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Thread: Length of the working day

  1. #1

    Length of the working day

    Hey,

    Where do I go for Austrian discussion of the length of the working day? Outside of Marx discussions about it and the forces controlling it are pretty thin on the ground.

    Any guidance appreciated.
    In New Zealand:
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  3. #2
    Quote Originally Posted by idiom View Post
    Hey,

    Where do I go for Austrian discussion of the length of the working day? Outside of Marx discussions about it and the forces controlling it are pretty thin on the ground.

    Any guidance appreciated.
    I think you're in the right subforum. In Austrian economics, the work day never ends. If you are exchanging value for value, it doesn't matter whether or not you've punched a clock.
    "And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works." - Bastiat

    "It is difficult to free fools from the chains they revere." - Voltaire

  4. #3
    I meant any papers on it or books. So without state intervention the ideal workday is like 12 or 14 hours? 30 hours?

    Is it just a continuous race to the bottom?

    Say you have to make $100 per day to cover your living costs. You can work 5 hours for $20 per hour. Similar person to you offers to do the same job for $10 per hour as long as they get 10 hours of work.

    Do you try and get 20 hours of work at $5 per hour?

    Or consider it in another form:

    What is the difference between hiring one person to work for 12 hours, or two people to work for 6 each?

    In the first instance the persons minimum bid is spread over 12 hours, in the second each person needs to cover their costs in only six hours.
    Last edited by idiom; 10-11-2018 at 06:43 AM.
    In New Zealand:
    The Coastguard is a Charity
    Air Traffic Control is a private company run on user fees
    The DMV is a private non-profit
    Rescue helicopters and ambulances are operated by charities and are plastered with corporate logos
    The agriculture industry has zero subsidies
    5% of the national vote, gets you 5 seats in Parliament
    A tax return has 4 fields
    Business licenses aren't even a thing nor are capital gains taxes
    Constitutional right to refuse any type of medical care

  5. #4
    Quote Originally Posted by CaptUSA View Post
    I think you're in the right subforum. In Austrian economics, the work day never ends. If you are exchanging value for value, it doesn't matter whether or not you've punched a clock.
    If you are self-employed or the boss, it never ends as well.

  6. #5
    Quote Originally Posted by idiom View Post
    I meant any papers on it or books. So without state intervention the ideal workday is like 12 or 14 hours? 30 hours?
    Is it just a continuous race to the bottom?
    Race to the bottom? For Whom?

    Quote Originally Posted by idiom View Post
    Say you have to make $100 per day to cover your living costs. You can work 5 hours for $20 per hour. Similar person to you offers to do the same job for $10 per hour as long as they get 10 hours of work.

    Do you try and get 20 hours of work at $5 per hour?
    If both are guaranteeing to get the exact same job/amount of work done, then it really doesn't matter does it? I'm just paying a set amount, right? Although, why should I wait an extra 5 or 15 hours for the same job to complete? That could end up costing me money.

    Quote Originally Posted by idiom View Post
    Or consider it in another form:
    What is the difference between hiring one person to work for 12 hours, or two people to work for 6 each?
    In the first instance the persons minimum bid is spread over 12 hours, in the second each person needs to cover their costs in only six hours.
    That is quite the assumption that 2 people can get the same amount of work done by splitting the job in 2. Not practical in reality from my experience.

  7. #6
    Quote Originally Posted by idiom View Post
    I meant any papers on it or books. So without state intervention the ideal workday is like 12 or 14 hours? 30 hours?

    Is it just a continuous race to the bottom?

    Say you have to make $100 per day to cover your living costs. You can work 5 hours for $20 per hour. Similar person to you offers to do the same job for $10 per hour as long as they get 10 hours of work.

    Do you try and get 20 hours of work at $5 per hour?

    Or consider it in another form:

    What is the difference between hiring one person to work for 12 hours, or two people to work for 6 each?

    In the first instance the persons minimum bid is spread over 12 hours, in the second each person needs to cover their costs in only six hours.
    As far as references, I'd probably begin with Henry Hazlitt's Economics in One Lesson. It sounds like you still need to update your basic understanding a little, though.

    It's not really a "race to the bottom"... maybe a race to the top?? You shouldn't be getting paid for how many hours you spend doing something, but how much value you are providing.

    Think of it this way, if I needed my car washed, should I pay the guy who spent 3 hours doing it more than the guy who did it in 10 minutes if the quality was the same?

    Meanwhile, the guy who does it in 10 minutes can earn more by washing more cars in the same amount of time. The first thing you need to realize is that we are not interchangeable cogs. The quality and time of each person's work is going to differ greatly - and that's a good thing!

    In Austrian economics (and the real world, for that matter), the amount of money you make is dependent on the amount of value you provide. For example, if your employer values your piece of work (in hours, quantity, quality, whatever) at $20 and you value your labor at $10, the difference is $10. And then it's between you and your employer to decide how you want to split that $10. To make it easy, let's say you agree upon an 80/20 split in his favor. You'd get paid $12 (which is an increase of over the $10 you valued your labor at) and your employer would get $8 in value out of it (because he got $20 of value for $12). In other words, you both become wealthier.

    Now you, as the employee, have many ways of increasing your wealth:
    You can change nothing and renegotiate the split.
    You can increase the value to your employer and then renegotiate the split (this is really what you should always be doing).
    You can maintain the value to your employer and lower the value of your own labor (this happens with experience - the more you do a job, the less effort you need to put into it. If it's easier, then the value you are expending is lower.)
    You can find other things about the job that increase its value (flexible schedule, enjoyable coworkers, experience for your resume, etc. All of these things are values that need to be considered when you determine how much you're making.)
    "And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works." - Bastiat

    "It is difficult to free fools from the chains they revere." - Voltaire

  8. #7
    Quote Originally Posted by specsaregood View Post
    If you are self-employed or the boss, it never ends as well.
    In Austrian economics, we are ALL self-employed.

    We may just exchange our labor with one buyer instead of several.
    "And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works." - Bastiat

    "It is difficult to free fools from the chains they revere." - Voltaire

  9. #8
    Quote Originally Posted by idiom View Post
    I meant any papers on it or books. So without state intervention the ideal workday is like 12 or 14 hours? 30 hours?

    Is it just a continuous race to the bottom?

    Say you have to make $100 per day to cover your living costs. You can work 5 hours for $20 per hour. Similar person to you offers to do the same job for $10 per hour as long as they get 10 hours of work.

    Do you try and get 20 hours of work at $5 per hour?

    Or consider it in another form:

    What is the difference between hiring one person to work for 12 hours, or two people to work for 6 each?

    In the first instance the persons minimum bid is spread over 12 hours, in the second each person needs to cover their costs in only six hours.
    So many variables and factors at play. It is an interesting question, especially when exploring the completely arbitrary standard of the 8x5 40 hour workweek.

    I have my own analysis of the situation, which does not come from dogma or a school of study. The most important single factor, IMHO, is the supply of labor. This informs my opinion on other issues like immigration, much to the chagrin of globalists.

    When there is demand for labor, as a whole and on the average, labor can dictate more terms of employment, which includes how many hours a person will work.

    I judge that to be the single most important variable, but by no means the only variable.

    You seem to want to know the minimum number of hours that can be worked that will cover your living costs. Even that simple question is full of more variables, some of which have been brought up.

    What style of living are you interested in? A minimalist tiny home? A four story luxury home on the beach? Do you want to live a lavish lifestyle that requires constant spending?

    What do you provide that is of value? How much can you get for each hour that you work? How productive is an hour of work?
    Twitter: B4Liberty@USAB4L
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
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  11. #9
    Quote Originally Posted by Brian4Liberty View Post
    So many variables and factors at play. It is an interesting question, especially when exploring the completely arbitrary standard of the 8x5 40 hour workweek.
    Its not arbitrary. We got there after centuries of labour organisation. It is enforced by the state. Before that 10 and 12 hour days were they maximums.

    Without maximums the working day extends to be extremely long. Do Hazlitt, Mises, or Hayek have any discussion of this?

    Now Marx thinks that the length of the working day is where profit comes from, right. He is wrong here, but its why socialists fixate on it, and why labour has fought for shorter work days. However his discussion of commodification is interesting in this regard. His costing of a commodity is basically marginal. The cost of something isn't what it cost to make, but the replacement value using the latest technology, so on a cost basis everything you have in stock is constantly depreciating as capitalism moves technology forward. Of note by Marx's commodity rather than surplus value framework employees are forever being overpaid.

    Now we look at a machine operator, a worker babysitting a machine, so easy a child can do it. Almost no opportunity for a person to differentiate their value. Also assume a market where supply outstrips demand. The value of this job is going to be set by the lowest bid. Lowest bid is going to be the cost of staying alive divided by the number of hours per day worked.

    Under these conditions there is strong incentive to work as many hours as physically possible. The work will also go to women or children who are cheaper to keep alive.

    Under these conditions I see moral value in a state imposed maximum workday. Note this is my own work, its very different from Marx, just an Austrian look at the conditions he was studying. Surely someone else has tackled this first?

    The following are all from historic English government reports:

    This is an English free market working children 18 hours per day, being compared unfavourably with American cotton slaves.

    Mr. Broughton Charlton, county magistrate, declared, as chairman of a meeting held at the Assembly Rooms, Nottingham, on the 14th January, 1860, “that there was an amount of privation and suffering among that portion of the population connected with the lace trade, unknown in other parts of the kingdom, indeed, in the civilised world .... Children of nine or ten years are dragged from their squalid beds at two, three, or four o’clock in the morning and compelled to work for a bare subsistence until ten, eleven, or twelve at night, their limbs wearing away, their frames dwindling, their faces whitening, and their humanity absolutely sinking into a stone-like torpor, utterly horrible to contemplate.... We are not surprised that Mr. Mallett, or any other manufacturer, should stand forward and protest against discussion.... The system, as the Rev. Montagu Valpy describes it, is one of unmitigated slavery, socially, physically, morally, and spiritually.... What can be thought of a town which holds a public meeting to petition that the period of labour for men shall be diminished to eighteen hours a day? .... We declaim against the Virginian and Carolinian cotton-planters. Is their black-market, their lash, and their barter of human flesh more detestable than this slow sacrifice of humanity which takes place in order that veils and collars may be fabricated for the benefit of capitalists?
    Fifteen hours of labour for a child 7 years old! J. Murray, 12 years of age, says: “I turn jigger, and run moulds. I come at 6. Sometimes I come at 4. I worked all night last night, till 6 o’clock this morning. I have not been in bed since the night before last. There were eight or nine other boys working last night. All but one have come this morning. I get 3 shillings and sixpence. I do not get any more for working at night. I worked two nights last week.”
    “Last winter six out of nineteen girls were away from ill-health at one time from over-work. I have to bawl at them to keep them awake.” W. Duffy: “I have seen when the children could none of them keep their eyes open for the work; indeed, none of us could.” J. Lightbourne: “Am 13 ... We worked last winter till 9 (evening), and the winter before till 10. I used to cry with sore feet every night last winter.” G. Apsden: “That boy of mine when he was 7 years old I used to carry him on my back to and fro through the snow, and he used to have 16 hours a day ... I have often knelt down to feed him as he stood by the machine, for he could not leave it or stop.” Smith, the managing partner of a Manchester factory: “We (he means his “hands” who work for “us”) work on with no stoppage for meals, so that day’s work of 10˝ hours is finished by 4.30 p.m., and all after that is over-time.” [40] (Does this Mr. Smith take no meals himself during 10˝ hours?) “We (this same Smith) seldom leave off working before 6 p.m. (he means leave off the consumption of “our” labour-power machines), so that we (iterum Crispinus) are really working over-time the whole year round. For all these, children and adults alike (152 children and young persons and 140 adults), the average work for the last 18 months has been at the very least 7 days, 5 hours, or 78 1/2 hours a week. For the six weeks ending May 2nd this year (1862), the average was higher — 8 days or 84 hours a week.”
    Now these days this all still happens, but not in western countries with state imposed maximum workings days and working age laws.

    The question is why?
    Last edited by idiom; 10-11-2018 at 12:55 PM.
    In New Zealand:
    The Coastguard is a Charity
    Air Traffic Control is a private company run on user fees
    The DMV is a private non-profit
    Rescue helicopters and ambulances are operated by charities and are plastered with corporate logos
    The agriculture industry has zero subsidies
    5% of the national vote, gets you 5 seats in Parliament
    A tax return has 4 fields
    Business licenses aren't even a thing nor are capital gains taxes
    Constitutional right to refuse any type of medical care

  12. #10
    Quote Originally Posted by idiom View Post

    Without maximums the working day extends to be extremely long. Do Hazlitt, Mises, or Hayek have any discussion of this?
    http://www.notbeinggoverned.com/hazl...-work-schemes/
    "And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works." - Bastiat

    "It is difficult to free fools from the chains they revere." - Voltaire

  13. #11
    Let's see, half my $#@! isn't being stolen, so I guess I could work half the hours.

    But then, half of the $#@! my customers make isn't being stolen either, so they can afford to buy more from me so maybe 1/4 the hours to have the same standard of living..

    Or I could work half the hours and double my standard of living.
    "He's talkin' to his gut like it's a person!!" -me
    "dumpster diving isn't professional." - angelatc


    "Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

    "Paul said "the wave of the future" is a coalition of anti-authoritarian progressive Democrats and libertarian Republicans in Congress opposed to domestic surveillance, opposed to starting new wars and in favor of ending the so-called War on Drugs."

  14. #12
    Quote Originally Posted by idiom View Post
    Without maximums the working day extends to be extremely long. Do Hazlitt, Mises, or Hayek have any discussion of this?
    Ya, it's called the half my $#@! isn't being stolen axiom.
    "He's talkin' to his gut like it's a person!!" -me
    "dumpster diving isn't professional." - angelatc


    "Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

    "Paul said "the wave of the future" is a coalition of anti-authoritarian progressive Democrats and libertarian Republicans in Congress opposed to domestic surveillance, opposed to starting new wars and in favor of ending the so-called War on Drugs."

  15. #13
    Thanks, this is roughly what I was after and has the same conclusions I reached regarding 30 hour weeks, but doesn't address the historical cases of 7 year olds working 16 hour days. Is that simply a desirable market outcome to avoid paying tax?

    Also his claims that labour campaigned against 18 hour days in order to decrease unemployment is also untrue, and is straw-manning it.

    Unions can create serious economic difficulties, but luddite type action is not what we are addressing here.

    What free market mechanisms lead to a world where children aren't working themselves to the bone with menial labour?

    Bear in mind that the English state was also hanging 7000 people a year for the crime of begging.
    In New Zealand:
    The Coastguard is a Charity
    Air Traffic Control is a private company run on user fees
    The DMV is a private non-profit
    Rescue helicopters and ambulances are operated by charities and are plastered with corporate logos
    The agriculture industry has zero subsidies
    5% of the national vote, gets you 5 seats in Parliament
    A tax return has 4 fields
    Business licenses aren't even a thing nor are capital gains taxes
    Constitutional right to refuse any type of medical care

  16. #14
    Quote Originally Posted by idiom View Post
    Thanks, this is roughly what I was after and has the same conclusions I reached regarding 30 hour weeks, but doesn't address the historical cases of 7 year olds working 16 hour days. Is that simply a desirable market outcome to avoid paying tax?

    Also his claims that labour campaigned against 18 hour days in order to decrease unemployment is also untrue, and is straw-manning it.

    Unions can create serious economic difficulties, but luddite type action is not what we are addressing here.

    What free market mechanisms lead to a world where children aren't working themselves to the bone with menial labour?

    Bear in mind that the English state was also hanging 7000 people a year for the crime of begging.
    Compared to what?

    Before kids were working in factories, they were working on farms, and often starved.

    They chose working in factories to help their family survive and it was a higher standard of living than working on a farm. Otherwise they would have opted for farming.

    The reason kids don't work in factories today is not because there are laws against it, it is because we came up with more efficient machines and tools and so they don't have to work in factories anymore. We can afford to send kids to school longer.

    That isn't the case in some developing countries, where kids still work in factories or on farms.
    Last edited by dannno; 10-12-2018 at 09:08 PM.
    "He's talkin' to his gut like it's a person!!" -me
    "dumpster diving isn't professional." - angelatc


    "Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

    "Paul said "the wave of the future" is a coalition of anti-authoritarian progressive Democrats and libertarian Republicans in Congress opposed to domestic surveillance, opposed to starting new wars and in favor of ending the so-called War on Drugs."

  17. #15
    Found it, in Chapter 19 Hazlitt advocates for unionization to solve the problem

    "The only exception to this occurs when a group of workers is receiving a wage actually below its market worth. This is likely to happen only in rare and special circumstances or localities where competitive forces do not operate freely or adequately; but nearly all these special cases could be remedied just as effectively, more flexibly and with far less potential harm, by unionization."

    Thanks for the help guys.
    In New Zealand:
    The Coastguard is a Charity
    Air Traffic Control is a private company run on user fees
    The DMV is a private non-profit
    Rescue helicopters and ambulances are operated by charities and are plastered with corporate logos
    The agriculture industry has zero subsidies
    5% of the national vote, gets you 5 seats in Parliament
    A tax return has 4 fields
    Business licenses aren't even a thing nor are capital gains taxes
    Constitutional right to refuse any type of medical care

  18. #16
    Quote Originally Posted by idiom View Post
    ...Also assume a market where supply outstrips demand...
    Yes, the root of all evil...
    Twitter: B4Liberty@USAB4L
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul


    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.



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  20. #17
    Quote Originally Posted by Brian4Liberty View Post
    Yes, the root of all evil...
    The really evil $#@!ers are guys like Wakefield apparently, just digging into him. Though that colonies had a hard time because people were not compelled to become pitiful wage slaves, so colonial governments should put in price floors on land so that people have to work for the rich. Marx cites this as proof of his theories.

    When people bitch about colonialism, this is the dude they mean, a bloody awful strawman of colonial theory.

    Poor old industrialists travelling to the new world with tonnes of machinery but can't find cheap labour. My heart breaks for them.

    Marxists genuinely believe capitalists feel entitled to magic profit. The problem is a lot of people do, hence 2008 etc. Ayn Rand excoriated this sort pretty fiercely.
    Last edited by idiom; 10-12-2018 at 04:20 AM.
    In New Zealand:
    The Coastguard is a Charity
    Air Traffic Control is a private company run on user fees
    The DMV is a private non-profit
    Rescue helicopters and ambulances are operated by charities and are plastered with corporate logos
    The agriculture industry has zero subsidies
    5% of the national vote, gets you 5 seats in Parliament
    A tax return has 4 fields
    Business licenses aren't even a thing nor are capital gains taxes
    Constitutional right to refuse any type of medical care

  21. #18
    IMHPOV working for "The Man" is modern slavery- or living in The Matrix.

    Our whole society is based on the myth that this is the "real world". Public schools were set up to edumacate everyone into the Matrix prison & keep you compliant.

    Anything that threatens that becomes "illegal".

    i.e. Tesla invented free power for all, Ford made steel that lasts for ever, & oil, from hemp. Can't any of that, now can we?

    The longest living, and happiest people in the world, the Hunzas. live simple lives, helping each other & their lands, enjoying the arts & their own personal culture. Many don't reach middle age until their 80s & are still having children.

    http://thespiritscience.net/2015/11/...-their-secret/
    There is no spoon.

  22. #19
    Quote Originally Posted by idiom
    Is it just a continuous race to the bottom?
    Suppose an employer is confronted with two workers, A & B:

    They can each produce 1 widget per day.

    A charges $10 hour and will take 10 hours to produce the widget.

    B charges $5 per hour and will take 20 hours to produce the widget.

    The employer will choose A, because a widget at T+10 hours is more valuable than a widget at T+20 hours.

    So, no, B doesn't drag down A's wages.

    ...

    So what determines a person's workday?

    A person's hourly wage is determined by his productivity.

    In a competitive market, he can't earn significantly more or less than his labor earns his employer.

    The length of the workday, on the other hand, is simply a matter of the personal preference of the worker.

    The reason that the workday has shortened historically is that people have gotten richer.

    Money is subject to diminishing marginal utility.

    The 18th century pauper could buy bread to feed himself with the wage from his 16th hour of work.

    The 21st century office-dweller could buy a Kanye album on iTunes with the wage from his 16th hour of work.

    The bread is more valuable to the pauper than not having to work another hour.

    Not having to work another hour is more valuable to the office-dweller than the album.

    Free time is in essence a consumer good, which people can be expected to "buy" in greater quantities as they get richer.

  23. #20
    Quote Originally Posted by r3volution 3.0 View Post
    Suppose an employer is confronted with two workers, A & B:

    They can each produce 1 widget per day.

    A charges $10 hour and will take 10 hours to produce the widget.

    B charges $5 per hour and will take 20 hours to produce the widget.

    The employer will choose A, because a widget at T+10 hours is more valuable than a widget at T+20 hours.

    So, no, B doesn't drag down A's wages.

    ...

    So what determines a person's workday?

    A person's hourly wage is determined by his productivity.

    In a competitive market, he can't earn significantly more or less than his labor earns his employer.

    The length of the workday, on the other hand, is simply a matter of the personal preference of the worker.

    The reason that the workday has shortened historically is that people have gotten richer.

    Money is subject to diminishing marginal utility.

    The 18th century pauper could buy bread to feed himself with the wage from his 16th hour of work.

    The 21st century office-dweller could buy a Kanye album on iTunes with the wage from his 16th hour of work.

    The bread is more valuable to the pauper than not having to work another hour.

    Not having to work another hour is more valuable to the office-dweller than the album.

    Free time is in essence a consumer good, which people can be expected to "buy" in greater quantities as they get richer.
    Two paupers from the 16th century with the same productivity, both will work until they can buy bread, but the employer only needs one person to tend a machine.

    The wage for the day is going to end up at the price of the bread.

    Who decides how long they will work for?
    In New Zealand:
    The Coastguard is a Charity
    Air Traffic Control is a private company run on user fees
    The DMV is a private non-profit
    Rescue helicopters and ambulances are operated by charities and are plastered with corporate logos
    The agriculture industry has zero subsidies
    5% of the national vote, gets you 5 seats in Parliament
    A tax return has 4 fields
    Business licenses aren't even a thing nor are capital gains taxes
    Constitutional right to refuse any type of medical care

  24. #21
    Quote Originally Posted by idiom View Post
    Two paupers from the 16th century with the same productivity, both will work until they can buy bread, but the employer only needs one person to tend a machine.

    The wage for the day is going to end up at the price of the bread.

    Who decides how long they will work for?
    The hourly wage will reflect their productivity.

    The workday will equal the price of the bread divided by the hourly wage.

    So, if their productivity is such that they can earn 10/hour, and they need 50 to buy the bread, the workday will be 5 hours.

  25. #22
    Quote Originally Posted by r3volution 3.0 View Post
    The hourly wage will reflect their productivity.

    The workday will equal the price of the bread divided by the hourly wage.

    So, if their productivity is such that they can earn 10/hour, and they need 50 to buy the bread, the workday will be 5 hours.
    One of them can earn the loaf of bread in 5 hours then, the other gets no loaf of bread. Why would the second individual not under bid the first and offer to work six hours for the same total pay?
    Last edited by idiom; 10-13-2018 at 03:02 AM.
    In New Zealand:
    The Coastguard is a Charity
    Air Traffic Control is a private company run on user fees
    The DMV is a private non-profit
    Rescue helicopters and ambulances are operated by charities and are plastered with corporate logos
    The agriculture industry has zero subsidies
    5% of the national vote, gets you 5 seats in Parliament
    A tax return has 4 fields
    Business licenses aren't even a thing nor are capital gains taxes
    Constitutional right to refuse any type of medical care

  26. #23
    I suppose the market will push people to the limits until fatigue makes them ineffective or prone to work injury or causing errors in machine usage or with paperwork. It will also depend on whether an industry cares about the loss of workers who get frustrated and quit. Some industries such as Truck Driving have crazy hours, but are a functioning revolving door of people quitting and constantly training new hires. New hires can expect low pay for the first 1 or 2 years and often get discouraged by the long work hours which leads to them quitting as well as contributing to a shortage of skilled drivers that can do HAZMAT or Heavy Haul.

    Truck Driving is currently regulated with the DOT and Hours of Service rules. Truckers are allowed to log 14 working hours or 11 drive hours within that 14. They are basically limited overall to 70 work hours per week. If they run really hard and use up their hours, it requires a 34hr Reset rest break.

    It's an interesting job to consider for this topic as it can push some people to their limits for work fatigue with serious consequences. It can also take a major toll on a person's health.

    I'm not sure how the free market would handle this as it's now regulated by government. In the past, some truckers ran multiple log books trying to cheat the system to get more loads and miles. I can imagine some drove up to 5000 miles a week. Today with stricter Electronic Log compliance and following the law, it would more realistically be 3000 miles a week.

    Possibly, the most 'Free' drivers are Owner Operators that have self ownership of their truck. That is very expensive, but they should be able to set their own schedule.

  27. #24
    Quote Originally Posted by idiom View Post
    One of them can earn the loaf of bread in 5 hours then, the other gets no loaf of bread. Why would the second individual not under bid the first
    If there's a single employer, yes, wages will be bid down to subsistence.

    ...Workers A and B will underbid one another until they hit subsistence.

    But if there are multiple employers competing for the same labor (i.e. the situation in any market economy), wages will reflect productivity.

    ...Employers X and Y will bid up the price of labor until it reaches a level at which it is no longer profitable to employ that labor.



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  29. #25
    8 Employers, 9 labourers.... Its just supply and demand. If supply of labour outstrips employment then you get subsistence wages and a 16 hour working day, and still one unemployed dude.

    If the employers voluntarily restrict the working day, you end up with a shorter working day, workers all still getting their bread, one unemployed dude, but lower productivity at the specific thing the employers are doing. Maybe you end up losing an employer or two and you end up with 5 guys with no bread.

    Point being with a labour surplus, the employers are punished severely for not working labourers as hard as they can as long as they can for as little as they can.

    So its not the employers exploiting the labourers, but competitive forces threatening employers.
    Last edited by idiom; 10-13-2018 at 03:29 PM.
    In New Zealand:
    The Coastguard is a Charity
    Air Traffic Control is a private company run on user fees
    The DMV is a private non-profit
    Rescue helicopters and ambulances are operated by charities and are plastered with corporate logos
    The agriculture industry has zero subsidies
    5% of the national vote, gets you 5 seats in Parliament
    A tax return has 4 fields
    Business licenses aren't even a thing nor are capital gains taxes
    Constitutional right to refuse any type of medical care

  30. #26
    Quote Originally Posted by idiom View Post
    8 Employers, 9 labourers.... Its just supply and demand. If supply of labour outstrips employment then you get subsistence wages and a 16 hour working day, and still one unemployed dude.

    If the employers voluntarily restrict the working day, you end up with a shorter working day, workers all still getting their bread, one unemployed dude, but lower productivity at the specific thing the employers are doing. Maybe you end up losing an employer or two and you end up with 5 guys with no bread.

    Point being with a labour surplus, the employers are punished severely for not working labourers as hard as they can as long as they can for as little as they can.

    So its not the employers exploiting the labourers, but competitive forces threatening employers.
    You assume that no labourers start their own businesses in response to bad working conditions and that they don't unionize.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  31. #27
    Quote Originally Posted by idiom View Post
    If supply of labour outstrips employment...
    As long as there are at least two employers, the price of labor will reflect its productivity. More precisely, the price of labor equals its discounted marginal revenue product (DMRP): i.e. the revenue that the unit of labor generates for the employer, discounted by the prevailing interest rate.

    [N.B. It's obvious that wages have to be less than the revenue they generate (otherwise there would be no incentive to hire anyone at all), but why discount that revenue by the prevailing interest rate to arrive at the wage? This reflects the essential economic function of the employer; he fronts the worker wages in anticipation of selling goods which don't yet exist, because the worker hasn't yet produced them. The worker's wage is the present value of the goods he is going to produce and which the employer is going to sell in the future.]

    To see why wages get bid up to DMRP, suppose that consumers had unlimited demand for apples at a price of $10 or less. The price of apples would always be $10, wouldn't it? Of course, consumers never have unlimited demand for consumer goods at any price. But producers do have unlimited demand for production factors (such as labor) at the DMRP of those factors (there is no reason not to buy factors if they can be profitably employed). Hence, the price of a factor is always bid up to its DRMP, just as apples would always be bid up to $10 if consumer were willing to buy an unlimited quantity of them at that price.

    ...

    A “surplus of labor” wouldn't change this; labor would still be priced at its DMRP.

    But the DMRP would be lower, due to labor being less well equipped with capital.

    ...

    Suppose there are two employers, X and Y, and 20 workers.

    X and Y are in the ditch digging business.

    They each have 10 shovels with which to supply their workers.

    Each worker has a DMRP of $10/hour working with a shovel, $5/hour without a shovel.

    All 20 workers will be paid $10/hour, as X and Y bid up the wage to that level.

    ...

    Now suppose a 21st worker appears on the scene.

    He will also be paid at his DMRP, but that's only $5, since there isn't a shovel available for him to use.

    Alternately, in the 20 worker scenario, the loss of a shovel would have the same effect.



    In other words, when the supply of labor exceeds the supply of capital (loosely speaking, since neither is homogeneous), the DMRP of labor drops, and wages with it. This can happen either through a loss of capital (as through war, natural disaster, or socialistic economic policies), or through population growth exceeding capital accumulation. On the other hand, it is the inverse (capital accumulation exceeding population growth) which accounts for the long term wage growth we've seen over the last several centuries.

    There's no reason to think that chronic overpopulation could occur in a market economy, given the historical record, but I don't see why it would be impossible in principle. I'm sure its physically possible for people to breed like rabbits to the point of overtaking even the most rapid economic growth, but this couldn't be blamed on the market economy any more than a capital-vaporizing asteroid could be.

  32. #28
    The goal isn't to ascribe blame but to describe the forces at work. The other difficulty is we are describing equilibrium conditions, when capitalism is inherently seeking of a disequilibrium as at the equilibrium nobody makes a profit.

    In a model market economy things should always get better, and historically in aggregate they do. The accounts quoted above were the result of massive rapid local dislocations. Peasants in England urbanized incredibly quickly with the mechanization of agriculture. Cities would double or halve from one year to the next with the incredible pace of innovation wiping out industrial centers and rebuilding them just as quickly.

    Thus we examine where the sweat shops come from, how we have alleviated conditions historically, if the cure is worse than the disease, etc.

    We also have the difference between an economic model and actual human action in the face of upheaval at beyond human scales, like when its not your neighbour that leap frogs your factory and shuts you down, but another country leap frogs your entire region and obliterates the regional economy fair and square.

    Are the realistic non-state responses better or worse than the reality of state interventions.

    Can these dislocations reduce highly productive workers to under bidding each other back to subsistence wages?

    On ones own block of land productivity is real and objective, but in a market economy it becomes relative. However there seems to be empirically a threshold for a race condition. Instead of seeing sweatshops proliferate in a dislocation, we now see mass unemployment, and structural unemployment, because of limits on age, working day, and minimum wage.

    Is having the winning part of the economy carry the unemployed while they relocate and rengage, better or worse that having people oscillate between good salaries and starvation wage labour?
    In New Zealand:
    The Coastguard is a Charity
    Air Traffic Control is a private company run on user fees
    The DMV is a private non-profit
    Rescue helicopters and ambulances are operated by charities and are plastered with corporate logos
    The agriculture industry has zero subsidies
    5% of the national vote, gets you 5 seats in Parliament
    A tax return has 4 fields
    Business licenses aren't even a thing nor are capital gains taxes
    Constitutional right to refuse any type of medical care

  33. #29
    Quote Originally Posted by idiom View Post
    The goal isn't to ascribe blame but to describe the forces at work.
    I just meant to suggest that, to the extent there's a problem, the solution won't be found in deviating from laissez faire.

    I thought you may have been heading in that direction.

    The other difficulty is we are describing equilibrium conditions, when capitalism is inherently seeking of a disequilibrium as at the equilibrium nobody makes a profit.
    We are indeed talking about equilibrium, but the underlined isn't correct. Markets tend toward equilibrium; the reason they never (or at least rarely) reach it is that the exogenous factors behind economic forces (e.g. consumer preferences or the physical environment) are constantly changing, while adjustment (i.e. various human acts) cannot occur instantly. Anyway, the more important point is that, while we're hardly ever at equilibrium, we're hovering around it. The price of a unit of labor may not exactly equal its DMRP, it may be a bit higher or lower, but this doesn't change the big picture, certainly not in the long run.

    In a model market economy things should always get better, and historically in aggregate they do. The accounts quoted above were the result of massive rapid local dislocations. Peasants in England urbanized incredibly quickly with the mechanization of agriculture. Cities would double or halve from one year to the next with the incredible pace of innovation wiping out industrial centers and rebuilding them just as quickly.
    There can be temporary, local distortions, sure.

    Thus we examine where the sweat shops come from, how we have alleviated conditions historically, if the cure is worse than the disease, etc.

    We also have the difference between an economic model and actual human action in the face of upheaval at beyond human scales, like when its not your neighbour that leap frogs your factory and shuts you down, but another country leap frogs your entire region and obliterates the regional economy fair and square.

    Are the realistic non-state responses better or worse than the reality of state interventions.

    Can these dislocations reduce highly productive workers to under bidding each other back to subsistence wages?
    In a global free market, with complete freedom of movement for goods, labor, and capital, long run regional price variations can only be the result of transportation costs or differences in land (immoveable). Temporary variations could and would arise (some new thing happens to be invented in this place rather than that place, etc), but these would be eliminated quickly through arbitrage.

    I fail to see how any state intervention could speed this process.

    It's essentially the same situation with liquidation and reallocation during a depression.

    Just let the market clear.

    On ones own block of land productivity is real and objective, but in a market economy it becomes relative. However there seems to be empirically a threshold for a race condition. Instead of seeing sweatshops proliferate in a dislocation, we now see mass unemployment, and structural unemployment, because of limits on age, working day, and minimum wage.

    Is having the winning part of the economy carry the unemployed while they relocate and rengage, better or worse that having people oscillate between good salaries and starvation wage labour?
    I'm not sure what you mean, especially re the underlined part.

  34. #30
    In reverse order:

    Lets say you are good at raising sheep, and can manage 1000 sheep on your own. That great in a closed system on your own farm, you get to have more sheep and wool that you can possibly use. You are rich in sheep and wool, regardless of what other do.

    As soon as you are in an exchange economy producing those sheep for exchange your productivity becomes relative. If someone can produce sheep a wee bit more efficiently than you, or better sheep, you are completely $#@!ed. Your production capabilities become unprofitable, and thereby worse than useless, they become capital sinks.


    At equilibrium in a free market with no barriers to entry and so on, one only makes an profit equivalent to the risk rate plus a small premium related to cost of entry. So if an individual wants to create a profit they must create a dislocation. There are bad ways to do this, but the good ways are technology innovation, organisational innovation, market innovation, branding, or anything else that creates a temporary concrete difference between your product and that of everyone else. Either you can make something cheaper, more appropriately, or something new. One can't make a noteworthy profit by doing the same thing as everyone else in a competitive market.

    This is the blessing and curse of capitalism, a permanent revolution. We tolerate millions being made obsolete en masse, because what they were doing was sub-optimal, and now they can do something better. But maybe they can't, not all of them as individuals, or maybe they all can, maybe they need a boost, maybe they need to be left to become desperate enough to create the next dislocation.

    Capitalism is a welfare system because to make a profit you have to improve the world measurably. In aggregate everyone is better off over time, by a lot, and it doesn't matter why you want that profit. But if you just invested a lot in being able to build canals, you better pray to god you can retool to build railway lines in a hurry.
    In New Zealand:
    The Coastguard is a Charity
    Air Traffic Control is a private company run on user fees
    The DMV is a private non-profit
    Rescue helicopters and ambulances are operated by charities and are plastered with corporate logos
    The agriculture industry has zero subsidies
    5% of the national vote, gets you 5 seats in Parliament
    A tax return has 4 fields
    Business licenses aren't even a thing nor are capital gains taxes
    Constitutional right to refuse any type of medical care

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