This made me lol, I truely love your responses Liberty.
If an employer controls what the workers to for the company, he’s merely using them as some kind of intellectual tools, if you will. Since the employer serves as the brain and the employees his fingers, if the brain decides to put its hand under an atom smasher to reach for a million dollars and loses the gamble, then it’s his fault! The “shareholders” aren’t responsible for what they don’t directly control.
Exactly! That’s why Bakery B’s system doesn’t work
I fail to see how solid capital is valid in a free market, although that may sound dumb. Could you explain its purpose?
If they’re not responsible for the failures, why should they be responsible for the successes? In other words, if you say that it’s not their fault when the company fails, why is it their accomplishment when the company succeeds? Profit and loss are a result of risk-taking, not labor.
It sounds really dumb. What is “solid capital”?
How do we pay the workers before their goods are produced, brought to market and sold? Who is taking all of the risk, paying the workers up front, with no guarantees or assurances that the product produced will actually clear at a profit or break even in the market?
These are your problems.
You don’t understand prices.
You don’t understand value.
You don’t understand capital.
You don’t understand time and the role of interest.
You don’t understand entrepreneurship.
While I know you come to this with the best intentions, you are woefully ignorant of some basic economic ideas.
There is no such thing as fixed wages in a free market. (Prices)
Workers would not take jobs without profit sharing (lower wage), if jobs with profit sharing are available (higher wage). (Value)
Someone has to pay the workers this week for the product which may not be sold for 6 months or 6 years. (Capital)
The workers accept a wage without profit sharing, because they want to be paid now. The discount on the full value (cost + profit) of the good sold, is the discount they take to get paid now, regardless of profit and loss (time and interest)
No one would start a firm, if they had to invest the initial capital, and take all of the downside risk, so that their employees could take equal shares of profit. (Entrepreneurship)
Please don’t ask me more questions. All of your answers are here. Think about them.
All of the questions I asked you were rhetorical.
Why would the new employees accept the employment contract if it’s not favorable to them?
Today’s employment contracts allow for this just fine in the event of deflation or inflation.
Telford, I realize I was short with you yesterday, and that’s on me, not on you. I apologize.
I do wish you would do some investigation into the basics of free market economics, perhaps Bastiat, or a general overview of the Austrian approach. You’ve been around awhile, and some of these things, like prices and value, are key to being able to make broad statements about markets.
That’s okay 
And yes, I realize I am quite the n00b in economics, although I have a firm belief in the free market, along with the Invisible Hand Theory. I think i need to brush up on my definitions and such, but my thread here was just to see if that method of paying employees is valid. I guess it’s not then
If you believe in the free market and invisible hand, why not leave it to them to decide on the method of payment? After all, they are what will determine what happens.
I’m completely self-taught, and still a n00b in many regards.
When you start to understand it, then belief will be changed into trust by your understanding of it.
It is valid if both parties agree to it. But workers are not getting screwed now by not being partners. One of my friends and I work as freelancers of a sort. We were talking about how great it was to be an employee. When it is time to go home, you stop thinking about work. You typically don’t have to get up in the middle of the night to turn off an alarm. You don’t have to worry about how payroll gets met, someone else deals with it. You don’t have to find customers, or chase them to pay their bills. You don’t have to hire and fire. You get regular pay, on a regular schedule.
But if you want more, then you have to take on more responsiblity and you have to invest deeper into what you are doing. This means taking out credit using your own properties as collateral, risking savings, working more hours, and taking less vacations.
Being the owner of a small business (less than 25 employees) isn’t always a walk in the park. And being successful at it, doesn’t come automatically. Plenty of people go into business and lose their shirts. Their employees get unemployment benefits. If you own your own company, at least in Canada, you’re not eligible for benefits if you put yourself out of work.
Every worker should strive to be his own boss, if only to see what it is like, so they can make an honest assessment of whether they prefer to labour for a wage or profit. But don’t make the Marxian mistake of seeing workers and owners as opposing classes. One can move freely between these classes in a (relatively) free society, and their relationship is symbiotic, not parasitic. Without workers, the owners cannot prosper, and without capitalists, workers might not be able to find higher paying labour (through access to capital goods).
Agreed. It would promote the essential individualism that is definitely needed in today’s society.
Transition of classes may be easy in that case, but I still see a distinction between those who plan their part of the economy and those who work for the planners, many of whom would be more efficient and therefore more successful if they abandoned their innovation to fulfill their “master’s” economic plan (kind of like being a better cog by giving up one’s brain).
What is the distinction?
The distinction takes the form of how you get paid (steady wage vs flexible profit), as opposed to how much you get paid. Le Petite Bourgeoisie, like the self-employed Joe the Plumbers and such, don’t fit the Marxian view of the Bourgeoisie itself.
But they are related. In order to engage in risk for profit, you need capital to sustain yourself in the meantime.
Understand, in the west, wage workers are only wage workers because they choose to be. If they want to save up capital and engage in risk taking behaviour there is (for the most part) nothing to stop them. They aren’t limited by social class, ethnicity or religious group.
So the notion that wage workers aren’t getting a good deal is to me, misguided. They choose that path when an alternate one is presented.
Are some people underpaid? Sure. The state limits true competition, and so there is not enough competition for some workers. But the ones who suffer aren’t your Chrysler assembly workers or convenience store clerks. Rather, the highly skilled and productive are punished with higher marginal taxes and barriers to entry that are a deterrence to entrepreneurship.
The petty bourgeois are techincally supposed to be gone as a class. For overtime these individuals are pushed out of their class by the concentration of capital and either become proletariat or full bourgeois themselves. So it is not necessarily that they don’t fit in. They are like undecideds who are push into a cause. It always struck me as peculiar because say if a petty bourgeois became a proletariat then he would start thinking like a proletariat due to the relationships of production. However, why can’t a proletariat then think like a bourgeois if he ever advances or a bourgeois think like a proletariat if he ever decreases especially if he is kicked out over the concentration of capital. If we are destined to think of our social classes because our material position in life, it seems very odd that we just suddenly do a 180 degree turn in thinking just because we’re not rich anymore.
I think in times of tight money, idealism has to make way for realism. Working a monotonous peon job is more secure than making the risk of starting a new business.