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Thread: Length of the working day

  1. #31
    Quote Originally Posted by idiom View Post
    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.
    Less-efficient producers get outcompeted and driven out of business by more-efficient producers, yes; but what's the problem?

    It doesn't follow that the less-efficient producer starves to death. He almost certainly finds another, more profitable occupation (either as an employee-shepherd, or in some other sector altogether). And if not, there's nothing to prevent him from continuing as before, producing only for his own consumption. The "market economy" is so named not because people are required to produce for the market, but because virtually everyone chooses to do so when given the opportunity (since it means much higher incomes).

    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.
    The entrepreneur can "create dislocations," as you put it, or respond to natural dislocations (e.g. changing consumer preferences).

    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.
    Sure, some won't be retrainable, but this isn't the "curse of capitalism."

    People who can't feed themselves in the market economy will have ever greater trouble feeding themselves in any other system.

    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.


    It's a welfare system ...because it's a meritocracy?



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  3. #32
    Quote Originally Posted by r3volution 3.0 View Post
    It's a welfare system ...because it's a meritocracy?
    That's the beauty of it, and why its moral. Its not even the merit of people, but of their actions, measured objectively, and agnostic about its goal seeking. The point of it is that is better than any other welfare system and even people who are looking out purely for themselves end up benefiting others.

    The upside is it massively increases productivity. The downside is this process isn't necessarily humane. It works out in the global aggregate, but for example whole chunks of the US are only competitively employable at 16 hours @ $2 day if we went entirely deregulated. Now that is working its way up gradually over time.

    Now to go from a safe job to that, does that increase risk tolerance or lower it? Does it increase capital accumulation? Would talent flee to regulated countries?

    Quote Originally Posted by r3volution 3.0 View Post
    The entrepreneur can "create dislocations," as you put it, or respond to natural dislocations (e.g. changing consumer preferences).
    The consumer preferences change for her competitors equally, so that is not a defensible advantage. One may arrange the company so it is faster to notice and respond, but that is organisational innovation for the purpose of going something better or something new. Again if the competition adapts you have to change again.
    Last edited by idiom; 10-15-2018 at 10:07 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



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  5. #33
    Quote Originally Posted by idiom View Post
    That's the beauty of it, and why its moral. Its not even the merit of people, but of their actions, measured objectively, and agnostic about its goal seeking. The point of it is that is better than any other welfare system and even people who are looking out purely for themselves end up benefiting others.
    That's all substantively true, though I don't know why you call it a welfare system.

    ...no need to argue over semantics, I suppose.

    The upside is it massively increases productivity. The downside is this process isn't necessarily humane.
    In comparison to what?

    The upside is it massively increases productivity. The downside is this process isn't necessarily humane. It works out in the global aggregate, but for example whole chunks of the US are only competitively employable at 16 hours @ $2 day if we went entirely deregulated. Now that is working its way up gradually over time.

    Now to go from a safe job to that, does that increase risk tolerance or lower it? Does it increase capital accumulation? Would talent flee to regulated countries?
    A sudden movement to laissez faire would cause a bust just as at the end of the business cycle. It's exactly the same phenomenon: subsidized enterprises (not justified by consumer demand) will have to liquidate, with the resources they're (mis)using being reallocated to other enterprises (justified by consumer demand). There would be frictional unemployment of production factors, including labor, but this is temporary: just a lot all at once of the creative destruction that's always occurring. Markets would clear soon enough and Bob's your uncle.

    The consumer preferences change for her competitors equally, so that is not a defensible advantage. One may arrange the company so it is faster to notice and respond, but that is organisational innovation for the purpose of going something better or something new. Again if the competition adapts you have to change again.
    The point is that one of the functions of the entrepreneur is to actually bring about those reallocations in response to changing conditions.

    These don't occur by magic. Humans beings must act. Profit is their reward/incentive.

  6. #34
    Quote Originally Posted by r3volution 3.0 View Post
    A sudden movement to laissez faire would cause a bust just as at the end of the business cycle. It's exactly the same phenomenon: subsidized enterprises (not justified by consumer demand) will have to liquidate, with the resources they're (mis)using being reallocated to other enterprises (justified by consumer demand). There would be frictional unemployment of production factors, including labor, but this is temporary: just a lot all at once of the creative destruction that's always occurring. Markets would clear soon enough and Bob's your uncle.
    Point was that every wave of destruction would trigger massive moves to starvation wages instead of structural unemployment due to the huge disparities between economies suddenly joined with 300 years of economic development separating them.

    If half of Michigan was on $2 a day, 16 hours a day with no hope it would change, the Trumpian anger would be way hotter than it already is.
    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

  7. #35
    Quote Originally Posted by r3volution 3.0 View Post
    That's all substantively true, though I don't know why you call it a welfare system.

    ...no need to argue over semantics, I suppose.



    In comparison to what?



    A sudden movement to laissez faire would cause a bust just as at the end of the business cycle. It's exactly the same phenomenon: subsidized enterprises (not justified by consumer demand) will have to liquidate, with the resources they're (mis)using being reallocated to other enterprises (justified by consumer demand). There would be frictional unemployment of production factors, including labor, but this is temporary: just a lot all at once of the creative destruction that's always occurring. Markets would clear soon enough and Bob's your uncle.



    The point is that one of the functions of the entrepreneur is to actually bring about those reallocations in response to changing conditions.

    These don't occur by magic. Humans beings must act. Profit is their reward/incentive.
    +rep for correct understanding of economic theory and praxaeology.
    Quote Originally Posted by Torchbearer
    what works can never be discussed online. there is only one language the government understands, and until the people start speaking it by the magazine full... things will remain the same.
    Hear/buy my music here "government is the enemy of liberty"-RP Support me on Patreon here Ephesians 6:12

  8. #36
    Quote Originally Posted by heavenlyboy34 View Post
    +rep for correct understanding of economic theory and praxaeology.
    So what happens if we shorten the working day to six hours, apart from the 30% loss in wages? How will humans act with a workday synced to the school day?
    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

  9. #37
    Quote Originally Posted by idiom View Post
    So what happens if we shorten the working day to six hours, apart from the 30% loss in wages? How will humans act with a workday synced to the school day?
    Who is "we"???

    Listen, the workday hours are determined by the employee and the employer. Perhaps a group of employees unionize to collectively bargain the hours with the employer. Whatever the case, it makes no sense to have some uninformed third party getting involved. Markets will always work it out to the maximum possible benefit. Unless some central planner decides he can make decisions better than people he doesn't even know. That's when artificial distortions happen. And while those distortions may help existing employees in some cases, they will always hurt the potential employees that never get considered.
    "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

  10. #38
    Quote Originally Posted by CaptUSA View Post
    Who is "we"???

    Listen, the workday hours are determined by the employee and the employer. Perhaps a group of employees unionize to collectively bargain the hours with the employer. Whatever the case, it makes no sense to have some uninformed third party getting involved. Markets will always work it out to the maximum possible benefit. Unless some central planner decides he can make decisions better than people he doesn't even know. That's when artificial distortions happen. And while those distortions may help existing employees in some cases, they will always hurt the potential employees that never get considered.
    Pretty much that^^ Also, entrepreneurs' and freelancers' work days are often much longer than 8 hours.
    Quote Originally Posted by Torchbearer
    what works can never be discussed online. there is only one language the government understands, and until the people start speaking it by the magazine full... things will remain the same.
    Hear/buy my music here "government is the enemy of liberty"-RP Support me on Patreon here Ephesians 6:12

  11. #39
    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.
    An Austrian economist would never say there is an ideal work day. Real economics doesn't prescribe solutions. It merely describes what the processes that occur in the real world are and how they happen. People will work as long as they need to in order to achieve their desired ends. Employers pay workers according to their productivity. Investment in capital goods creates tools and machines that make workers more productive, thereby increasing their real wages.

    Any government activity that diverts investment or regulates this process only impoverishes workers. Any monetary inflation that drives up the cost of inputs does so at the expense of workers. Any monetary inflation that drives up the cost of consumer goods does at the expense of consumers, which are mostly workers.

  12. #40
    Quote Originally Posted by idiom View Post
    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?
    Because your premise is wrong. The length of working days in the U.S. fell long before any laws were passed about it. The length of the work day decreases when society becomes wealthier. How does it become wealthier? By companies producing products demanded by the market. The greater the number of products, the cheaper they are to buy, and the wealthier everyone is.

    So the poor countries that have long work days do so because they are not wealthy enough to be able to afford to stay home 16 hours a day. It's the same argument as child labor. Child labor in the U.S. was almost completely gone decades before the government did anything about it. Before then, society wasn't wealthy enough that they could afford the kids not to work. Once it became wealthy enough, the kids didn't work anymore.

    With no regulation on working hours, they would still fall as steadily as the wealth of society would allow.



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  14. #41
    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.
    Those competing forces drive up wages too. If a laborer is more productive than subsistence wages, then he will be bid away from the employer paying only that much, because they can give the worker a raise and still make a profit off of them. The process repeats itself until the worker's wage is at or near his productivity.

    Even in your unrealistic scenario, with such a surplus of labor, wages are going to be so cheap that it will create opportunities for companies to arise and hire these people, which starts the competitive process of increasing wages again.

    All of this assumes private property rights and the lack of state interference, of course.

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