Stephen Williams sdw at lig.net
Sat Oct 8 00:39:15 PDT 2011

On 10/7/11 6:25 PM, J. Andrew Rogers wrote:
> 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.

There should be no negative productivity employees.  Creating more is dumb.  Better to let them sit at home in front of Khan Academy...
There's a lot of confusion about all of this.  Compared to not having the benefit of the last 40 years of efficiency seeking, 
offshoring, super cheap container shipping, etc., everyone in the US receives a huge subsidy-like advantage.

No one even remembers many layers of middlemen in the food business in the US, but Japan just let go of it (I think) in the last 10 
years or so.  The fact is that people kept busy in those useless middlemen layers were wasting their lives for no reason.  A lot 
like a real estate system that soaks up all available excess funds in a market.

Consistently encouraging people to improve and seek the most useful thing to do is one important problem, probably _the_ problem 
politically and economically.  Doing that while not letting people slip to lower levels of hierarchy of needs is the other major 
problem.  Some want the first while not wanting to do anything about the second, seemingly oblivious that this is sabotage.  Others 
are all about blindly helping people while not acknowledging any responsibility for strongly seeking self-improvement and utility.


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