Those on the right will hate this because this guy’s conclusions and findings run counter to conservative dogma. Those on the left (except socialist far left) may think he goes too far. Here is one, small part of it all:
Inequality leads to an excess of what [Samuel] Bowles calls “guard labor.” In a 2007 paper on the subject, he and co-author Arjun Jayadev, an assistant professor at the University of Massachusetts, make an astonishing claim: Roughly 1 in 4 Americans is employed to keep fellow citizens in line and protect private wealth from would-be Robin Hoods.
The job descriptions of guard labor range from “imposing work discipline” — think of the corporate IT spies who keep desk jockeys from slacking off online—to enforcing laws, like the officers in the Santa Fe Police Department paddy wagon parked outside of Walmart.
The greater the inequalities in a society, the more guard labor it requires, Bowles finds. This holds true among US states, with relatively unequal states like New Mexico employing a greater share of guard labor than relatively egalitarian states like Wisconsin.
The problem, Bowles argues, is that too much guard labor sustains “illegitimate inequalities,” creating a drag on the economy. All of the people in guard labor jobs could be doing something more productive with their time — perhaps starting their own businesses or helping to reduce the US trade deficit with China.
Guard labor supports what one might call the beat-down economy. Community Action’s Porter sees it all the time.
“We have based almost everything we have done on the idea that we always need a part of our workforce that is marginalized — that we can call this group into action at any time, pay them nothing and they will do anything that needs to be done,” she says.
More discouraging, perhaps, is the statistical fact that a person born into this workforce has little chance of rising beyond it.
He also believes in what he calls “universal welfare.” RTFA to find out about it.
I guess I am too stupid to get this. What? No cops for a better country? OK. I am ready.
My problem with this is that it doesn’t take into account the millions of people who are unemployed.
You can talk all you want about how the people in the “guard” business could be doing something better with their lives, but it’s not like there are any job openings for them outside of their current line of work.
@Faxon
Here I will boil it down to one sentence so even you can understand it: greed is not good. A healthy profit is all well and good but the love money is, in fact, evil. That is why greed is one of the seven deadly sins.
>This holds true among US states, with relatively unequal states like New Mexico employing a greater share of guard labor than relatively egalitarian states like Wisconsin.
Hmmm, I’m wondering if there are any other reasons here. Let me just ponder this for a bit.
#3 – Where do you get a “greed is not good” message? I don’t see anything that says it’s bad to take your 250K seed and start a business that eventually nets you a billion.
Reading between the lines, Bowles’ choice reveals the hidden symbolism of each medium: If the paperback is Karl Marx, the Kindle is Ayn Rand.
A bullshit analogy. A better analogy for Karl Marx would be a policeman barging into your room while you were studying and taking your book (which is 10 editions out of date) to give it someone else so they could study.
The second figure, 23, is the Gini for Sweden
Sweden’s “official” unemployment rate? About 9%, same as us. I would say that directly contradicts this guy’s theory.
It’s how much each person might receive under a key economic reform he supports: universal welfare.
First, from where is this money going to come? If you said taxpayers, give yourself a cookie. Second, what percentage of the people to whom this money goes will do something with it to make themselves self-sufficient? Said another way, do you think people will spend this on books, education, a new business idea or an HD TV? If you said a TV, give yourself another cookie (either that or paying the taxes to cover the 25k they got). Lastly, what do you suppose will happen to prices when everyone has another 25k in their pocket? Do you think the rent that the poor pay will stay the same? If you said no, you win the whole jar.
RE: Give everyone 250K
What happens when the 250K runs out? Suppose they blow the 250K in Vegas. Then what? Do we just cut them off after that? Let them starve essentially? From where does this 250K come? If there were only ten million people that is 2.5 trillion dollars. I thought this guy focused on reality and not just theory.
#5 your statement has nothing to do with greed. Opening a business and making a profit has nothing to do with greed. Making money does not equal greed. Making money for the sake of making money not as a by-product of creating something or providing a service to others is greed. Greed is terrible for business and the economy. One can make a good living running a company but if you take too much money for yourself the business will suffer. If you don’t give your employees enough pay, your business will suffer as well. Accepting a huge salary as a CEO shows to me that you are a terrible businessman as other parts of the business could make better use of that money.
I think their are plenty of people in America who don’t mind being poor and on welfare. They do not know anything else.They live to exsist and that’s it. Obama seems to be their president. I like the ideal that workers at Toyota plants do. If they are idle for whatever reason then you get a paycheck but you have to attend a training class, do community service or something. I think the same should be done for welfare. Make people give in someway back to the community or at least attend classes to eventually get them off welfare.
#6 USA unemployment rate is actually about 24%. People in Sweden aren’t suffering from being poor like they do here. So not really the same. No matter what your job situation is in Sweden you can dress nice, eat and have a place to live. That coupled with the more evenly distributed cash means more people can afford something extra beyond the minimal which makes for a healthy economy. GINI number deals with equality not with unemployment anyways. What would be better for businesses? 1, Many potential customers who could afford their goods or services; 2, Fewer customers who could afford their goods or services.
The disconnect among market fundamentalists is in thinking corporations HAVE any kind of nationalistic interest. Of course they don’t — just the profit motive, and of course anyone that ISN’T driven by that consideration places themselves at a competitive disadvantage.
We’re loathe to admit that there’s any management function that’s not better handled by the private sector, yet there are an infinite number of object examples of where this isn’t so. The free market creates jobs? We just gave them billions of our own money and got NOTHING in return. 1 in 10 is unemployed.
Yet our distrust for turning these issues over to the state to be managed is unequivocal.
So we either accept that NO ONE is fit to deal with these challenges, or we start building a state that we’re capable of trusting again.
It isn’t a complicated proposition; we’re a democracy. Yet nobody actually wants to do what must be done.
And here we are.
# 1 Faxon ==”I guess I am too stupid to get this.” Yea, but the glimmer is there as long as you don’t slop over into being proud of it, or forming a religion based on it.
#8–Heinrich==”Yet, tea-partiers and others continue to rationalize and defend the system against their own self-interest. This isn’t just a result of stupidity, it’s also a function of the base-superstructure relationship.” /// Is that right? That tea-party stupidity “arises from” the base set by the corrupt rich and their paid surrogates? I think not. I think the tea-partiers arise from propaganda targeting them from the same power group. Nothing really “natural” about it. Now, if the tea partiers were more anti-rich, THEN it would arise from the foundation furiously maintained in place.
It’s quite possible that this and even greater horrors await the american public. There are still good places to live. Find one and emigrate while you still can.
#10
RE: Sweden
Actually, I was being kind. It should also be noted that Sweden is notorious for cooking their unemployment numbers. Some people have Sweden’s unemployment rate at over 20% and has been that high for a decade or more.
Sweden you can dress nice, eat and have a place to live.
First, I don’t buy it. Second, I’m all for ensuring everyone can eat and sleep somewhere out of the rain. We absolutely do not have sufficient facilities for that. That is a far cry from handing out 250K per person.
What would be better for businesses? 1, Many potential customers who could afford their goods or services; 2, Fewer customers who could afford their goods or services.
The operative words are afford their goods or services. If payment for those goods and services are coming from the government, then the person in question is not “affording” them. Thus, it is absolutely the case that it is better in the long run for businesses (and individuals) to have more customers that can afford their goods which means the money used to pay for those goods was earned by the person in question.
I thought the economist was slightly to mildly whacko (first indication, he is a life long academic). Then I thought to look at a few more articles by this reporter and came across this real whack job:
http://sfreporter.com/stories/iphoned_home/5285/
I wonder what Apple thinks of this.
#7 – who defines a “huge” salary. I would agree that a salary that’s so “huge” it harms your company is bad management, but otherwise, take as much as you can.
Wealth is meaningless unless you spend it, thus putting it back into circulation and benefiting everyone else.
#16 – Absolutely correct. The Swedes and a lot of the rest of Europe are screwed in another generation, if not sooner. We’re following and will get there too if people don’t wake up.
nothing wrong with making a company from the ground up. But many of these corps are so INBRED, that you have IDIOTS running business and not knowing WHAT they are doing, or WHAT NEEDS to be done.
Its the thought that the CEO of ENRON, didnt know what was happening in his OWN BUSINESS. I wouldnt just take HIM to court, I would of had the WHOLE board of directors, and the WHOLE HEADs of the company..
So what makes Bowles any sort of expert on what makes an economy work?
I’ll put it this way: Has this man ever run a business that showed a profit? If not I suggest he stick a redwood in the nearest orifice.
“Yet, tea-partiers and others continue to rationalize and defend the system against their own self-interest.”
Right! when you think tea-partier you think of some guy who is just passionate about the status-quo.
Now that I’ve RTFA, what can I say? Pure Genius!
If we can arrange it so that no matter what you do you get payed the same as everyone else, this place would be a paradise! Brilliant!
Actually, it’s been that “better living through redistribution” ideology that has made New Mexico the blue-state economic basket case that it is.
“Even former Federal Reserve Chairman Alan Greenspan, a hero to free marketeers, admits that his way of understanding the world was wrong.”
How ignorant of economics do you have to be to confuse any member of the FED with a free marketeer?
(To be fair though, it’s not clear that comrade Bowles is being quoted there.)
WHAT CREATES A PROBLEM..
mANY THINGS.
1. a business that does not cater to the BUYER.
The buyers dont have the money to purchase the BETTER products so we end up buying CRAP.
2. MONEY has to go AROUND in a circle. Money at the top has to get to the bottom. IF you tighten the circle, you eliminate PART of the equation, and things change. the LOOP got to small to support itself. RICH were paying RICH to do the job, the LOWER PAID would do for LESS. AS well as Corps makng companies to do a job, then DISAPPEAR not paying anything(like TAXES)(but they WERE part of the CORP in the first place).. GAMES GAMES GAMES..
3. HOW disposable can you make a product and MAKE IT CHEAP? Who remembers cars lasting 20+ years? replacing METAL parts around the engine with PLASTIC(wears out faster) and its CHEAPER, saving $1 per part for 1,000,000 cars makes money. MAKING a DVD that dies in 1-2 years. Warranty?? 1 day AFTER it expires, it DIES. WHo remembers that profit margins on FOOD, was in PENNIES?? $0.10 tomato soup is NOW $0.60 per can. and it ISNT the farmers FAULT.
Making a food product that lasts 1 year rather then NEEDING to be FRESH for 1 week??
WHO here has an MP3 player thats OLDER then 3 years, and still works as an MP3 player??
4. understanding that Companies DONT PAY FOR ANYTHING. YOU pay for that advert, you pay for that CONTRIBUTION to HAITI.. YOU PAY for their electric bill, you PAY for any waste they make, thats ADDED to the cost of goods. YOU pay for that CAR running around in circles with a LOGO on it for KMART. YOU PAY for the court case of the LADY that fell down and CRACKED her head..
Some of you must be reading more into that than I see. I don’t see lifelong redistribution. It looked to me that you got a one time only payment as “seed” money. If you fail, tough, except for maybe bare minimum humanitarian aid – not enough to live on like current welfare. Sort of like the old homestead acts in the West. You got a plot of land free and kept it if you could make it productive.
If that’s the wrong interpretation, then I’m with #21. Some people having a lot more than others is the foundation of freedom. It’s called benefiting from your own ability and effort.
All you have to do is watch one episode of Shark Tank to realize most people will blow $250,000 and end up right where they started or worse. In other words somebody somewhere was the first one to eat the poison fruit so that the rest of us knew what not to eat. So yeah, life is a crap shoot that favors those who watch and listen and avoid the same pitfalls. It does not mean that the prepared always know what’s coming around the corner though.
Reading this article, I was reminded of a J P Getty quote:
“My father said: ‘You must never try to make all the money that’s in a deal. Let the other fellow make some money too, because if you have a reputation for always making all the money, you won’t have many deals.’ ”
Just as it’s true in the world of business deals, it’s also a good idea in economies. If the business owner sucks all the value out of the business’ activity, he may derive some short-term benefit, but eventually he will suffer. His will be the “mansion in the midst of a slum” and will come to be more like a fort and his life will come to resemble a siege rather than a picnic.