particularly this part:
> Early on in my own career in the industry, I felt guilty about making a “good” salary. Why did I deserve to make more money than a teacher or a nurse? Of course, I don’t — they deserve a lot more too. But if I was making less it would go straight into the pockets of investors, not other workers. Tech workers’ labor has made six of the world’s ten richest people, and today computing and the internet are an integral part of every industry. Although some workers are highly paid, the differential between investor profits and employee salary is as stark as in any other industry, because workers are not organized.
it's true that tech workers frequently make good money and we should be grateful for that, but when our industry is producing oligarchs like Musk, Zuckerberg, Bezos, it means that they are profiting from the things that tech workers produce. It's how inequality is increased. It's no coincidence that the rise of the tech economy has coincided with American inequality rising sharply.
Only a hundred years ago, a bunch of immigrants from places like Germany or Spain or Italy could arrive in New England (including New York City), perform manual labor, provide for their families on one income, and pool their additional money to _build whole buildings_ as social or fraternal clubs.
That has more to do with the cost of building than a lack of pay. When you don't account for higher education, buildings, and healthcare, Americans are significantly richer than they were in the past. The problem is that politicians don't bother to address the underlying perverse incentives that are the root causes of these rising costs. They can win elections just fine by throwing money at the symptoms, even though they cause even more long-term pain. Until these root causes are addressed, most of the money squeezed from employers is simply going to go to the rent seekers in areas. The most clear example of this is tech salaries going to Bay Area landlords.
I grew up in the 1950s and 1960s in Detroit. It was a place where a high school diploma could get you a secure job that would support a middle class family. It’s all changed and Detroit is now half the size it once was while cities like Houston and Austin have grown tremendously.
Why did that happen? Did corrupt unions kill the goose that laid the golden eggs? Or was it poor management of the automotive giants that allowed overseas companies to take market share. Did wages across the board fall behind inflation or was the automotive fundamentally changed by automation.
I wish I understood what happened since I actually lived through that period.
My sense is that German automotive companies dealt with Japanese competition better than American ones did, though I'd love for someone who knows about the history of the industry to chime in. Germany had strong unions and was a market leader then, similar to the US, so it suggests something was wrong with American automakers, labor unions, or the American government that led to the disaster.
I wonder if Germany was more aggressive with tariffs to protect automakers from competition.
> I wonder if Germany was more aggressive with tariffs to protect automakers from competition.
It's somewhat the opposite actually. Germany taxes imported cars, but at least it still allows them. At the behest of automakers and unions, the US banned imported cars entirely in 1988. This allowed American automakers to profit despite stagnating. It wasn't until foreign subsidiaries started capturing market share from the US that American automakers were forced to innovate again.
There was a combination of factors. I suggest reading the book "On A Clear Day You Can See General Motors" for some starting information. But for some information upfront, in the 1950s GM had become the largest automotive company in the world, buying makes from all over the world with the money they made from their contracts with the U.S. government during World War II and the subsequent money from their core U.S. divisions within the Sloan Ladder. GM had seen Volkswagen as a threat, but only Volkswagen thanks to their quick proliferation during the 1950s at the lower end of the market. To them the French were essentially making toys, the Spanish would never make anything worthwhile under Franco, the Italians had already gained a reputation for extremely fragile and temperamental cars, and the Japanese were producing enclosed golf carts. Only the British and the Germans were a threat, but by the mid 1960s British automotive manufacturing was nosediving, and German cars were still divided into economy and ultra luxury with almost nothing in between thanks to slow post war recovery and targeting the U.S. upscale market.
During the 1950s the U.S. had invested huge amounts of money into Japanese manufacturing in order to have a cheap place to outsource labor to, and as a good will gesture after what happened during World War II. The Japanese, taking technology from American manufacturers, started making their own advancements. By the late 1960s they were on-par with the Americans in ingenuity, but lacking in quality. This applied to everything from their radios to their cars. At the same time, the Japanese yen was inflated compared to the dollar, making it a good idea to export Japanese goods to the U.S. so that Japanese companies could then trade in U.S. dollars internationally. The goods were cheaper to manufacture and import, and it made companies like Matsushita and JVC quite a lot of money they'd use in the 1970s. Toyota and Nissan were also picking up on this, selling the Toyota Crown and Corona in the U.S. as lower cost luxury options and the Nissan Bluebird (as the Datsun 510) as a cheaper alternative to European sports sedans.
In the U.S., by 1965, GM had a majority control of every market. They had done this by essentially siloing every division and making them work on their own, with their own funds, with no collaboration between divisions without executive permission. Permission which was often not granted. This worked fine for the European and Australian divisions like Vauxhall and Holden, but it was starting to strain the U.S. divisions. Then in 1968 three disasters occurred simultaneously for GM. Semon "Bunkie" Knudsen defected to Ford. Chrysler began courting Mitsubishi for captive imports of cheaper Japanese cars. And Lee Iaccocca perfected the personal luxury coupe with the upcoming 1970 Ford LTD and Lincoln Continental Mark IV, the dominant car template of the 1970s.
In 1973 you had a massive recession thanks the the 1973 OPEC Crisis and the 1973 Stock Market crash. These new huge vehicles that Iaccocca had gotten the U.S. addicted to were suddenly much more expensive to buy and run thanks to being opulent and thirsty. Ford was not immune to this, despite the success of the Lincoln Continental and Mercury Grand Marquis. This worked in Chrysler's favor however, as they had both the Dart in the wings and their captive Mitsubishis. Chevrolet meanwhile had blown public trust with the Vega in 1970 thanks to it rusting on the dealer's lots and destroying it's engine within the first month of ownership. Then once again they took a hit with the 1971 Pontiacs and Buicks, both of which were poorly received due to polarizing styling and issues like the trunks filling with water thanks to a ventilation engineering oversight. Chrysler had misread the market with their 1968 styling, and it took costly changes to slowly update the body dies to be in line with industry styling by 1973.
This primed the Japanese manufacturers to swoop in and take over. Datsun struck first, with the B210 and the 720 taking spots in the economy car and mini truck markets that the Big Three had ignored. Honda hit next with the Civic CVCC, capitalizing on the 1973 OPEC Crisis to provide a fuel efficient vehicle to panicking Americans who weren't satisfied with the disappointing Ford Pinto and Dodge/Plymouth Aspen/Volare twins. Toyota came in last, but strongest, introducing the third generation Corolla and reworking the Celica slightly for 1976 to fit American tastes. With the combination of Americans scrambling for smaller and more fuel efficient cars, the weak Japanese yen compared to the dollar, cheaper Japanese manufacturing due to automation, and cheaper Japanese steel thanks to being untreated and of thinner gauge, Japanese cars sold like crazy after 1973 and spread from California all the way to the East Coast.
This of course caused the Big Three to panic. GM tried several times to fix the Vega and it's siblings, only managing to make just as bad a car each time in the Monza and then the Cavalier. The 1980 X cars were a disaster, with the Chevrolet Citation and it's sisters driving customers away from GM for life. The failed 1985 downsizing of the full sized cars under Ed Cole's direction left every division's cars looking like clones of eachother both inside and out. And finally the dilution of the Oldsmobile brand by naming every car Cutlass killed their last golden goose. The GM10 "W-body" cars, meant to come out by the 1984 model year and engineered to the standards of the 1980 Honda Civic, ended up five years and hundreds of millions of dollars over budget when they arrived in 1988 as 1989 model years.
Ford disregarded the 1970s oil crises almost entirely, continuing to bank on large personal luxury coupes to keep them afloat. A token gesture was placing the Mustang on the Pinto platform for 1974 and playing it up as a baby Thunderbird rather than the performance heavy brute it was in the 1960s. By 1978 these tactics had nearly bankrupted the company, forcing a scramble to the Fox platform as they quickly downsized everything and killed vaunted nameplates to scrub any ill will from the brand. Were it not for the continued sales of the Lincoln Continental Mark V and the development of the Tempo and American Escort, Ford might've followed the path of AMC in the 1980s.
Chrysler was... Chrysler. They were up and down like a spring as they had always been. They suffered through 1973, suffered the failure of the Aspen and Volare, suffered the death of their profit ensuring muscle cars due to rising insurance costs and the fuel crisis, and suffered having to sell an ailing Rootes Group and essentially leaving the European market. But before they sold the Rootes Group they filched a rather interesting piece of technology in the Talbot Horizon. A car which they reverse engineered into the Dodge Omni, the basis of the K-Cars that Lee Iaccocca would champion and eventually pervert throughout his stay at Chrysler during the 1980s. As such Chrysler was the best positioned to survive the 1980s.
But then we come back to Europe. To the already small, fuel efficient, high quality cars that GM had thought no threat in the 1960s. If, during the 1970s, GM had brought over vehicles such as the Opel Rekord and Vauxhall Astra, they would never have had to waste money developing the Vega, the Monza, and the Cavalier. The cars already fit the market GM was targeting. The same was true of Ford. If Ford had brought over the Ford Escort, Taunus, and Granada, they wouldn't have had any need to develop the Pinto, Tempo, and Fairmont. Detroit was too insular and xenophobic to take the option that would have saved them. An option they would inevitably end up adopting thirty five years later anyways.
Detroit died for a number of reasons. But the main reason was the pride of Ford and GM.
> Did corrupt unions kill the goose that laid the golden eggs?
Yes, go look up % of costs going to labor for the USA automotive industry back during the glory days of Detroit. The only reason it worked at all was there wasn't a fraction of the global competition.
"provide for their families" was also a much lower standard than it is now. Back then having a good life (for immigrants at least) didn't mean a large house in the suburbs and 3 cars, it meant an entire family of 5 sharing 1 bedroom and walking everywhere. A pair of jeans was a multi generational investment. If your family could afford one bicycle, you were living large.
This was unimaginable wealth compared to what was available back home. You had all 3 meals and even meat! Meat! The luxury.
sauce: I'm from one of those European countries where 1 in 6 people emmigrated between 1880 and 1920. Literature from the time (that we read in school) contrasts the local situation with the riches of America as reported by people who sent letters.
Being able to "walk everywhere" is itself a kind of luxury nowadays, because there are limited walkable cities in the US and they have all become very expensive.
It's often actually much cheaper to live somewhere in the suburbs where you can't walk everywhere, because everything is designed around cars.
The fact that everything is designed around cars is one of the invisible nooses around the neck of America. When you look around and notice that everything is covered in cars, that's hard to unnotice. All those cars, roads, parking lots, highways, box stores, mile of sewer and water pipe, cost a staggering amount and are going to start costing a lot more to maintain over the next decade as systems age out and need replacement or maintenance. Not to mention the cost of demolishing the country we spend the previous 300 years constructing. The vampiric system of automobilism has made everything much more expensive for everyone.
Living in a semi-crowded city, near your family and friends, should be the default, cheap option. Instead we've wasted about 10 trillion dollars pave the entire continent. Possibly the most expensive mistake ever made in history.
It disturbs me that your comment is "greyed out," whatever that means: you're speaking an obvious truth. The car-scale of American infrastructure is an impediment to physical health; it's an impediment to social capital, and therefore to democracy and to mental health, as well. It funnels us down restricted, commercial avenues--pun intended. It's physically dangerous, it's chemically toxic, it's ecologically destructive, and it's damned expensive to maintain!
It's obvious when I visit a city / countryside with poor transit and pedestrian infrastructure how much more I suffer. It's so damned obvious, it's the first thing that screams out to me right when I land / pull in / ride up.
I can't understand what literate person would take issue with the core of your assertions.
Apartments are fine as long as they're good apartments. Properly-built concrete walls completely mitigate the sound problem you mentioned below. In four years at my current place, I've never heard a neighbor's voice from inside my apartment.
Shitty slumlord apartments are what everyone wants to escape from, in my experience.
The post to which you're responding said nothing about apartments. Do you mind connecting a few dots for those of us less well-versed in the presumptions of your milieu?
The post didn't explicitly say "apartment", but it said:
> Living in a semi-crowded city, near your family and friends, should be the default, cheap option.
What kind of dwelling, apart from apartments, are there in a "semi-crowded city"? They may not be high-rises, but even if it's a "multi-family house", it's still "apartments". There's only a (usually thin) wall separating your room from your neighbor's. This is one of the main aspects people typically hate about apartments.
Funny enough, having everything being designed around cars is actually more expensive for society on the whole. Walkable cities everywhere would actually be cheaper, and then it also wouldn’t be a luxury.
The quality of living a family in the suburbs has today is like what a rich person a hundred years ago would have.
I see people with houses, multiple brand new cars, TVs in every room, and who take a vacation at least once a year complain about the economy their entire life.
The fact that some people don’t know how well they have it is not evidence that everything is fine.
Watch a few news reports on poverty in America and you will see that a decent percentage of working adults live with their entire family in a small cramped apartment, can’t afford any vacation, and likely can’t afford emergency medical care if it comes up.
And even those people in the suburbs with all those TVs could have more financial security and work fewer hours if our economy was more fairly arranged.
They didn't say "everything is fine". There's a lot wrong with everyone's economy from the perspective of "we work just as hard, why don't we get the same stuff?"
However, I think you're misapprehending quite how much worse things were a century ago. Now the poor may struggle to afford a PET/CT/MRI/ultrasound scan, or a PCR test, or a dose of antibiotics, or a heart (lung, liver, kidney, bladder, pancreas, ovary, …) transplant, but 100 years ago they did not exist. Diabetes only stopped being lethal just over 100 years ago, the first successful human treatment in the beginning of 1922. Smallpox no longer exists. And so on.
No I’m not misapprehending how much worse things were a century ago. I simply believe that argument has no bearing on the discussion of a fair distribution of wealth in todays society. No one today lives 100 years ago as a matter of simple fact. Yes, we have antibiotics now, and that’s great, but that has nothing to do with the fact that workers are producing vast amounts of wealth and receiving very little of that wealth as remuneration. We have cars today that make certain kinds of transportation easier, but that has nothing to do with a lack of maternity and paternity leave for new parents. We have cell phones so we can now talk to anyone in the world but that has nothing to do with the fact that business owners will selfishly decide to ship 1000 jobs overseas with no input from the workers who will be disenfranchised.
I’m talking about unfair power imbalances today. This has nothing to do with the past.
Not even close. That rich person had servants, could go on lengthy vacations, etc. and most likely they had substantial passive income.
The key thing to understand is the difference in how precarious those situations are: that affluent suburbanite has some shiny things but their cash flow is much higher than their wealth. A TV in every room is a rounding error on the $11k/year each of those new cars costs on average, and over the course of someone’s working life that kind of thing makes a huge difference in net worth.
The American healthcare system factors into this significantly: if your income depends on showing up to work daily, all of that can go away with a single health incident which leaves you unable to work. A truly rich person is considerably more likely to be able to ride something like that out.
Similarly, retirement is a source of stress for many Americans. Having given mortgage processors and car companies millions of dollars over your life won’t help you much then.
The rich people of the past had no internet, cars, air travel, or much health care by modern standards. The average 2022 American is vastly better off materially.
What they had was social status, and I think that's more what you're talking about. Social status is incredibly important for humans, so I understand focusing on it. But since it's pretty much a Zero Sum Game, nothing much changes there.
Commercial aviation was just getting started, yes, But a rich person in 1922 had luxury rail travel, boats, cars, horses, etc. Most importantly, they had time: air travel is important for most of us because having a paltry couple weeks per year means people try to do things like weekend trips which couldn’t otherwise work. If you’re truly rich, you have a lot more margin for having other people do the unpleasant trips for you or adjusting schedules to suit your comfort.
Health care is the biggest differential - wealth can buy you out of a lot of lifestyle factors but a hundred years ago was just before the dawn of the antibiotic revolution. That part is true, but it isn’t a factor of rising incomes and given how many Americans have stress, lower quality of life, and experience severe financial strain due to healthcare costs I don’t think it’s attributable to higher incomes.
My point was that this isn’t so clear cut: healthcare is great, but a lot of things are mixed because humans care about relative status and the real signifiers continue to be things which involve other humans doing labor for you. Even though Netflix exists rich people still go to the opera because it’s an experience most people can’t afford.
>The rich people of the past had no internet, cars, air travel, or much health care by modern standards. The average 2022 American is vastly better off materially.
No, while rich people in the past had no iPhones or internet, they had something far more valuable than that: income generating businesses and appreciable assets like land, housing, gold, fine art, jewelery, etc.
And no, the average American is vastly poorer now as housing, stable well paying jobs, healthcare and education, are now massively out of reach for the average joe than they were a few decades ago. Having iPhones and internet doesn't make up for these.
Which somewhat reduce that risk. People on SSI are usually struggling, not affluent, and actually getting those benefits can be a struggle for people with conditions less clear cut than, say, losing limbs.
I’m not saying they’re not worth having but again that there’s a big gap between someone being rich and a middle-class worker with decent active income.
Most, myself included, have a very limited understanding of the economy we are part of, so I'm not surprised by complaints. Every so often, someone making 2 or 3 times the national average income makes an ass of themselves on TV by claiming they're economically disadvantaged.
In some senses, you don't even have to go to the suburbs to be unimaginably better off now than it was possible to be a century ago, because a century it was not possible, at any price, to make a weekend trip between New York and London; to be immune to the common forms of seasonal flu; to have a video call with someone; to get penicillin; 3D printers, and indeed all CNC machines more complicated than a loom controlled by punched cards, would've been fantasy; and so much more besides.
TVs are cheap now. So are 3D printers, travel, and phones.
> Every so often, someone making 2 or 3 times the national average income makes an ass of themselves on TV by claiming they're economically disadvantaged.
Someone making 3X the US national median income is paying roughly the US national median income in federal/state/local taxes. They're paying a median working citizens' earnings in taxes.
How would you feel if someone taxed you an absolute amount that would leave 50% of your countrymen penniless? And they denied you tax breaks, like the child credit, that they grant themselves? And then that same 50% vilified you to boot?
Nobody said "not fine". You mentioned "economically disadvantaged". Such a person person literally is disadvantaged in some economic ways. Not all. Not most. But some.
You asked how I would feel. That's the answer to that: I'd be fine.
And as I'd be on 3x average pay, the only way a tax break could possibly be large enough to make me not better off economically was if average people get so many their tax rate is negative.
>TVs are cheap now. So are 3D printers, travel, and phones.
Being able to own disposable gadgets made in China doesn't make you rich. Those are not necessities. But you now what is? Housing, stable well paying jobs, healthcare and education , all of which are now massively out of reach for the average joe than they were a few decades ago.
And a century ago? Because that's what this sub-thread is focusing on.
And, like I said, much of what we now consider basic healthcare had not yet been invented.
And even in the last decades, those cheap Chinese gadgets you're so dismissive of, they give access for free to not just k-12 but also university and post-graduate level educational courses and materials on topics which had not been invented then either.
And the tech also lets more work remotely, changing the dynamics on housing.
The whole point of civilization is that generation to generation, our standards of living should increase.
Instead, they are regressing. If we are comparing to 100 years ago, we sure should have been doing better! If we compare to 50 years ago, there are some key ways where we have regressed within the United States.
The key here is that when we are speaking of standards of living, we are speaking within some narrow contexts. In the developing world, standards have blossomed. Within the United States, the GDP has continued to grow but the value hasn't spread equally.
I can say that in the lower 50% of people in the US, the standard of living has markedly decreased. For 50-80%, it's mildly increased. For the top 20%, it's doing just fine, but it's never been a better time to be wealthy as the pathway for compounding growth on wealth has never had so many tools.
You can do extremely well with just a Bachelor’s in CS. Professions like nursing, medicine, law, even business have had their earning potential sapped by larger and larger costs of education. And degrees past Bachelor’s are less well supported by financial aid schemes.
If there is one “tech disruption” I hope actually sticks is the death of credentialism and the rise of proof of ability by doing. I have only a bachelor’s in a liberal art(!) and working in tech has opened up so many doors for me, in teams where nobody cared where I went to school and my lack of a master’s was met with curious shrugs.
proof of doing is in large part responsible for how grueling and grinding tech interviews are. you don't hire nurses by asking them to demonstrate operating on a cat. and to some degree the grueling and grinding is there because the degree doesn't indicate anything at all, and desirable companies ending up having to process a lot of underqualified applicants.
All upsides for real people and all downsides for multi-billion-dollar companies, it would seem. There is never going to be a university degree program that precisely matches what a company needs. So why bother?
My salary now adjusted for inflation is exactly where i was in 1999. Having more money in the hands of those not in the 1% would make a better country. The 1% and above engage in deeply risky behavior.
This is not analogous. You likened criticizing our economy (inclusive of the state of various laws that determine how it impacts people) to criticizing physics itself (to suggest that doing so is unreasonable).
The economy is like a singular, gigantic vehicle we all occupy. It abides certain natural laws (such as human nature, and the scarcity of certain resources), but the vehicle itself is designed by some of our fellow passengers (and its design does not optimize for the things many of us feel it should).
Sure it is. You and other passengers are trying to design the vehicle by ignoring human nature, scarcity, etc. (the physics). Because you are asking yourself why does the piston deserve all the fuel and not the headlights.
And if somebody makes a shitty car that contains an extra bomb that randomly explodes and kills people we tell them that's a shitty car. We don't blame physics.
I thought implying there was some sort of cosmic injustice when a software developers"deserves" more than a nurse, was some sort of sarcasm. We would never understand anything about the world if we talked like that about for example why does this rock deserves a higher potential energy than that acorn.
I'm not following you. Rocks and acorns are not outcomes of human political will, but our economy, society, and systems, among others, are. Maybe I'm missing something, I'm eager to understand your perspective further.
I hope you agree that human political will is bounded by some natural laws, the same way rocks and acorns are bound by physics. And if you want to do something useful with that political will, you better understand those laws.
Yes I agree with that, but having understood those laws (hypothetically), of which I guess you might be referring to human behaviour, evolutionary principles etc. How can we be sure that those naturalistic foundations could possibly inform the problem of 'what to do now'? Wouldn't be a bit like a mirror trying to reflect itself, or possibly, a fish trying to understand that it's in water?
True enough. At this point I suppose I don't disagree with you, though I've also lost the plot a bit. Hope you enjoy a restful holiday season wherever you are
I phrase things like this: the lack of real labor power through unions or ideally worker cooperatives leads to bad deals for workers. It would be in the interest of workers to build collective power and demand better compensation or start their own cooperatives to guarantee higher pay and benefits.
This has to be said because collective action necessarily requires convincing a lot of people to do it. But either way this language avoids the claim of right and wrong and simply focuses on the fact that workers today get a bad deal due to poor bargaining power.
It’s also not just about markets. The federal government places severe restrictions on what organized labor can do to advocate for itself:
Labor Management Relations Act of 1947 Aka “Taft-Hartley Act”
https://en.m.wikipedia.org/wiki/Taft–Hartley_Act
One of the memes that you frequently see in the upper middle class left-leaning tech worker circles is that anything less than a worker co-op is ultimately an organizational structure that is inequitable and exploitative to its labor force, leading to negative externalities for society at large.
I'm 100% ignorant of the history of labor and of all philosophical dialectic around it, but I would love to form an opinion on this. Would someone mind steel manning both sides of that argument?
E.g. I have questions like, if I'm the founder of a company and I sell it 10 years later and make most of the upside, did I exploit my employees because they didn't make as much as I did in the end?
This is a really good question, and there isn’t a clear answer. I’m only answering this from the left point of view though, so take it with a pinch of salt.
Traditional labor theory can make arguments for both, if you put in most of the work, then you deserve most of the benefits. However the case for equal pay is also solid, especially if the fruits of labor are abundant. How much does 5 million give you that 1 million doesn’t, and why shouldn’t you settle for 1 million if it means everyone would get more?
But from a leftist perspective there is a fault in the question (but it is still a good question). Namely that you sell the business. In an ideal left world, you wouldn’t do that. The business belongs to the workers. If the workers can all form a consensus that it is time to leave the business and sell it to another set of workers—those that leave will be bought out basically—then this is a valid scenario. However if under a new leadership, some workers are receiving more benefits then others, then that is exploitation. I would say actually that the new leadership is exploiting their previous workforce by spending the money the workers created by buying a new business without their consent.
So in short, you as the founder of the business that was bought, are enabling exploitation by selling it to a larger organization (unless you sell it to a worker owned and operated business).
Workers can bank their paychecks and walk away at any time. They would deserve more of the benefits if they bore more of the risks of failure, like investors are doing.
Yes, as a leftist, I’m not a believer in that. I’m of the opinion that the supposed risk that investors take is overstated. The average investor is quite wealthy compared to most workers, and can afford to loose a bunch of that money without it causing significant harm, even leaving the investor still significantly wealthier then the worker. On top of that, many investors have insurance, or a wide portfolio of low risk stocks, guaranteeing them continued exploitation without risking much.
Compare this to a worker, most of whom can’t afford to go without paychecks for a single month. Meaning that the loss of a job is far riskier then the investor’s supposed risk of loosing their investment.
This transaction between an investor and a worker (if you look at it as a transaction) is always biased significantly towards the investor, they will grab proportionally more of the profit and tank less of the loss. So I would say the average worker is both risking a lot more and reaping less of the benefits.
I agree that investors self-select partly by their ability to weather losses, which is why workers tend to trade away speculative upside for the certainty of wages now. But investors need a reason to take on risk, we need to steer more resources under the guidance of the most successful of the competing decision makers, and profit solves those problems.
Labor unions don't challenge the core structure of capitalism; even when they're working, they mostly serve to give a slightly bigger piece of the pie to workers. And in practice, they are hijacked by a certain bureaucratic caste that mostly optimizes for stability and self perpetuation. They become integrated with state sponsorship, which will never allow for substantive change. For instance, in the USA the general strike was a powerful tool in the arsenal of workers' power and drove substantial wage gains, but disrupted capital too much and as such is banned by the NLRB. Since unions' scope is limited to accounting, law, and mediation, they become mostly administrative organizations staffed increasingly by members of the professional services class. These people can never provide leadership that primarily serves the working class, as their economic interests diverge and they can't do anything that would threaten their social good standing.
Argument against:
An economy dominated by worker co-ops is just wishful thinking. We have no idea how to get from point A to B, and no idea if it would even work. The limited evidence we have for that kind of economic structure comes from post WW2 Yugoslavia and suggests it wouldn't ("they just didn't do it right!" invites the question of how we do do it right). Conventional unions do shift some of the capital pie to workers, and we shouldn't let a very hypothetical best be the enemy of the concrete good. And even if worker co-ops are the ideal, any path that gets us there requires more worker power, so stronger unions would be a good first step to getting us to that point.
I have, yes, and I've gone as far as finding friends and former colleagues who would be interested in joining me. Unfortunately health insurance is tied to employment in this country and we all have families. The uncertainty in that regard leaves it a non-starter for people in our situation. At least for the time being.
I'm not sure I follow on how that would stop you from forming a worker co-op. Almost all businesses who have full time employees pay for health insurance. Are you implying a co-op would make less revenue and therefore could not provide its employees insurance?
Businesses get way different insurance rates than a single individual (or 12 individuals). It costs me $240 a month for full health coverage ($1000 deductible), dentistry, and eye from my current employer; for me to get something equivalent outside this company would cost me $3,000 to $5,000 a month. I can't afford that plus rent, plus energy, plus food.
Not all businesses are equal, not all benefits are equal.
When I worked in a call center the only insurance that wasn't pure garbage cost me $300 a paycheck.
Yeah I agree with all of that but I don't see how it is relevant to the discussion. A worker co-op should be able to provide health insurance to it's employees the same as any other business. The fact that it is worker-owned shouldn't change that at all.
Have you ever tried to start a business? Myself and five of my friends simply can't afford that level of health insurance, even with our resources pooled together.
Just because you say the word "business" doesn't make insurance cheaper for small players.
1) That was a statement of arguments about whether or not a worker co-op driven economy is superior to labor unions, from a pro-labor perspective. Stating an argument doesn't mean endorsement of it; that's the entire point of steel manning.
2) To the extent I buy either argument, I don't think it's subtle that my sympathies lie with the criticisms of an economy of worker driven co-ops.
A highly successful worker coop leads to a bunch of people with comfortable lives and steady jobs.
A highly successful privately owned company leads to a handful of people with a ton of money and free time, which they can use to found other privately owned companies.
At least with startups, are most founded by affluent people with free capital and time, or by those who sign a deal with VC? Afaik YC founders aren't thousands of bored millionaires, they're average middle class people with a college degree who quit their jobs to live on their seed investment for a few years, and share the spoils in the end with their employees and investors if the project succeeds.
Can you get away without initial starting capital if your startup has a very low chance of success? You need someone to be willing to eat the 99% risk of failure in exchange for proportionally high returns.
I imagine the same problem is much ameliorated if you were opening a pizza shop, a daycare, or a hair salon, where the business is more predictable?
I forgot I posted this comment so just seeing this but as an upper middle class lefty tech worker I'll offer an answer.
I think your question is a bit too focused on the individual and not the system. I think it's actually difficult for founders to share the upside "equitably", whatever that means. Like, are there any examples of it actually happening? I suspect that the acquiring company frequently dictates terms that won't allow you to make every employee a millionaire because then what incentive do they have to work anymore. I think once you get to the multi billion dollar level of wealth it's difficult to get objective advice - many of the people surrounding you are just trying to please you to continue getting their slice of the vast wealth that you control. So just as a human it's hard to navigate that I think (this is me being sympathetic to billionaires, which I'm generally not).
The much easier answer to me is just much higher taxes on wealth. Capitalism is not a system built to share resources equitably, but inequality can be tamed through taxes. If you as a founder see most of the upside, fine, but a lot of it will get redistributed to society through taxes, and theoretically your workers benefit from that. It also means it's not up to the whims of the individual people or companies involved in something like an acquisition to try to make it equitable.
(another way inequality in capitalism can be tamed is through unions, but I don't know if there are any examples of unions being involved in something like an acquisition or IPO in tech)
The traditional view is that "The workers control the means of production".
Suppose you built a successful small company but, suddenly, every employee quit at once. Could your business carry on the next day? Could it survive until you hired and trained replacements?
If the answer is "no" then you have made the case that employees both deserve to share in the business's success and will probably be incentivised by co-owning the company.
Does the janitor deserve as much of the profits as the CTO? Well, what premium do you put on your other employees not getting sick, or injuring themselves?
(Wasn't there a case where a Google chef made a fortune from stocks? Much to the chagrin of some?)
The opposite argument is that those who risk capital are the only ones who deserve the reward. Without investment, a company can't launch or grow. Workers are an operational cost - they are paid for labour and no more deserving of reward than the electricity company. Both provide a service but neither takes a risk.
I would say that, yes, a carpenter is entitled to a share of the profits. They used their labour to build something which appreciates in value.
Traditionally, it has been too hard to track fractional ownership of an asset and calculate a share of profits. And most workers prefer cash up front rather than waiting for a payday which might not materialise for decades.
I'm not going to go full blockchain/NFT on this idea. But it is easy to see how in the future a long-lived guild of tradespeople could build your house at a discounted price now in return for a share of the sale profits in the future.
I don't know if that's a good or bad thing though.
No. The carpenter is entitled to pay for his work.
He's not entitled to additional value the recipient of the work may or may not get from him completing the job, unless he negotiates that up front. It seems likely that no one in their right mind would agree to pay the carpenter profit sharing for every transaction that may occur from that building. They'd find another carpenter.
Could you make the argument that the carpenter should be given the option to be paid in equity or in cash, if both parties agree to it? Is there any argument against giving people the option to choose the sort of compensation risk profile that works best for their individual situation?
This is a silly question, so silly in fact that I suspect it is only intended as reductio ad absurdum (which can be a fallacy if based on a false or inadequate premise).
A carpenter is entitled to the fruits of their labor, which can adequately be provided with money.
>> This is a silly question, so silly in fact that I suspect it is only intended as reductio ad absurdum (which can be a fallacy if based on a false or inadequate premise).
I commend you for knowing logical fallacies. Though it would be even better if you were able to demonstrate those fallacies instead appealing to your own authority.
>> A carpenter is entitled to the fruits of their labor, which can adequately be provided with money.
I agree. Unfortunately, some people here claim developers working for google are entitled to their share of google's profits and carpenters working for said developers are not entitled to a share of profits from what those developers earn.
There are plenty of examples of Reductio ad absurdum being a fallacy because of a false or inadequate premise. Zeno’s paradox[1] being a famous one. The false premise being that you can actually add infinite number of times (modern mathematics take the limit as n approaches infinity).
Here the prime candidate for the premise being wrong is to equate the work of carpenter working in their own enterprise at a project, to that of a google worker, working at Google’s enterprise for any project their management tells them to.
The former gets the fruit of their labor in full when the job is finished and paid for, the latter is suffering from a systematic exploitation as each time the stock goes up in price (or when dividends are issued) the shareholders get the fruits of the worker’s labor, as opposed to the workers them selves.
>> The former gets the fruit of their labor in full when the job is finished and paid for, the latter is suffering from a systematic exploitation as each time the stock goes up in price (or when dividends are issued) the shareholders get the fruits of the worker’s labor, as opposed to the workers them selves.
This is a bit hard to parse. Isn't the developer's work also paid for after each unit of time served. And why exactly is the developer being systematically exploited every time the stock price increases and the carpenter is not if the house appreciates? Doesn't the developer literally live in the fruits of carpenter's labor?
The difference here is in control. The carpenter has full control on which task they take, whereas the developer hasn’t. A developer is forced to work at a bad product that they know is gonna fail, but the carpenter can refuse to take on a job that they know is gonna cost them more then the customer is willing to pay. For the developer, after their project inevitably fails, it will probably cost them their job, despite the failure not being their fault. Given the option, the developer would have voted against the project, the carpenter can simply refuse it. Upper management usually never takes the responsibility of failure, opting instead to mass layoffs. Shifting the cost of failures onto their exploited workers.
Instead of looking at the house the carpenter builds, look at the carpenter as an enterprise. If the carpenter grows in skill, and is able to take on more complicated jobs, they are able to charge more. The carpenter’s enterprise grows in value, which means more pay for the carpenter them self.
This is not true of the developer. The developer might be able to demand more pay, but they are at the mercy of their upper management to relay that to the owners of the business, who might see more value in exploiting the worker for more profit for them selves. Being able to collectively bargain through a union the developer might approach the freedom of their enterprise as the carpenter, but it is still not nearly the same level as if they had direct control of the business, like the carpenter does.
If the carpenter is poor and has mouths to feed, he can't pass the task even if he knows it will fail. He needs money. On the other hand google's developer has earned so much money the previous year, he can then quit any time he wants and get a new job with ease. To me it looks like the carpenter is the exploited one.
> This is not true of the developer. The developer might be able to demand more pay, but they are at the mercy of their upper management to relay that to the owners of the business, who might see more value in exploiting the worker for more profit for them selves.
A typical developer at Google makes $200k-$500k. That was enough for me, I didn't feel exploited, so don't come here and tell me that I should feel exploited, I'm sure that even Marx would agree with me that such a huge salary is fair.
Please note that exploitation here is a technical term from marxism and should not be confused with how this word is commonly used in english as a synonym for oppression. In my native language of Icelandic there is a much nicer word arðrán which literally means “dividend burglary”, “profit burglary” or “stealing the fruits of your labor”. It doesn’t matter how much you personally makes, if someone else is taking money that someone else worked for, that is exploitation of labor.
I didn't work for the money others were paid, I was paid the fruits of my labour, others was paid theirs, thinking that I would be worth more than I was paid is just hubris. Then after having worked a few years, getting 25% pay raises every year, I quit and can now easily work on my own projects because I made ridiculous amounts of money.
You might not feel exploited, and maybe you personally weren’t. But collectively you and your coworkers were, or at the very least, you and your coworkers were used to enable exploitation of other workers—within Google, or through Google’s third parties. The only way a shareholder of Google can make money off of Google without contributing any work is by exploiting people that do the work. In the context of distributing the wealth a company creates, who gets what is a zero sum game. And if shareholders are making money without working for it, it must be through exploitation. And given the power dynamics at play. It is the workers that are exploited. If not Google’s own workers, then the workers of the companies that are Google’s paying customers.
The Google founders did a lot of work initially. And then, my job was enabled thanks to that work and the investments.
Your point only works if the company is stable and the work is keeping that company running, but Google has expanded exponentially every year, it hasn't reached the stable rent seeking stage yet. All those profits were reinvested in the form of salaries and jobs, if those went to the early workers then I'd never have gotten a job there and I'd have to live with a much much smaller salary. Stable rent seeking businesses are a problem, yes, that is the bad kind, but modern tech is too young for companies to have reached that stage.
So with your model I'd have made less money, that isn't good for me. Your model only works momentarily, when you stop growing the company and suddenly start to pay everything to current workers. But all the future workers whose jobs were enabled by those reinvestments would then be worse off, and I'd be one of those workers since I joined close to two decades after Google was founded. By the time I left there were twice as many people working there, their salaries were paid by the labour done by the previous workers, and Google barely pays profits so far so most of this actually went back to the workers, just future workers and not current ones, that is why I can't say that I deserve more than I got, I paid it forward as thanks for those who made my job possible.
Edit: And about unions, did you know that Google also operates in countries with strong unions? I joined the company in one of those. And you know, Google started paying me much more when I moved from that country to a country where unions weren't strong? How is this possible if those strong unions would make me get more? So apparently unions don't make these jobs pay more, in my experience it is the opposite, they didn't even manage to get my salary up to par with my non union co-workers. Unions mostly cares about the median, they don't care about high end workers that already makes a lot, unions aren't for me.
With this kind of logic, you could then just as easily say the workers of google are exploiting the shareholder's capital to profit as they didn't bring any of their own with them. Just as soon as things will go bad for google, all the developers will find another jobs and shareholders will be left suffering the losses.
I imagine the steelman version of the argument here is: yes, they do own part of the company, that portion of upside and control is so minuscule that it's almost insignificant. And thus we're back to needing unions to advocating on behalf of workers so that they get to own a bigger slice of the pie.
This neglects the reality that loans exist. In an ideal leftist world your local credit union redistributes wealth by collecting pepole’s savings from the community and hands them out as loans for slightly higher interest rate. That interest rate is the “cut” of the rewards. If an enterprise goes bankrupt and is unable to pay back the loan, there is usually some kind of insurance the credit union has to prevent going under with it.
That sounds like a world in which everyone ends up worse off. Maybe it’s more equal, but I value standard of living and opportunity more than equal outcomes.
Unions don't add economic value, hence why employers don't like them. The way they secure higher pay is by going on strike, not by offering more production or value.
Unions provide training, good healthcare, and safety, which very much add economic value. Employers typically have the full force of market forces to pay as little as possible. Collectivisation is the workers only means to advocate for themselves.
How would unionizing prevent you from being replaced by a machine? Striking isn't a threat when you not being there is what the company is going for anyway.
Automation is not instant, and if the clock is between “implement AI correctly to automate the work” and “run out of money because you have no workers” a strike is still effective.
If they would be based on supply and demand shouldn't nurses salaries gone through the roof recently? In every country I read the news shortage of nurses (and teachers to a lesser degree) is a huge topic and many places are badly understaffed. So why did their salaries not increase dramtically?
They did, in the US at least[0]. Just not for the saps who signaled any sort of loyalty to the company, those people got hosed. Nurses need to adopt the "f you pay me" attitude the hospital administration has, doing things like working without protective gear is a great way to tell your boss that you will accept anything he does to you.
I don’t have a reasonable answer. Though I think some element of universal compassion would be nice to embed in our economy.
Though, I don’t imagine that can ever be governed into place, given that socialism and communism ultimately end in totalitarianism.
It’ll likely take many generations and many revolutions, but I do hope someday we figure out how to stop excusing our selfishness and naturally give until everyone else has what they need.
We could create utopia today if we could successfully fight the urges of our monkey brains.
But in the near-term, I think the best we can do is survive and chip away at the notion that just because we can take more, we don’t have to.
The notion that capitalists aren't compassionate is pure propaganda. People like capitalism because it's the best economic system in terms of results [0] [1] [2] [3]. It may increase the variance in wealth but it also raises the median and that's what actually matters.
Economic decisions should be viewed in terms of the incentives they create and not their stated intentions. Any economic system is one of rationing resources and this involves making tradeoffs. The apparent intent of one approach for doing this over another doesn't necessarily correlate with its results. E.g. "minimum wage" laws intending to protect workers from exploitation actually create unemployment instead (which is a zero wage, and that's less than the "minimum" wage). The "solution" is presented as being about low wages vs. high wages, so it sounds good and compassionate. But the reality is that it's about low wages vs. zero wages, and low is better than zero.
There's a film by the late economist Walter Williams called Good Intentions that is all about that kind of stuff.
does raising the price of oranges mean you sell less of them? of course it does
employment is a two way agreement, why does the government need to set a price floor for labor? anyone who doesn't want to work for $4/h can just decide not to, but the law makes it illegal for anyone who would rather do that than be unemployed. Wages generally correlate with experience and these laws are robbing teenagers and young adults of valuable experience years.
Raising the price of anything doesn’t mean you’ll sell fewer of them. In fact, that’s kind of the problem.
There’s a margin between the price you can sell a product for and the price you decide to sell a product for.
The same applies to wages. There’s a wage that you can offer and still have a healthy business, then there’s the wage you do offer because someone is willing to take the job.
Maximizing pricing and minimizing wages based on the limits you can get away with is the problem. Human decency should be a factor in setting prices and wages, not just strictly market economics and opportunity.
Insulin is too expensive and minimum wage is less than what’s needed to live reasonably well.
Those who control prices and wages can and should fix those problems. The government shouldn’t even have to intervene.
They do, but my point is, as a species, we should do better to improve conditions for others when we have the opportunity.
> There’s a margin between the price you can sell a product for and the price you decide to sell a product for.
price elasticity is irrelevant. if someone is paid $10/h and earns their employer $11/h, and the city they live in raises minimum wage to $12/h, that person is now unemployed
> minimum wage is less than what’s needed to live reasonably well
this is irrelevant and an example of how "minimum wage" is an insidious term that hides the fact that there is still a (legal) minimum of $0: unemployment. Unemployment is not better than a low wage that can help you get valuable experience as a teenager or young adult. Once again, everyone in the world who is employed can make decisions about their own employment and how much they're willing to accept in return for their work, but magically we decide that some people would be better off without jobs because they're not providing above a certain threshold of value?
> They do, but my point is, as a species, we should do better to improve conditions for others when we have the opportunity.
Again, there is no economic system that can change the fact that we live in a world with limited resources that need rationing. And preventing people from gainful unemployment is improving their condition how exactly?
> How many businesses that pay minimum wage really can’t afford to pay more? By my estimation, it’s a fraction, if any.
Have you never used an automated car wash or self checkout?
People can decide their own minimum wage and to be unemployed if an employer isn't offering enough. This is literally what everyone does above the minimum wage.
> We do live in a world with limited resources, but there are certainly enough for everyone if we collectively decided there should be.
Every country that "decided" this ended up with famines killing millions. Meanwhile even imperfect capitalism keeps lifting the poverty floor, life expectancy, child survival rate, etc.
The incentive structure of central planning doesn't work and it's not something that can be solved with people evolving to be more altruistic. Meanwhile even imperfect capitalism has raised the quality of life of billions of people.
> as the illusion of scarce resources dissolves
It's not an illusion. If you want gold, you need to mine it. If you mine gold, it means you're not raising chickens or writing a social networking app or cutting down trees or whatever. Everything has a trade-off, scarcity is never going away.
For your three examples getting early into theses stocks, say stock compensation, or employee stock purchases would have produced outsized returns up until a few months ago. Much of the wealth is not from salary and simply stock compensation. Musk/bezos/zuck became billionaires on stock price alone. Early employees at these companies became millionaires many times over. But this is backwards looking and a survivor ship bias - for every one of these companies there companies who didn’t make it big , or value went to zero.
>when our industry is producing oligarchs like Musk, Zuckerberg, Bezos, it means that they are profiting from the things that tech workers produce
The workers that built the foundations of these companies received stock options or RSUs over a decade ago and reached FATFIRE territory as well. Had they unionized, the companies they worked for wouldn't be able to reinvest as much money into growth, which would be compounded by a lack of external investors. In that case, they would lose to an unionized competitor.
How about the Media moguls? A pretty good argument can be made that media oligarchs produce less value, but they dominate financial and political circles.
+1 Worker-Unions-conversation-point for using "oligarch" in a comment. /jk
The comment about "used to feel bad about making a lot of money" hits home for me, when I compare my wages to other family members who're struggling. Thanks for the perspective, it helps open me up a bit more about this.
Great information in the link, too - helps to consider whether and how a Union might be attractive, under various workplace circumstances.
Outsourcing technical work comes in waves. I've seen it up-close-and-personal 3 times. It's worked once and the magic that went into making it work (one of the founders moved back to his home country and started a consultancy that was contracted by the original business) in that specific instance isn't something that is easily replicated.
Well if there was an actual union in place there would be general strikes. A company that lost all IT/SWE staff for the period of the strike may be more open to negotiations.
There’s certainly been a technological improvement in which increasing numbers of people have access to the internet and smart phones, with an explosion of information, communication and entertainment.
Compare to 30 years ago instead. Wealth in terms of being able to buy property is decreasing in many countries, which can be more significant than any increased ability to buy consumer gadgets (that will spy on you). And the countries with less wealth inequality don't in principle have less wealthy common people.
"Yah". Few generations ago, you could buy property cash in a "NIMBY hellhole", that is a place where you can find gainful employment, on a few years worth of savings. Not the case anymore. Property prices inflated much more than CPI.
Marx didn't predict that capitalism wouldn't generate wealth. On the contrary, he believed it was the most economically revolutionary structure the world had yet devised and would create untold wealth. That's entirely consistent with the world we see.
To be very specific, where he fell short was predicting a secular decline in the rate of profit. This wasn't a crazy error--most early economists also believed it--but it was very wrong, and his analysis of the failure of capitalism rests on that false premise.
He's referring to marx belief in the "tendency for the rate of profit to fall" which is literally objectively wrong and the opposite of it is accepted within economics.
This is the accepted explanation, which implies that the rate of profit rises over time
Btw, marx predicted that capitalism is inevitably destroyed due to tendency for the rate of profit to fall. I believe capitalism is the strongest that it's ever been right now.
I'd emphasize not only that there have been advances in theory but also in, more importantly, the empirical evidence. Marxism is a scientific theory in the sense that it can be falsified, and if you look at the rate of profit over time in most countries and periods, the evidence very strongly falsifies Marxism. Even if someone refuted Okishio, Marxism makes predictions about capitalist economics that simply aren't consistent with the world we see.
particularly this part: > Early on in my own career in the industry, I felt guilty about making a “good” salary. Why did I deserve to make more money than a teacher or a nurse? Of course, I don’t — they deserve a lot more too. But if I was making less it would go straight into the pockets of investors, not other workers. Tech workers’ labor has made six of the world’s ten richest people, and today computing and the internet are an integral part of every industry. Although some workers are highly paid, the differential between investor profits and employee salary is as stark as in any other industry, because workers are not organized.
it's true that tech workers frequently make good money and we should be grateful for that, but when our industry is producing oligarchs like Musk, Zuckerberg, Bezos, it means that they are profiting from the things that tech workers produce. It's how inequality is increased. It's no coincidence that the rise of the tech economy has coincided with American inequality rising sharply.