Reply to post: Re: Errrm

Basic income after automation? That’s not how capitalism works

I ain't Spartacus Gold badge

Re: Errrm

There's quite a bit wrong with the article - but then that's because there's limited space, so it can'd talk about its assumptions, or go into detail.

So in our shoe factory example your factory owner has many choices. Firstly though, the piece ignores that they have to pay for their extra technology. This will be a large chunk of cash that they're going to have to pay off for many years. This means that the factory owners are taking risk which is a reason why they might be due some of the rewards for the money they're investing in that upgrade.

They then have a choice of making more profit at current output by sacking people, or redeploying them to other roles - or they can increase output and try to win some market share. In which case they'll probably have to cut costs.

But then they're not stealing all that market share off the competition, as they're going to bring new customers into the market at the new, lower, price point.

They might also decide to pay higher wages, especially if they have to train people to use the shiny new machine - and they then want to keep their staff.

Too many people think of economics as a zero-sum game, and it really isn't. In some situations everyone can be winners. And in others, everyone can be losers...

There is no similar public grudge against people who live off our work by other means: by living off dividends and off government transfers like tax exemptions. While welfare recipients form the bottom of our social hierarchy, the idle rich are even admired.

That's total bollocks for a start. There's plenty of public grudge against rich people.

But living off dividends doesn't necessarily mean you are doing nothing you're (actively or passively) choosing which risks to take with your money. Whether you earned it yourself or inherited it is another matter. Similarly tax exemptions are often made for a reason, i.e we want people with money to invest it in certain ways deemed to be socially beneficial which they otherwise might not. One downside is that the more of this we do, the more complex we make the tax system, and the more chance for people to abuse it.

But unless the author is calling for the end of private property, then there are always going to be people with more than others, and some of them are going to be investing their surplus - and are going to want interest/dividends.

In which case we're going to be trusting government to decide how much we're allowed to have and what we can do with it, and what new technologies we're allowed to invest in. Free market capitalism has many faults, but I'm not sure we've found any better alternatives yet. It's also pulled more people out of poverty due to globalisation in the last 30 years than has ever happened in all of human history - so I'd need some convincing of the alternatives.

What we need government to do is to regulate things (you can't have a functioning free market without a reasonably honest and effective government), stop people from taking the piss, and help those who get hurt by sudden changes. Government is also great for collectively doing the things we need to maintain a civilised society, like education/health/justice/social insurance. Not that it's perfect at any of them either. I think fetishising the caring power of government is as stupid as fetishising the uncontrolled free market.

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Biting the hand that feeds IT © 1998–2019