I've tried to give voice to this idea before (#1457057) so it's not an unfamiliar theme to the stackers.
Daniel Priestley is out yesterday responding to our non-friend Mr. Gary (#1521916)
Socialists imagine a class struggle. In their made-up fantasy the CEO is in competition with low level workers, the wealthy entrepreneur is stealing from the underpaid nurse. In reality, workers do not compete vertically they compete horizontally.
How so?
Entrepreneurs compete with entrepreneurs. Investors outbid each other. CEOs are benchmarked against other CEOs. Nurses are hired from a pool of nurses. The CEOs pay has no correlation to the entry level workers. The Football star on £300K a week isn’t linked to the person selling drinks in the stadium. A biotech entrepreneur raising VC capital isn’t paid relative to a cleaner.
"What is linked is the demand and supply dynamic of each role.""What is linked is the demand and supply dynamic of each role."
Sure you can say that a CEO want’s profitability and would like wages to be lower BUT it’s not up to the CEO - demand and supply tension sets the price of workers. An Airline like RyanAir would like free pilots if they could get them but they can’t… so they pay the market rate.
They way I've put this before is that remuneration is range bound: can't go above marginal value add (at least not sustainably, for long, or only until you run out of suckers/bagholders to support you. Can't go below what the competition offers.
The reason incomes are rising at the top and falling at the bottom is not class warfare. It’s technology and globalisation.
Yes, old observation. We've known this for decades Claudia Goldin's books and articles on this are from the early 00s! https://www.nber.org/system/files/working_papers/w12984/w12984.pdf
Illustration of how global scale matters:Illustration of how global scale matters:
A CEO used to run a smaller organisation. Today a CEO who’s 2% better on a $5B company is generating $100M more. Seems sensible to try and pay a few million to get $100M. Globalisation has put workers from all over the world in competion with each other - downward pressure on wages. Globalisation has given CEOs more market opportunities to explore - upside opportunity to unlock.
The rich are not very interested in buying houses that poor people own. The poor are not buying up the homes the rich want. They are separate groups living separate lives.
There is no class warfare. Please, just leave:
Catherine Liu has an interesting book on the professional managerial class. Chris Hedges also discusses the various labour actions that were violently resisted even in America. Worth reading them
Thanks, will check them out
Not sure how convincing this would be to the socialism-attracted.
In my experience, explaining why things are the way they are doesn't really matter to most people. They just know they don't like how things are and want it to change.
I frequently think gravity's a son of bitch but I don't plead for the government to fix it.
I DO!!
https://www.imdb.com/title/tt0060665/quotes/#:~:text=Some%20men%20think%20the%20earth%20is%20round%2C%20others%20think%20it%20flat.%20It%20is%20a%20matter%20capable%20of%20question.%20But%20if%20it%20is%20flat%2C%20will%20the%20King%27s%20command%20make%20it%20round%3F%20And%20if%20it%20is%20round%2C%20will%20the%20King%27s%20command%20flatten%20it%3F
Is there something about gravity in there?
the flat earth/can-the-king-flatten-it scene that Judge Napolitano often uses in his lectures. Thought you'd appreciate the s/o -.-
...as does a toddler who hasn't learned to use his faculties (reason) to manage his or her passion.
That's cute and understandable at age 4; not so much at 24 or 44.
oh look, I've already written this -.-
from the Wittgeinstein's economist empathy article way back when #1457057
https://twiiit.com/DanielPriestley/status/2075182431574143075