From: ae547@yfn.ysu.edu (Ronda Hauben)
Newsgroups: sci.econ
Subject: Re: Clinton on Economics (transcript of speech)
Date: 26 Aug 92 21:04:33 GMT
Reply-To: ae547@yfn.ysu.edu (Ronda Hauben)
Organization: St. Elizabeth Hospital, Youngstown, OH


In a previous article, jwh@citi.umich.edu (Jim Howe) says:

>In article <seavn2i00WBKQ3vZ1H@andrew.cmu.edu>, ss9o+@andrew.cmu.edu (Stephen Sorensen) writes:
>|> Excerpts from netnews.sci.econ: 26-Aug-92 Re: Clinton on Economics (t..
>|> by Jim Howe@citi.umich.edu 
>|> > How about a self-service ice machine?  It is a machine that takes
>|> > water and produces ice.  Customers put money in the machine and
>|> > get ice in return.  The 'labor' to produce the product (ice) was
>|> > performed by the machine, not a person.  Wealth was created because
>|> > a desireable commodity was produced which did not previously exist.
>|> 
>|> And where did the machine come from ? 
>
>Who cares?  The point being made is that new wealth is produced
>from a capital investment, i.e. the purchase of an ice machine.

No labor and nature produced the machine.

It is not that CAPITAL INVESTMENT produced the machine.

Capital investment doesn't produce anything.

A machine is producing ice - the machine is a machine not a 
CAPITAL INVESTMENT. 

>The ice machine itself represents wealth produced by some other
>entity.  The fact that A produced B and C uses B to produce D
>does not mean that A is producing D.
>

It's not a question of something represening wealth, but producing wealth.

The ice machine was made by labor and takes labor to service and keep
it operating. It requires nature - i.e. WATER - to operate on.

It is the product of Labor and Nature.

But its also not a typical example of how new wealth is created.

Take the auto factory for example.

Workers are hired to operate the various machines.

They are hired and paid a wage for the week.

The employer tries to work them as many hours as he can at as high
an intensity of labor as he can.

The result is that new cars are produced.

The labor acting on the materials of nature have resulted in 
automobiles.

Something new has been produced.

The worker is only paid enough to eat and to come back the next day,
to have a place to live, i.e. barely enough for the necessaries and
conveniences of life.

But the result of his labor is that the auto company ends up with
more than they paid the worker - wealth was created by the workers's
labor.

Yet the worker gets no part of that new wealth. 

Regardless of whether the process is via machne or not, new cars
are produced and there is new value created from the process of 
production - of the worker acting on nature.

I agree that it is desirable for the society to have the process as automated
as possible - but also for the worker to work as few hours as possible.
It is not socially advantageous to have labor saving machines that 
make it possible to do more work with fewer workers if the workers who
are left working have to work 55 to 60 hours or more aweek.

                  Ronda
-- 
Ronda Hauben                    email address:ae547@yfn.ysu.edu
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Newsgroups: sci.econ