Labor then is in surplus supply, as Marx predicted. It is displaced by capital and lower waged labor on distant shores. Its marginal productivity in aggregate and across the labor pool has fallen, even though for some few working with much capital, it has risen. There are too few jobs. Unemployment is high. Indeed, many have dropped out of the labor market altogether. We need to consider the labor pool as a whole and the impacts on it. On balance, it has suffered net losses in this process.
The Randian notion of no redistribution of income in this situation is therefore absurd. It is crazy. There is no significant real class of either hyper productive gainers or lazy, indolent and base losers, though exemplars of each can be found to muddy the waters in ad hoc fashion. More, the situation is some wallow in unearned income and the fruits of it and much of the labor pool is cut out of the productive process entirely because of a surplus of labor caused my more labor becoming available and by capital being substituted for labor.Wandering the Oceans
Ayn Rand's Central Idea Is Wrong
Kimball Corson
posted from Pago Pago, American Samoa
I found his other post also much worth reading - Quoted below
ReplyDeleteOn the Nature of Work
An Exchange on the Idea of Work
A friend said, " So, dear Kim, is there any place in that bubble of abstractions you surround yourself with, any place or room for those who grow capital through their own enterprise, their own analysis, their own wiser than average investments? . . .
"And you really did go to the U of C and not flunk out????!!!"
I responded: "Grow capital through their own enterprise?" You mean 1) distort capital allocations by positioning one's own capital well for capital gains (like I do) or 2) acquire land or natural resources at favorable prices to acquire some surplus rents or 3) get an ownership interest in a bank which can create money as new loan funds costlessly and then get an interest return on that money? Tough productive work, right? Certainly not wealth acquired the old fashion way by -- saving and not consuming so as to incrementally acquire wealth. People die first.
"I survived Chicago by listening carefully and by parroting back or thinking within their frameworks, not by putting my own thoughts, which they don't want to hear, on the table. I learned the controversies well and in fact studied both sides but kept my mouth shut, except a bit with Friedman because he loved to argue so."
I reject the use of the word "capital" as well as "money".
ReplyDeleteI simply cannot mathematically "see" what "capital" is.
The concept of "capital" has an overall "invisible hand-ish" nature to me and my BS detector goes off right away.
Prof David Harvey has been teaching Marx's "Kapital" for 40 years and he even still cannot define what it is; without resorting to nebulous semantics.
A discussion about "Capital" is another rabbit hole.
Entities either have possession of balances of NFAs or they don't... no need to apply another layer of semantics to confuse the issue imo.
A question I would have for Corson here is if he thinks "money" is endogenous or exogenous... if the answer is exogenous then he still has a lot to learn...
rsp,
Kimball's got MMT -
ReplyDeletehttp://www.sailblogs.com/member/thewanderer/?xjMsgID=210826
"Man at Work + What Is Modern Monetary Theory All About"
You guys are congenitally unable to grasp any basic libertarian or Austrian concepts. Rand’s grand thesis in “Atlas Shrugged” was that individuals used their minds to create great new products and services for the masses who then hated and resented such creators. People like Steve Jobs and the Beatles, for example. Those people finally get pissed off and decide to go on strike. Did you even read the book?
ReplyDeleteYou MMTers, being quasi-Marxists, have a giant black hole in your minds about the essential concepts of scarcity and entrepreneurship. Somehow, your little guiding hand plus oodles of fiat funny money can solve all economic problems. You guys are clueless. As Rothbard wrote:
Marx and his followers have never demonstrated any awareness of the vital importance of the problem of allocation of scarce resources. Their vision of communism is that all such economic problems are trivial, requiring neither entrepreneurship nor a price system nor genuine economic calculation — that all problems could be quickly solved by mere accounting or recording. The classic absurdity on this matter was laid down by Lenin, who accurately expressed Marx's view in declaring that the functions of entrepreneurship and of allocation of resources have been "simplified by capitalism to the utmost" to mere matters of accounting and to "the extraordinarily simple operations of watching, recording, and issuing receipts, within the reach of anybody who can read and write and knows the first four rules of arithmetic." Ludwig von Mises wryly and justly comments that Marxists and other socialists have had "no greater perception of the essentials of economic life than the errand boy, whose only idea of the work of the entrepreneur is that he covers pieces of paper with letters and figures."
http://mises.org/daily/6045/The-Dialectic-of-Destruction
However, you guys do perform an important public service in providing daily evidence that Keynesianism is merely a wacky outgrowth of socialism/central planning and is not related to the free market.
Bob,
ReplyDeleteLooks good for him... however this:
"that focuses more on the money supply",
I would suggest some caution here... rsp,
Ha Bob:
ReplyDelete" Did you even read the book?"
Hell no thank God! I wouldnt use the pages of that book for toilet paper at the risk of contamination... ;) rsp,
If you haven’t read the book, how are you capable of commenting on it?
ReplyDeleteHeck, I bought and read several chapters of the vile and loathsome “The Economics of Control”.
http://www.flickr.com/photos/bob_roddis/5560086472/in/set-72157626353319778/
I read the entire “frauds” book by Warren “Hut Tax” Mosler.
Rand preaches freedom. MMTers preach “control”.
I don't believe I've ever commented on the book Bob. I have no idea what specific garbage it contains...
ReplyDeleteI have however commented on an interview of the author I viewed and have offered opinion on some policy proposals by human morons who have become spoiled by her philosophy.
rsp,
Matt, the way that capital was figured in Marx's time was quite different from now and pretty specific. Capital was ownership of physical means of production. He modeled it as similar to land in feudalism, where the landowner collected rents from ownership and contributed no labor to the production process. Marx was not alone in this, either. It is the way that Smith and Ricardo thought of it, too. This is way Classical economics is about rent-seeking, and it is also the basis for Keynes "euthanize the rentier." Rent is an extraction from production and it disrupts the circular flow necessary for economic equilibrium at full employment — unless govt pitches in the difference, i.e., "pays the rent."
ReplyDeleteKimball's got MMT -
ReplyDeletehttp://www.sailblogs.com/member/thewanderer/?xjMsgID=210826
"Man at Work + What Is Modern Monetary Theory All About"
Yes, posted here when it came up. That's how i found him IIRC.
Bob,
ReplyDeleteYou guys are congenitally unable to grasp any basic libertarian or Austrian concepts. Rand’s grand thesis in “Atlas Shrugged” was that individuals used their minds to create great new products and services for the masses who then hated and resented such creators. People like Steve Jobs and the Beatles, for example. Those people finally get pissed off and decide to go on strike.
The problem with that is that it's a dumb thesis.
Jobs was a bit of a crap example of an innovator making people’s lives better. All the heavy technical lifting was done by others – the technological innovations of a bunch of people most have never heard of working at IBM, Bell, the government, etc. and hobbyists sharing their work with no expectation of profit. Those people, in turn, relied completely and totally on scientific discoveries and mathematical methods developed by people who published their work in journals which was thereafter free for anyone anywhere to use for any purpose – they did it, in general, out of sheer curiosity and to feed their ego.
What does the individual entrepreneur actually do? For the most part, just organize the production and distribution process, or organize the people who organize the production process. Beyond that, they might leave their personal quirks on the products: Steve Jobs had a penchant for industrial design, so we had smooth feeling MP3 players with a neat wheel – but had he never been, we would still have something roughly analogous to an iPod in existence. For a military analogue, they’re more or less logistics officers. Room exists for them to act as real leaders and promoters of morale, but this is rarely pursued – although employee loyalty might be dynamically efficient and profitable, being rather cutthroat about layoffs is more immediately and obviously financially sound. Example: Apple's ghastly corporate culture.
In my humble opinion, the best examples of creative genius – even in things that are of immediate value and directly marketable – are rarely entrepreneurs. The week that Jobs died, Dennis Ritchie died. Who was he? He developed the C programming language and Unix. He was infinitely more important and directly responsible for the technological world we have today, including Jobs’ own machines. He wasn’t an entrepreneur and didn’t wear a turtleneck.
So yes, go on strike - we'll just get scabs. You have to be scientifically and historically illiterate to buy into Rand's Great Man nonsense.
"You have to be scientifically and historically illiterate to buy into Rand's Great Man nonsense."
ReplyDeleteThanks for bluntly stating the obvious Edmund. Case closed mind. Given that, why keep trying to open dialogue with superficial sociopaths?
There are, indeed, better ways to employ agile minds.
ps: Matt,
It seems useful to compare capital to leverage in any complex system. New avenues for local leverage continue to emerge, as formerly weak influences become rate limiting (the transistor effect). If a system survives, then multiple, indirect checks & balances evolve to tune vast permutations of leverage to adaptive purposes.
Meanwhile, whole ranges of Luddite minds are still boarding at Austrian Economics stations. It's always been that way. Extracting relevant signals from all that platform noise is all that matters.
bob is so far up his peculiar ideological hole that everything else seems absolutely normal in comparison. thanx bob.
ReplyDeleteJobs has to be given credit for tremendous technological innovation, as well as scaling it. But Jobs was essentially a monopolist, who wanted to control the supply horizontally and vertically. This has been Apple's chief operating m. o. Now it is a huge monopoly that is being challenged by Google's monopoly aspirations. Free market competition? Forget about it once the game gets sufficiently capital intensive and concentrated. Jobs realized that profit comes from rent and he attempted to build walls rather than bridges.
ReplyDeleteLet me get this straight. Rand allegedly has a "great man" theory which means a "ONE great man" theory. And since, of course, many inventions result from the workings of a group of people, the "ONE great man" theory has been refuted.
ReplyDeleteThat's the objection?
Matt Franko wrote:
ReplyDeleteHell no thank God! I wouldnt use the pages of that book for toilet paper at the risk of contamination... ;)
Followed by:
I don't believe I've ever commented on the book Bob.
Followed by:
I have no idea what specific garbage it contains....
Ayn Rand's "John Galt" position is hardly far-fetched, in that it was borne out by the financial crisis. TPTB, even though they were running control frauds, were not only able to scare the government away from investigating them but they also the country hostage by pointing out to politicians that they could crash the economy if they were not bailed out and given a free pass. As we know, Ayn Rand liked sociopaths, and she hit this nail squarely on the head with the bankstas.
ReplyDeleteRight now the economy is starved for private spending, which really means firm spending (investment). Business is sitting on trillions of ready money. Watch what happens if the GOP sweeps the general. Not only is the GOP obstructing to defeat the "socialists," so is business. This is "Galtism."
Tom,
ReplyDelete"Right now the economy is starved for private spending, which really means firm spending (investment). Business is sitting on trillions of ready money."
Every pass of the fiscal year for businesses in the aggregate results in dollars being removed from the pool of spending.
Investment using only this money on the sidelines makes things worse over the long term unless we increase taxes on the high end substantially (tax rent) or run adequate deficits.
There is a Paradox of Investment as well as a paradox of saving. I suspect there are many other paradoxes we could come up with.
I don't see any way around this mathematically.
Bob,
ReplyDeleteNo. The objection is that the people who actually matter are not the same people whom Rand thought mattered. What's more, the people who actually matter operate out of complex motivations that she more or less despised, and display a "rationality" at odds with her own unscientific, philosophically sloppy definition.
The people who matter for material human betterment are generally not captains of industry and are generally not the ultra-rich. In Randverse, they most emphatically are.
In reality, we might be better off if some of the real go-getters dropped out a la Atlas because they frequently engage in nasty, anti-competitive practices. The Mexican telecom industry probably wouldn't suffer if Slim's monopoly disappeared. Cross border trade wouldn't suffer if Matty Moroun stopped lobbying against the construction of a competing bridge to Canada.