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May 09, 2008
Workers and Employers
Don Boudreaux
Let's reflect on an implicit presumption -- indeed, I'm sure, a presumption held unawares -- that undergirds many familiar discussions of workers' relationships with employers.
This common presumption is that employers generally are philanthropic benefactors of their employees.
Consider that many pundits, politicians, and ordinary folks believe that workers are expendable - that one of the surest and least-painful ways for firms to cut their costs and improve their bottom lines is to fire workers. This belief make sense only if workers contribute little to firms' profits. Put differently, this belief make sense only if, in employing workers, firms don't expect much in return.
In short, this belief makes sense only if most workers are overpaid.
A worker who is not overpaid is a worker whose compensation reflects pretty accurately that worker's contributions to his employer's revenues. So if a firm fires workers who are not overpaid, that firm suffers a loss of revenue at least equal to the compensation that that firm would have to pay those workers in order to keep them in its employ. Such properly paid workers are not expendable; firing them is not key to improving the firm's bottom line.
Of course, if workers are underpaid, the above holds true with special ummpphhh. An underpaid worker is one who contributes more to his employer's revenues than that employer pays to keep that worker on the job. So firing underpaid workers is an especially bad deal for their employers.
So in this view – what we might call the “Progressive” view - workers are seen as contributing little to their employers (which is why employers can so blithely fire workers). At the same time, employers are seen as contributing enormously and philanthropically to their workers. “Enormously” because the presumption is that the typical worker’s next-best employment option would pay him or her much less than he or she makes in the current job, and “philanthropically” because the presumption is that the worker is paid more than he or she is worth to the employer.
Strange economics.
Posted by Don Boudreaux in Myths and Fallacies, Work | Permalink
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Comments
Is this any more strange than the Progressive presumption that employers owe their employees jobs, rather than employment being a market exchange of labor for money?
Posted by: Bob Smith | May 9, 2008 1:59:59 PM
Isn't this just about the conflict between long and short term? There may be some category of employees - let's call them R&D - who are working right now but the fruits of their work may be many months away. I can improve the next quarter's figures by firing them and see an immediate reduction in payroll costs with no apparent effect on earnings. The lost earnings will only be felt in the quarter after next. By the time that situation arises, the falling revenues can be blamed on "unfavourable market conditions". So in the long term, the company is punished and loses out to wiser competitors, but in the short term there is an apparent reward that serves to tempt the stupid.
Of course this is not a failing of competitive markets. It's more a failing of large companies that internally operate like centrally-planned states, so they suffer from leadership that lacks the information needed to make decisions in its own best interests. (Why such companies form in the first place, or how they survive long enough to be noticeable, is another exciting mystery!)
Posted by: Daniel Earwicker | May 9, 2008 2:09:53 PM
Firms hire workers based on a production roll out plan, so workers, once hired, become a part of future production and are treated a little like capital.
The more accurate the firm is (except a monopoly) then the deeper it is in employment hierarchy. Once the firm reaches the limit of accuracy then the firm or market reorganizes.
The problem is that firms decide to reorganize all at once, so they synchronize.
Economists need to focus on that problem.
Posted by: Matt | May 9, 2008 2:12:21 PM
This common presumption is that employers generally are philanthropic benefactors of their employees.
I think many employees know that their employers could replace them with a machine, with substantial savings and an improvement in performance. They're glad their employers don't -- which makes them philanthropic.
My guess is that these beliefs are most common among people who in some form work for the government -- in which case their employer really is a philanthropic benefactor.
Posted by: SheetWise | May 9, 2008 2:25:25 PM
...just seeing 10% of my company laid off today, this was particularly interesting.
"but, you can't fire that guy! he worked overtime all the time!"
me:
"umm...and he was paid to do so."
Posted by: shawn | May 9, 2008 2:38:59 PM
I suspect that the way most people view the employer/employee relationship is more complicated. What if an employee contributes tremendously to the revenue of a company over a twenty year period, but then the market changes so that the employee's contribution is small net loss for the company? I think people who have been loyal to a company feel that there should be a quid pro quo that creates at least a moral obligation that the company be loyal to them. I think that companies might find that creating an environment that fosters loyalty in both directions is profit-maximizing behavior.
Posted by: PaulD | May 9, 2008 2:39:51 PM
shawn:
Exactly. Maybe they have others who can do a better job without working overtime, and for less compensation.
Posted by: Joe Grossberg | May 9, 2008 2:52:25 PM
I suspect that, at least where I work, there are plenty of people that don't contribute to the company equal to their cost.
Getting rid of people is very difficult. Having under-paid employees is my guess for what is the key to staying profitable.
Of course, this is anecdotal. I'm not sure how this could be proven empirically.
Posted by: Deryl G | May 9, 2008 3:18:23 PM
Some people just don't believe in competition, and don't believe that markets are real. This same is true at the other end of the pay scale.
http://www.forbes.com/2008/05/08/ceos-not-overpaid-ent-competition08-cx-mh_0508hodak.html
Posted by: M. Hodak | May 9, 2008 3:20:25 PM
Shawn --
Here's a problem: if you fire the guy who worked overtime all the time, it communicates to everybody else "you can't save your job by working hard." That seems to be the opposite of the message you actually want to send.
Layoffs create incentives among the remaining employees which are probably adverse to the company's interest. A previous employer of mine did a series of layoffs a few years ago, with the idea that the most valuable people would be the last to be laid off. That didn't work out, though, as many of the best people found other jobs shortly after the first layoffs. They recognized that a company going through layoffs was not likely to give them a raise and was more likely to lay them off at a time when it would be hard to get a job.
Posted by: Chris | May 9, 2008 3:21:30 PM
In the real world employers run the gamut from brilliant to moronic, and from compassionate to sociopathic.
Accordingly, generalizations are difficult. However....
Smarter employers tend to view employees as assets.
Dumber employers tend to view employees as a necessary nuisance.
The dumber employers never seem to understand why management is so diffiult, but make wonderful revenue sources for management consultants. Bless them.
Posted by: save_the_rustbelt | May 9, 2008 3:30:31 PM
chris,
hardworking and best aren't necessarily the same. if someone worked really hard (including weekends) just to keep pace with someone else who works half as long to do the same amount of work, would you keep him on? i think the message you want to send to your employees is that they need to work smart.
Posted by: hutch | May 9, 2008 3:54:38 PM
Hutch makes an excellent point. I know people who work a lot harder than I do, but I continually am considered to do a good job. If I solve a problem in 6 hours that takes someone else 9, I can then do whatever bonus activity I want and leave on time, while the slow bugger in the cubicle next to me calls his wife to say he will be late getting home.
Hard Working Employee = High Value Employee is a foolish myth of the Marxist. All that matters is the value you produce, not how much sweat it takes to produce it.
Posted by: Hammer | May 9, 2008 4:27:49 PM
In todays day and age, I think that employers treat employees as disposable resources. Use them until they are no longer needed. I think that if you (both employer and employee) are realistic then when "your time is up" it should not be a big surprise to anyone.
Banker
Posted by: Banker | May 9, 2008 4:36:56 PM
After reading all these posts, I think the first is absolutly the best and most simple. Bob Smith, you got it right. I might also mention that life happens, layoffs happen, companies fold.
One other point: I feel that it is essential leadership that does not seek "bad" power that makes the good companies.
Posted by: Craig Glackman | May 9, 2008 4:39:01 PM
PaulD: "I think people who have been loyal to a company feel that there should be a quid pro quo that creates at least a moral obligation that the company be loyal to them."
There is no moral obligation between employee and employer beyond the basic contract that the employee provides a service to the employer, then the employer pays him. In other words, every two weeks, on pay day, the employee and employer are squared up.
The employer is under no moral obligation to keep someone on the pay roll simply because he has worked at a company for a long time. The company has been PAYING him that entire time.
At any time an employee can quit for any reason at all, yet I never hear about an employee's obligation to stay at a firm because that firm depends on him. But, when an employer no longer needs the services of an employee, the are let go, then there are all sorts of outcries.
What nonsense.
Posted by: Ken | May 9, 2008 5:09:32 PM
Chris: "if you fire the guy who worked overtime all the time, it communicates to everybody else 'you can't save your job by working hard.'"
Wrong. Working overtime isn't communicating that I work hard. Usually, it's communicating that I can't get the job done in the 40 hours that I was supposed to get it done. Or, I'm saying look how hard I'm working. You should never lay me off.
The problem with this is that your supervisor all ready knows how good of an employee you are. If you are not all that good, you are only magnifying how inefficient you are and how willing you are to waste company resources, i.e., scarce salary dollars.
Almost all the overtime I've ever worked was so I could pad my paycheck. It did help the company, but by how much- I got paid time and a half up to two and a half times my base. I only NEEDED to work about 10% of all the overtime hours I've ever worked. The other 90% were because I like money and the supervisors approved of it.
Posted by: Ken | May 9, 2008 5:16:22 PM
Banker: "In todays day and age, I think that employers treat employees as disposable resources. Use them until they are no longer needed."
In this day and age, employees treat employers as places to make money and earn experience while looking for a better job and more money. Employees use employers until they are no longer needed.
Posted by: Ken | May 9, 2008 5:19:40 PM
I've been self employed for 30+ years acting as an independent contractor, owner, or partner -- but never as an employee.
Having had, and having, employees -- I see the employer/employee relationship the same as I see a master/slave relationship, there's just more rules. The government fosters it.
The tax code is so skewed in favor of the free man (the "independent contractor" or owner) that no amount of protection the government pretends to provide for employees could ever compensate them in return.
Life is a game -- learn the rules. Being a wage slave is, quite simply, just what it is.
Posted by: SheetWise | May 9, 2008 6:52:49 PM
I had to look this up -- for The Wealth of Nations.
"Ch.8, Of the Wages of Labour
The wear and tear of a slave, it has been said, is at the expence of his master; but that of a free servant is at his own expence. The wear and tear of the latter, however, is, in reality, as much at the expence of his master as that of the former. The wages paid to journeymen and servants of every kind must be such as may enable them, one with another, to continue the race of journeymen and servants, according as the increasing, diminishing, or stationary demand of the society may happen to require. But though the wear and tear of a free servant be equally at the expence of his master, it generally costs him much less than that of a slave. The fund destined for replacing or repairing, if I may say so, the wear and tear of the slave, is commonly managed by a negligent master or careless overseer. That destined for performing the same office with regard to the free man, is managed by the free man himself. The disorders which generally prevail in the economy of the rich, naturally introduce themselves into the management of the former: The strict frugality and parsimonious attention of the poor as naturally establish themselves in that of the latter. Under such different management, the same purpose must require very different degrees of expence to execute it. It appears, accordingly, from the experience of all ages and nations, I believe, that the work done by freemen comes cheaper in the end than that performed by slaves. It is found to do so even at Boston, New York, and Philadelphia, where the wages of common labour are so very high."
And yet the government (at least one party), continues to promote policy that makes a free man a slave. Social security, workmans compensation, health insurance, tax on income (as opposed to tax on profit), etc.
Posted by: SheetWise | May 9, 2008 7:14:27 PM
Ken,
I think you miss out on the joy of work by reducing it to an economic agreement between an employer and employees. Though I think that Dickens' "A Christmas Carol" goes overboard in its portrayal of the change in Ebenezer Scrooge, it's not a bad thing to bring a degree of humanity to work in the way one treats employees.
Posted by: David P. Graf | May 9, 2008 7:19:55 PM
Socialists believe that bad decisions by managers to punish/fire good employees is "unfair" and should be prohibited by law. They don't believe in the corrective actions by the free market to punish these companies bad decisions. After all, in the short term those employees are suffering from the bad decision.
What has to be weighed are the pros/cons of interfering with that corrective market force.
Posted by: FreedomLover | May 9, 2008 7:38:54 PM
Ken:
Employers and employees use each other to their mutual benefit. Why get the government involved?
Posted by: FreedomLover | May 9, 2008 7:41:34 PM
Good employers - by that I mean competent - understand implicitly or otherwise that there is a certain amount of value in every employee that manages to just show up and do their job without causing a train wreck of some kind.
More to the professor's point though, most people do unfortunately view a job as a right, and employers as wealthy incompetents who fire and hire randomly.
I usually address this in conversation by asking if my neighbor has a right to mow my lawn for wages of his own determination.
Posted by: Ray G | May 9, 2008 9:33:43 PM
Therefore isn't that the gripe against the notion of the 'just wage'? A 'just wage' invariably implies there's also a 'unjust wage'. If wages are deemed 'unjust' then you have the calls for 'minimum wages' and 'maximum wages'. The reality there is an 'as it is wage'.
But still (esp. SheetWise) how is there proof of an institution called slavery? If there is should onus of escape be on the 'slaves'? What if the 'slaves' don't want to be free because they can't see how they'd be better off in the open world because there are no free workers doing the same work (or there is but the work's pretty much the same except you get to 'love it or leave it'). If 'slaves' aren't particularly willing to leave then how is it necessarily 'slavery' but free people choosing the least worst form of employment? Alternatively, how do we know slavery is an unprofitable institution since it has lasted so long? Surely the sensible master would make more profit than idiot master and the idiot master would be driven out of business. Besides Ancient Roman city slaves were treated quite well and had a great deal of responsibility so should the life of slave be automatically worse than a free person?
Posted by: Gil | May 9, 2008 11:52:05 PM
I think you miss out on the joy of work by reducing it to an economic agreement between an employer and employees. Though I think that Dickens' "A Christmas Carol" goes overboard in its portrayal of the change in Ebenezer Scrooge, it's not a bad thing to bring a degree of humanity to work in the way one treats employees.
That's why the best scenario for workers is a surplus of jobs available, a scenario that government and unions work against.
Posted by: Sam Grove | May 10, 2008 12:44:41 AM
Check this article defending Scrooge from the them thar dang Socialists:
http://www.lewrockwell.com/shaffer/shaffer93.html
Posted by: Gil | May 10, 2008 2:26:10 AM
In my experience, when companies make employees redundant during tough times, they are usually recognising something that they should have done earlier. Over time, unnecessary jobs build up - sometimes because of a reluctance to remove jobs after automation or some other efficiency improvement and sometimes just the result of empire building in departments.
Tough times for the business forces management to face up to this.
Usually it would have been far better for everyone if the redundancies had been recognised much earlier.
Posted by: Ken Nielsen | May 10, 2008 4:00:50 AM
Alternatively, how do we know slavery is an unprofitable institution since it has lasted so long?
Interesting enough that you're using slavery to defend a warped sense of freedom. Something about human rights would answer that question. Then again, it's not stopped, it's now the Taft-Hartley Act.
Employers and employees use each other to their mutual benefit. Why get the government involved?
One of those parties usually has a lopsided disadvantage. It is not the employer, as they can spend tons against the employee.
Mutual benefit stopped when firms could be hired to turn it into a war of attrition. If they can't win, they just attempt to sink the ship.
I think people who have been loyal to a company feel that there should be a quid pro quo that creates at least a moral obligation that the company be loyal to them. I think that companies might find that creating an environment that fosters loyalty in both directions is profit-maximizing behavior.
Well said. That is how you survive without unions, not by Reaganist hostility.
Posted by: sethstorm | May 10, 2008 5:44:11 AM
Does a worker/employee ever quit for the good of the company? If companies are expected to be loyal, shouldn't it go both ways?
"Boss, I'm overpaid. You're losin' money on me. I'll be on my way. Thanks for carrying me despite my inadequate productivity."
Posted by: Joe C. | May 10, 2008 7:10:44 AM
I still ask is there really such a thing called 'slavery'? Somehow I doubt it from a truly free market point of view.
Posted by: Gil | May 10, 2008 9:31:17 AM
I still ask is there really such a thing called 'slavery'? Somehow I doubt it from a truly free market point of view.
What do you think of corporate subsidies?
Are companies such as ADM, et al, enslaving you just a bit?
Posted by: Sam Grove | May 10, 2008 9:58:51 AM
"I still ask is there really such a thing called 'slavery'? Somehow I doubt it from a truly free market point of view.
Posted by: Gil | May 10, 2008 9:31:17 AM"
Gilduck,
I have no doubt that you still ask is there really such a thing called "slavery".
I also have no doubt that you also still ask is "why is there air"?
and
"does the same water lap the same piece of shore eternally"?
and
"Why does the moon shine"?
and
"Do I have to eat all my spagetti"?
and
"What do I do with the booger that is now on the end of my finger"?
I witness you still asking foolish questions and making silly pointless poorly crafted comments on a daily basis.
No doubt, as this is a free market blog, I will see you continue this line of discourse.
Try focusing on things you can handle, such as "righty tighty, lefty loosey".
Ironic isn't it Gilduck, how that little saying works for mechanical things and it also works in political philosophy as well.
Right, neat, tight, and kept together; left, loose, disorganized, and falling apart.
Posted by: vidyohs | May 10, 2008 10:44:04 AM
I think people who have been loyal to a company feel that there should be a quid pro quo that creates at least a moral obligation that the company be loyal to them. I think that companies might find that creating an environment that fosters loyalty in both directions is profit-maximizing behavior.
When my employees come to work, they get a check on Friday. If I screw up and lose money -- they still get a check. If they screw up, and lose my money -- they still get a check. When they're in training, and unprofitable to me -- they get a check. I shoulder the entire financial risk -- making or losing money. That's the quid pro quo. That's the loyalty.
I still ask is there really such a thing called 'slavery'? Somehow I doubt it from a truly free market point of view.
Slavery isn't necessarily a bad thing, and there's good reason to believe, in any period of history, that some would chose to be slaves. What we object to is people being born into slavery, and not being free to leave. A lot of slaves have a really good gig -- why would they quit? I'm certain it's always been so.
Posted by: SheetWise | May 10, 2008 10:59:59 AM
Some very interesting viewpoints, but nobody discussed slavery, unions and overpayment for work in the public sector vis-a-vis the private sector.
In the kind of market described here, why is the public sector so philanthropic?
Why are public sector unions necessary?
How come an individual that wants to work for a government doesn't have the right to work for a government without belonging to a union?
Also, how come that private sector contractors with the lowest price can't win a construction contract with governments, when all other things are equal?
Posted by: CANUCK82 | May 10, 2008 11:15:38 AM
Derp! I asked is there truly anything really called 'slavery'. I remember reading how there's no way a boss can 'exploit' a worker especially in a way that would justify unions. The worker accepts the position or leaves. If an employer used some sort of force and/or fraud on the work site then it's a criminal act not 'exploitation' (as exploitation is usually defined as grossly unfair yet technically legal). Similarly in history is there any employment or association called 'slavery'? It's not the employer's fault the worker has a crumby job rather it the worker's fault for not having or trying to learn any productive skills which pay well. It a similar story to native people complaining there's no jobs or opportunities only for migrants to keep coming in, working hard, seizing opportunities and within a generation or two become rather well off.
P.S. If someone chose to be a 'slave' then then it isn't slavery is it? But I do believe it is traditional that a debt carries on to next of kin lest it create a situation of someone who's terminally ill financially ruining everyone around him.
Posted by: Gil | May 10, 2008 11:34:48 AM
David Graf: "I think you miss out on the joy of work by reducing it to an economic agreement between an employer and employees."
Expecting work to be something more than economics is the root of more misery at work than anything else I can think of.
Freedomlover: "Employers and employees use each other to their mutual benefit. Why get the government involved?"
Please reread my posts and note NOT ONE reference to the government getting involved.
Posted by: Ken | May 10, 2008 1:28:42 PM
I remember reading how there's no way a boss can 'exploit' a worker especially in a way that would justify unions
There's no way a boss can exploit a worker in the way that justifies unions if bosses in general are behaving in a rational and law-abiding manner. The reason I'm not a libertarian is that there's a big horizon problem for decision makers: anyone who has been in business has inevitably learns that it's highly costly to deviate from the status quo. Further, for large businesses, the business as a whole constitutes a vastly complex system, which means that determining how you deviate from the status quo is very costly.
That means that you can have a large business that treats its employees in irrational or even criminal ways that might obviously be exploitative to an outsider, but just "the way things work in this business" to an insider.
Similarly in history is there any employment or association called 'slavery'?
The Constitution of the Confederate States of America explicitly mentions slavery, and explicitly protected the "right of property of negro slaves."
If someone chose to be a 'slave' then then it isn't slavery is it?
It's called indentured servitude. Slept through history classes much?
Posted by: ben | May 10, 2008 2:38:44 PM
Ken --
I agree that my experience does not apply to all situations. It was an engineering environment; nobody got paid overtime and getting things done often required late nights and weekends, largely because the equipment we worked on needed to be scheduled.
I think my broader point is still valid -- when a company has layoffs, employees often infer things (some true, some not) which the company didn't intend to communicate. And, those inferences create incentives.
I'm not suggesting that lay-offs should never happen. I assert, though, that they often have costs that go well beyond the forgone work that those employees were doing.
Which ties into the main point -- companies will often not fire underperformers (especially if they are clustered together), just to avoid those other costs. So, to a certain extent, employers ARE philanthropic benefactors.
Posted by: Chris | May 10, 2008 2:59:40 PM
That means that you can have a large business that treats its employees in irrational or even criminal ways that might obviously be exploitative to an outsider, but just "the way things work in this business" to an insider.The only person who should be judging "exploitation" is the person allegedly being exploited. For example, many feminists think strippers are being exploited. Many strippers think feminists are daft. At any rate, if the employee concludes they're being "exploited", they can renegotiate the terms of their employment, or they can leave. If the outsider wants to save workers from "exploitation", why don't they start their own business? If what they say is true, employees will flock to their banner and the bad, evil employers will go out of business for lack of employees. The answer is this was never about the employees at all, but rather the outsider himself. He demands no risk to himself in the pursuit of his principles. His high-minded, self-righteous rhetoric justifies imposing his will and beliefs on others for their own good, and he will not hesitate to use whatever coercive capablity he has at hand to get others to do what he wants and what he says.
Posted by: Bob Smith | May 10, 2008 7:55:11 PM
I can't comprehend a discussion of the employee/employer relationship that doesn't include the concept of slavery. Yet, I think the word "slave" has incited too much rationalizing. I always thought Smith's opinion was interesting, especially given the date of it's writing -- but that's a whole 'nother story.
As an example -- I have an employee now who is a very well educated man, 50+ years, intelligent, a graduate of a well known seminary, fun person to be around and liked by all. I consider him an asset to my enterprise, and he enjoys working with us. But he has a problem -- when I hired him he was homeless. He was homeless for the next year. When he got paid on Friday, he was broke on Monday (with nothing to show for it). He could not handle money -- period.
Understand, he can leave anytime he wants. So here's how we handle it today. He shows up 40 hours a week. I pay his rent and utilities. I pay his cell phone. I buy him a bus pass every month. I pay his medical insurance. He has several restaurants where he can charge his meals to me. Of course, I deduct all of this from his paycheck. I give him whats left, and to nobody's surprise -- he's still broke on Monday. But -- he has a place to live.
Am I a slave owner?
Posted by: SheetWise | May 11, 2008 2:47:29 AM
Isn't that the point SW? It's near on impossible to define 'slavery' without an essence of criminality. If force&fraud is being used there's a criminal act in progress. Yet if someone seems to be exploited by some onlookers it isn't slavery nor is it necessary the fault of the employer. The employee for all we know feels better (seemingly exploited by onlookers) because low paid work is better than no money for anything.
Posted by: Gil | May 11, 2008 2:56:14 AM
Gil -- Yes. It's obvious to those involved in voluntary exchange.
To those involved in "public service", it's a bit of a mystery at best -- and often times viewed as a conspiracy.
Posted by: SheetWise | May 11, 2008 3:18:35 AM
Isn't that the point SW? It's near on impossible to define 'slavery' without an essence of criminality. If force&fraud is being used there's a criminal act in progress.
Interesting point from a character on this comment board who regularly champions/advocates for government to legislate away all socio-economic injustices.
Yet if someone seems to be exploited by some onlookers it isn't slavery nor is it necessary the fault of the employer.
So, is the logical position to take, Gil, is to form a majority of concerned onlookers that will stop this so-called eploitation? To opt for the slavery of all onlookers, the exploited, and the eploiters because that scenario is best?
The employee for all we know feels better (seemingly exploited by onlookers) because low paid work is better than no money for anything.
The liberty and freedom to choose one's own lot is better than not to have it, in my opinion. I suspect that the inner fairness policeman within you wants no part of liberty and freedom for those that are 'exploited'. That so-called enlightened and altrusitic position of yours, Gil, makes you the slave master.
Posted by: LowcountryJoe | May 11, 2008 10:05:50 AM
Ouchies LCJ!! That dreary strawman of accusing all non-Libertarians of being baby-eating Communists? I'm wondering what is slavery? People complain about sweatshops but it just employment for poor people in a way a country might overall exit poverty. Or people whinge and whine about being 'exploited' they have no rational basis for it. Maybe I wonder how Libertarians necessarily feel more exploited to call themselves 'Libertarians' or how the world would be different if it were 'Libertarian'? It seems there are plenty of grump vidyohsesque would-be total private property owners who'd be as mean as any Guvmint except it'd be called rules not regulations and rent not tax.
Posted by: Gil | May 11, 2008 10:53:19 AM
Strawman, hell. Using government as a tool to rid society of all economic unfairness -- as defined by those with communist/socialist sympathies (e.g. you, muirgeo, sometimes Martin Brock, others that come around) -- is an idea that you seldom, if ever, disavow. This is not some sort of strawman, Gil, because you bring it upon yourself. You just cannot handle others highlighting the stark consequences and pretzel logic of your precious ideas.
Posted by: LowcountryJoe | May 11, 2008 12:24:53 PM
Yeah right. Create a false dichotomy - you must choose between Libertarianism and Communism - there's no 'third way'. It's just like saying to a mildly religious person "you're as damned as any Atheist".
Posted by: Gil | May 11, 2008 8:32:50 PM
Poor Gilduck,
Precious Gilduck, I feel for you, I really do.
Find out where muirduck went, and go there. You will feel so much more comfortable.
You are just so lost here. History has shown all of us that, like muirduck, you're not here to exchange ideas and learn from that, you're here to babble confused sophomoric silliness and invite people to chase you around the mulberry bush, much like Martin Brock.
Posted by: vidyohs | May 11, 2008 9:31:18 PM
Cool blog...thanks.
Posted by: Raker | May 12, 2008 1:01:33 AM
"Understand, he can leave anytime he wants. So here's how we handle it today. He shows up 40 hours a week. I pay his rent and utilities. I pay his cell phone. I buy him a bus pass every month. I pay his medical insurance. He has several restaurants where he can charge his meals to me. Of course, I deduct all of this from his paycheck. I give him whats left, and to nobody's surprise -- he's still broke on Monday. But -- he has a place to live.
Am I a slave owner?"
Is your employee free to quit? If he can, then you are not a slave owner.
Posted by: PaulD | May 12, 2008 9:47:04 AM
Yea... all this debate about "what is slavery" is pretty silly. If you can quit your job and the only penalty is you no longer get paid for doing it, it is not slavery. If you quit your job and your boss tracks you down and kills you, drags you back to work or what have you because you belong to him, that's slavery.
"Wage-slavery" is just a stupid concept. When you are chained to a chair and threatened with violence if you don't come to work the next day, that's slavery. If you get paid very little, but can go get another job or even no job if you want, that's freedom.
Seriously, do we need to have this coversation to clear anything up?
Having " a little slavery" or "a third way" is patently ridiculous besides, Gil. There might be a million ways, but it is just a question of how much slavery you are willing to accept and impose on others. The trouble being that no matter how much slavery the government imposes, it is more than some people are going to be willing to accept.
Posted by: Hammer | May 12, 2008 3:10:44 PM
" . . . kills you, drags you back to work . . ." - Hammer.
Um, wouldn't that be considered not so much slavery as a criminal act? Murder? Kidnapping? On the other hand, what if you talking of an escaped dangerous prisoner? But you, in essence, got the gist of my point when you dismissed the notion of 'wage slavery'. It's a empty provocative term to get sympathy votes. But what of other empty provocative term 'tax slavery'?
Posted by: Gil | May 12, 2008 8:30:10 PM
It's just like saying to a mildly religious person "you're as damned as any Atheist".
Faithful or religious? Most people with a true faith believe in God's grace and His extension of free will. Therefore, while we all are imperfect and many times judgemental, the truly faithful would never elevate themselves to God's level and cast damnation on their fellow man -- as if they could pretend to know what God sees and what God's opinion is.
But, given how you operate, Gil, it surprises me none just how much stock you place in the moral pronouncements of obviously corrupted men. Does it matter that I label you a commie? Who am I to judge? Do you feel compelled to shield yourself from the charge and my judgements? Why is it that you do? Maybe if started acting like a lover of liberty, I wouldn't bust on you so often.
Posted by: LowcountryJoe | May 12, 2008 8:48:15 PM
Gilduck,
Again you don't have a point, you don't have an idea, you don't have a clue.
"But you, in essence, got the gist of my point when you dismissed the notion of 'wage slavery'. It's a empty provocative term to get sympathy votes. But what of other empty provocative term 'tax slavery'?
Posted by: Gil | May 12, 2008 8:30:10 PM"
"Wage slavery" is an empty provocative term because it is voluntary.
"Tax slavery" is a fact because it is involuntary, the result of force or coercion.
When you grow up you might be able to see the difference.
If English were your first language you might be able to explain yourself better.
Posted by: vidyohs | May 12, 2008 9:30:36 PM
How isn't 'tax slavery' a provocative term vidyohsgoose?
* I pay a monthly fee for internet service.
* I can choose another but most have transaction costs that doesn't make changing appealing unless my existing provider decides to do something stupid.
* I can choose to go without no fee for no internet services.
* I can expect an angry ISP if I could consumed the internet services without paying.
* I can expect an even angrier ISP if I set up my own ISP services whilst using the resource of the previous ISP.
Somehow I can't see how any one in the West can be a 'tax slave'. Others pointed out in other uncomfortable scenarios - "well you have the right to leave". So where does the U.S. Government 'coerce' the U.S. citizens? Alternatively on what grounds is the U.S. government illegimate in the sense that doesn't have the right to make laws or taxes? Somehow if I kept whinging and whining to my ISP that their deals are unfair they'd say something to the tune of "well if you don't like it then leave otherwise if you continue to consume our internet services then you'll still get billed and we'll get debt collector if you decide to start missing payments".
Posted by: Gil | May 12, 2008 11:34:10 PM
"Wage slavery" is an empty provocative term because it is voluntary."Tax slavery" is a fact because it is involuntary, the result of force or coercion.
Income tax, payroll tax, and other "employment" taxes are voluntary? Under the law -- it's only the wage earner who can't avoid them. And while nobody can avoid them altogether -- their impact on the owner/employer is much more controllable.
Being defined by the government as an "employee", as opposed to an independent, is what makes you a tax slave. It's hard to divorce the two -- which you're trying to do.
Somehow I can't see how any one in the West can be a 'tax slave'. Others pointed out in other uncomfortable scenarios - "well you have the right to leave".
If you leave the United States -- you will have to pay capital gains on all assets you sell in the US and you will have to continue paying US Income Tax for 10 years, and if you visit the US for 30 or more days a year you can pay US Income Tax on your foreign income. Free to leave?
As Smith brilliantly observed -- to an employer the biggest difference between a free man and a slave is simply who is reponsible for their welfare. Smith understood that it made sense to free the slaves and hire them back as employees -- because it was cheaper.
Posted by: SheetWise | May 13, 2008 5:27:56 AM
As far as I know, my ISP was not legally bound through a codified constitution where the inteded purpose was to secure the blessings of liberty to its customers and to their customers' children.
Does my ISP renege on its contractual obligations? Do the 535 asshats?
Does my ISP make a habit of charging different fees to different people for the same level of service? Maybe for a short promotional time frame but they certainly don't pander and tell me that their wealthier customers are going to take it on the chin so that I can shirk my obligations. And you'll never once hear their CEO and principals say we ought to provide universal Internet service where even our non subscribers will be covered even though the monthy rates may be increasing for those that are the paying customers; why is that?
Others pointed out in other uncomfortable scenarios - "well you have the right to leave".
Yes, I do have the right to leave. I also have the right to say that this is bullshit and the federal government should not be involved in this area of governing society. I also have the right to tell the defenders of government encroachment that they're misguided, wreckless, hypocritical, naïve, and tyranical.
Liberty and freedom: two terms that the Left finds provacative. You must wince everytime one of your ACME analogies backfires Coyote Gil.
Posted by: LowcountryJoe | May 13, 2008 6:00:21 AM
Gilduck,
You wouldn't happen to be the son of Chuck Wepner would you? Only muirduck has shown your capability to get the shit beat out of him, bleed all over the cafe, and still senselessly get up off the carpet and flail away in ignorance and stupidity until knocked down again.
Is there a socialist school, there must be, where folks like you, muriduck, and Martin learn to debate with the evasive stupidity that you show? You are so pitifully transparent.
"How isn't 'tax slavery' a provocative term vidyohsgoose?"
Is it an "empty" provocative term, dipstick?
"Tax slavery" is real and therefore is definitely a provocative term, especially when used in a setting that includes socialist; but, it is not an "empty" provocative term as you labeled it.
But then you go from that idiocy straight to the socialist boogie-man, voluntary commercial transactions and try to draw a parallel between the contractual nature of those to the coercive nature of association with government.
Posted by: vidyohs | May 13, 2008 7:32:03 AM
Sheetwise,
If I read you right, I believe that you're not looking at the subject clearly.
"Tax slavery" is a fact because it is involuntary, the result of force or coercion.
Income tax, payroll tax, and other "employment" taxes are voluntary? Under the law -- it's only the wage earner who can't avoid them. And while nobody can avoid them altogether -- their impact on the owner/employer is much more controllable.
Posted by: SheetWise | May 13, 2008 5:27:56 AM
Correct me if I am wrong, please.
What you're making a case for as "wage slavery" in the quoted comment is in fact "tax slavery". And, you are 99% right to the deepest level that the wage earner can not escape those because of the total climate of fear created by our government through its rouge agency of thugs, the IRS.
If one is to address "wage slavery" and avoid it being in reality "tax slavery" one would have to say that the employer was docking an involuntary earner's pay for the benefit of the company and not a pass through for the IRS.
"If you leave the United States -- you will have to pay capital gains on all assets you sell in the US and you will have to continue paying US Income Tax for 10 years, and if you visit the US for 30 or more days a year you can pay US Income Tax on your foreign income. Free to leave?"
Just to clear up this small matter, in this quote, I assume you meant leave without renouncing citizenship in the USA and taking up citizenship in another country?
If I renounce citizenship in the USA and take up citizenship in Brazil, I guaran-damn-tee you that the USA is not going to tax my income for the next ten years, and if I visit the USA as a newly minted Brazilian citizen they are not going after me for an income tax.
But, on this subject, just to screw with your thought processes a little, here is a riddle:
Why does one intentionally renounce what one has never intentionally announced?
Posted by: vidyohs | May 13, 2008 7:47:15 AM
Ffs! At what point do Libertarians get on their high horse and say the government is illegimate? Was not the U.S. Govenment formed in 1776? Who here is descended from a North American family prior to 1776? I find part funny/part pathetic when some white Aussies rant about 'immigrants who come to our country telling what to do' when in reality they're descended from a family who migrated only some 50 years ago - far after 1901 when Australia was federated.
On the other hand, if the U.S. Constitution 'doesn't follow the intentions of the Founding Fathers (or at least the ones who could pass as Libertarians)' can you say what Amendments were illegitimately passed? Some Libertarians want to restrict the Constitution to the first 10 or the first two or just the Second - why should their view of the Constitution should be everyone's? Or the Constitution was supposed to the first ten and no more then isn't Libertarians' tough luck? Lawyers would say tough luck if you entered a contract where the other party violated what you felt agreed to but they aren't technically breaking it because the contract wasn't specific enough or wasn't quite worded the way you thought it was.
Ultimately, if yous say 'tough luck' to a 'wage slave' because a worker has inadvertedly cornered themselves via not having the skills, experience, etc., to get stuck in the worst jobs then why should I necessarily care for those who cry 'tax slavery' if they have cornered themselves whereby they have to jump when government says 'how high' especially in this modern international globalised world?
Posted by: Gil | May 13, 2008 10:49:21 AM
At what point do Libertarians get on their high horse and say the government is illegimate?
You're misunderstanding things. Not many will get on their high horse and make claims that the government is illegitamate. But, what they will shout from the saddle is that many things should not fall under the scope of a centralized government and do not need legislation at the federal, state, county, or municipal level. However, if an issue is something that is the proper role of government to meddle into, it ought to be reserved for the lowest level of governance as logically possible.
The U.S. Constitution was adopted in some twenty years after 1776. Its adoption was extremely contentious and its Bill of Rights were hammered out concessions on both sides of the Federalist/Anti Federalist debate. The U.S. Constitution was never meant to be a document that granted liberties and prohibitions by government super-majority decree. It was a document that recognized that liberties were men's natural rights and that the document served to limit the power and scope of what the federal government would be allowed to do. The ninth and tenth amendments were written for a reason. It is very sad that something went terribly wrong in our understanding of what the document attempted to codify for its people present and future.
Posted by: LowcountryJoe | May 13, 2008 11:49:34 AM
vidyohs --
Just to clear up this small matter, in this quote, I assume you meant leave without renouncing citizenship in the USA and taking up citizenship in another country?
No. I meant expats, who do give up their citizenship. According to the tax law, neither renouncing your citizenship or taking new citizenship will eliminate your US tax liabilities for ten years. This does assume that you're worth something when you leave. If you are -- you're treated as US property.
"Tax slavery" is a fact because it is involuntary, the result of force or coercion.
There are a lot of forms of slavery, and as I said earlier, all of them are not objectionable. As to how I see it, all that's necessary is the recognition of both a master and a servant who are treated differently under the law.
My basic objection with the law is that it does treat people differently. It classifies one group of people as in need of government protection, i.e., wage earners, and is increasingly taking responsibility for their support and welfare.
----------------
On the subject of slavery and what it means -- consider a person who plays professional sports. They are bought, sold, and traded in a government recognized monopoly. Only if they work long enough, can they earn freedom from their masters. What could be closer to slavery? Sure they can quit -- but they would have to give up their profession. This is a form of slavery where millions of American would like to be enslaved, because the slaves are paid very well. Likewise, in a world market, hundreds of millions would like to be enslaved in Americas minimum wage. At other times in history, slavery may have looked attractive because slaves got to eat.
Slavery doesn't have to be objectionable to the slave -- it's enough that it's favorable to the master.
Posted by: SheetWise | May 13, 2008 11:53:27 AM
Sheetwise,
Here is the URL of the U.S.Code maintained by Cornell U., it is easily searchable. I am a pretty fair student of Title 26; care to look up and quote the exact place in Title 26 that supports your contention that the USA can and will attach your wages after you renounce your citizenship here and move to and take up citizenship in Brazil (or any other country). For the first part the IRS and the U.S. Gov't has no jurisdiction to enforce attachment and collection procedures in Brazil. I am sorry but I believe you are mistaken on this subject.
Now, I temper my comments by acknowledging that should the expat have income originating in the USA, such as a retirement fund, then it is possible that it can be attached by the government. But, they are not going to go to Brazil and attach the wages you make solely on activities conducted in Brazil after immigrating to Brazil.
Also I have a much more stringent interpretation of what constitutes slavery than you but even so I am able to apply it more liberally than most.
Your use of professional sports as an example of slavery does not meet any reasonable defintion of slavery. Anytime there is choice on the part of both parties to terminate the arrangement then there is no slavery. When you acknowledge that a player can quit at will, regardless of how onerous on his pocketbook or self esteem, then you acknowledge there is no slavery. When the player can renege on his contract and walk away and become a plumber or a truck driver (etc.) and the owner can do nothing more than sue to recover unearned bonuses and salary then there is no slavery.
Slavery exists when all choice, except the ultimate one of to live or to die, resides in one of the two parties involved, specifically the slavemaster.
A liberal application of the term slavery can be made in the instance of rape. Rape may be temporary, a single act consuming very little time, but while being carried out it is a form of slavery and the rapist is the slavemaster using another for his own benefit and pleasure over any objections or resistance.
Posted by: vidyohs | May 13, 2008 7:23:34 PM
Sheetwise,
Sorry, forgot to put the URL in.
http://www.law.cornell.edu/uscode/
Posted by: vidyohs | May 13, 2008 8:17:43 PM
Professional sporting institutions such as the MLB, NBA, and NFL are monopolistic in nature. Current owners control the entry (and relocation decisions) of teams and are on one side of the policy-making that affects the whole league of play and the marketing of that professional sports 'product'. On the other side of the policy-making is the players, formed in a union and represented by slick laywers.
Somewhere in that mix, the owners decided that a draft would be necessary -- presumably for parity and fairness within the league -- and the players bought off on that. This arrangement allows for a team to control the rights of the player for something like six years after signing with the team that drafted them (and, if not mistaken, for some smaller length of time if the player does not sign with the drafting team). Players voluntarily enter this arrangement for the opportunity to play the game, possibly gain stardom, and to make an incredible amount of money.
If professional sports players are technically slaves, then what does that make a volunteer in our Armed Forces? They sign a contract, too, and receive far less in compensation. They have far less liberty than a ball player does as well. But the vast majority of them would probably reject the notion that they are slaves.
Posted by: LowcountryJoe | May 13, 2008 8:35:06 PM
"Anytime there is choice on the part of both parties to terminate the arrangement then there is no slavery." - vidyohsgoose
Tada!!! :D
Posted by: Gil | May 13, 2008 11:14:50 PM
vidyohs --
A liberal application of the term slavery can be made in the instance of rape. Rape may be temporary, a single act consuming very little time, but while being carried out it is a form of slavery and the rapist is the slavemaster using another for his own benefit and pleasure over any objections or resistance.
There is a subtle distinction between the acts of rape and seduction. The action is the same.
Posted by: SheetWise | May 13, 2008 11:21:54 PM
vidyohs --
Perhaps I didn't put enough emphasis as needed on the wealth of the expat -- but my point is the same nonetheless.
Again -- I object to laws which classify people arbitrarily based upon their management skills, and treat them differently under the law. As the unintentional beneficiary of many of these laws (from an owners perspective), I am painfully aware of the skewed tax burdens -- most which are never addressed. I see both sides.
When most business owners go for a vacation, they will choose a trade show, or a convention -- always from a number of options provided by the free market. There is no mystery as to why these confabs are always in the best destinations in the highest season. The airfare is deductible, so is the cabfare to the airport. The rental car is deductible, as is the hotel and tips, so is most entertainment and consumption (which are conveniently applied to lodging charges). If you can't find a show you want to attend -- find someone you want to talk to at your destination of choice. Write it all off. Perfectly legal. Write it off 100%.
I don't know how many years you have to live like this before you realize that your employees cannot even deduct the gas they consume to commute 2 miles to work. They cannot deduct their car, insurance, mileage, clothing -- or even the federal tax on their gas consumption. If they take the bus, that is also non-deductible. They are a "protected" class known as "employees".
I'll keep going if you want -- but I'd rather rest my case.
Posted by: SheetWise | May 14, 2008 1:16:29 AM
I have been an independent business owner since 1983, so I am very familiar with the techniques of taking tax writeoffs.
You're not the only businessman patronizing this cafe.
You've rested your case prematurely because you haven't made it. All those employees you feel sorry for can walk away from your employee at any time and start their own business, or they can create a side business in some sort of sales and still take the same advantages you do and still enjoy being your employee. My wife is a prime example, she sold dental health plans on the side and everything we did in the way of travel, etc. was a writeoff because we always made sure we pitched someone on the way, at the destination, and on return and kept records. Not a burden at all considering the benefits.
The only reason your employees do not do that is that they are ignorant and lazy. "Too much bother, doncha know?"
In closing, if you equate rape and seduction as having a "subtle distinction" in your mind then you must be lousy at seduction, and also you must have the cops on your payroll as well because rape is a crime.
But, lets not go off around the mulberry bush about rape and seduction.
Got an answer for my riddle?
Posted by: vidyohs | May 14, 2008 6:24:40 AM
All those employees you feel sorry for can walk away from your employee at any time and start their own business ...
Correct. Workers are presumed to be slaves -- they can proactively take steps to become free. It's my understanding that slavery was always this way -- freedom was always available for a price.
In closing, if you equate rape and seduction as having a "subtle distinction" in your mind then you must be lousy at seduction, and also you must have the cops on your payroll as well because rape is a crime.
You missed my point. You stated earlier, "... rapist is the slavemaster using another for his own benefit and pleasure over any objections or resistance." To which I replied, there is a subtle distinction between the acts of rape and seduction. The subtle distinction rests only in the mind of a single actor.
Posted by: SheetWise | May 14, 2008 11:38:17 AM
I am sorry but I don't see how you contradicted or corrected what I said in any fashion with this:
"You missed my point. You stated earlier, "... rapist is the slavemaster using another for his own benefit and pleasure over any objections or resistance." To which I replied, there is a subtle distinction between the acts of rape and seduction. The subtle distinction rests only in the mind of a single actor.
Posted by: SheetWise | May 14, 2008 11:38:17 AM"
However, this:
"The subtle distinction rests only in the mind of a single actor.
Posted by: SheetWise | May 14, 2008 11:38:17 AM"
makes my closing above completely accurate.
Posted by: vidyohs | May 14, 2008 8:25:29 PM
