped.

    Now, the strange thing is, writers and artists (free-lance, at any rate) really are petit bourgeois, but often do not reflect the thinking of the class; whereas those professionals you mention very often do.

  63. Steve, compare your characterization in #63 with what the 11th century peasant would have said.

    “enough healthful food” == “not starving, not even hungry very often”

    “clean, safe, and comfortable place to live” == “very little risk of frostbite”

    What kind of “health care” was available then? How much “safety”?

    My point is that even your definition is way more than anybody’s would have been a long time ago.

  64. skzb@65:

    Well, that explains that. Small shopkeepers. Fair enough. Of course contemning or even merely ascribing a common mentality to this particular group of highly disparate individuals is absurd in reality, but is understandable as a sort of metaphor, based on traditional notions about their mentality, which were of course somewhat mythical even when they originated.

    And after all, some shopkeepers actually sell books, and are therefore far more worthy of respect than some non-shopkeeper who doesn’t even read.

    And now I will go off on a tangent.

    More appropriate for contempt, I think, than members of a particular shrinking social class, are another kind of non-class category of let us say “avid consumers” of commercialized products, such as television, fast food, mainstream politics, mall store retail items, SUVs, and so on*. This category spans all traditional social classes and basically describes those who are willing and submissive slaves to the worst and most demeaning aspects of modern society.**

    *Needless to say, what you put on or leave off this list is highly subjective and debatable, but there is a core concept there that conflates various things such as “conspicuous consumer”, “waster”, “party member”, “company man”, etc. etc. etc.

    **And virtually everyone in society partakes to some guilty extent of this category — those who are entirely pure in this regard tend to be weirdos and recluses. So even though I may not watch television, I still buy clothes from Sears and entertainment from GameStop, or else I eat the occasional meal from McDonalds, even knowing how awful it is. But there is a difference between occasional, partial, or unwilling participation in consumer society, and the real avidity that marks one of the category I am trying to define.

  65. Seth @ 67: If you want to talk about these, we’ll talk about them.

    Food: Look, you either have reason to worry about hunger and/or malnutrition, or you don’t. This one is pretty easy. The 11th Century peasant was, in that regard, better off than many of those living in, say the south Dallas projects. Or anywhere US troops have been.

    Living space: This one is also pretty easy. Yes, our standards do change with time, but keeping the weather out (in all senses) and not needing to worry about filth and infestations, and having sufficient space and a certain amount of privacy would be recognized by your 11th century peasant as well.

    Health care is the trickiest, because it changes so much so fast. But if everyone has access to whatever technique and education and equipment the society has produced, and confidence that those in the field have a relatively high level of skill and care, then I think that, too, would satisfy both your peasant and today’s individual.

  66. How many people in the south Dallas projects can’t get food stamps or welfare? What fraction of them starve to death each winter? They’re a lot better off than 11th Century peasants.

    “Keeping the weather out” meant something very different 1000 years ago. (Consider how drafty European castles are. Are you really suggesting that peasant huts were better?) Likewise, “filth”? How many peasants then didn’t have dirt floors?

    How much space and privacy do you think people then had?

    It has never been the case that everybody has “access to whatever technique and education and equipment the society has produced” and it never can be; that would exceed the total resources of the society, in any age. Which is better, the health care available to someone in the south Dallas projects today, or that available to an 11th century peasant (or an 11th century aristocrat, for that matter)?

    My point remains: by the standards of an 11th century peasant, the US today is post-scarcity.

  67. Was the 11th century chosen solely because living conditions were so bleak then or is it the standard?

  68. Seth: I said hunger and malnutrition. Hunger is a at least as serious a problem for much of the world today as it was for the your 11th century peasant; and malnutrition is I believe, a greater problem in the south Dallas projects than it was for them. So: no on that one.

    Your remarks on shelter, likewise, miss the point. I said filth, not dirt. Being protected from the weather changes with technology, to be sure; but if you believe that the conditions of a family of nine in a one-bedroom roach and rat-filled Dallas apartment with no cooling and with the heat, electricity, and water shut off regularly is something an 11th century peasant would admire, I think you need to re-examine it.

    As for health care, I don’t know what you’re talking about. For most of humanity’s existence (measured in years, dating from whatever arbitrary point you set on “here we become human) that is exactly the condition: everyone within a given society had access to the same level of medical care. That the level was effectively zero doesn’t change the point. It was only with the introduction of surplus, and social classes, that different layers of society got different quality of health care. I must be missing your point, because what you say isn’t making sense. Can you expand.

    Bawrence @ 72: I think he picked the 11th Century peasant arbitrarily to illustrate his point. If his point is that, over-all, conditions have improved since then, he is correct. If his point is that to 11th century peasant we are living in a post-scarcity society, then I am forced to disagree.

    As far as health care goes

  69. I would like to get back to the original question. I have a strong libertarian steak myself, it just pertains to different things from what the Libertarians worship. I think, for example, that the government has no business telling consenting adults what to do (even for pay) or regulating recreational drug use.

    But my real gripe with the Libertarians is that they have arbitrarily chosen one aspect of human existence–the existence of private property–and decided that that one is a natural right and therefore it is good to allow people to band together to enforce that right, while it is evil socialism to allow them to band together for health care (substitute your favorite government program for health, but I have been living in Canada for 40 years and have gotten used to that one). AFAIK, the primacy of private property is not even discussable among Libertarians.

    Bob Barr, the Libertarian candidate for POTUS is, to my way of thinking, as far from a libertarian as it is possible to be. He is (or used to be, or claims he used to be and no longer is) a strong advocate of drug control, of government enforced “morality” (as he narrowly defines or at least defined it).

    While I would not call myself a socialist, my own personal belief is that the people have a “natural right” (insofar as such a thing exists) to band together for whatever purpose is required for their own enjoyment of the necessities of life, that is proper food, shelter, clothing, protection of body (including medical care), and, yes, private property. If they want to invade other countries, let those who agree pay the taxes to support the invasions and leave the rest of us off the hook, and especially don’t slough it off on our children–in my case, grandchildren.

    While I am here let me say a word about drugs. (In the interests of full disclosure, let me say that I once tried marijuana–even inhaled–and felt no effect whatever and I never used any stronger drug. I used to smoke, but stopped the day I had a heart attack over 43 years ago. I drink occasionally.) Prohibition was a disaster. The motive, incidentally, was not to save the drinker from him (occasionally her)self but to save his family from his profligacy. As we all know the experiment didn’t work and was fairly quickly abandoned. Probably because the number of people ignoring the law was overwhelming. There was an unfortunate residue, however, organized crime.

    Having a police force with not much to do, the government quickly moved to banning drugs. At that time most of the addicts were from medical treatment, often WWII soldiers recovering from injuries. As drug pushing became more and more profitable (because the enforcement of the drug laws raised the price) the pushers had more and more incentive to get new users–and did. This has been especially true for marijuana where perhaps a majority of adults have tried it at least once. At this point it seems to me that the drug laws are enforced mainly against blacks and one of its purposes seems to be to prevent them from voting. Although they have now turned to voter ID laws for the same purpose.

    But the basic problem, and the source of my libertarian tendencies is that people worry more about how others live than how they do.

    Getting back to the original post, I think it safe to say that nothing would stop child labor in a fully libertarian society. (I should add that if I were dictator, there would be various child protections built in to the law.)

  70. I picked the 11th century because it was a round amount of time ago.

    Steve, I specified the US, not the world.

    If somebody suffers from malnutrition because he chooses to eat unhealthy food rather than healthy food, and he does have the choice, then I see that as his problem. I don’t think society should force-feed people.

    I don’t know about families of 9 in a one-bedroom apartment. Places where I’ve lived, welfare provides much better than that. It’s quite possible that Texas is less civilized than the US.

    As far as health care goes, you seem to believe that equality is more important than absolute quality. By that standard, no society containing humans will ever be post-scarcity.

    And while health care sucked (by today’s standards) for everybody back then, that doesn’t mean it was the same. A peasant worked or starved, no matter how sick or injured he was. An aristocrat could afford to rest and heal.

    Suppose you define what it would take (in terms of the minimum any human has) in order for society to be post-scarcity. Then consider a society where 90% of people have between that and twice that, and 1% of people have more than 100 times that (with the rest in between). Is that post-scarcity? You started by defining it that way, I just made a few people even more better off in order to add inequality.

  71. BigMike, libertarians don’t mind people voluntarily banding together for any purpose that involves only consenting adults, whether that’s communal living, growing food, or purchasing/providing healthcare. The objection is to forcing others, who don’t consent, to be part of that band.

    In any society, social custom tends to be a lot stronger than casebook law. The fact that something isn’t illegal doesn’t mean there’s a lot of it, if people don’t approve. (How many people do you see picking their noses in public?)

    Nestles didn’t stop killing babies (selling formula inappropriately) because of laws against it, they stopped because people didn’t like what they were doing and bought less of their stuff.

  72. “If somebody suffers from malnutrition because he chooses to eat unhealthy food rather than healthy food, and he does have the choice, then I see that as his problem.” That is egregious over-simplification. Knowledge is part of the equation, and more significantly, the choice between sufficient nutrients and sufficient calories.

    And permit me to suggest that your knowledge of the living conditions of those on welfare is incomplete. It ain’t like that.

    “And while health care sucked (by today’s standards) for everybody back then, that doesn’t mean it was the same. A peasant worked or starved, no matter how sick or injured he was. An aristocrat could afford to rest and heal.”

    At the time I was referring to when I mentioned that most of humanity’s existence was spent with equal health care, there were neither peasants nor aristocrats. If that is not what you’re referring to, I don’t understand your point.

    I would contend that post-scarcity is a necessary condition for equality.

  73. If somebody cannot have both sufficient nutrients and sufficient calories, then he can’t afford a healthy diet, so it isn’t his choice to be malnourished. Knowledge is part of the issue; but I’m sure there is dietary information that is currently unknown to anybody. Does that imply that nobody can have a sufficiency?

    I was referring to the 11th century, when there were people who didn’t have to work every day.

    If post-scarcity is necessary for equality, and you desire equality, then you ought to work for whichever system causes the most production (or production capability), since without that there can’t be equality.

    I disagree with that point, though. I see no reason a subsistence economy can’t have equality.

  74. seth@76: I never said voluntary. When libertarians talk about protection of property, they mean that everyone must pay for the police, army, etc. And they have made a big deal that private property is a sacrosanct right, but not, say, health.

    The point is they can be as coercive as the next guy; it all depends whose ox is being gored.

  75. “If somebody cannot have both sufficient nutrients and sufficient calories, then he can’t afford a healthy diet, so it isn’t his choice to be malnourished.” Exactly.

    “If post-scarcity is necessary for equality, and you desire equality, then you ought to work for whichever system causes the most production (or production capability), since without that there can’t be equality.” Bingo!

  76. But now you have a problem: enforced sharing reduces the incentive to produce, which will cause some people to produce less. So enforcing sharing now makes equality less achievable.

  77. Unlikely. Wouldn’t ‘producers’ want to maintain current status quo, and produce more to achieve this? Your position seems more petty than reasoned.

  78. If I get to keep 50% of what I produce, rather than 100%, then the tradeoff between “producing (and having) more stuff” and “having more free time” shifts in the direction of “having more free time”. Therefore, I produce less stuff.

    At the extreme, “sharing equally with 7 billion other people”, why would I produce anything? I won’t get to keep enough of it to even see with a magnifying glass.

  79. Enlightened self interest. If no one produces any then no one has any,not even former producers.

  80. And if I produce, I still don’t have anything. So why should I bother? I’d rather spend my time enjoying myself.

    Any place that tried a system like that has forced people to work, and they weren’t very productive (“They pretend to pay us, and we pretend to work.”)

  81. Seth @85: I think that a system where people must be forced at gunpoint to produce, is by definition not post-scarcity. But I also don’t think that anyone has ever tried the “forced to work” method in the name of equality. Certainly the Soviet and Chinese examples aren’t applicable, neither are a thousand years of European feudal examples.

    I agree with Steve at least far enough that I find the appeal of socialism rises as scarcity falls, and I tie it very closely to emerging technology. I disagree on how close we are to that capability, globally. And I have other concerns about the goals of socialism, both short- and long-term (namely, their [to me] unclear stance on the importance of artistic expression and research/exploration), but that’s another matter.

    Interestingly, whenever I need my perspective adjusted, I take a look at Open Source Software. OSS is a fascinating study of the ability (and willingness) of people to produce: without direct compensation or incentive, their output available equally to all, conflicts resolved in an orderly fashion without requiring permanent leadership, etc. The success of the OSS movement defies explanation from a capitalist viewpoint. It doesn’t solve hunger in Africa or resolve conflict in the Middle East, but it’s real and it’s inspiring.

  82. Enjoying yourself with what? All that’d be left would be due to the production of others. You’d become what you appear to despise.

  83. If your premise, Seth, is that the only, or even main reason people create is in order to end up with more Stuff then the guy next to them, I certainly don’t agree.

  84. When did I say anything about the guy next to me?

    I want more stuff so I can be more comfortable. It’s great if the guy next to me has more stuff, too.

    Since I consider it immoral to take from others, I’d produce the amount I could keep, rather than the much larger amount I produce today.

    And I’m not talking about creating (which is an urge, and many people create for the pleasure of it) but building, working, assembling; doing boring stuff that results in production.

    There are many people, who act for many different reasons. Those who produce because they enjoy doing it won’t be affected by forced sharing (aka theft). Those who produce in order to have (or be able to give away) more stuff will be. Therefore, some people will produce less. (I don’t know how many. Neither does anybody else.) Therefore, there will be less produced.

  85. So you presume that some will be pewtty, and you number yourself among them. What is your ‘moral’ opposition based on? Jesus disagrees with you, who’s left?

  86. Will you work an extra 20 hours next week to give away any extra you receive as a result? No? Are you being petty?

    My time is mine. I use it for my benefit. I get some pleasure out of time spent reading books. I get little pleasure out of working, but I get pleasure out of the stuff I can buy with the money I earn. At any time, I have the choice between working and reading (and other stuff). I choose based on what I get out of each. If someone removes the benefit I get from working, I’m a lot less likely to choose that.

    I think it’s immoral to steal from others (anything taken that is not voluntarily given is stealing). Was Jesus a thief? I hadn’t heard that before.

  87. “I want more stuff so I can be more comfortable. It’s great if the guy next to me has more stuff, too.”

    Then we have no disagreement.

    “There are many people, who act for many different reasons. Those who produce because they enjoy doing it won’t be affected by forced sharing (aka theft).”

    By “theft” do you mean, for example, the way a worker produces $150 worth of value in a day and is paid for maybe half of it? I don’t think that is a moral issue, that is just how things work in a free market economy. Being outraged by it is a waste of time. And remember that the market economy, aka capitalism, was a positive benefit at one time. I agree that it is terribly destructive today, but that is no reason to condemn it throughout all times and places, and because it functions based on theft.

    As for less being produced, it would seem to me that when it is possible to fully use automation without casting millions into unemployment and poverty, and without worry about the rate of profit falling, there will damned little grunt work left to do, and I’d be more than happy to do my share of what is left. Unless I’m very much mistaken, so would you.

  88. If you produce $150 worth of stuff in a day, why would you sell it for $75? Why not sell it for $150?

    (Oh, the person who’s willing to pay $150 is 3 states away, and you don’t know who he is, and he might not want it this time? So somebody else will pay you $75, and he’ll transport it, and try to sell it, and take the risk of it not selling. Or you can do that yourself, but it will take you 3 days, so you’ll (maybe) get $150 in 4 days. Or you could just sell each day’s product for $75, and have $300 (guaranteed) in 4 days. Your choice.)

    A voluntary exchange isn’t theft. Is the worker free to leave if someone else will pay him $100/day? If nobody is willing to pay him that, how you can say his production is worth more than that? To whom is it worth more?

    Automation doesn’t typically reduce the amount of labor used. What it does is increase the amount of labor, and increase production by a larger factor. (There’s an economic law about this: if drops from 1 man-hour to 1/2 man-hour, there are likely to be more man-hours used, and way more than twice as many widgets produced.)

    And then, with so much more being produced, the level required to be post-scarcity increases.

  89. Matthew 25: 35-40

    Calling Jesus a thief will not look good on your performance review.

  90. Seth, the basic nature of a market economy requires that the worker produce more in value than he is paid; that’s where surplus value comes from, a portion of which is profit. The difference between what he produces and what he is paid is appropriated (also called stolen).
    Now, of course, he is free NOT to sell is labor power; in the same sense that if someone pointing a gun at you says, “Your money or your life,” you have a choice.

    Automation reduces rate of profit, and increases the productivity of labor, and generally results in more profit so long as there is an ever-expanding market. It certainly results in unemployment as well (which works, because unemployment is another factor determining the value of labor-power–that is, the greater the unemployment, the more it is a buyer’s market).

  91. I’m not sure how far you want to continue this, as the discussion as moved far beyond your initial posting.

    You said, “The difference between what he produces and what he is paid is appropriated (also called stolen).” I beg to differ. The difference between what he is paid and what he produces is the value of the resources he doesn’t own which he is using to produce those goods. For example: a man owns his own gun shop, he produces guns, he receives the full value of his labor. A man works in a gun factory, he receives some percentage of his production in exchange for using the machinery and marketing of a larger company (which he did not pay to build/buy/develop). Closer to my field, a farmer who owns his land receives full value of his labor and production (pun unintended). A farmer who rents his cropland from a landlord does not receive the full value of his production because he pays rent (often in a portion of the crop which is very prevalant still in US farming practices). So, no, workers production values are not being stolen by the owners.

    Yes, we are all free to not sell our labor. A person could instead open up their own store through raising capital, produce for themselves and eventually pay off the captial and receive full benefits of their productivity. It is difficult, but very possible (microsoft for example). Or a writer (don’t even have to raise capital – you can start out using a computer/typewriter at a public library and beg in your spare time to get postage to mail off your submissions/queries…).

    I would agree that companies will consistently try to charge as high a rent as possible on workers. Two items act as a check on this; firstly government mandated minimum wage and secondly workers ability to transfer jobs to find the best return for their labor. Both of these have problems in themselves (may not be able to relocate to the best job site, derth of skills, government intervention usually sucks).

    p.s.: no jab was meant at you on the writing thing – my wife is a freelance writer and I know how tough it is. And I love your books. Reading Kits post about books which shape her thoughts reminded me that everytime I read about Vlad’s adventures I gain more appreciation for them and they make me think about my own life choices.

  92. Bawrence, you were the one who said that Jesus disagrees with me when I said that taking from someone without his permission is stealing.

    Steve, capitalism would still be a benefit, if we had it. The corrupt system currently used in the US isn’t capitalism. A good system would have lower barriers to entry; consider the difference between the PC industry and the automobile industry.

    Steve, how do you define “value”? If it’s the amount the end-user pays, then sure, everybody has to produce more value than he gets paid, unless he delivers the stuff to the end-user himself. The value of an apple to a supermarket might be $0.10; the the customer, $0.20; so when the farmer sells it for $0.08 to a distributor, is he not getting full value? If he wants to spend his time carrying that apple into the city to sell it to me directly, he’ll get more money for it but I doubt he’ll be better off.

    Or do you think distributors, retailers, etc. should work for free?

    If you define “value” as “the most someone will pay for something” then a laborer does get the full value for his labor (else he’d sell to someone else for more). A claim of “value” that is more than any purchaser is willing to pay (and also more than the minimum any supplier is willing to accept) just doesn’t work. I could claim the value of a particular painting I own is $25,000; nobody is willing to pay me that much for it, but I won’t sell it for less, either.

    The point of markets is that something I produce is worth more to you than to me, and something you produce is worth more to me than to you, so we exchange them and both come out ahead. If you want the full value (to me) of what you produce, why would I bother doing the transaction?

    The worker is free not to sell his labor to a particular employer; I’ve done that a few times, when I believed I was being underpaid. Since I was right, I found someone else willing to pay more.

    Suppose a laborer takes stuff that costs $100 and builds a widget “worth” $200 (meaning, it sells for that at retail). Who would pay him $100 for the work? A company that did that would soon go out of business, since it can’t cover its costs (interest on the cost of the stuff, rent on the place where the worker works, inspecting the product to ensure its quality, etc.)

    Automation does not “certainly result in unemployment”; it often leads to less employment of certain types (e.g. fewer people wash dishes by hand) but that’s just an opportunity for increased production elsewhere. As automation happens, the value of labor increases, even as the labor market changes. (Someone driving a tractor can earn a lot more than someone tilling soil by hand.)

  93. How much productive effort is your salvation worth? I’m not religious by any means, but you brought immorality to the discussion.

  94. My “salvation”? What is that supposed to mean?

    There are things I won’t do because they’re wrong. That has nothing to do with some malign thug (per Mark Twain) threatening me.

  95. Not at all. Immoral is what I say it is. Someone who disagrees is just wrong.

    People have the right to be wrong, of course.

    The fact that someone thinks an act is morally permitted (or required) doesn’t provide him the right to perform it. (Consider, for instance, the Inquisition.)

  96. By value in this context I refer to exchange-value—ie, price determined by the market. And yes, exactly: if the worker were paid according to the amount of value he produced (ie, the degree to which the exchange value of the commodity increases by his labor on it), the company would instantly be out of business. Instead, the worker is paid according to what his labor-power (his ability to work) is worth, according to the market (the economic state, personal negotiations, collective bargaining, and all the other factors). The difference between these two numbers (the value he produces, the amount he is paid) is the source of profit. That doesn’t mean that the difference isn’t appropriated. I do not attach a moral judgment to that, it is just how things work in a market economy.

    There can be circumstances where increased automation does not result in decreased employment, so long as there is a continuously expanding market. This is by nature temporary.

  97. To answer Bawrence @101

    The good, or the moral, is what promotes an individuals life as a rational human being.

    To Steve @109

    I agree, though I’d clarify it a bit more. When I get a moment I’ll do so! :-)

  98. An individual who own’s his own business will sell his labor for whatever the market will bear. He may sell it for less than others and may even donate some of his labor in various ways, but he will typically take as much as he can get for his effort.

    A worker working for a company chooses to work for that company and takes the pay he can get for his effort. What the company sells the products of his and other worker efforts for doesn’t matter. If he thinks he is being ripped off he should find another job or start his own company.

    The compensations of working for yourself or a company are different.

    Clearly the more skill you have the more marketabe you are.

    More later!

  99. I cannot see how a company would be out of buisness if the a worker is paid a according the value he/she produced if he/she is owns a fair and reasonable stake in the company.

    Problem here I see though, is that the education system in a market economy does not tell you how to do this. It tells you (albiet by indirect means) how to make a living by your worth of labor-power. You only learn about these things by formal education means if you do a post-graduate business course (like an MBA).

    If the government supports a market economy then it’s the government’s responsibility to teach everyone the fundamentals of it.

  100. 112 schmwarf

    That’s not something governemnt can (or should) do.

    Instruction only takes you so far. To go beyond it one has to do a lot of self-education. The pieces of paper handed out at universities are useful only in getting your foot in a door. Most of the real learning takes place on the job or on your own time.

  101. Steve, if the worker builds a chair, you claim the chair has the exchange-value between the furniture store and final customer. Why doesn’t his labor have the exchange-value between him and his employer? Why doesn’t the chair have the exchange value between the manufacturer and wholesaler? Or the internal value at the manufacturer?

    Would it differ if he were paid piecework? He buys the parts for $100, assembles them, and sells the chair for $150 (instead of being paid $50 for his labor). Now, he’s getting “full value”. Is he better off?

    Suppose the company paid the worker in chairs, say 1 chair for every 3 he built. That’s a raise, isn’t it? Or perhaps the value to the worker of a chair isn’t the full exchange-value, so he’s actually worse off?

    It just isn’t consistent to value some stuff at exchange-value and other stuff at well over exchange-value, and then claim that the difference is “appropriated”.

    Ethan, “The advantage of working for myself is that I get to choose which 70 hours I work each week.”

  102. Schmarf @ 112: It seems what you are discussing is the text middle class–ie, those who both own the means of production and work them. They are considered their own class for very good reason.

    Seth @ 115: “Steve, if the worker builds a chair, you claim the chair has the exchange-value between the furniture store and final customer. Why doesn’t his labor have the exchange-value between him and his employer?”

    I apologize for being unclear. It does, indeed, have the exchange-value realized (in general, on average) between the manufacturer and the wholesaler in the example you give. And his labor does, indeed, have the exchange-value (again, realized on average, socially, in the market place) between him and his employer.

    The confusion comes here: The worker is paid the market value of his labor-power (ie, his ability to work). The capitalist receives the value of his *labor* (ie, the work that he actually does). In any healthy business, the latter is greater than the former, and the difference is appropriated by the capitalist. That is the scientific (as opposed to the emotional) definition of the word “exploitation.” I repeat for emphasis that I am not making a moral judgment on this.

  103. But Steve, the employer has costs involved in selling the chair to a wholesaler. Shouldn’t they be deducted from the price received to get the value of the chair?

    Now consider two almost identical employers, except that the first finances by borrowing money, pays interest, and earns no profit. The worker gets his full value in that case, right?

    The second had cash to start with, so he earns a profit (equal to the interest the first one pays). His workers somehow aren’t receiving full value, yet they’re doing the same work for the same pay as those of the first employer.

  104. “But Steve, the employer has costs involved in selling the chair to a wholesaler. Shouldn’t they be deducted from the price received to get the value of the chair?”

    Usually, in fact, most of those costs are absorbed by the wholesaler. But that is beside the point. There are many costs of doing business that have no direct connection with production: bookkeeping, certain forms of maintainence, advertising, heating and cooling, &c &c. That is why it is properly referred to as “surplus value” instead of “profit”–profit is only one portion of the surplus value produced by the worker.

    As for your example, I don’t understand why that is confusing. The first employer must use a portion of his surplus value to finance his business; this comes directly from his profit. It has no effect on the market value of his product, nor the market value of labor-power he is buying, nor the market value of the labor that is going into the products being produced.

    I think I must be missing your point. Can you come at it from another angle?

  105. Steve is correct in that the employer is clearly getting a profit that is the difference between what he pays for an employees work and what he sells it for.

    He also notes that he is not making a moral comment upon this.

    I think he’s absolutely correct. Now, if you start to comment on this wondering what it’s moral implications are, that may be a different discussion entirely. As Steve has stated it, he is correct.

  106. Ethan, my point is that there’s no such profit.

    The employer pays someone $50 to build a chair from $50 worth of materials. He sells the chair for $150. You claim there’s a $50 profit.

    I observe that he also paid a salesman $5 to do the selling, a bookkeeper $3 to handle the accounting, his bank $4 in interest on the money between the time he paid it and the time the buyer paid him, rent, lighting, payroll taxes on what he paid all the people mentioned, etc. etc.

    His final profit might well have been negative. The value the employee added to the company by the work of building the chair certainly wasn’t $100 (less the $50 he was paid).

  107. Is this mythical employee building chairs one at a time, or does he or she practice modern production techniques?

  108. Seth,

    I guess I’m confused.

    Certainly the employer pays the employee, and lots of other expenses. The difference between what he pays out and what he takes in is the profit. If there was no profiit, why is he in business?

  109. Ethan, your post #120 claims the difference between what the employer pays for an employee’s work and the sale price is profit. That’s ignoring all the other costs.

    Consider my post #117.

    Bawrence, it’s much simpler to understand in the case of one-at-a-time. Using lots of equipment and making a tiny portion of 50 chairs doesn’t change the principles.

  110. Seth,

    You are correct. It was, perhaps, an over simplification. So, now that we’ve clarified that, is there a contention here somewhere?

    I expect the one typically heard would be, the worker isn’t paid eaqual to the value of what he produces. This is really a non-issue though. If he (and I use the term to mean she as well) feels he is being cheated of this value he can always go into business of himself.

    Not to jump ahead, but…..the argument I hear against this is typically is that it’s not easy for a person to start their own business as there are costs of entry that will be beyond them. My answer to this is to point out that that is a hidden value you get of working for another.

    Still, you can work for another and save money towards your busniess, or come up with and sell a plan to investors or a bank to raise the money to start out.

  111. It isn’t that simple (is it ever)? In some cases, the company is unfairly exploiting workers.

    There are both barriers and costs to entry. The costs are less of a problem; the barriers are a big problem. I can’t start a cellphone company to compete with ATT. I can start a PC company to compete with Dell.

    Other costs involved in starting a company are the risks. The example worker makes $50/chair. If the market changes, and people stop buying chairs (big asses need sofas), he might lose his job, but he still got $50/chair while he worked. If he worked for himself, he’d be stuck with a lot of chairs he paid for the materials for, and gets nothing for his recent work.

    Then there’s the issue of sales. I’m a really good programmer, but I can’t sell. As a consultant, I could make several times as much money by working with a salesman who could persuade companies to hire me. So, what is his fair share of the joint income? (E.g. on my own, I get $200/hour for 10 hours/week. With him, I get $250/hour for 30 hours/week.) (Fortunately, I have a well-paying job, so I don’t have to worry about that issue.)

  112. Barriers to entry? In the AT&T example you are blocked by the governement, which I disagree with.

    As for risks….So? Why should you be immune to risk? Life isn’t like that. No goverment/social system that tries to prevent risk will succeed. You can fall back on your own resources, or the good-will of friends and relatives. Honestly, what is without risk?

    You have a good paying job? Was it an accident? Did you get it by doing and knowing nothing? Do you keep it by not doing anything? Of course not!

  113. I agree, barriers are generally bad.

    What about automobile manufacturers? There’s no law saying I can’t compete.

    I’m not saying anyone should be immune to risk. Risk exists. I’m saying it’s fair that people who take risks get compensated for that.

    My point about having a job is that I don’t have to worry about salemanship. But I haven’t seen an answer to the question: how much of the total revenue is it fair for the salesman to get?

  114. Automobile workers inability to start their own businesses is somwhat true, but I don’t see that as an issue.

    If you choose to work in a field you could find yourself stuck when things turn bad. That is a risk. So what is killing the auto industry in this country? Bad managment for one. The companies are suffering due to their choices. Also, the workers are suffering due to that and their own choices. The auto workers unions have put them in a bad place.

    Then there is foreign competition. Cheaper labor right? How can we differentiate from that? Companies could outsource production to forien locations to compete more. What about their workers here? Again, that was a risk, and a pretty sucky one. If the compnaies wanted to keep manufacturing in the U.S. and still pay their workers a premium they needed to differentiate themselves in design or marketing from the competitors who are using cheaper labor. They haven’t! That’s why they are failing.

    One must always have an eye out on the market and choose a course that you think will work for you. It sucks to be an American auto worker now.

    One of the large problems in this country is that we assume that the government is and should always going to be there to bail us out. That can’t work. Bailout is an attempt to avoid results from actions that were wrong. It is doomed to collapse. What we need to do is realearn self sufficiency and Benevolnce. Then, if things fail you can fall back on yur reserves and/or the goodwill of others around you.

    More later.

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