Another argument in favor of limited socialism.

[sparr]

One of the more popular arguments in favor of capitalism is that it rewards effort and skill. After giving that point some thought I found myself wandering down a line of thought that I would enjoy some feedback and dialogue on.

People have skills. Some people have skills that are objectively or subjectively more useful than others. Those skills tend to dictate which jobs a person can perform to some degree of competency. The job(s) that a person performs, if we extend the term "job" to include any sort of effort expended to earn income, tends to dictate their income.

People have needs (and wants). Those needs dictate the goods and services that they are willing to pay for. This drives the job and production markets, and affects prices and wages in the expected system of supply and demand (government controls aside, for the moment).

Where I find fault in the argument in favor of strict capitalism is in the assumption that these two systems (the jobs people are capable of doing and the jobs that need doing) are well matched, or even of equal size.

At the high end, let us consider doctors. The world only needs so many doctors. Far more people are qualified to provide competent medical care than the world needs. So we have a competitive market, inflated supply and constant demand driving the wages down (in a world without government over-regulation of medical care) and forcing doctors into other lines of work.

At the low end, let us consider day laborers. After downward-displacing workers in every more skillful industry (out of work doctors become accountants, out of work accountants become fast food workers, out of work fast food workers have nowhere to go), we end up with people of various levels of overqualification forced to perform manual labor just to earn minimum wage. If that was the end of the problem then minimum wage would simply rise as the demand for labor increased and the supply of laborers remained constant. But...

And, at the absolute bottom, the unemployed. If the two systems (skills and needs) are not only mismatched, but also the "skills" (wherein we consider "able to lift a shovel" a skill possessed by every capable adult) absolutely outnumber the "needs", then some people are unable to find work at all. The supply of labor outstrips the demand, keeping the minimum wage low (5% unemployment being good for a "healthy economy" is a statistic you will encounter if you study this issue). You hear things like "record high 7% unemployment" and discount them, but consider that that number is exceptionally conservative, possibly as little as half the actual rate.

As educational standards rise the first problem will become greater, with more people qualified for the same number of skilled jobs. As automation technology improves, even the number of jobs (relative to the population) will decrease. We are on a steadily steepening slope wherein less and less people are required to fulfill the needs of all. Five thousand years ago the vast majority of the population spent their time on needs, hunting and farming and building things. A thousand years ago most people spent their time on needs, and some on wants. A hundred years ago the needs of the many could be supplied by a few, and even the wants began to be supplied by a shrinking portion of the population. Today that trend continues. Thanks to technology, today the work of five people can feed, clothe, and shelter a thousand more. The other thousand people are stuck working on the wants of each other, and it only takes 950 of them to do that, leaving us with 50 people out of work and no jobs to fill. Ten years from now, or twenty, or fifty, 500 people will be doing the jobs of those 950.

As much as people complain about welfare today, it is an inevitable state of affairs. Every person who backs the mantra "A man's gotta work" is deluding themselves. We have to begin to implement systems today that will grow to support those hypothetical 500 people twenty years from now. The longer we wait, the greater the shock to our culture will be when we finally do.

Comments

[tanglered.livejournal.com]

At the high end, let us consider doctors. The world only needs so many doctors. Far more people are qualified to provide competent medical care than the world needs. So we have a competitive market, inflated supply and constant demand driving the wages down (in a world without government over-regulation of medical care) and forcing doctors into other lines of work.

I challenge that there are too many doctors. Is this merely a theoretical example or what?


At the low end, let us consider day laborers. After downward-displacing workers in every more skillful industry (out of work doctors become accountants, out of work accountants become fast food workers, out of work fast food workers have nowhere to go), we end up with people of various levels of overqualification forced to perform manual labor just to earn minimum wage. If that was the end of the problem then minimum wage would simply rise as the demand for labor increased and the supply of laborers remained constant. But...

but let us not forget that while a recession is a trend it is not an absolute. people are still getting hired and getting fired , getting promoted or retiring. Its not that simple. There is still room for upward mobility if you have a good employment record and reseme. so perhaps the worst doctors become accountants but some of the best accountants become doctors

[sparr0.livejournal.com]

Yes, but as time goes on the trend continues to worsen. Consider the ridiculously (to old fashioned people) extreme case in which everyone is fully proficient at every job, and it only takes ten people to provide everything that the other 995 need or want. How, then, do the other 995 earn a living?

[tanglered.livejournal.com]

that case in and of itself. is as you said ridiculously extreme. first of all there is a clear trend that as the value an individual in a society contributes goes up the economy expands, rather then collapsing. How many man hours does it take to feed a town of 100 people for a year? has the number of man hours increased or decreased from the roman era, through the middle ages, the Renaissance the industrial revolution, the chemical revolution, the atomic age, and finally the internet age. now how many unemployed are there in our town of 100 on average in each of this ages?

[sparr0.livejournal.com]

For the upper class, the number of working hours has increased. For the lower class, it has decreased. Until very recently there were no unemployed who were willing to work, there was always need for more unskilled labor to dig ditches, plow farms, carry lumber, etc. That is no longer the case. The world only needs so many ditch diggers and farmhands now that we have ditch digging machines and tractors, and that same trend applies to almost every industry. More machines means we need less people to support the needs of more people. Today, I think unemployment is at least 10%, and climbing. Yes, we are in an economic slump, but the recovery won't be quite as good as before, and the next slump will be worse. Ignoring temporary fluctuations we are on a permanent and unstoppable trend towards higher unemployment, and pure capitalism in the face of that is asking for riots or worse (somewhere around the 50% mark, I would say).

[inlkflyn.livejournal.com]

Far more people are qualified to provide competent medical care than the world needs.

Yeah, notsomuch.

[sparr0.livejournal.com]

I didn't say the qualified competent people were the ones currently holding the jobs :)

[inlkflyn.livejournal.com]

True. Your roommate is living proof. hehe.

[bdsmweblog.livejournal.com]

The answer is obvious. Have competitions for the needed jobs, take the top-ranking competitors, then kill and eat the rest.

On a serious note, I'm not sure that we will ever come to a point where our wants can be fully supplied. Really, the line between "need" and "want" is a blurry one. We need shelter, but we don't really "need" a house/apartment, or air conditioning, or electricity, to live. But I digress.

I assert that people's wants are almost always greater than their position -- people in general will always want more than they have, to put it simply.

I've done the same mental exercise before. What happens at the extreme case where, due to technology and other factors, everyone's needs are attended to without them having to do anything for them? Then people spend their time pursuing wants -- in essence, hobbies become lifestyles. Advancing technology, medicine, science.

And to your point, such a society would be somewhat socialistic as far as needs, but wants would still be a capitalistic thing. Instead of trading grain for a horse shoe, you now make a web page for someone, who then gives you a blowjob (or whatever). The greater an ability you have to meet others' wants, the more your own can be met. So if you wanted to just exist, you would be provided food, shelter, etc. in such a world. But if you want anything more than that, then you would have to work for it.

So I guess that's a very roundabout way of saying, "I agree." Because what I describe above would be considered limited socialism, I think.

[sparr0.livejournal.com]

What you describe is pretty close to the sort of socialism that I am in favor of. I happen to think that certain "wants" that are subject to massive economies of scale (individual cars, $.25/person/mile. mass transit, $.10/person/mile. houses and small apartment buildings, $500/month/person. government housing projects, $50/month/person.) should be taken care of by the govt, but I definitely agree that luxuries should be subject to capitalism.

I may have misspoke in the wants/skills descriptions. You are correct that all wants will never be met. I was more referring to wants that people are willing to pay to have met. Right now there are so many people out of work that you can have pretty much any task you want done at minimum wage (or less, if you shop globally) by at least competently skilled workers. There are too many people to fulfill the needs/wants of society. The role of the government that I envision would be to ensure that some minimal degree of support is provided to all, while effort provides luxury.

I am of the opinion that a person should not suffer for reasons outside their control. That includes not being able to afford food, clothes, or medical care, especially for children.

[idav5d.livejournal.com]

I find your logic flawed Sparr...
"out of work doctors become accountants, out of work accountants become fast food workers, out of work fast food workers have nowhere to go"
Why would a doctor displace an accountant, when there are plenty of professional accountants? There are plenty of jobs out there if you have the skill set to fill them. If you can build electrical assemblies or aircraft structure I can put you to work tomorrow for 50k + if you can troubleshoot and repair the same 70k + . That skill is in short supply, and there are no doctors,ditch diggers, or accountants lining up for those jobs. If you're a one trick pony, you can expect to be out of work at some time in your life. I decided to close a business which was based on the disposable income of other businesses. In this economy,I went from six figures to two pretty quickly... calling on a different skill set, I had my choice of jobs and was employed rather quickly.
In your industry, if you limited yourself to the knowledge of only one computer language, would you be a viable job candidate,or self limited?
In this state we are fortunate to have the Hope scholarship which will pay for any certification program for any adult. If more people used programs such as this and broadened their pool of available skills, perhaps the unemployment level would not be as high. While there is a serious economic crunch going on, and unemployment is high, there are plenty of unfilled jobs out there.

Socialist with fork looking for Socialist with pork pie - unknown

[sparr0.livejournal.com]

I am somewhat aware of the highly technical skillset required for the positions open where you work. I believe that those skillsets, while in short supply, do exist in the ~17% of Americans who can't find work right now.
That said, there are plenty of unemployed folks at Freeside, many of which have engineering and mechanical backgrounds. Have a link with job descriptions that I could send them to?

[idav5d.livejournal.com]

Have them shoot me a resume, I scan the job boards everyday for friends and I don't mind hooking people up. If they're recommended by an employee, they're looked at before the great unwashed masses.