Sunday, March 26, 2006

Social justice - who's in the right ?

"They make too much money !"
"People shouldn't be allowed to make 10 million dollars a year."
"How can any person be worth that much ?"

You hear these complaints again and again, against pro athletes, rock stars, CEOs (especially of those big bad pharmaceutical companies - how dare they make medicine !), and other multi-millionaires. The "argument" being that these people are just like you and me, and so they should make as much as we make. That there is somehow something morally outrageous about making more money than most people. That there should be class jealousy, and perhaps more class warfare.

But what does this really mean in economic terms ? Most people do not make their money by stealing it from other people (except politicians, but few people complain about their salaries - they even defend politicians by comparing them to athletes). They make money by selling or helping to sell a product - music albums, tickets, jerseys, whatever. And people pay for these products because they perceive them as being of value. Athletes and singers make their money because they contribute much needed entertainment to people, and these people appreciate it and buy their products.

So then the question arises, how much contribution to people's values is too much ?

Seen from this individualist perspective, the complaints against high salaries are absurd. How can we fault anyone for contributing too much to society ? And more importantly, how can we blame them for consumer choice, something they have no control over ?

At best, an anti-individualist could argue that his values are better than everyone else's and that he wouldn't buy such products, but his values are irrelevant to those of the other people in a given society. People will hold the values they want, and express them in the way they want, and it's the role of the free market to help them do so.

Calls for class warfare, therefore, are misguided. It is not against "the rich" that they are really fighting, but against their "fellow classists" who go to the arena, buy CDs, and watch shows on television. In essence, they are against individual values, because individual values do not promote their classist agenda.

Either way, it is the connection between salary and people's values, which is obvious if you look at the situation in individualist terms, that they are failing to grasp. Salaries are not taken out of thin air. They depend on revenues, which depend on spending, which depend on values. If no one was interested in sports, then no one would go to the stadiums, and no athlete would make money. It is, in fact, a testimony to Western civilization that we have attained such a level of prosperity that we can devote so much money to entertainment !

"Social justice" is not to be found in the greedy power-mongering and kangaroo courts of the statists. Coercion is not just. The only social justice that exists, must be based on cooperation and non-coercion. This is because justice consists of getting what one earns, and not getting the unearned - this applies to trials but to other aspects of life as well. By trading, people deal with each other by value. But when coercion exists, the strong and powerful will always take what the masses earn and use them for themselves, sometimes using them as a tool of manipulation, unearned resources for the taking of this or that interest group.

The free market, therefore, is true social justice, where you receive resources and popularity proportionally to the perceived value of your contributions, and give proportionally to how you perceive other people's work. That is the only just principle. That is the only way society progresses and the only way the masses can work for a better life. It is, in fact, the only principle that has ever yielded progress or equality. The opposite principle - that a ruling class should establish itself by force and redistribute resources to further its aims - has never produced anything but tax slavery, war (financed by tax slavery) and suffering (thanks to war). You shall know them by their fruits !

14 comments:

Marcus said...

But isn't it skewed, that people who contribute little or nothing to the actual producing of something gets a profit which is absurd in comparision to the person producing it. For example, Phil Knight of Nike makes a hell of alot more than the guy in the sweatshop in korea who makes, say, half a cent per produced shirt.

Since clothes are a commodity, this isn't really something you ponder when you go out and buy clothes, but I believe Phil to be immoral by exploiting workers in the ways he does. Now, one could argue that government and the free-trade agenda is to blame for this too, with trade-embargos and the notion of piracy (i.e. what's stopping the guy producing the clothes from selling them himself at a lower price but earning more money), but given the status quo, Phil is immoral, no?

Francois Tremblay said...

Well, there are two things. As you said, there are plenty of problems with the system of State Capitalism to begin with. But beyond that, the value of your work is determined by the market. It's really the only way we have to determine the value of any product on a market, and that's why socialist systems have an inherent measurement problem, which is now well known. People in third-world countries are generally oppressed and artificially limited in their choices, and therefore it wouldn't be reasonable to measure the value of their work by current salaries.

As for Phil Knight, well, I don't know how well he does his job, but having a big salary is not exploitative - at least the board of directors at Nike isn't being exploited. They figure they are making the right decision. But if no Nike shoes were sold ever again, he would be out of a job either way.

Aaron Kinney said...

Dont forget that if there was no "boss" of Nike to manage the company, then all those shoe makers would be out of jobs.

Marcus, here is the more important question: Can the sweatshop shoe maker run the Nike company just as good as Phil Knight is?

If not, then you have nothing to complain about.

If so, then you can rest assured that in a market anarchy, the best performers excel the most, and the sweatshop worker would be able to move up in the company and eventually run it, because his abilities would be so outstanding.

Francois Tremblay said...

Well, I think the main point is, there is a stereotype that CEOs don't really do much. Having been raised by one, I know that is total bullshit. Being a CEO is a fucking demanding job.

Aaron Kinney said...

CEOs typically work more hours than their employees. They also make much more risky and important decisions.

I was also raised by a CEO (partially raised) but I can also attest firsthand to the amount of work the guy did as a CEO.

We are talking 60-80 hour workweeks, with constant business related phone conversations after-hours in the home. This guy did virtually nothing but business from the moment he woke up to the moment he went to bed.

Delta said...

Having been raised by one, I know that is total bullshit

I'm so glad you said this. It's really be racking my mind how you can constantly post blogs glorifying those who have power and how they deserve everything they get while demonizing the poor who just want their fair share.

How can we fault anyone for contributing too much to society?

Wow, you really need to get off your knees and look at the real world. I used to think that you were just stuck in a rut and that you would later renounce your capitalist views like you did your libertarian ones, but now I see that you truly are hopeless. Some kids are raised by clergy and become hardcore christians, others by CEOs and become hardcore capitalists.

Dont forget that if there was no "boss" of Nike to manage the company, then all those shoe makers would be out of jobs

AK, don't allow your arguments to go soft man. Having a manager in a company has nothing to do with why they should make 6 orders of magnitude more money than someone.

Marcus, here is the more important question: Can the sweatshop shoe maker run the Nike company just as good as Phil Knight is?

If not, then you have nothing to complain about


Of course he can't. Could the CEO mentally handle the abuse that the worker goes through on a day by day basis, with no end in sight? I doubt. Regardless, just because someone does something better doesn't mean they deserve to make a million times more. It means that the one who has business training should be the manager, but once again it doesn't say anything about making a million times more. It's debatable whether it suggests that the manager make any more money at all.

Francois Tremblay said...

"It's really be racking my mind how you can constantly post blogs glorifying those who have power and how they deserve everything they get while demonizing the poor who just want their fair share."

When have I ever "glorified" people who have power ? I don't "glorify" CEOs, and no one else does. And I never "demonized" the poor - I am against the state, which is an attack against the poor. Apparently you don't read my entries, even though you like to disparage them like the little vermin that you are.


"Wow, you really need to get off your knees and look at the real world."

I'm looking at the real world, and I'm seeing people glued to their TV to watch sports, and buying expensive tickets. What do YOU see ?


"I used to think that you were just stuck in a rut and that you would later renounce your capitalist views like you did your libertarian ones, but now I see that you truly are hopeless. Some kids are raised by clergy and become hardcore christians, others by CEOs and become hardcore capitalists."

Yes, that must be it. There was no reasoning behind me becoming a market anarchist at all. Just plain ol' brainwashing.

By the way, my dad was a socialist, you fucking braindead moron.

Get the fuck out of my blog.

Aaron Kinney said...

Delta,

Im sorry to see that you are so anti-capitalist. IIRC you are an American who is directly benefitting from the relatively pro-capitalist economy that America has in place.

You said:

AK, don't allow your arguments to go soft man. Having a manager in a company has nothing to do with why they should make 6 orders of magnitude more money than someone.

Actually, yes it does. Taking a higher personal risk by having more responsibility in a company DOES entitle you to more money. And being the owner or CEO of a company DOES entitle you to pay yourself more than your employees if you so choose.

Of course he can't. Could the CEO mentally handle the abuse that the worker goes through on a day by day basis, with no end in sight? I doubt.

Usually they can. CEOs get to where they are typically through hard work. They are no stranger to putting ones nose to the grindstone.

Regardless, just because someone does something better doesn't mean they deserve to make a million times more.

Yes it does. Compensation for work should be proportionate to the quantity and quality of work.

It means that the one who has business training should be the manager, but once again it doesn't say anything about making a million times more. It's debatable whether it suggests that the manager make any more money at all.

If the manager didn't make more money, then nobody would want to be a manager.

Delta, I happen to be a manager at an insurance company. I have my own office with a window. I didnt used to have this job. Before I got promoted to this position, I worked in a cubicle and processed paperwork. Now I make more important decisions. Accordingly, I get paid more and have my own office instead of a cubicle.

If my new position didn't pay me more, what incentive would I have to take on greater responsibility? Who the hell would want to have increased risk and more responsibility without more compensation?

I dare you to start your own company, Delta, and pay yourself the same as you pay your data processors or factory assemblers. I dare you to work 60-80 hours a week making big decisions that will make or break your company, and not pay yourself more for it.

You are totally disregarding the concept of incentives and merit-based pay. And because of that, your worldview would prevent anyone from accepting higher amounts of responsibility and higher amounts of work.

Delta, if everyone were to get paid the same, regardless of responsibility, then why would anyone even bother going to COLLEGE? I, for example, am about to graduate with a degree in Computers. This degree cost me over $50,000 to get. Why the hell would I go through that trouble if I weren't able to get a better job with more responsibility and more pay?

Delta, have you ever got promoted? Have you ever felt that you deserved more than what you were getting paid? Have you ever had the desire to get a better job with more demands and better compensation?

These merit and skill based incentives are essential to getting any kind of skillful, high quality work. They are the only reason people go through the trouble of bettering themselves professionally and educationally.

What you are proposing is a world of failure and mediocrity.

Marcus said...

I'm not arguing that a CEO doesn't work, I just argue that his efforts aren't worth a thousand times more than the guy sewing the shirt. Not to get into details, but I feel the need to demonstrate:

In his last year as CEO of Nike, 2004, Phil earned $3.7 Million, whilst your average asian sweatshop worker earns around two bucks a day, equalling 700 dollars a year. That's 500 000 times less. Now, I will agree that some differentiation in the sallaries are to be had (and even desirable, given the increase of risk), but 500 000 times?

This isn't about the board of directors being fucked over by Nike policy, nor the market. It's about the silly levels of differentiation. I myself am well on my way to graduating with an engineering degree, which might explain both my poor english and my weak debating skills (I sometimes feel like an infant wrestling Muhammed Ali), so I plan on earning quite a bit more than I would have if I didn't spend 50 000 bucks on this. I'm just saying, you shouldn't loose touch with your humanist side. If you earn 500 000 times more than a guy working for you, could you sit down with him and argue that fact with a straight face?

To be clear, I'm really not here to bash anyone. I've recently just lost touch with a lot of my values, so I'm basically looking around to find new ones, allthough that's a different story :-)

Francois Tremblay said...

"I'm not arguing that a CEO doesn't work, I just argue that his efforts aren't worth a thousand times more than the guy sewing the shirt."

Once again, without market decisions (and keeping in mind that we do NOT have a free market right now in most third-world countries), how do you know what the value of their work is ?


"To be clear, I'm really not here to bash anyone. I've recently just lost touch with a lot of my values, so I'm basically looking around to find new ones, allthough that's a different story :-)"

Here's one value you should like : non-coercion. That's what we're all about. ;)

Francois Tremblay said...

By the way marcus, my latest entry on statist trolls does not apply to you (as my publication of your latest comment testifies).

Monkey-Boy said...

Please forgive me for my intrusion into this discussion at such a late stage, but I thought I might add my two cents and if it isn't appreciated, feel free to delete me.

I think the original discussion of free market economies and labor practices was ideologically sound but it lacks the reality of the situation. It's easy to blame the individuals that sit in fron tof their TV's munching on Doritoes and buying Nike shoes, just as it is easy to blame the CEO that makes 3.7 Million a year. However, in the case of the Dorito eaters, it's important to remember that there is relatively little alternative, just as the possibility that the sweatshop worker in Taiwan isn't likely to ever move up to be president of Nike regardless of their abilities. It's a reality that class is hereditary with only a few exceptions, which we can easily see in the way that those exceptions are touted so patriotically. The rags-to-riches story is so rare that when it does occur, we make it out to be a national treasure, reinforcing the notion that every good little boy can be president if he only works hard enough. Frankly, that's Bullshit.

One commentor noted that there is currently no free market in operation in Third World countries, and I would add that there isn't one in operation in the U.S. either, given the incredible complexity, expense and inertia of current economic policy and control exerted by major corporations. Look at the example of Wal-Mart. While it is certainly true that anyone can open a department store in any location they choose, can they really operate in a fair market with a mega-power like Wal-mart exerting so much pressure and undercutting the market? Of course not, so while the free market is "technically" preserved, the reality is that it doesn't exist.

Marcus's discussion obviously originates from a Marxist standpoint, evidenced by his discussion of the fetishism of the production process, and while I recognize and favor many of Marx's theories on the consequences of capitalism, his operational model obviously fails, especially on the grand scale. I wouldn't consider it a viable alternative to capitalism, but then again, we do not operate under a strict capitalistic model, relying instead on a strictly consumerism model. The difference, in my opinion, originates in the leveraging that major corporations use in their sales process. The average child has seen 4,000 McDonald's commercials by the time they are six years old and while that obviously places some responsibility on the parents that allow the TV to baby sit their child, to absolve corporations of all responsibility is far too reductionist in its analysis. The issues are immensely complex, but at the heart of the matter is profit. As long as the major motivation for growth and gain is profit and power, corruption will abound.

A final note about a CEO...while many work quite hard at what they do, it represents a distinctly different form of labor, being INTELLECTUAL labor, not physical, and with that has arisen a stereotype that those capable of successfully operating in an Intellectual labor position are somehow superior to those that simply labor in the physical sense. I do not believe this is a valid distinction and it is based wholly on a Western notion of a division between mind and body, with the mind being privelaged above the body. Could a sweatshop worker operate Nike successfully? Perhaps if he or she had the opportunities that the CEO had, such as upbringing, education and wealth.

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