Wednesday, June 29, 2005

Second Response to Currie

This is the author's response to two commentators. I address each allegation in a separate paragraph, usually beginning with a quotation and proceeding with my rebuttal.

”The first commentator, Mr. Henry, theorized that I was recognizing that poverty exists, but I just didn't care. This misrepresents my position - I care as much as socialists about the welfare of all. I simply feel there is an alternative approach that is both morally and practically superior.”

Fair enough. But in fact the decisions made by people espousing rhetoric and policies like yours have concretely increased inequity (and decreased growth rates), indicating something else is at work here.

In any respect, "practically" superior is a bit of a stretch, as inequity is apparently increasing. Even if capitalism produced more but was more inequal (something that's false), that would make it unsustainable both from a justice and an economic standpoint.

”The first commentator claims "the corporate world relies on the existance of poverty". But how do you define "poverty"? Every individual with even minimal means today has better technology, entertainment, communcations, urban sanitation, life expectance, than at any point in the past.”
1) This is a Eurocentric view. 1 billion people in the planet live on a dollar a day. Global inequity has increased both relatively and absolutely.
2) Wrong, wrong, wrong. People, even people with college degrees, are now making less in real terms. This is why there has been an explosion in the amount of families forced to have two wage earners instead of one. And there is epidemic levels of starvation, mostly in the US but notably enough in Canada too.
3) But is this the result of corporations? The era of the most government intervention, before the 70s, had higher growth rates. So your advocacy decreases growth, not increases it. Further, most of the research to do this was done inside state institutions such as universities. The simple fact is that you’re pulling exactly what a commissar would do in Russia: point to economic growth as an excuse for a system with power and material inequity. It’s not going to work on anyone with a grasp of history.

“Corporations enable the invention, manufacture, and distribution of all the goods and services we take for granted today.”
That’s not even remotely true. The vast majority of the good R&D is done outside of corporations – even the New York Times recognizes that. Further, most of the innovation that occurs inside corporations is “me too” products that masquerade as competition or additions (say, in Microsoft Word) to a product that are burgeoning and useless and make the product more unwieldy.

“So, no, sir, you are wrong - corporations have helped to create a world where people can define poverty as having only one TV, and not two.”
But any economy that isn’t insane have growth rates. An economy without corporations would be, ceterus paribus, better than one without. Why?
1) Corporations are central planning institutions. You know why central planning institutions are inefficient more than I do, but I’ll just mention bureaucracy, nepotism, and ineptitude. ;)
2) Corporations repress the bottom workers, letting even skilled or talented workers work as janitors, thus wasting human potential.
3) Advertising, military production, etc. are all waste forms of production.
“Next came the second commentator, Mr. Wark. He suggests that people born into poor familes were unable to get the skills they need to lift them out of "poverty". How do we address this problem? By assigning huge salaries to unskilled jobs?”
Yes. Why not? As I said earlier, why is it wise to key pay to skills? Is it harder to be a coal worker or be in college?
But a consistent person could argue for money (yes, even subsidies, perhaps) going into corporations and institutions that train people, and for raising the price of jobs as they exist now.
“Or by helping those disadvantaged people get that education? The first violates corporation's freedom to set wages, and actually hurts small business with high barriers-to-entry.”

I have no problem with helping small business, reducing inequity and making proportional regulatory systems like our taxes…. In fact, that’s my position.

Corporations, in my view, don’t have the right to exist. They sure don’t have the right to set wages. Especially since, as a matter of practical fact, if the government does not intervene for the poor it will be guaranteed to intervene for the rich.

“Thus, I favour the second approach: To help the poor with their education, I suggest people should donate to charities that offer scholarships and bursaries to students.”

And when those corporations’ policies contribute to their disability and lack of training? What about the companies who injure their workers then hire company doctors to tell their laborers they’re not sick?

“I also suggest that an OSAP loan, though initially expensive, can pay big dividends for those who want to get a job requiring an education. “

And the rich don’t have to pay those loans. Fantastic. Sounds like a great way to increase inequity in society.

"'If [Safeway was] truly interested in operating as efficiently as possible they would cut [executives'] salaries.'" A reform of corporate governance to make executives more accountable to shareholders may indeed by a good way to curb the worst excesses of executive bonuses. But if a company does have an accountable system in place, high executive salaries are justified - after all, CEOs don't sit around and smoke cigars all day; they put their years of education to work and, in general, work very hard every day.”

As hard as a janitor or programmer? Come on, sir. And why do we reward education? Isn’t education innately rewarding anyways, far more so than, say, having worked in crappy jobs in the meantime?

Further, the studies show that most companies simply don’t have such accountability. And these CEOs often do eat lunch and smoke cigars instead of working.

“Only a few people in the world are smart enough and have the right skills to be a truly great executive. That's why shareholders gladly approve of high executive salaries - to recruit top talent.”

And only a few people are really wiz-bang scientists or car mechanics or artists or writers. Compare their wages for a second and see how silly this argument is. In any respect, A) many executives are mediocre and get paid the same anyways, and B) there’s no reason to reward innate intelligence. Why do I get more and be smart? What control did I have over my intelligence? Even Milton Friedman recognizes this.

”The objection, however, was deeper than simple executive greed: "my opposition.. [is] to the corporations themselves... it's impossible for a capitalist institution to operate for the benefit of society." Every day, people use corporations to get all sorts of good things - hamburgers from McDonald's, clothes from Wal-Mart, food from Safeway (well, not anymore in Thunder Bay). Clearly we think it is to our benefit if we patronize these establishments! Corporations also employ millions of people - this is quite beneficial!”

That’s because they’re the only places that provide those things. In Russia, the only way people got vacuum cleaners was to buy from the state shops; does that mean that the state run shops were legitimate? Again, you’re conflating what any good economy should do with the particular institutions that run it. It’d be better, more efficient, more just and more liberatory if the corporations were replaced.

By your logic, clearly people love the Canadian and the US government because they pay their

"I do find it curious that the author seems to support corporate greed but condemn the apparent greed of unions." Unions should act in the interests of workers' desire for higher wages ("greed", as you call it) - that's their purpose. But when they are aided by government legislation that violently precludes workers from forming alternative associations (associations that might have saved our Safeway), unions become the bully.”

But governments and corporations also violently stop labor organizations: with programs like COINTELPRO, the Pinkertons, Nicaraguan contras, and the current attack on labor that is against things like the Zanon collective in Argentina (remember: the Zanon collective and other organizations are based on factories that have been left behind by bankrupt corporations that are now forcing the workers to turn back over the factories that they reclaimed. When I take an abandoned car and work on it, it eventually becomes mine. But when it's a capitalist company, I don't have that right.)

In any respect, the people who work there have a right to help control it. And that may mean, as part of the class war that the corporations are waging, fighting other people.

"'presumably it's perfectly ok for the state to subsidize and even bail out corporations'. At last, sir, we can agree on a point! Any form of government subsidy to prop up unproductive sections of our economy is needless, expensive, immoral, and benefits no one in the long-term. Government should end this practice. “

But you don’t recognize the key point: Capitalism is so inefficient that it needs these subsidies. So let’s kill it completely. I oppose both the nation-state and capitalism. Not inconsistent.

"The inference that people shouldn't have a family unless they are highly skilled and rich is very disturbing". I find it equally disturbing that children are brought into this world by people unprepared to deal with the burden. My simple appeal is that if one wants to have a family, it is sensible to first seek a good job to be able to provide for that family. Most good jobs require skills - those that don't (like the fat Safeway jobs) are only there because union monopolies unfairly created them. “

That is true, and yet it is not your decision to make. In any respect, those children are not responsible for the actions of their parents; why don’t they deserve some form of aid, like AFDC?

"In the 'real world' (i.e. capitalist world) it is supply of labour not skill that determines ones compensation", says the commentator. Of course, it is both factors that influence an individual's pay, not one or the other - and any one individual should see that an education will help to lift him out of poverty.”

It will help, but it will not always do it, as shown by numerous examples you concede. Meanwhile, the trust fund kiddies who don’t need to work at all to live get a free ride. Mm.

What really determines remuneration is bargaining power. The inefficiency of unions is built in, as is the corresponding reactionary backlash.

“The commentator rejects this because, he claims, it won't work for everyone, and low wages will still abound. But - in this hypothetical world, where we all have PhDs and no one wants to be a garbage man, will the garbage man's salary be low, or high? Why, high, of course, because there otherwise there would be a shortage of garbage men.”

You’re presupposing what’s being rewarded. What will be rewarded is the effort exerted at the job. Of course, instead of having everyone be Ph. Ds except for a few victims, why not share the tasks of society in what Michael Albert has called “balanced job complexes?”

“The commentator suggests that "If everyone... acquired skills, then the supply of skilled workers would increase and wages for high skilled jobs would fall or at best remain stagnant". This allegation is materially false - it commits the so-called "lump of labour" fallacy. An economy doesn't simply have a certain amount of work to "parcel out"; educated people start businesses, need lawyers, and form a synergy and dynamism that soon creates new forms of employment. On a short-term microeconomic level you are correct - a law firm inundated with applications from law-school grads, for example, will undoubtedly stop handing out big starting salaries - but for the economy as a whole, more educated people in the labour market means more prosperity for everyone.”

And since corporations help stop against this, with political pressure and by designing the tasks of society so many are permanently unemployed or underemployed and others are doing onerous and self-destructive tasks?

”1) Government has but one role: to protect individuals and corporations against violations of life, liberty and property. No other service from them is beneficial.”

Including protecting people from managers who take away their liberty, companies that pollute other people’s property, etc. In other words, eliminating capitalism, since these externalities and dominations are built in.

“2) Corporations in a free market compete to provide goods and services that consumers want, as cheaply and efficiently as possible.”

And there has never been a free market, but that’s false because corporations actually compete for profits, collude to reduce competition since it helps them.

Meanwhile, in a parecon (see, no company has an incentive to make profit by making crappy products, no person benefits from increased sales, and the workers (in their worker’s councils) directly get told what consumers want from consumers councils. All producers have the incentive to make the best product, sell it for the cheapest cost possible (while taking into account the full costs and benefits), not sell it to people who don’t want it (though there will be informational advertising), and not externalize their costs onto others.

“3) Individuals benefit in the long term, with a raised standard of living, and in the short term, with cheap and plentiful goods and services.”
And could benefit more with a sensible economic system. Further, some people are actually ”4) Unemployed people should be helped by charities - food banks, people who care. The alternative - government cheques - promotes dependency, and are inefficient and immoral, because they confiscate wealth from those that earned it.”

Actually, in practice these welfare programs have done the opposite: promoted independence, by letting people not be worried about being fired from their jobs if they demand higher pay.
Society has a debt to pay to every human member.

Of course, a parecon could decide to have no welfare for those who don’t work. But inequity will decrease.

”5) People should indeed be permitted to freely associate into unions, as long as employees are left with the _freedom_ to leave if they don't want their representation. Unions can indeed be a useful weapon against oppression - but unions can be as guilty of predation as any corporation, if government shelters them from competition.”

Competition that is sheltered by the amassed power of corporations and governments.


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