Newsgroups: alt.politics.elections,alt.activism,talk.politics.misc
Date: Sun, 26 Jul 1992 20:17:17 -0400 
From: Conrad Poelman <cp2w+@andrew.cmu.edu>
Subject: Re: Tsongas Economic Plan
	<1992Jul25.053217.12311@NOC.Vitalink.COM>

Excerpts from netnews.alt.politics.elections: 25-Jul-92 Re: Tsongas
Economic Plan Rick Buchanan@vitalink.c (1429)

> > HIgher wages and shorter hours are needed to increase the wealth that
> > is available for the economy - that means a more stringent set
> > of labor laws which act as a pressure on corporations to invest more
> > in technology and more efficient methods of production -

> Why would they want to do _that_?  You just said that capital is not
> the source of wealth!   They shouldn't invest in technology and efficient
> productive infrastructure;  that's CAPITAL investment (yuck!).
> Better they should take all that money and give it to the workers 
> outright.   THAT'LL increase everybody's wealth for sure!  

> *** dripping sarcasm mode off ***

> Do you actually read your own articles, or do you have a program that
> randomly assembles idiotic socialist rhetoric and stock leftist slogans?

>    ---   Rick

>        ***   I think, therefore I can't be a socialist   ***

You forgot to say "*** red under every bed mode on ***"!

I think its valid to suggest that labor, not capital, is the true source
of wealth.  Capital is sort of like a labor savings account - you put a
bunch of labor into making something, and it becomes "capital" which you
can store somewhere or use it to produce something else.  In reality,
the entire cost of virtually everything you buy is labor - sure, some of
it may be listed as "parts", but the cost of those parts is just the
cost of the labor it took to put it together.  Even for raw materials
like wood or metal, the real cost is the cost of the labor for cutting
down the trees or digging the stuff out of the ground.

In fact, it seems reasonable to assert that forcing higher *real* wages
would give companies an incentive to reduce the amount of labor they use
via technology (robots, improved manufacturing methods, etc. - yes,
these things are usually capital) and more efficient means of production
(not always capital - things like better organization, reducing
inventory overheads, worker training, etc.)  The problem is that this
would result in people being laid off, so you mandate shorter working
hours to "spread the wealth" around.

Of course, I can think many problems with this plan.  One is, how do you
raise workers' *real* wages?  If you simply mandate a 25% wage increase
tomorrow, every company will raise its prices by 25%, giving us 25%
inflation and no real benefit to anyone.  But let's assume you
miraculously somehow manage to mandate a 25% increase in workers' *real*
wages.  When you do this, you also raise the wages of the workers who
produce the more efficient labor-saving devices.  What do these
companies do?  It would be nice to suggest that they somehow find more
efficient production techniques or invest in technology also, but that
just passes the question on to the next supplier.  At some points, some
company has to pay for the increase in real wages simply by raising its
prices.  Thus its labor-saving devices become no less expensive than
just hiring the labor anyway, so no one gets new technology and
companies just increase their prices and we get 25% inflation after all.
 So when we *assume* some magic mandate to increase workers' real wages,
we get a contradiction - we end up only causing inflation.

Of course, I'm open to any lines of reason that I've overlooked...

I must say, though, it's refreshing to hear a pro-worker pro-labor
person actually advocating labor-saving technology and more efficient
means of production, since many of the pro-labor pro-socialist people I
know view labor-saving technology as harmful to workers.

--Conrad
Newsgroups: alt.politics.elections