Indeed. The very fact of capitalism allowed certain workers to receive such high wages, but the very fact of capitalism punished this wage because it was above market rate for the service rendered. It had nothing to do with 'exploitation.' In fact I think you or any Marxist would have a difficult time explaining exploitation as a notion.

Ok Equivalnce, lets think about this for a moment. Inferior products usually cost less money than higher quality products. Indeed, you get what you pay for. When a company sells a lower quality problem they can command, or ask such a lower price than the higher quality product. So to be able to sell something they lower the price. To lower the price the company has to lower costs. Since the American cars quality was lower, or perceived to be lower, the markets did not think that American cars were worth their asking price. Now if the car companies lower their prices then demand increases. Now look at the situation of the American car companies, their costs include electric bill, automotive supplies and labor costs. The average wage labor totality for the American Unionized worker came out to about $75 an hour. The foreign car company's cost was about $40-45 an hour. That is a massive difference in cost for the different companies. The reason of the difference is the unions demanding the higher wage. These wages became what are known as sticky prices or sticky wage. Thus this high labor cost tied the hands of the American car companies to lower the price of their cars because they still had to cover costs. The breakdown of cost of a Car is mostly supplies and labor, design is a much smaller percentage of cost.


Saya, there were way too many assumptions and a lack of coherent thought for me to even see what the point of your post was.

You're so far off the mark, it's hilarious.

And Alan isn't a Marxist.

Yea that didn't even make sense.

Starting off your argument with a complete oxymoron isn't a good technique...

Let's.

This is true.

However, I want to preemptively point out that the inverse, that products that usually cost less are inferior, isn't necessarily true.

I think you've misunderstood my argument. When I say "cheaper-by-design", I mean that the Asian cars cost less material supplies to build than American cars (remember, you said that the car's cost is mostly supplies and labor). I am saying that I believe Asian cars were designed to be cheaper to build than American cars, and therefore the difference in wages wouldn't matter.

Also, Asian cars could have theoretically been sold at a lower profit margins than American cars, which would increased demand (lower prices = greater demand, by your own words), and make up for the difference. If I sell 10, $21,000 cars at $1,000 profit, I will make the exact same than the person who sells 2 cars at $25,000 for $5,000 profit.

The car companies mostly purchase their supplies from the same suppliers, the biggest difference to the cost of a car to the company producing it is the labor costs.

The high price of American unionized labor paralyzed the American car companies from responding to market forces.

So then, high wages are something bad for capitalism, right? So Joker was right.

The problem with American cars lately, is that they produce shit.
You copy a Volvo shittily, make it bigger and stick a Cadillac badge on it, doesn't make it luxury, it makes it expensive shit.

U.S. Car Manufacturers need to get with the times or get rolled over. Ford only survived because Ford Europe have been producing best sellers like the Focus ST and the Focus RS.

How does the meager $75 an hour an auto worker makes compare with the paycheck of a CEO or a marketer or the president of a corporation? Marketing research, advertising and so on take a bigger chunk out of profits than paying workers.

It IS exploitational to tell the people who are producing the goods that are making the profit for the company that they aren't entitled to the money they create. There are plenty of places that money could be cut back in order to keep the cost of the product low- including the ammount of money that the owner takes home. But, then again, that would defeat the purpose of capitalism.

Not necessarily. If the company then invest that amount of money into the company again, they can increase production, or R&D or any of the myriad of options that on the whole increase the capital they acquire until the next fiscal year, thus progressing capitalism. ...of course, then the CEO can grab some of THAT money to increase his income over the years, at a slower rate though but he probably gains more that way anyway.

Nope. High wages are good insofar as they aren't over market prices. If the business can sustain the high wage then all the better for them. A auto worker making $45/hour is still a good wage for a job that requires no education. Capitalism promotes high wages since it values good labor and is willing to pay for better quality workers.

I don't know how much you make a year, but $75 an hour is a very very good wage for a job that requires no education. Comparing the CEO with the unskilled worker is a silly comparison, one will probably at least have a masters degree from a prestigious university.

It is not exploitation because the workers don't make any profit. They merely provide a service which is paid with a wage. The owners provide the capital, the factory and take all the risk on. There are employee-owned companies as well so that doesn't necessarily defeat the purpose of capitalism.

Exactly, and then GM decides to shut down Saturn. Terrible idea, some of the longest running cars I've seen are Saturns. And they get great gas mileage, and are mechanically strong. My Dad owns one.

America's hayday for cars was the late 60's early 70's, when muscle ruled all.

Complete bullshit. Look at the real world instead of just using rhetoric like an Austrian school capitalist.
Average wages keep decreasing while profits keep increasing, and more and more companies that didn't outsource their jobs still work under a structure in which all workers are rotated in less than a decade because it's cheaper and more efficient to hire and underpay unskilled workers who would settle for much less than they're worth, will adjust to their jobs in an analogous level to skilled workers in a couple of years, and will work under the fear of being fired rather than on the ambition of getting a raise based on seniority.
That right there is a huge profit for the company. It's one of the best methods to reduce costs. Why would they give a shit about the workers then?

Where are you getting this information from?

The only reason I ask, is because you have changed your argument three times now (twice in the same paragraph). First you said the majority of a car's cost came from the quality of a car. Then you said that the majority came from supply costs and autoworkers. Now you're saying it's just autoworkers.

It may be a great wage, but it's nowhere near the ammount that the trust-fund babies and inheritors of the factory make for doing almost nothing in comprison to the labor put into the product by the workers.

To get into a "prestigious university" you have to have money in the first place. Why should they get payed more because they started life out on the better end of an uneven playing field? It's not as though these auto workers have always been payed $75 an hour- the unions had to fight to get there. That's CLASS WARFARE.

The end result of forming a union is to collectivise the factory. The workers should be able to make decisions regarding production, rather than answering to the demands of a boss who is only there to make a profit off of their labor.

Ok, so I guess I just shouldn't complain when my boss is racking in the bucks from MY labor, but he pays the guy who yells at me to work harder a higher salary and 10% of all of the profits I make for doing nothing but making me work harder for less wages, and then the boss sits on his profits... worrying that he can't feed his kids or pay the electric bill?

As for the argument of worker-owned buisinesses, the point of capitalism is to make as much money as possible regardless of who you step on to get to the top. Wal-mart started out as something kind of great. It was a local buisiness that was lucky enough to branch out, and until a point it advertised everything as being made in America. Then all of a sudden, Ronald Reagan comes along right when Walton's kids inherit the chain, and there's tons of cheap labor overseas. It's not the fault of the labor in America being more expensive becuase of labor unions and at least a feigned attempt at caring about American citizens' human rights- it's a fault in capitalism, especially globalized, corporate capitalism. You said that you think the problems in capitalism are caused by government intervention? You haven't been paying attention.

If worker-owned buisinesses are collectivised, that's great. Everyone has a democratic say in what happens in production, and the distibution of wages is also discussed and voted on by the workers. But if the point of the whole operation is to create as much money as possible for one or two owners, at the expense of the workers who have little to no control over their situation, it is, by nature, exploitational.

Nope, I haven't said that at all. Read my print, I have consistently said labor costs are the majority cost factor.

Your post doesn't prove to be true because the entire history of of the past 150 years supports my view. Worker wages are the highest they have ever been, a median American worker in the 50s had to work a substantial amount of time longer to purchase a burger than the median American worker does now. The history of economics simply doesn't support your views.

Um...

Now, the first sentence may just be poor understanding on my part. However, you've changed your story at least twice. Which brings me back to my original point:

Where are you getting this information from?

Alright, there is alot of nonsense and mostly rhetoric here, but I'll try my best to get around it.

So you make the contention that you have to have money to get into the Prestigious universities. That simply isn't the case, we live in a meritocracy, not an aristocracy. Obama did not come from a rich background and he graduated from a very good school I'd say. Furthermore if you have the grades most ivy leagues will give you a free ride. The problem of not affording prestigious universities is simply not applicable anymore. Between the massive student loans and FAFSA grants available, not to mention the free rides that schools give to talented students really makes your point trivial if not outright obsolete.

Next, this notion of class warfare rest on Marxist notions of 'class consciousness' which is very problematic and suffers from some deep epistemic issues.

The actual purpose of a union isn't to 'collective' the factory, that is called stealing. Unions merely exist to put labor in a position of power when negotiating wages and contracts.

The notion that because you, the worker, made the product makes your inherently deserve more money is nonsense. You provide a service, that is to make the product. There is no metaphysical connection between you and the product. Its not like the steel created by steelworkers is somehow inherently connected to the workers. Its just a product that they create, a product that the workers did not provide for the capital or efforts necessary to even give the worker a job.

'You said that you think the problems in capitalism are caused by government intervention? You haven't been paying attention.'

I'd actually say you haven't been paying attention. It is government intervention within the free-market that created the conditions for an inflated market that led to unnatural, insofar as the freemarket wouldn't have done it, levels of risk. Because the government subsidized many risks in the market, the corporations took on levels of risk they normally would not have taken on.

The point of capitalism from the supply side is for everyone to make as much money as possible. A company wants to hire the very much worker money can buy as long as it is within cost constraints.

Nope, I can introduce some logic into your problem of reading my post.

Supplies make up a portion of costs -- True
Labor makes up a portion of costs -- True

S ^ L together is a true statement. I haven't been inconsistent.

I have to look up some facts about the car costs. I remember reading the breakdown of a average GM car cost when the companies were receiving bailout funds. I'll look it up and get back to you on that.

Actually, you have been.

Your argument originally was,

Cost = Quality
Q = Labour * Supplies

Then it was,

S + L = C whereas S + L > Design whereas S ≈ L

Now it is,

C = S + L whereas L > S

Either way, this is arguing pure sophistry. You said that supplies and labor made up the majority of the cost of the car, and then you said that only labor made up the majority cost of the car.

Compare: "[sic] is mostly supplies and labor", with "[sic] the biggest difference to the cost of a car to the company producing it is the labor costs".

I await your reply on where you received your information.

HAHAHAHAHAHAHAHA! You really think that Ivy League schools will give you a free ride just because you have good grades?!

First of all, there are fewer and fewer entry level jobs- you can have a job that requires a degree and still make minimum wage. This means that more and more people who can't afford to live like you're supposed to be able to in a first world democracy are trying to go to school (or stay in school longer), and there's no way all of those people are going to get a scholarship. Grades-based scholarships are almmost obsolete- you have to have a perfect 4.0 along with having done a shit-ton of community service, which no one who has to take a job to help support his or her family while still completing highschool can be expected to acheive.

There are a lot of reasons why many working class and working poor kids still can't get into college, even though a general degree is becoming more and more neccesary for survival.

Trade Unionism is class warfare. Negotiating wages and so are are just steps in the ultimate goal of expropriation to the collective of workers, or what you call "stealing". Collectivism is the desired result of trade unionism.

I'm not arguing a metaphysical connection, and the last half of your post is bullshit that doesn't even address the arguments I brought up, much less have basis in reality, but here it goes.

Innitially, yes, the owner provided the capital for the means of production and for the steel, in the case of your example. But once the labor of the workers, who were not in a position to start a company in the first place, brings in enough money to make the investment profitable, what claim does the owner have? The workers know their factory better than anyone. They would be just as qualified to make descisions for the factory, if not more, than the boss who has already made back his or her contribution, which was nothing more than supplying the means of production, and as little possible a wage for the workers as he or she can manage.

From the Open Door Policy to NAFTA, please, I would love to hear how unregulated globalism has ever been anything but an anal-r ape fest.

Everyone CAN'T make as much money as possible unless you're a socialist- for everyone to make as much money as possible, everyone would have to make about the same.

Once again, sorry about the belated reply, I've been busy.

This actually surprised the hell out of me, I didn't think you had it in you Jill. Apology accepted.

But to continue this, need I remind you, it's not my logic, it's the logic of your argument, which was clearly broken. Previously in this thread you seemed to be claiming something like it at every turn, that is until:

I agree! However, until this statement this seemed to be the crux of your argument. Now that you have agreed that our behavior is more complex than the systems we cleave to, we can move on.

Insult /= Ad Hominem it is a fallacy of irrelevance, I was not arguing that you were wrong because you were irrational, I'd already made a very strong case for you being wrong without it. You were attempting to make Ad-Hominem attacks on my position as to why you were wrong about capitalism by trying to draw me into a political discussion where I would be forced to defend my own political beliefs, which I'm sure you presumed would be unable to do and thus be proved a hypocrite/politically ignorant and therefore wrong, when in fact, the fact that I like representational democracy is of little relevance to the discussion at hand.

I was very clearly employing hyperbola to poke fun at this assertion:

hence the "Yadda Yadda"

But lets get back to your main argument: that all goodness a capitalist has, comes in spite of his capitalism, like a good slaveowner, dictator, or feudal lord. Thus, it is implied, if one supports capitalism on the grounds that capitalism works if the employer and employee engage in fair practices, one should be a fan of benevolent dictatorships etc. ie: Why support a bad system on the grounds that good people make use of it, why support feudalism because of King Arthur?

(For the purposes of this discussion I'm going to ignore the fact that I disagree with the prevailing assertion here, that capitalism is inherently exploitative.)

This is actually a straw man argument. Once again, it is a fallacy of irrelevance. I would argue that slavery is indefensible because it is the ownership of another human being, and thus, unethical on the grounds that it violates anothers inalienable right to liberty. I would argue against benevolent dictatorship and a feudal system for the simple fact that these systems both lack sufficient protection against abuse (interestingly enough, this is also why I argue against Anarchism) even with a benevolent leader, this system will inevitably descend into malevolence as we cannot guarantee that leader and/or those who come after him will continue this behavior.

Now this point might hold water if we were arguing about anarcho-capitalism, a completely unfettered free market, but we're not. No one in this thread has argued for that, nor did the original poster present that as his idea of capitalism. We're not using capitalism in the totally unregulated sense, and thus, Jillian's argument: capitalism is only saved by socialism, thus a mixed economy is a bad idea is totally irrelevant.

This is part of why I have called Alan "irrational" and a big part of why I have given him so much shit over the years: He is a fundamentalist not in the religious sense, but he approaches economic politics with an irrational religious-esque zeal. He equates morality with the system he argues for, and thus, sees no problem with removing all government-imposed restrictions from society, because once people think like he does, they will all be moral, and everything will be fine.

Saya has echoed this sentiment in a big old post a little later in the thread, arguing:

Folks, This kind of thought is a huge part of what is what is wrong with the world. This extremism, this zealotry, be it religious, political, or social, be it dedicated to human equality, animal compassion, or social morality, thinking like this robs otherwise normal people of their rationality. It turns normal, rational minds in upon themselves and you get reactions like this:

And that, unchecked, will usually lead to bloodshed.