Wealth ditribution in stateless societies

[B0b]

Forgive me, but I think you do not understand economy.

 

Today, under an authoritarian government that redistributes income from the middle class to the poor, employers can squeeze down wages and employees are still willing to take the job, because they can rely on welfare to fill up whatever is missing between their salary and their needs.

 

They don't squeeze down salaries. They give workers more or less what their companies can offer. If I am not too smart an entrepreneur, my productivity is low and I cannot pay workers too well.

 

 

Employers will have to learn the lesson that they can no longer squeeze down wages below the basic needs of their workers.

 

Without the state, companies will be richer and will tend to pay the employers more.

 

It is not a large business owner's responsibility to think about the buying power of each employee. His mission is to ensure that his workers prefer to work for him than elsewhere, that they are good at what they are doing and to satisfy the customers. It is already a lot of work.

 

Suppose I can replace a guy with a $100,000 machine. Why would I keep the guy and pay him 30,000 a year? The guy should learn new skills. In a stateless society, as a business owner, I am not his father. My company is not a charity. If the guy has not money, I can give him food if he is in trouble, but I will not increase my company's spending and reduce competitiveness for this guy. As a business owner, I do not have more responsibility than this man. We are both adults.

[AncapFTW]

Let me see if I got that right.

First you claim what I said is wrong and you contest my claim that the poor will need a sufficient income by:

 

And two sentences later you repeat with slightly different words precisely what I had said, contradicting yourself:

 

How is that any different from me saying the rich may make more than the poor, but they must leave the poor enough to buy what the rich produce?

No, I contested your claim that the poor need some sort of artificial help to make enough to survive in an anarchist society, and your claim that the rich would prey on the poor.

[Thomasio]

No, I contested your claim that the poor need some sort of artificial help to make enough to survive in an anarchist society, and your claim that the rich would prey on the poor.

 

Sometimes I have the impression, some of you guys in here misunderstand me on purpose.

I NEVER said anything remotely close to "need artificial help", I said the precise opposite of that.

I said, it will happen automatically once the free market has learned how it works.

Any attempt of whatever form of artificial help only prevents the markets from learning the true conditions of life in a free world.

[B0b]

Thomasio, could you comment my last comments?

[Thomasio]

Thomasio, could you comment my last comments?

They give workers more or less what their companies can offer. If I am not too smart an entrepreneur, my productivity is low and I cannot pay workers too well.

In a truly free market, business models that depend on paying the workers less than they need to make a living cannot exist, simply because no worker would be able to afford taking a job there.

That's why in a free society wages will automatically adjust to a given minimum, completely without any government setting any minimum.

Companies like Walmart will simply lose all their workers, or have to replace them with students who don't have to make a living out of their wages.

 

Without the state, companies will be richer and will tend to pay the employers more.

How on earth could you possibly believe that?

Isn't Walmart the perfect example that the wealth of the owners has no influence on the wages they pay?

Walmart could easily triple the wages of all their workers without increasing any of their prices, just by lowering the personal profits of the owners a bit, yet they don't have to, because there are more than enough unemployed workers around willing to take any job, no matter how low the salary and that's why they don't pay more.

Only and exclusively the fact, in a free society without welfare they won't find workers for these low wages anymore will force them to increase wages.

[AncapFTW]

Sometimes I have the impression, some of you guys in here misunderstand me on purpose.

I NEVER said anything remotely close to "need artificial help", I said the precise opposite of that.

I said, it will happen automatically once the free market has learned how it works.

Any attempt of whatever form of artificial help only prevents the markets from learning the true conditions of life in a free world.

I must have misread your post, because I thought you were implying that the more talented people would exploit the less talented people.

[B0b]

In a truly free market, business models that depend on paying the workers less than they need to make a living cannot exist, simply because no worker would be able to afford taking a job there.

That's why in a free society wages will automatically adjust to a given minimum, completely without any government setting any minimum.

Companies like Walmart will simply lose all their workers, or have to replace them with students who don't have to make a living out of their wages.

 

 

If you agree that wages would automatically adjust, then, why did you say that employers need to make particular efforts?

 

 

How on earth could you possibly believe that?

Isn't Walmart the perfect example that the wealth of the owners has no influence on the wages they pay?

Walmart could easily triple the wages of all their workers without increasing any of their prices, just by lowering the personal profits of the owners a bit, yet they don't have to, because there are more than enough unemployed workers around willing to take any job, no matter how low the salary and that's why they don't pay more.

Only and exclusively the fact, in a free society without welfare they won't find workers for these low wages anymore will force them to increase wages.

 

 

Can't you understand that in a free market, there would be much more competition, and that there would be other cheaper supermarkets offering better paid jobs?

How do you know that they could pay people 3 times as much? Please do the maths for us.

 

Since it is so easy to make so much profit that one could pay employees 3 times as much, I will open a company tomorrow.

[Thomasio]

If you agree that wages would automatically adjust, then, why did you say that employers need to make particular efforts?

 

Because if employers attempt to keep things going as they are now, by the time the fact they can't find workers anymore will force them to pay more, economy will have collapsed already and it will take a LONG time to rebuild society afterwards.

 

Can't you understand that in a free market, there would be much more competition, and that there would be other cheaper supermarkets offering better paid jobs?

How do you know that they could pay people 3 times as much? Please do the maths for us.

 

Since it is so easy to make so much profit that one could pay employees 3 times as much, I will open a company tomorrow.

 

If you can mange to make deals with Asian manufacturers and international transport companies that through the sheer size of the business allows you to negotiate prices nobody else can reach, if you then have the money to launch a gigantic chain of stores, if you then can manage to locate these stores in areas where there are so many unemployed that workers are willing to work for next to nothing, you surely could do that, just like Walmart did it.

 

Here are the actual numbers

 

An increasing profit reaching $130 bln in 2015.

All competitors combined make less profit.

http://www.wikinvest.com/stock/Wal-Mart_%28WMT%29/Data/Gross_Profit

 

Running 11,500 stores in 28 countries.

$7.2 bln paid out to shareholders.

http://corporate.walmart.com/newsroom/company-facts

$2 bln donated to charity.

 

=> means over $120 bln left for the Waltons.

 

2.2 million employees

https://en.wikipedia.org/wiki/Walmart

 

Do the math, a rough estimate will do, even without knowing the minimum wages in all 28 countries and without knowing how many hours they work on average.

Let's say $10 per hour tripled gives $20 per hour and worker extra cost for the Waltons.

Let's ignore the vast amount of part time workers and those working for less than $10, let's say that evens out with those who earn more than $10.

(If you want to insist their average worker makes more than $10 per hour and/or works more than 40 hours a week, just alter my initial statement from triple to increase by $20 per hour, that's the same to me, but maybe you find it easier following the calculation then.)

 

$20 * 2.2 million workers * 40 hours a week * 52 weeks a year = $91.5 bln.

Still leftover profit for the Waltons roughly $30 bln a year.

 

Obviously those are the numbers before taxes.

If there's a tax on wages, that would be deduced from wages, same as workers who work for $10 do not get paid the full $10, while a tax on their profits would automatically be reduced by the smaller profit they make when paying higher wages.

 

At the same time the economy in all these 28 countries would experience a gigantic boost in demand.

$91.5 bln more purchasing power in the population would create demand for more goods, would create the need for more production, would create investments, factories and jobs, which would allow Walmart to get back to (if not exceed) their 120 bln profit upon triple wages, they would have more diligent and better motivated workers, better service and they would force their competition to pay more as well, or else the competition would end up with the bottom end of worker skills.

Furthermore it would force literally ALL other businesses in ALL other branches of business to raise wages accordingly, because no hairdresser would do haircuts for minimum wage, if he could make 3 times as much filling bags at Walmart, which would again cause an even bigger increase in demand, even more investment, even more jobs and so on, an endless spiral upwards in a win-win-win-win-win situation.

 

But before you come up with the usual counter argument:

Nope, nobody would mind if a haircut would become more expensive, if everybody had that much more income.

There wouldn't even be any inflation, as long as production can keep up with the increasing demand, only if production would fall behind, prices would increase.

[B0b]

Because if employers attempt to keep things going as they are now, by the time the fact they can't find workers anymore will force them to pay more, economy will have collapsed already and it will take a LONG time to rebuild society afterwards.

 

Workers were paid much less 100 years ago. The system did not collapse, so what makes you think that he will collapse now. The system adapts. 

Why should employers have a special responsibility?? We are all equal. Employees are just as responsible as employers. If employees are not happy, they should find other jobs, learn new skills, start companies.

 

 

$120 bln left for the Waltons

 

This is so ridiculous. 120 bln is not what they made in 2015, but what they made during their whole lives. Check out forbes. I think that the Waltons make less than 1 bln a year in total in dividends. They get richer by 1 bln each every year because of their assets, mostly their company.

1 bln/2.2 M = 455. This represents 0.22 cents per hour. Congrats!

[AncapFTW]

Because if employers attempt to keep things going as they are now, by the time the fact they can't find workers anymore will force them to pay more, economy will have collapsed already and it will take a LONG time to rebuild society afterwards.

 

Workers were paid much less 100 years ago. The system did not collapse, so what makes you think that he will collapse now. The system adapts. 

Why should employers have a special responsibility?? We are all equal. Employees are just as responsible as employers. If employees are not happy, they should find other jobs, learn new skills, start companies.

 

 

$120 bln left for the Waltons

 

This is so ridiculous. 120 bln is not what they made in 2015, but what they made during their whole lives. Check out forbes. I think that the Waltons make less than 1 bln a year in total in dividends. They get richer by 1 bln each every year because of their assets, mostly their company.

1 bln/2.2 M = 455. This represents 0.22 cents per hour. Congrats!

I didn't know the exact numbers, so I couldn't do the math, but I had already done it for McDonalds, and calculated that if everyone's pay was capped at 100k, their workers would only get 5 cents more per hour.

[Thomasio]

They get richer by 1 bln each every year

 

Then I guess they must have finished building their company in 1860, they make their 1 bln a year ever since and never spend any, or how else did they get to 151bln net value today?

http://www.techscio.com/richest-family-in-the-world/

[Thomasio]

Workers were paid much less 100 years ago.

 

I suggest a few lessons in basic math.

An increasing productivity of about 3% per year means, every single worker doubles the amount of stuff he produces about every 25 years.

100 years of 3% increase means doubling 4 times, means every single worker today produces 16 times more stuff than 100 years ago.

 

Furthermore between 1900 and 2000 world population has grown from 1.5 bln to 6.1 bln, today we're already over 7 bln.

That means not only every worker produces 16 times more stuff, also there are 4 times more people, including 4 times more workers, all together making 64 times more stuff than 100 years ago.

 

Do workers today make 64 times the money, or at least 16 times the money they made 100 years ago?

AFTER inflation that is.

Nope, they don't, by FAR not.

 

http://usa.usembassy.de/etexts/his/e_prices1.htm

In 1915 (taking the middle between the numbers shown for 1910 and 1920) the average income was $990 per year.

 

https://en.wikipedia.org/wiki/Household_income_in_the_United_States

In 2014 the average income was $53,657 per year actually going BACKWARDS from 2013.

 

Now what did consumer prices do in the same time?

Let's take for example bread.

http://www.bls.gov/opub/btn/volume-2/pdf/average-food-prices-a-snapshot-of-how-much-has-changed-over-a-century.pdf

$0.056 in 1913 and $1.422 in 2013.

Some things like potatoes have increased by 40 times, other things like butter only 9 times, I take a rough estimate of 25 times.

 

The rest is easy math.

Production increased by 4 times per worker, prices increased by 25 times, requiring 100 times more income to keep the same purchasing power in relation to production.

But the average income increased only by 54 times, meaning in relation to production the population has only HALF the purchasing power, or in other words, roughly half the worlds industry is doomed to collapse, as soon as the population has maxed out their credit limits.

 

Do you need examples, proving this is already happening?

Half of all the cars manufactured in the world cannot be sold, because there are no buyers.

[Torero]

I suggest a few lessons in basic math.

....

Do workers today make 64 times the money, or at least 16 times the money they made 100 years ago?

AFTER inflation that is.

Nope, they don't, by FAR not.

...

But the average income increased only by 54 times,

 

 

Half of all the cars manufactured in the world cannot be sold, because there are no buyers.

 

I don't know where you get this claim, but that would be very very hard to believe.

 

Let's say Bayerische Motor Werke (BMW) -you didn't specify it by manufacturer- produced 100,000 cars in München in 2015.

Then only 50,000 cars were sold.

 

What happens?

 

1 - the person making the sales prognosis gets fired for hugely failing market analysis and production planning

2 - the company adjusts its production for 2016, based on a combination of last years sales (50,000), domestic market analysis, more advertising, etc. so they make let's say 60,000 cars (a 20% margin -w.r.t the 50,000- for growth potential)

3 - what to do with the remaining 50,000 cars?

 

The company plans a combination of A and B:

A - they are sold for reduced prices (let's say 20,000 instead of 25,000 euros) in the domestic market

B - they are shipped/transported by train to growth markets where the middle class and upper middle class able to afford a BMW are growing; Catowice, Qatar and Cambodia for instance

 

Or do you think that BMW (and any other car manufacturing company):

1 - does not reduce production so every year they will have only 50% sales vs production?

2 - just keeps the cars getting dusty on some parking lot outside of München?

3 - dismantles the cars again like some communist Arbeitstherapie?

 

And what I asked before; have you ever run a company or worked in one?

[Thomasio]

Maybe you should get some information, before you pretend to know more than me?

http://www.zerohedge.com/news/2014-05-16/where-worlds-unsold-cars-go-die

 

To answer your last question:

Yes, I've worked in large companies, like Siemens in Munich, I've worked in smaller companies like a computer reseller in Stuttgart, I've run my own business for about 5 years and I'm perfectly aware of what's going on, especially the fact that small business cannot compete against the bribery driven politics in favor of large corporations and their gigantic over production.

[Torero]

Maybe you should get some information, before you pretend to know more than me?

http://www.zerohedge.com/news/2014-05-16/where-worlds-unsold-cars-go-die

 

Indeed, this is "information". Doesnt mean it's true information...

 

This "Tyler Durden" from Zerohedge claims a combination of the 3 options I listed, only on the basis of photos -and you seem to believe that-?

 

1:

The car manufacturers have to buy more and more land just to park their cars as they perpetually roll off the production line.

 

2:

The amount of cars keeps on piling up on it until its overflowing.  Nissan then acquires more land to park up the cars, as they continue to come off the production line.

 

3:

UPDATE: Currently May 16th, 2014, all of these cars at the Nissan Sunderland test track have disappeared? Now I don't believe they have all suddenly been sold.  I would guess they may have been taken away and recycled to make room for the next vast production run.

 

The car industry would never sell these cars at massive reductions in their prices to get rid of them, no they still want every buck.  If they were to price these cars for a couple of thousand they would sell them.  However, nobody would then buy any expensive cars and then they  would end up being unsold.

 

Trust me, they are just mountains and mountains of brand spanking new unsold cars. There is no real reason why you should be driving an old clunker now is there?

 

It is a sorry state of affairs and there is no answer to it, solutions don't exist.  So the cars just keep on being manufactured and keep on adding to the millions of unsold cars already sitting redundant around the world.

• No sales analysis figures
• No production analysis figures
• Just photos and handwaving interpretations
• Assumptions all around - e.g. that companies would pay money for extra parking spaces for cars they don't sell - "ever"!
• To fit some story. And when the story doesn't fit anymore (cars "suddenly" taken away), then they are "recycled", not shipped to growth markets or sold for less, no just Arbeitstherapie?

Really, Thomasio, do you believe this BS??

 

 

To answer your last question:

Yes, I've worked in large companies, like Siemens in Munich, I've worked in smaller companies like a computer reseller in Stuttgart, I've run my own business for about 5 years and I'm perfectly aware of what's going on,

 

Ok, that's good news.

 

 

 

especially the fact that small business cannot compete against the bribery driven politics in favor of large corporations

 

Indeed a big problem of the crapitalist system we live in.

[B0b]

Thomasio, The Walmarts make more from their assets than from the dividends.

 

And what do they do with their 50% unsold cars, they use them for crash tests?

 

The poor are much better off nowadays than 100 years ago, this is a fact.

 

The fact that there are well paid employees in almost any company proves that employers do not pay poorly employees.

 

You seem to have a problem with some employees paid very little. What if someone is so poorly qualified? Would you give him 40k a year? Good luck with keeping your business alive. Also, good luck with the other qualified employees who will ask you for a substantial raise.

 

People like you an Piketty should try to create large companies and run them differently. then, we would see how successful they are and how employees are happy and well paid. the proof is in the pudding, not in silly figures. You calculated a $10 an hour raise, I calculated $0.20 raise.

 

If we do not pay the employees better, the system will collapse. This is such a ridiculous claim. The system adapts, that's all. It has always done so.

[shirgall]

Thomasio, The Walmarts make more from their assets than from the dividends.

 

 

A quibble. You don't "make" anything from an asset unless you sell it or use it to make something you can sell. On the other hand, dividends are a pay out. Stock price fluctuations change your potential profit if you sell a stock.

[Mister Mister]

Thomasio can I ask what is your experience in the free market?

[B0b]

Shirgall, what I meant is that they make money from their asset that is invested outside Walmart. They get dividends and salaries from Walmart, but they make also tons investing elsewhere.

 

I do not know what Thomasio's experience with the free market is, but saying that the walmarts make 120B every year even though their total fortune is 150B, to support his economic theories, is preposterous.

 

Thomasio, I am afraid that all your claims are as silly as your calculations. How can you be both a Marxist and a libertarian? It is so contradictory.

[LibertarianSocialist]

The very first thing required to do that would be figuring out, how do you prevent them from getting those children?

Stop paying doesn't mean they stop having sex and being poor often means they cannot afford contraception.

Furthermore poor people as well as those with low IQ are on average more religious than rich and/or intelligent people, therefore religious reasons make them refuse contraception.

So if you stop paying, you either have to sterilize them, or you will get to literally BILLIONS of starving people all over the world, where you have to be willing to watch them die in order to reduce their numbers.

The Nazis were on that line, online a few more steps further ahead, actively killing those they believed to be inferior.

 

This is a tricky problem I don't have any solution for either.

Killing them is out of the question, so is sterilizing them against their will, but feeding them allows them to have more children, so no matter how many poor people the world might be able to feed, a few years later their numbers will have increased.

There's a given deadline, from where on the world just can't feed the growing population anymore, even if none of them were poor and/or had a low IQ.

From a humanitarian point of view one tends to help them, even a free society would have charity, but from a logic point of view it's doomed to collapse one day.

The only solution that has worked so far is industrialization, education and increasing wealth to a point where having too many kids doesn't fit into their lifestyle anymore, but that's about the opposite of not paying anymore, because it would mean extremely big investments into poor areas.

I'd love to find a peaceful working solution to this one.

Evidence please?

 

Why do people have children? Cultural indoctrination? Biological drive? Yes, but mostly it is for security.

The only regions of the world still growing rapidly are third world nations, in which extended families means increased security.

All first world nations in which security is not an issue are experiencing declining, stalled or even regressing populations.

 

The whole people will starve because not enough food is bullshit. You probably know from Italy, but growing food takes very little room. Most of the people in my village get by on truly tiny gardens, and keep animals on the otherwise spare scraps of grass. Look close and you will see huge amounts of usable land. It is not any real scarcity of food we have, but a wholly artificial one.