From: denning@vax.oxford.ac.uk (Iain Morrison)
Newsgroups: alt.society.anarchy
Subject: Re: Exploitation
Date: 9 Nov 92 16:23:02 GMT
Organization: Oxford University VAX 6620

In article <1992Nov6.164633.2328@athena.mit.edu>, danny@athena.mit.edu (Daniel A Lagattuta) writes:
> In article <MAD.92Nov3110345@spirit.clearpoint.com>, mad@spirit.clearpoint.com (Michael Davis) write
> |> Dale,
> |> 
> |> You do not address the fundamental issues.  As I see them they are:
> |> (1) In a historical sense, all capital comes from an expropriation of
> |> unowned or communal resources, and (2) in a modern sense, labor is a
> |> cheap commodity which is not rewarded in proportion to the value it
> |> produces.  That a small minority should be rewarded for ancestral
> |> theft does not make sense to me.  Capital `primes the pump' of
> |> productivity;  it should get a fair reward for that, but perpetual
> |> ownership of the majority of the value produced stretches the
> |> definition of fair reward beyond the breaking point.
> |> 
> 	I had a summer job.  I was paid money for it.  I put the money in a bank.
>  The bank loans it to help start a business.  Where is the expropriation of
> communal resources to supply that business with its capital?
> 
> 	If my parents work hard so that I can be better off, is it right to stop
> them and confiscate their accumulated capital?  Is that fair?  
> 
> |> Your statement that "Capital must produce *something*" is not even
> |> always true.  What is produced by the capital invested by arbirageurs
> |> who make bags of money investing on the spread between the buy and
> |> sell prices of pork bellies on the commodities market?  By LBO mania
> |> which has lessened but not stopped in the 90's?  "Efficiency of the
> |> market" as an answer here is merely a tautology, so answer with some
> |> other good...
> 
> 	In the language of economists, investing in financial assets such as 
> buying stocks from someone else should be called a transfer of assets rather than 
> investment.  In economics, investment means purchasing capital, such as machine
> tools or constructing a building.  Investing in financial markets is only
> investment in economic terms when the money is going directly into new capital.  
> 
> 
> 	This is not to say that trading is a valueless activity.  Somebody has to
> figure out at what price the supply of commodities and assets equals the demands.
> Someone also has to help protect people against risk in the market and to help
> the uninformed make better decisions about which assets to hold.  These are
> highly valuable services (in $ terms) and that is why these people are paid lot
> of money.
> 
> |> 
> |> I support the right of people to get rich (hope to do so myself :^),
> |> but hard work, or clever work, are the ways to do it, not by paying
> |> others $4.25 an hour for services that are worth $10.
> |> 
> |> -mad
> |> 
> 	If they were worth $10 then the Marginal Revenue Product of that unit of
> labor is worth $10.  Marginal Cost is $4.25.  Marginal Profit is $5.75.  One will
> increase labor employed until the Marginal Profit of each unit of labor is driven
> down to zero.  Wage will then equal the Marginal Value of Work.  This is basic
> microeconomics and explains why people who are being paid $4.25 are doing $4.25
> worth of service, not $10.
> 

Of course. The low paid get whats coming to them. And here was me thinking 
that they were being exploited by virtue of their sex, status, education or
financial situation.

I do wish people wouldnt spout economics as if it were akin to mathematics or
science. Your exposition above is content-free.
 

> 					Daniel A. LaGattuta


iain
Newsgroups: alt.society.anarchy