What’s a Fair Price? Or: You’re Not Underpaid(fakenous.substack.com)
fakenous.substack.com
What’s a Fair Price? Or: You’re Not Underpaid
https://fakenous.substack.com/p/whats-a-fair-price-or-youre-not-underpaid
49 comments
Perhaps an economist can enlighten me: consider two scenarios, one where an owner keeps 90% of the revenue and pays 10% as wages, and a second where they keep 10% of revenue and pay 90%. Under what conditions is it more advantageous (to society as a whole) for one or the other scenario to be true?
> In most cases, if you find a price unfair, you wouldn’t agree to it, so if someone does agree, that’s evidence that they find it fair, which is evidence that it is fair.
Lol, no? It makes me wonder if the author lives in the real world. Accepting a deal does not happen in a vacumn and is in no way evidence of fairness. 1) it could be there are no other people offering what you need, forcing you to accept an unfair deal 2) it could be a trade union forcing unfair deals on a sector so you really don't have a choise 3) You may find out the deal is unfair after the fact because some new information came to light, and so much more
Lol, no? It makes me wonder if the author lives in the real world. Accepting a deal does not happen in a vacumn and is in no way evidence of fairness. 1) it could be there are no other people offering what you need, forcing you to accept an unfair deal 2) it could be a trade union forcing unfair deals on a sector so you really don't have a choise 3) You may find out the deal is unfair after the fact because some new information came to light, and so much more
Precisely. I think the two biggest reasons that people accept job offers with unfair compensation are:
1) Desperation. People need to eat. If someone needs food, water, health care, and shelter they can be forced to accept a job, any job, no matter how unfair, to survive. IMHO all those things are human rights. If we make it official policy that those things are human rights, then people will only accept jobs that are worth it.
2) Information asymmetry. People do not realize what their labor is worth. Most employees do not know, in real numbers, the value of their own labor. If they knew that their labor was producing 10x value for the company, but their wages were only 3x, they would probably demand wages of 9x or quit. The company’s ability to keep that information hidden is essential to maintaining their labor exploitation mechanism.
1) Desperation. People need to eat. If someone needs food, water, health care, and shelter they can be forced to accept a job, any job, no matter how unfair, to survive. IMHO all those things are human rights. If we make it official policy that those things are human rights, then people will only accept jobs that are worth it.
2) Information asymmetry. People do not realize what their labor is worth. Most employees do not know, in real numbers, the value of their own labor. If they knew that their labor was producing 10x value for the company, but their wages were only 3x, they would probably demand wages of 9x or quit. The company’s ability to keep that information hidden is essential to maintaining their labor exploitation mechanism.
They argue this this in section 2.
>Due to an unfortunate sequence of events, only one towing company is operating at this moment. The driver wants $1000 to tow your car. The normal price, which obtains when the towing companies have to compete with each other, is $75. The $1000 price seems unfairly high.
>Due to an unfortunate sequence of events, only one towing company is operating at this moment. The driver wants $1000 to tow your car. The normal price, which obtains when the towing companies have to compete with each other, is $75. The $1000 price seems unfairly high.
I think the author's point is that all these factors (like the basic supply and demand in your first point) are what sets the 'fair' price.
If they don't, then their point is how are you defining 'fair'? Just a gut feeling?
If they don't, then their point is how are you defining 'fair'? Just a gut feeling?
But there's no universally absolute metric for what it means to be "fair".
The best metric so far is that if someone else exists that accepts the deal, then the deal could be considered fair. It's essentially like in an auction (but instead of the highest bidder, it's the lowest bidder).
The best metric so far is that if someone else exists that accepts the deal, then the deal could be considered fair. It's essentially like in an auction (but instead of the highest bidder, it's the lowest bidder).
> 7. If it’s so unfair, change your job
This is not sustainable on society level. Someone needs to do those jobs even if it's not you. If "the market" was going to fix this, it would have happened already.
This is not sustainable on society level. Someone needs to do those jobs even if it's not you. If "the market" was going to fix this, it would have happened already.
I don’t agree with you. If the employer experiences that people quit their job all the time they will increase pay.
There are a lot of places where the employer just brings in new people when that happens. Again and again and again. The well of people desperate enough for a paycheck just never seems to dry up.
Depends on the job - if it’s specialized sure. If its not then no, they just hire the next guy. There’s always a next guy because there’s always a supply of people looking for jobs even at minimum wage.
This isn't true in many areas. Even when I was in high school with zero experience it was easy to find jobs above minimum wage. Which means almost nobody wanted minimum wage jobs.
Have you ever heard of Amazon? There are like 20 threads about a leaked internal memo that basically says they will dry out the labor pool.
Or not was there not an article on shortage of teacher recently or earlier in the summer on restaurant not finding staff.
When you are used to exploit your workforce and don't care for churn you probably won't change unless it's too late.
When you are used to exploit your workforce and don't care for churn you probably won't change unless it's too late.
Not in all sectors. There are many low wage jobs that employeers don't give a damn about constant personel rotation because they always find people and the profits are up
Can't have more first world statement than this one.
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It is all free market and fair capitalism. Yet many offered salaries, do not even cover basic expenses (rent, food, bills). And cheap underpaid workforce must be illegally imported.
> Some people think that there’s a wide class of people, ‘the rich’, who are getting paid way more than their labor is worth, for doing trivial tasks that anyone could do. Think how bizarre it would be if the world worked like that. Why would other people be pointlessly giving them that money?
Because they own the means of production. Nobody should listen to this crap take from someone who clearly hasn’t even read the wikipedia article on Marx. You don’t have to be a full blown communist to understand that the capital/labour lens is incredibly useful when trying to understand economies.
Because they own the means of production. Nobody should listen to this crap take from someone who clearly hasn’t even read the wikipedia article on Marx. You don’t have to be a full blown communist to understand that the capital/labour lens is incredibly useful when trying to understand economies.
> Because they own the means of production.
so how did they get to own that means of production?
so how did they get to own that means of production?
Well, in the vast majority of the cases, because they are related to someone who historically owned some means of production. Often originally obtained through imperialism or colonialism. In some rare cases, they were a smart person in the right place at the right time - or even more rarely, created some valuable invention or innovation (i.e. they created a new means of production from scratch)
> In some rare cases ... contributed some valuable invention or innovation.
i would say this is way less rare, and is in fact, the majority of the reason why means of production is owned by those who do.
i would say this is way less rare, and is in fact, the majority of the reason why means of production is owned by those who do.
I would strongly disagree. Even in cases where the vast majority of the wealth was “created” by an individual not inherited (gates, musk) - even in those cases, their ability to invent or innovate was largely a result of their parents wealth helping them be in the right place at the right time.
But the parent's wealth helping the children is irrelevant, if you consider the family's line to be a single entity. At some point, the parents also worked hard to gather their wealth, and so did their grand parents, etc.
the idea that it's somehow bad that parent's help makes for the child's success is wrong. It's fair to receive such help.
the idea that it's somehow bad that parent's help makes for the child's success is wrong. It's fair to receive such help.
Except, as I said, The initial wealth of a family was usually obtained via some imperialist or colonialist process. See elon musks’ family diamond mines, or the entire united states and it’s resources being take by force from the millions of people who were living here prior to colonization.
I’m not saying it’s wrong to pass wealth to your kids in general - but I am saying it’s wrong to pass wealth obtained by violence and exploitation to your kids.
And it’s wrong to received wealth from your parents and then attribute your successes to your hard work or invention instead of attributing it to your situation + your hard work or invention.
Or rather: situation * hard work * invention * luck.
These are all clearly multipliers on each-other. You can frame the terms of the equation differently, but it always has a large portion that is outside the person’s control.
I’m not saying it’s wrong to pass wealth to your kids in general - but I am saying it’s wrong to pass wealth obtained by violence and exploitation to your kids.
And it’s wrong to received wealth from your parents and then attribute your successes to your hard work or invention instead of attributing it to your situation + your hard work or invention.
Or rather: situation * hard work * invention * luck.
These are all clearly multipliers on each-other. You can frame the terms of the equation differently, but it always has a large portion that is outside the person’s control.
Only the biggest of companies ... Most 10-50 person companies I know are
1) mostly the result of long-term-sustained hard work, not (any significant amount of) innovation or inheritance. Inheritance money helps with getting started, but in my observation, learning how to run a real business from your mom/dad helps a lot more than money you get from them.
2) up for grabs: the kids don't want them. The owners are either actively looking for someone to take it over, or open to offers to some degree, ranging from "someone PLEASE take over my company" to "if you pay off the capital, the business is yours".
Of course, this is local builder companies, real estate companies, a hotel, shops, "Industrial" companies of limited scale producing beer, ice cream, ... Not Microsoft.
1) mostly the result of long-term-sustained hard work, not (any significant amount of) innovation or inheritance. Inheritance money helps with getting started, but in my observation, learning how to run a real business from your mom/dad helps a lot more than money you get from them.
2) up for grabs: the kids don't want them. The owners are either actively looking for someone to take it over, or open to offers to some degree, ranging from "someone PLEASE take over my company" to "if you pay off the capital, the business is yours".
Of course, this is local builder companies, real estate companies, a hotel, shops, "Industrial" companies of limited scale producing beer, ice cream, ... Not Microsoft.
If someone is paying you, then you don't own the means of production - they do.
Too literal a reading of “pay”. Read it as “buying what the means you own produce”. Very hard - maybe impossible - to be truly “rich” with pure labour
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This train of thought always strikes me as similar to religious thoughts.
"You think what the market does is unfair? But it is the market it can by definition not produce any unfair results."
Any argument about fairness is swiped away by explaining that this is just how the market works. But the chance that the market always produces fair results is very unlikely unless you come in with the presupposition that the market is by definition always fair. I guess if this is your only moral belief this starts to make sense.
EDIT: Use quotes to clarify that a statement does not express my personal opinion.
Any argument about fairness is swiped away by explaining that this is just how the market works. But the chance that the market always produces fair results is very unlikely unless you come in with the presupposition that the market is by definition always fair. I guess if this is your only moral belief this starts to make sense.
EDIT: Use quotes to clarify that a statement does not express my personal opinion.
>Finally, by the way, if you think your job is underpaid, then quit
You heard it here working people and single mothers, if you don't like your job just quit and become a libertarian philosophy professor, like the author! Problem solved.
Seriously this is atrocious. I would expect someone in that profession to question his own unquestioned assumptions, yet he boldly states:
" In our world, though, your income comes from other people. The other people start out with money that belongs to them and that they have no obligation to give to you. Your being morally virtuous doesn’t make them obligated to just give you their money. I assume this as obvious; if you disagree, ask yourself how often you have given someone money just for being virtuous."
that's not our world, that's a videogame. In our world people don't magically start out with money, they inherit a lot of it, and who is to say they have no obligation to give it to anyone else? how often do people give someone money above market rates for expressing virtue? All the time. Ethically sourced food, "Buy American!", sponsor an open source project, religious folks are well aware of the concept of a tithe, and so on.
You heard it here working people and single mothers, if you don't like your job just quit and become a libertarian philosophy professor, like the author! Problem solved.
Seriously this is atrocious. I would expect someone in that profession to question his own unquestioned assumptions, yet he boldly states:
" In our world, though, your income comes from other people. The other people start out with money that belongs to them and that they have no obligation to give to you. Your being morally virtuous doesn’t make them obligated to just give you their money. I assume this as obvious; if you disagree, ask yourself how often you have given someone money just for being virtuous."
that's not our world, that's a videogame. In our world people don't magically start out with money, they inherit a lot of it, and who is to say they have no obligation to give it to anyone else? how often do people give someone money above market rates for expressing virtue? All the time. Ethically sourced food, "Buy American!", sponsor an open source project, religious folks are well aware of the concept of a tithe, and so on.
The article fails to tackle or even acknowledge is that our economic system is nothing like the libertarian ideal free market. The author doesn't examine any practical realities about how wages are formed.
The conclusion, "Stop randomly claiming that people are “underpaid”" is totally unearned.
The conclusion, "Stop randomly claiming that people are “underpaid”" is totally unearned.
Watching nerds puzzle through basic economics theory from first principles - ignoring massive bits of the picture that they have no idea about - over and over again, to try to justify the excesses of consumer corporate late-stage capitalism through profoundly simplistic and naive arguments that fall apart upon any exposure to the daylight of reality, is so tedious that I can't imagine actually going through and rebutting every point. It's like trying to explain how database indexing works to a goatherder.
It's not even worth it as an exercise in convincing anybody else of anything, because you either understand the practical (much less moral and ethical) problems inherent in modern capitalism, or you're probably not terribly bright to begin with, and it's a waste of effort trying to make you understand.
It's much more fun just to point at you and laugh, especially because we're all so trained to regard capitalists and their bootlickers as intelligent that the look of confusion and outrage on their faces when you tell them to go sit at the kiddie table because the grownups are talking is worth its weight in gold.
It's not even worth it as an exercise in convincing anybody else of anything, because you either understand the practical (much less moral and ethical) problems inherent in modern capitalism, or you're probably not terribly bright to begin with, and it's a waste of effort trying to make you understand.
It's much more fun just to point at you and laugh, especially because we're all so trained to regard capitalists and their bootlickers as intelligent that the look of confusion and outrage on their faces when you tell them to go sit at the kiddie table because the grownups are talking is worth its weight in gold.
People are only desperate enough to accept shitty working conditions and wages because they are born poor. So this unfairness in income is just the same unfairness of being born in the wrong household.
So then the question is, is it fair that some babies are born rich and others are born poor?
People need to eat, and now all the land is 'owned', they can't just forage, so they'll work for whatever rather than starve. Is that a 'free market'?
Hunter-gatherer can support only like ~10 millions persons globally [1].
Take that number with a grain of salt, but it's only 0.13% of the current population. To get a full hunter-gatherer world again you must get rid of 99.9% of the current population.
[1] https://www.pnas.org/doi/10.1073/pnas.1721726115 One of the first results searching in Google. I'm not sure it's the most accurate number.
[1] https://www.pnas.org/doi/10.1073/pnas.1721726115 One of the first results searching in Google. I'm not sure it's the most accurate number.
I think the key part of the previous comment was about land ownership rather than agriculture being bad. Of course land ownnership is just another version of inequality. And massive wealth inequality leads to massive power imbalances when negotiating fair wages.
Nobody is going to plow the land unless they are confident they will harvest the result a few months later. You can go with a bunch of friends and family and plow some random piece of land and camp there with a few pikes. You don't own the land, but if someone else shows up you ask them nicely to go to another place.
Is that place nice? Do you want to use it next year? Are you camping all the year and squattering it?
What if your group split? How are you dividing the spot?
What about the group that is nearby? Does that steam separate the part you don't own and the part they don't own? Who can use the water from the stream?
Is that place nice? Do you want to use it next year? Are you camping all the year and squattering it?
What if your group split? How are you dividing the spot?
What about the group that is nearby? Does that steam separate the part you don't own and the part they don't own? Who can use the water from the stream?
These are all good questions. And yes society is complicated. But I don't think the current solution of: let's just have a couple people own everything everywhere while others starve and suffer, is the necessarily the best one. In fact, history has shown the 'few people own everything while everyone else can suck it' approach to resource distribution inevitably leads to collapse.
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Is this a comment on how "unfair" it is that keeping a human alive is not free? That "God"/Darwin/the universe/gaia/... did not make it so.
This is merely a direct consequence of the laws of physics and does not really have anything to do with the organisation of society (which is what economics, and "free market" describe). Every society, however organised, must on average get a positive net output from every human alive.
This is merely a direct consequence of the laws of physics and does not really have anything to do with the organisation of society (which is what economics, and "free market" describe). Every society, however organised, must on average get a positive net output from every human alive.
just curious why this is flagged ? can someone please let me know ? thanks !