[FoRK] [IRR] RMS on SPJ
J. Andrew Rogers
andrew at jarbox.org
Fri Oct 7 18:25:27 PDT 2011
On Oct 7, 2011, at 3:38 PM, Ken Ganshirt @ Yahoo wrote:
> As part of what you said, Ford is also credited for reasoning that, in addition to having more productive workers, by paying them $5/day -- double the going wage at the time -- lots of his workers would also be able to afford to buy what they were building, thus increasing/ensuring demand.
> Where's the altruism?? Simple and sensible economics that today's robber barons seem to have completely overlooked.
That only works insofar as the workers produce more value than they remove by way of compensation. Increasing wages to the point where you lose money on every sale is not a business model. The net value created by average employees is pretty thin in any remotely competitive market -- companies make it up in volume. There are exceptions but not many.
Growing an economy by increasing consumption is variant of the Broken Window Fallacy. Increasing the number of negative productivity employees for the increased consumption is a recipe for inflation, not economic growth.
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