Thread needs to be renamed to “Laotzu Del Zinn’s personal economics education”.
This thread is incredilbly embarassing. (Not for me)
When I used “sale of the good” I refered to the sale of the product which comes about as a result of the joint work of all the factors of the production.
No, I do not possess telephatic powers. Hence, I do not read motives. Why do you think an individual prefers to be employed and not to produce on his own? Why is the capitalist a capitalist? Then why does a capitalist prefer to hire employees and not do the whole production work on his own? With my text above I briefly answered these questions. It looks like you do not think that deductive reasoning is useful for obtaining knowledge about the real world. You imply that for each hire of labour stands a different reason, such that can not be known a priori, but must be experienced or to put it in other words, we should interview the employer and the employee why they do exchange. Maybe we do not know anything that is fundamentally true for all exchanges. Maybe we should interview every two parties of an exchange.
When I used “sale of the good” I refered to the sale of the product which comes about as a result of the joint work of all the factors of the production
Then you’re straw-manning him. You’re arguing a different argument.
No, I do not possess telephatic powers. Hence, I do not read motives. Why do you think an individual prefers to be employed and not to produce on his own? Why is the capitalist a capitalist? Then why does a capitalist prefer to hire employees and not do the whole production work on his own? With my text above I briefly answered these questions. It looks like you do not think that deductive reasoning is useful for obtaining knowledge about the real world. You imply that for each hire of labour stands a different reason, such that can not be known a priori, but must be experienced or to put it in other words, we should interview the employer and the employee why they do exchange. Maybe we do not know anything that is fundamentally true for all exchanges. Maybe we should interview every two parties of an exchange
I don’t think there can be any valid reasoning (at least in deriving and verifying truth value) from unsubstantiatable, and unverifiable supposed axioms.. no.
But yes, perhaps we should interview each individual on his motives instead of deciding thejm for him. Groups only act on the motives of their individual consituents.
We don’t need to analyze why someone has a high or low time preference. We are not phsycologists. All we do is recognize that they do.
In the same way we don’t need to know why someone prefers milk to orange juice we just know that from their purchasing history that they do.
Subjective preference is objectified after human action has taken place.
In the same way we know that a laborer prefers to recieve a regularly scheduled wage. For security reasons, for other reasons that are beyond our ability to comprehend. It’s not that we are tryign to read his mind, we just simply observe his actions. He is exhibiting a tendancy to having what economist call a “high time pference”. Meanwhile the capitalist defers his consumption and chooses not to pay himself a regularly scheduled wage. Instead he aims to recieve a larger sum of money later in the form of interest(Accounting profit).
Why do you think an individual prefers to be employed and not to produce on his own? Why is the capitalist a capitalist? Then why does a capitalist prefer to hire employees and not do the whole production work on his own?
It’s different for everyone. Some have no idea how. Some don’t have the money, perhaps they have kids to feed. Some like their fun now, not later, as you say. Some would fail horribly at it.
But people are not one monolithic blok to be generalized about.
Most workers save, when they can. I can tell you from personal experience this is true (tho I don’t expect you to believe such superflous evidence). And after 40 years, they end up with maybe 10k, maybe a more. Meanwhile most of that is going to pay for their house.
Some people are poor because they suck. Some because of luck. Some because of ignorance. I sure would like to see more methodological individualism on the site of its’ supposed champions.
(Strange that a socialist could be a MI’ist? Well, honestly, I think it’s ignorant not to be, for anything you advocate.)
You missed the point. The why is not important.
I believe that some people save. I believe that many 1st world individuals, especially in the US, are both laborers and capitalists. I dont think there are classes of people but classes of roles that people play a part of depending on the situation.
This sounds awfully anecdotal to me. Do you have a citation to support this or are you just spouting out numbers you just made up?
I don’t even comprehend this statement.
You don’t really sound like a socialist to me.
“The trick of marxism was to convince people that socialism was to enpower the working class. When i see government workers protesting for the working class, they are actually protesting for more government and more taxation.”
That’s not a trick of orthodox Marxism. Marxism states that the working class will eventually be empowered because of the laws of nature written in history. There is no need of arguing over the morality or acceptability of Socialism according to a Marxist because it will happen no matter what.
You missed the point. The why is not important.
I never denied the what, but the political conclusion drawn from it.
You don’t really sound like a socialist to me
I have my own interpretation of worker’s democracy.
I dont think there are classes of people but classes of roles that people play a part of depending on the situation
There are, imo, definitely general currents of the have’s, the have nots, and the power mongers and that they tend to be antagonistic towards each other. But we are sort of in agreement here. There is no rigid caste system… tho I’m not sure that was universally claimed by socialists, including Marx.
This sounds awfully anecdotal to me. Do you have a citation to support this or are you just spouting out numbers you just made up?
No, and as I said, it is just personal experience. I don’t expect you to just take my word for it.
I don’t buy the claim that people choose to be workers because they are more risk adverse or because of time preference. The specific reasons for someone becoming a worker has to be determined on an individual basis. Although the efficiency of worker run firms is more of an emperical issue than anything else. If they were efficient, why are they not more common?
I am sorry for the misunderstanding I caused. When I asked “Why such and such?” I did not mean to go into the psychological aspect of one’s preference. I was trying to get your attention to why does the labourer agree to an arrangement that specifies such circumstances that he will be paid in wage which rate is lower than the output price. And more importantly what does the choice of an individual to be employed and not to have his own production reveal us about his preferred way of getting to a more satisfactory state. When I use the word labourer I refer to all employed individuals not to a particular individual.
I am talking about the individual whose action to become a labourer contains implications which when unbundled reveal that 1) he prefers present goods to future goods relatively more than the capitalist who employs him or 2) that he is relatively more risk-averse than the capitalist who employs him.
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His wage represents certain number and kind of present goods, which marginal utility, according to his degree of time preference, he values more than the marginal utility of future goods of the same number and kind. And compared to the capitalist he puts a relatively higher premium on the present goods. It does not matter for what use he puts them, whether food to feed his children, or medicine or whatever.
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There can be an individual who has got low time preference, but does not part with his wage income in order to pursue own entrepreneural projects. That is, he accumulates savings, but does not capitalize them. He does not engage in capital investment. For example, an individual wants to live in a bigger house. He knows that it costs X, and that with his current wage rate of Y he will have to save for 30 years to accumulate enough so that he can purchase the house. Yes, but he can get the house sooner if he saves only for 10 years and start his own business which will increase his income above Y in such an additional amount that he will be able to buy the house only after 10 years of business activity. And when he adds the initial 10 years of saving, it turns out that he will get the house 10 years earlier if he does not only save, but also capitalize. Yes, but he chooses not to capitalize. It is out of the scope of economics to investigate why he is risk-averse.
These two categories of action are praxeological theorems.
What we are investigating here is what does the preferred action of an individual to bring about a more satisfactory state reveal us. He can prefer to be an employee or be self-employed. Each action aims at the same end. There are some fundamental circumstances (conditions) in which action takes place. Two of them are the relative scarcity of goods and uncertainty. Accordingly these conditions are necessarily implied in one’s actions. He simply can not act in a way that does not use these inbuilt conceptions. I suggest you read http://community.mises.org/danielsanchez/essays/economic-theory/mises-on-mind-and-method/
I am talking about the individual whose action to become a labourer contains implications which when unbundled reveal that 1) he prefers present goods to future goods relatively more than the capitalist who employs him or 2) that he is relatively more risk-averse than the capitalist who employs him.
You cannot make either of these two conclusions.
1.) Maybe the worker thinks that reamining a laborer will provide more present and future goods than starting his own business.
2.) Workers take all kinds of risks. Idk where people get the idea that workers are more risk adverse than capitalists.
Your 1) is a case where the worker is relatively more risk-averse than the capitalist.
Regarding 2), where have I written that workers do not take any risks with anything? As you can clearly see above, I have written about their relative risk tolerance.
Your 1) is a case where the worker is relatively more risk-averse than the capitalist.
Regarding 2), where have I written that workers do not take any risks with anything? As you can clearly see above, I have written about their relative risk tolerance.
1.) There is no way you could know for example that donald trumps daughter (were she to become a capitalist, idk if she is) has a lower time preference than say a worker in China.
2.) What is more risky, working in a coal mine or attempting to become a successful capitalist? This is just going to be one opinion against another.
Are you actually going to argue that it is up to debate whether recieving a regularly scheduled guaranteed wage is less or more secure than depending on a long term wager(bet/gamble)?
Are you actually going to argue that it is up to debate whether recieving a regularly scheduled guaranteed wage is less or more secure than depending on a long term wager(bet/gamble)?
What do you mean by “secure?” The propability of recieving income is going to be higher, but that is only one componenet of risk. The topic was risk adversion, and there are physical risks that go along with being a laborer. You can’t tell me a coal miner in china is relatively risk adverse.
Security is a felt subjective concept. The coal miners behavior shows us that he would rather recieve regularly scheduled installments of payments rather then starve himself a year before receving his wage.
The risks involved being a coal minor is not relevant as we are discussing finances. Thats a strawman. (If I understand your argument correctly)
As far as financial security is concerned many people choose to recieve a regularly scheduled payment. Others do not. We are not placing value judgements on people as to what they SHOULD do. We are only using vocabulary to describe their behavior. It is said that those who prefer to recieve regular installments of payments are receiving a wage or are collecting rent. Those who defer their payment untill the time that a project bears fruit are recieving interest.
The ones who recieve interest have a low time preference, their behavior shows that they are able and willing to wait to be paid. Those who are receiving regular installments have a high time preference. Their actions show that they are not willing to wait to recieve payment.
All the other risk involved in whatever work they are doing has nothign to do with the point Vaduka is making.
Eric, I believe me and filc are both talking about two distinct types of action, each of which demonstrates the actor’s, who perfroms it, different degree of bearing uncertainty.
An individual who prefers to be employed because he thinks he will have in total enjoyed more goods at the end of time period X if his income consisted of labour’s wage than if his income consisted of entrepreneur’s profit plus interest on capital demonstrates that he is relatively less prone to uncertainty than the capitalist who employs him.
We are not considering whether coal miners or alpinists are more risky than some or all capitalists. These matters are wholy beside the point discussed here.
Are you actually going to argue that it is up to debate whether recieving a regularly scheduled guaranteed wage is less or more secure than depending on a long term wager(bet/gamble)?
Well, when you have a trust fund to fall back on…
But that aside, a proper interpretation would be that he is asking whether working in a coal mine w its’s risks for a “guaranteed” wage is more risky than a gamble.
Id rather take a million dollar gamble, lose, and go through bankruptcy than work in a coal mine, that’s for sure. What about you?
You guys are stuck in this world where you think we are making a judgement as to which path is better.
As I have repeatedly said we are not passing judgement. We are just using economics to describe human behavior. We are not saying which way one person should or should not go. We are not saying which way will be more or less risky. We are simply explaining
100% completely irrelevent. You guys are off in lala land. I don’t even know what you two are stuck on.
Do you have a million dollars in capital to gamble? All of these things are factors in where you place your time preference. Obviously a wealthier man will behave with a lower time prefernce as he can afford to wait. But thats irrelevant.
Vaduka and I are talking economics. I haven’t a clue as to what your talking about.