Atlas Shrugged

Turtwig · 29-06-2014 02:47PM

bnt wrote: »

So when it comes to employment, I think we're looking to find a balance between two extremes. On the one hand, the free market ideal of totally flexible employment, where businesses can hire and fire people as needed, with as little overhead as possible. That means a government that isn't in the picture at all, not taxing employers for employing. On the other hand you have a unionised workforce, with a government behind them to enforce the rules. Enforcement means bureucracy, and that's got to be paid for. A Union workforce is a smaller workforce - since each employer is costing the company more on average - so provision has to be made for the unemployed, so that means taxes to pay for benefits, and so on.
.

I like the idea of the markets being as free as possible to hire and fire. The problem is there's usually such a gulf between being employed and unemployed that in some countries e.g France it is practically impossible to fire people. So hiring people occurs at much greater risk and cost. This isn't just about tax it's about productivity. If you can't fire an inefficient worker productivity takes a hit.

The four "types" of employees:
Consciously competent - they know their stuff and they know they know it.
Unconsciously competent - they know their stuff but not aware or confident enough of this.
Consciously incompetent - they know they don't their stuff.
Unconsciously incompetent - they don't know they don't know their stuff.

That last one is a cluster fck. If you can't fire them then group morale and productivity will likely suffer too. The problem is even the unconsciously incompetent are humans and firing them could mean seriously fcking up their lives depending on where they live. So if a company is not in dire straits they're unlikely to be fired. The further up the ladder they make it the less likely they are to be fired.

The best way I can see for high flexibility between hiring and firing is a good social support structure. People who are unemployed have a safety net by this I don't mean food stamps shtye. I mean they get a dole and retraining in something else. It's an accepted part of society to be hired and fired. Losing your job isn't seen as the end of everything.

One thing people always overlook is that inefficient people exist in all sectors of society and corporations. How we manage that is up to us. An extreme approach from either side definitely isn't the solution.

Valmont · 29-06-2014 04:03PM

Pherekydes wrote: »

This quote, referenced above, sums it up:

If I buy the factory, the machines, develop a profitable business model and hire the workers I have *created* jobs that would not have existed without my efforts. I don't see how Nick Hanauer's quote contradicts this.

Valmont · 29-06-2014 04:07PM

Turtwig wrote: »

One thing people always overlook is that inefficient people exist in all sectors of society and corporations. How we manage that is up to us. An extreme approach from either side definitely isn't the solution.

You are talking about a one-size-fits-all policy for every single employment contract, though, even if it is somewhere in between the extremes. I think the way 'we' manage 'it' is by acknowledging that not all employees or companies are going to benefit by one set of rules across the board but by extending them the freedom to develop systems that suit small or large groups of employees and employers. The nature of employment is not, as many on the left insist, exploitative. In an open economy employers must charge what their employees or potential employees perceive as fair or else nobody will want to work for them, instead going to a competitor. As long as this fact remains in place there is no reason to believe that labour negotiations need the coercive hand of the state to ensure a fair outcome.

MrPudding · 29-06-2014 04:09PM

Permabear wrote: »

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So again, I will ask, how many time should we allow the bankers to mess up the work economy before steps to prevent them from doing it again won't be an over-reaction, in you beleif?

Permabear wrote: »

This post had been deleted.

Hmm, I think one of the main problems if the people that should have understood them did not.

I can see you are runing the NRA approved defence of 'CDOs don't cause finanacial meltdowns, people cause financial meltdowns' so this begs two questions:

1) What exactly caused the last big meltdown.
2) How do you propose we stop them from happening again?

MrP

MrPudding · 29-06-2014 04:17PM

Turtwig wrote: »

The four "types" of employees:
Consciously competent - they know their stuff and they know they know it.
Unconsciously competent - they know their stuff but not aware or confident enough of this.
Consciously incompetent - they know they don't their stuff.
Unconsciously incompetent - they don't know they don't know their stuff.

I think there are few countries where you can't, in actuality, fire incompetent workers. Ther eis a perception that incompetent workers can't be fired, but this tends to be down to a lack of knowledge or a simplt unwillinness to begin the process.

I have spoken with team leaders and managers that freely admit certain members of their staff are worse than useless, yet will not begin the process to safelt and legally get rid of them. This has nothing to do with a nanny state, or overly protective employment laws, it is simply down to employers or HR departments being too risk averse and unwilling to begin the process to legally, as they are perfectly entitled to, get rid of useless staff.

MrP

Karl Stein · 29-06-2014 04:40PM

Valmont wrote: »

If I buy the factory, the machines, develop a profitable business model and hire the workers I have *created* jobs that would not have existed without my efforts. I don't see how Nick Hanauer's quote contradicts this.

Why are you ignoring what has been explained above?

Your business would quickly fall on its face if it didn't have plenty of consumers to purchase your products/services. You know these product and their consumers do not exist in a bubble but an economic ecosystem.

How could any business function without roads, bridges, rail, airports, sea ports, water and sanitation systems, electricity supply stations/grids, police, courts, patents, copyrights, prisons, schools, universities, graduates, hospitals, customs officials, defence etc etc.

Turtwig · 29-06-2014 04:43PM

Valmont wrote: »

You are talking about a one-size-fits-all policy for every single employment contract, though, even if it is somewhere in between the extremes. I think the way 'we' manage 'it' is by acknowledging that not all employees or companies are going to benefit by one set of rules across the board but by extending them the freedom to develop systems that suit small or large groups of employees and employers. The nature of employment is not, as many on the left insist, exploitative. In an open economy employers must charge what their employees or potential employees perceive as fair or else nobody will want to work for them, instead going to a competitor. As long as this fact remains in place there is no reason to believe that labour negotiations need the coercive hand of the state to ensure a fair outcome.

Every system IS exploitive. Somebody somewhere will always look to game it. Obviously if everybody plays hawk then everybody loses. But we're not talking in such absolutes, some will be hawks, some will be some will be doves. So, no I'm not talking about one size fits all. We can't really adopt such an approach to anything where humans are the significant factor.

Turtwig · 29-06-2014 04:49PM

MrPudding wrote: »

I think there are few countries where you can't, in actuality, fire incompetent workers. Ther eis a perception that incompetent workers can't be fired, but this tends to be down to a lack of knowledge or a simplt unwillinness to begin the process.

I have spoken with team leaders and managers that freely admit certain members of their staff are worse than useless, yet will not begin the process to safelt and legally get rid of them. This has nothing to do with a nanny state, or overly protective employment laws, it is simply down to employers or HR departments being too risk averse and unwilling to begin the process to legally, as they are perfectly entitled to, get rid of useless staff.

MrP

Fully agree. The perception is just damaging as the actual law. Was it that you that used the brilliant analogy of abortion laws and access to abortion?
Poland having a relatively liberal law but it's almost impossible to get an abortion. Britain having a comparably strict law but it's basically perceived as abortion on demand. If you pardon the term.

Think it was either you or peregrinus, either way credit to one of ye.

Permabear · 29-06-2014 07:39PM

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Permabear · 29-06-2014 07:55PM

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KahBoom · 29-06-2014 08:21PM

Except financial instruments that miscalculate/distort/hide the real amount of risk, end up pushing the real risk and costs of that risk, onto the rest of society, when the amount of miscalculated assets grows so large that it harms entire industries/economies.

Pretty nice to be able to pocket profits, while creating conditions where other people end up paying for the risks.

Valmont · 29-06-2014 08:22PM

Turtwig wrote: »

Every system IS exploitive.

Could you explain this? I don't understand.

Permabear · 29-06-2014 08:47PM

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Valmont · 29-06-2014 08:58PM

Karl Stein wrote: »

Your business would quickly fall on its face if it didn't have plenty of consumers to purchase your products/services. You know these product and their consumers do not exist in a bubble but an economic ecosystem.

Demand alone does not create jobs. There is an unfathomable demand for teleportation. This demand won't create jobs, however, until somebody invents the technology, purchases a factory to create the transporters and hires people to produce, market and sell the devices. You can't deny that entrepreneurs create jobs and it's irrelevant whether the state owns the roads they have no choice to use to get to work. The state could padlock their door and force them to pay to have it opened every morning but that doesn't mean business 'couldn't function without the state' - as your logic contends.

Karl Stein wrote:

How could any business function without roads, bridges, rail, airports, sea ports, water and sanitation systems, electricity supply stations/grids, police, courts, patents, copyrights, prisons, schools, universities, graduates, hospitals, customs officials, defence etc

Could you identify for us this period in history when a government--without a market to tax--built roads, educated citizens, created prisons, and got things ready for businesses before they even existed? Your logic dictates that the modern nation-state paying for third level education and patent law, among other things, preceded the market, but history shows us that the state did not expand to its current size without first having a robust private citzenry to tax.

We can apply a more general analysis to this also: you are improbably claiming that without involuntary coercion (the state), voluntary order would not exist (voluntary activity between individuals). Voluntary order is not possible where the individuals concerned believe in and exercise coercion and this is why the state cannot logically have preceded private interaction. That we reserve a monopoly on coercion for the group of individuals who at any one time comprise the state is nothing but a double standard. This is all axiomatic, to use Mises' term.

magicbastarder · 29-06-2014 09:23PM

Permabear wrote: »

This post had been deleted.

i think it's an historical fact that financial institutions grossly miscalculated the risk on the financial solutions which led to the **** hitting the fan a few years back.

Karl Stein · 29-06-2014 09:27PM

Valmont wrote: »

Demand alone does not create jobs. There is an unfathomable demand for teleportation.

No that's a desire. You can only have demand for real things not things yet to be created/invented/developed.

You can't deny that entrepreneurs create jobs

They're a part of the process but as you've ignored now twice the idea that entrepreneurs 'create' jobs out of thin air is utter tripe and is a propagandised sound-bite.

The state could padlock their door and force them to pay to have it opened every morning but that doesn't mean business 'couldn't function without the state' - as your logic contends.

Now you've resorted to arguing with a point I never made.

Could you identify for us this period in history when a government--without a market to tax--built roads, educated citizens, created prisons, and got things ready for businesses before they even existed?

Aside from the glaringly obvious fact that these things were all done in command economies consider the Interstate Highway network in the US.

The interstate highways in the US were built under the guise of national security when in reality it was a massive Keynesian project that stimulated economic activity and benefited the auto-makers and petroleum industries.

Government driven R&D has led to numerous spin-off technologies that the private sector then market to the public. As I highlighted earlier in the thread the modern smartphone simply wouldn't exist as it is only for government driven R&D. You probably ignored that too because it's an inconvenient truth that so-called libertarians would rather not acknowledge.

Your logic dictates that the modern nation-state paying for third level education and patent law, among other things, preceded the market, but history shows us that the state did not expand to its current size without first having a robust private citzenry to tax.

See above.

We can apply a more general analysis to this also: you are improbably claiming that without involuntary coercion (the state), voluntary order would not exist (voluntary activity between individuals). Voluntary order is not possible where the individuals concerned believe in and exercise coercion and this is why the state cannot logically have preceded private interaction. That we reserve a monopoly on coercion for the group of individuals who at any one time comprise the state is nothing but a double standard. This is all axiomatic, to use Mises' term.

I'm really not interested in getting bogged down in a debate about whatever cherry-picked brand of so-called 'libertarianism' you're interested in pushing.

magicbastarder · 29-06-2014 09:31PM

having been witness to a debate like this before, it became obvious to me that those taking side A were speaking a language they'd been taught, the rules of which language resulted in the conclusion A; and they would not concede anything not supported by the language, nor would debate in a different language.
which makes such a debate difficult; you have two sides speaking different languages, and refusing to settle on a lingua franca.

5uspect · 29-06-2014 09:37PM

magicbastarder wrote: »

i think it's an historical fact that financial institutions grossly miscalculated the risk on the financial solutions which led to the **** hitting the fan a few years back.

As far as I understand it, as a humble Aeronautical Engineer, the Credit Rating Agencies were complicit with the Banks. Even going so far as to even give them their software tools to fraudulently bundle sub prime mortgages as AAA themselves.

It's almost like an oil company selling water contaminated fuel to airlines as pure aviation fuel and telling everyone that there was only a very small bit of water in the fuel and that it was nothing to worry about.

But it's the Governments fault because they lowered taxes on fuel and gosh darn it, companies can't be held responsible for taking a risk to make a buck even if a few planes crash.

But I'm only a simple engineer who is required to design technology to operate at worst case scenario conditions for up to 20 years even though it may only experience those conditions for about 15 minutes if ever.

Turtwig · 29-06-2014 09:39PM

Don't know what Lingua has to do with this. We love her/him.

I see this rather simply:
Forget the label pedantry ensure you CONCEPTUALLY understand what others are referring to. The actual arrangement of letters isn't that important. Everyone uses words differently, what's important is you understand what they mean by those words. If you're not willing to do that then it's pointless being in a discussion.

magicbastarder · 29-06-2014 09:43PM

5uspect wrote: »

As far as I understand it, as a humble Aeronautical Engineer, the Credit Rating Agencies were complicit with the Banks. Even going so far as to even give them their software tools to fraudulently bundle sub prime mortgages as AAA themselves.

hey, if we have ten thousand mortgages, each with a chance of defaulting of 0.5, then the chance of them ALL defaulting is 5x10^-3011!

KahBoom · 29-06-2014 10:20PM

magicbastarder wrote: »

This post had been deleted.

Indeed - and to further back the point, here's a recent study about some of the risk models:

..
The high levels of model risk [] leaves open the possibility that market risk might be systematically under- or over-forecast, in a non-detectable manner. This can lead to costly mistakes, such as inappropriate levels of risk taking and the miscalculation of risk-weighted capital.
...

voxeu.org/article/model-risk-risk-measures-when-models-may-be-wrong

Permabear wrote: »

I've always been a vocal opponent of taxpayer-funded bailouts, if that's what you're insinuating. I'm sure Ayn Rand would have agreed.

Simply posing a threat to the stability of industries or the entire economy, through unsustainable risk taking, is an offloading of cost/risk onto the rest of society - even absent bailouts.

KahBoom · 29-06-2014 10:41PM

Valmont wrote: »

Could you identify for us this period in history when a government--without a market to tax--built roads, educated citizens, created prisons, and got things ready for businesses before they even existed? Your logic dictates that the modern nation-state paying for third level education and patent law, among other things, preceded the market, but history shows us that the state did not expand to its current size without first having a robust private citzenry to tax.

We can apply a more general analysis to this also: you are improbably claiming that without involuntary coercion (the state), voluntary order would not exist (voluntary activity between individuals). Voluntary order is not possible where the individuals concerned believe in and exercise coercion and this is why the state cannot logically have preceded private interaction. That we reserve a monopoly on coercion for the group of individuals who at any one time comprise the state is nothing but a double standard. This is all axiomatic, to use Mises' term.

Your whole argument here, rests on the idea that it's possible to have a workable society, with no state at all.

To actually have a valid argument here, first, you have to describe how you can have a workable society without a state - something nobody on Boards has ever been able to describe, without their proposal being easily debunked due to massive practical problems in the proposal.

Valmont · 29-06-2014 11:32PM

Karl Stein wrote:

Government driven R&D has led to numerous spin-off technologies that the private sector then market to the public. As I highlighted earlier in the thread the modern smartphone simply wouldn't exist as it is only for government driven R&D. You probably ignored that too because it's an inconvenient truth that so-called libertarians would rather not acknowledge.

Unfortunately your claims about the stimulating effects of state-sponsored scientific research are completely unfounded. In 2003 the OECD published a report titled Sources of Economic Growth in OECD Countries which examined the main sources of economic growth in 21 leading economies from 1978 to 2001. The report found that public R&D had no effect on economic growth, while private R&D did so significantly; the authors even concluded that public R&D crowds out its more effective brother. Could you reconcile your claims with this large empirical study, Karl? It would seem if the state got out of the way, we would have had better smartphones, sooner.

robindch · 29-06-2014 11:50PM

Turtwig wrote: »

Forget the label pedantry ensure you CONCEPTUALLY understand what others are referring to. The actual arrangement of letters isn't that important. Everyone uses words differently, what's important is you understand what they mean by those words. If you're not willing to do that then it's pointless being in a discussion.

I don't agree with this. Much of the conceptual and factual confusion caused by Rand derives from her distinctly sophistic abuse of words and ideas.

Alice in Wonderland wrote:

"When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean—neither more nor less."

At the risk of no-true-scotsmanning myself, philosophers and economists who are serious enough to want to make a worthwhile contribution, define their terms, their rules, their realms of applicability, their conclusions and, where possibly, their predictions.

Rand, on the other hand, avoided that hard, specific stuff and chose instead to sermonize at prodigious length.

Karl Stein · 29-06-2014 11:54PM

Valmont wrote: »

Unfortunately your claims about the stimulating effects of state-sponsored scientific research are completely unfounded. In 2003 the OECD published a report titled Sources of Economic Growth in OECD Countries which examined the main sources of economic growth in 21 leading economies from 1978 to 2001. The report found that public R&D had no effect on economic growth, while private R&D did so significantly; the authors even concluded that public R&D crowds out its more effective brother. Could you reconcile your claims with this large empirical study, Karl? It would seem if the state got out of the way, we would have had better smartphones, sooner.

Do you even read the articles you cite or are you wildly googling keywords in an attempt to refute my point? That's a rhetorical question.

In the very study you've cherry-picked from it says 'there is no clear cut relationship between public R&D in the short term'. It does not say that that public R&D had no effect on growth because that would be a blatant lie.

And despite that very article warning against the latter finding being overplayed you went right ahead and did it anyway which betrays your propagandistic agenda.

The results also point to a marked positive effect of business-sector R&D, while the analysis could find no clear-cut relationship between public R&D activities and growth, at least in the short term. The significance of this latter result should not however be overplayed as there are important interactions between public and private R&D activities as well as difficult-to-measure benefits from public R&D (e.g. defence, energy, health and university research) from the generation of basic knowledge that provides technology spillovers in the long run.

http://browse.oecdbookshop.org/oecd/pdfs/free/1103011e.pdf

Public R&D 'provides technology spillovers in the long run' which is exactly the point I was making about smartphone components and capabilities.

the authors even concluded that public R&D crowds out its more effective brother.

Then why is this in the very article you did not read?

An important policy consideration is whether the relationship between public and private R&D is one of complementarity or substitution. Available empirical literature gives conflicting answers: a number of studies support the complementarity hypothesis, but others cite instances where publicly-funded R&D displaces private investment

Yawn.

Valmont · 30-06-2014 08:06AM

Karl, you're getting desperate now:

OECD Report wrote:

For example, while business-performed
R&D is likely to be more directly targeted towards innovation and
implementation of new innovative processes in production (leading to
improvement in productivity), other forms of R&D (e.g. energy, health and
university research) may not raise technology levels significantly in the short
run, but they may generate basic knowledge with possible “technology
spillovers”. The latter are difficult to identify, not least because of the long lags
involved and the possible interactions with human capital and associated
institutions.

There you have it, private R&D is more likely (based a complex series of regressions on a HUGE data set) to lead to the implementation of innovation in production which leads to improvements in productivity. The only caveat is that public R&D might have other benefits which are 'harder to measure'.

Could you again reconcile your claims about the power of state funded science in light of the evidence and conclusions stated by the authors of the OECD report?

Valmont · 30-06-2014 08:07AM

Karl Stein wrote: »

Public R&D 'provides technology spillovers in the long run' which is exactly the point I was making about smartphone components and capabilities.

The authors clearly make this as a tentative suggestion, claiming that it is not something they can even measure! See above.

Valmont · 30-06-2014 08:09AM

robindch wrote: »

I don't agree with this. Much of the conceptual and factual confusion caused by Rand derives from her distinctly sophistic abuse of words and ideas.

Rand was very precise in her definitions of everything:

Ayn Rand wrote:

A definition is a statement that identifies the nature of the units subsumed under a concept.

It is often said that definitions state the meaning of words. This is true, but it is not exact. A word is merely a visual-auditory symbol used to represent a concept; a word has no meaning other than that of the concept it symbolizes, and the meaning of a concept consists of its units. It is not words, but concepts that man defines—by specifying their referents.

The purpose of a definition is to distinguish a concept from all other concepts and thus to keep its units differentiated from all other existents.

Since the definition of a concept is formulated in terms of other concepts, it enables man, not only to identify and retain a concept, but also to establish the relationships, the hierarchy, the integration of all his concepts and thus the integration of his knowledge. Definitions preserve, not the chronological order in which a given man may have learned concepts, but the logical order of their hierarchical interdependence.

With certain significant exceptions, every concept can be defined and communicated in terms of other concepts. The exceptions are concepts referring to sensations, and metaphysical axioms.

Could you provide some examples of her alleged sophistry?

robindch · 30-06-2014 09:40AM

Valmont wrote: »

Could you provide some examples of her alleged sophistry?

The bit between the first page and the last of "Atlas Shrugged".

Permabear · 30-06-2014 09:43AM

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Atlas Shrugged

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