Theories on how to efficiently run an economy

[phoenyx]

Before I begin, I'd like to say that while I've posted in many online forums over the years, I've never started a thread of this nature anywhere. It was something that definitely interested me, but not to the extent that I thought I should start a thread about it. That has now changed. I began to seriously get engaged in a thread discussing this subject, even though the thread itself had nothing to do with the economy. I think it's high time I transfer it over to one that does.

So now, for my politics: I am generally left wing, though I also believe in the market, so long as it is properly regulated. I think one of the biggest problem that economies today face is the double whammy of the rapacious nature of many corporations, and the way money is created. For those who are unfamiliar with how money is created, I invite you to take a look at the following 45 minute animated documentary on the subject:


I think it's fair to say that I'm a Berniecrat, despite the fact that I'm Canadian and so would never have been able to vote for him. I think he generally had the right idea on how to turn things around. What I'd like to discuss here, in a constructive way, is what people here think of Bernie's policy platform, and why. As I mentioned, I had previously been discussing the subject of how to efficiently run an economy in a thread that really had nothing to do with this, so I'll now be replying to those who I was discussing things with over there into this thread instead.

 

[phoenyx]

No, in my view, the unions/executives dichotomy is not the best system. With worker owned companies, there is no union/executive dichotomy. Or, put another way, the union -owns- the company. There could be executives, but they would also be part of the union. The union, in a very real sense, would be the company. If the company does badly, so does everyone in the company. Conversely, if the company does well, so does everyone in the company.

That's even worse. They are bullying the company by being part of the upper management instead of bullying them as employees.

In employee run companies, there aren't 2 sides. The union -is- the company: it owns it, fills out the admin positions and the lower run positions. There is no other side. The idea is to have it like a family, where everyone cares about what happens to everyone.

Anyway, Employee Stock Ownership Plans (ESOPs) have been around for a while. Here's the introduction to Wikileak's article on them:
**An employee stock ownership plan (ESOP) is an employee-owner program that provides a company's workforce with an ownership interest in the company. In an ESOP, companies provide theiremployees with stock ownership, often at no upfront cost to the employees. ESOP shares, however, are part of employees' remuneration for work performed. Shares are allocated to employees and may be held in an ESOP trust until the employee retires or leaves the company. The shares are then either bought back by the company for redistribution or voided.

Some corporations are majority employee-owned; the term "employee-owned corporation" often refers to such companies. Such organizations are similar to worker cooperatives, but unlike cooperatives, control of the company's capital is not necessarily evenly distributed. In many cases, voting rights are given only to certain shareholders, and more senior employees may be allocated more shares than new hires. Compared with cooperatives, ESOP-centered corporations often allow for company executives to have greater flexibility and control in governing and managing the corporation.

Most corporations, however, use stock ownership plans as a form of in-kind benefit as a way to prevent hostile takeovers or to maintain a specific corporate culture. The plans generally prevent average employees from holding too much of the company's stock.**

Source: Employee stock ownership plan - Wikipedia, the free encyclopedia

To be an employee owned company, the ESOP must be majority employee-owned.

Unions are already effected if the company fails, so all it needs to do is stay afloat enough to pay them, not succeed.

Staying afloat is a measure of success, but I agree that unions don't actually need anything more then that. The problem is that, unlike executives, most employees own little if any stock in the companies they work for. In worker owned companies, workers own the majority of the stocks, so the incentive to do well is high, along with the disincentive to do poorly (as their stocks would plunge if they did).

That also still takes control away from the actual owners, which would still cause the business to leave. Businesses are owned by the people that own them because they have qualifications in that department, you're advocating allowing unqualified people to own those businesses.

I'm advocating that those doing the work own the businesses. If they weren't qualified for the work, the companies would tank whether or not they were employee owned.

 

[AnCap'n_Murica]

You folks may find this informative.

 

[Pumpkin Row]

In employee run companies, there aren't 2 sides. The union -is- the company: it owns it, fills out the admin positions and the lower run positions. There is no other side. The idea is to have it like a family, where everyone cares about what happens to everyone.

Like I said before, that's not someone running their own business, that's giving a Union management positions, while they're not actually qualified for it, and that would drive businesses out of the Nation.

Staying afloat is a measure of success, but I agree that unions don't actually need anything more then that. The problem is that, unlike executives, most employees own little if any stock in the companies they work for. In worker owned companies, workers own the majority of the stocks, so the incentive to do well is high, along with the disincentive to do poorly (as their stocks would plunge if they did).

That's not expansion, that's just not failing. That means it would be creating few, if any, jobs. That makes it harder for other people to find jobs. It also creates less profit for the owner.

I'm advocating that those doing the work own the businesses. If they weren't qualified for the work, the companies would tank whether or not they were employee owned.

You're advocating taking ownership away from the people who created the business to start with, and giving ownership to unqualified people. That's an inherently stupid concept, and would result in an inefficiently run business, creating fewer jobs, and less profit.

 

[phoenyx]

Ah, you're talking about CNN, though, not The Huffington Post...
I haven't seen evidence of that.

Then you obviously haven't paid attention to both, just one or the other. It's all just Liberal garble that the Establishment wants to feed you.

Obviously eh ?

Yes, good administrators are needed, but not the fat cats just looking to pad their own bottom line. Here's why:
**The real job creators are not CEOs or corporations or wealthy investors. The job creators are members of America’s vast middle class and the poor, whose purchases cause businesses to expand and invest.

Then go apply for a job from a poor person.

You bring up a very good point, one that I'm not sure the article I was quoting brings up. Namely, that most money is concentrated in the hands of the very wealthy. Bernie puts it quite well:
“We live in the wealthiest nation in the history of the world, but that reality means little because almost all of that wealth is controlled by a tiny handful of individuals. There is something profoundly wrong when the top one-tenth of 1 percent owns almost as much as the bottom 90 percent, and when 99 percent of all new income goes to the top 1 percent. There is something profoundly wrong when one family owns more wealth than the bottom 130 million Americans. This type of immoral, unsustainable economy is not what America is supposed to be about. This has got to change, and together we will change it.”

Source: 10 Ways That Bernie Sanders Has Described Democratic Socialism That Prove It Isn't a Radical Idea at All

This has got to change, another point that Bernie makes:
“The gap between the rich and poor has extended beyond the breaking point of civil society and sound economics. Instead of addressing poverty, politicians of both parties have criminalized it and accepted incarceration rates that are obscene and racist; the devastating effects of climate change have been ignored; we have accepted a warped sense of priorities that says America can always find enough money for war but that there is never enough for infrastructure or education or nutrition programs. Our democracy has been rendered very nearly dysfunctional by Supreme Court rulings that make it easier for billionaires and corporations to buy elections and harder for people of color and students to vote in them. The United States is degenerating into a plutocracy as democracy is overwhelmed by money and negative ads and the collapse of serious journalism.”

I also already told you that the employees feed the business' expansion, and that's why they pay them what's needed by default.

You can say it all you like, but it doesn't mean it's true. What businesses today need is money in the present, not in the future. How much do you know about the 2008 stock crash? It was financed by Wall Street, using bad loans as collateral. Then, when it became obvious that there loans had been made to people who couldn't possibly pay them at the interest rates they were at (if at all), the government bails them out, meaning that -all- taxpayers foot the bill for the banks malfeasance. Here is a trailer to a documentary on the subject of the 2008 market crash that you may be interested in taking a look at:

 

[Pumpkin Row]

You bring up a very good point, one that I'm not sure the article I was quoting brings up. Namely, that most money is concentrated in the hands of the very wealthy. Bernie puts it quite well:
“We live in the wealthiest nation in the history of the world, but that reality means little because almost all of that wealth is controlled by a tiny handful of individuals. There is something profoundly wrong when the top one-tenth of 1 percent owns almost as much as the bottom 90 percent, and when 99 percent of all new income goes to the top 1 percent. There is something profoundly wrong when one family owns more wealth than the bottom 130 million Americans. This type of immoral, unsustainable economy is not what America is supposed to be about. This has got to change, and together we will change it.”

Source: 10 Ways That Bernie Sanders Has Described Democratic Socialism That Prove It Isn't a Radical Idea at All

http://www.huffingtonpost.com/brian-hanley/bernie-sanders-democratic-socialism_b_9986040.html
And businesses being rich is a problem how? They earned it. People will always be poor, and it's their own faults.

This has got to change, another point that Bernie makes:
“The gap between the rich and poor has extended beyond the breaking point of civil society and sound economics. Instead of addressing poverty, politicians of both parties have criminalized it and accepted incarceration rates that are obscene and racist; the devastating effects of climate change have been ignored; we have accepted a warped sense of priorities that says America can always find enough money for war but that there is never enough for infrastructure or education or nutrition programs. Our democracy has been rendered very nearly dysfunctional by Supreme Court rulings that make it easier for billionaires and corporations to buy elections and harder for people of color and students to vote in them. The United States is degenerating into a plutocracy as democracy is overwhelmed by money and negative ads and the collapse of serious journalism.”

'Wealth gaps' are not a problem, people who get rich deserve to keep the money they earned. Anyone deserves to keep the money they earned and spend it as they like.

Also, Climate Change is a myth.

Our country isn't a Democracy.

You can say it all you like, but it doesn't mean it's true.

Oh, so I guess before minimum wage, everyone got paid a penny per day, right? It's not just an assertion, it's a fact. Just like businesses have to compete to earn consumers, they have to compete for employees. If an employee isn't paid enough, they'll seek employment elsewhere. That's in addition to the fact that employers MUST pay their employees enough, or nobody can afford their goods and services. All people who earn money have jobs, and all people with jobs have to buy goods and services. Said goods and services are provided by businesses for a profit. If any part of this circulation fails, then all participants in said circulation stops making money, and that's against their interests. Proof of this is that fact that only 3% of the nation makes minimum wage. Most employers start people ABOVE minimum wage BECAUSE they understand this.' It's BASIC stuff that most people understand.

What businesses today need is money in the present, not in the future. How much do you know about the 2008 stock crash? It was financed by Wall Street, using bad loans as collateral. Then, when it became obvious that there loans had been made to people who couldn't possibly pay them at the interest rates they were at (if at all), the government bails them out, meaning that -all- taxpayers foot the bill for the banks malfeasance. Here is a trailer to a documentary on the subject of the 2008 market crash that you may be interested in taking a look at:

I don't agree with Federal Aid, that means I don't agree with bailouts or subsidies, either. I don't agree with individual OR corporate welfare.The president warned those banks, and they chose to ignore him, and because of that this issue happened. They should have let the Wall Street fail.

 

[phoenyx]

All the economic gains have been going to the top.

Because the government is too powerful and has been stifling competition.

Who generally finances politicians' campaigns? Who lobbies them? The general population or the rich?

I'd like you to take a look at a video that I think explains it pretty well in around 5 minutes:


And another short video that explains how to fix the problem:

Don’t blame globalization. Other advanced nations facing the same global competition have managed to preserve middle class wages. Germany’s median wage is now higher than America’s.

Through unionism, and their production and overall economy are garbage compared to ours.

Do you have evidence to support that assertion?

This means most workers no longer have the bargaining power to get a share of the gains from growth.**

Capitalism regulates itself

No, it doesn't. Capitalism needs to be managed, just like any other economic system. I'll include an excerpt from an article that gets my point across:
**Those of us who imagine economists to be mild souls preoccupied with tedious abstractions are in for a shock from The Shock Doctrine: The Rise of Disaster Capitalism, Naomi Klein's stunning, polemic re-examination of the last 30-plus years in the history of free-market capitalism. If we bought the myth of corporate globalization as a benign and bloodless process, Klein has more jolts in store.

The Canadian Klein is a columnist for The Nation and The Guardian and a former fellow at the London School of Economics. Her work on this, her third book, began in 2004, when she spent time in Iraq reporting on the reconstruction process for Harper's magazine. Her research is massive, meticulously documented and laid out in fluid, accessible and intriguing stories.

Klein's indictment revolves around Milton Friedman, the Nobel Prize-winning guru of the University of Chicago School of Economics and the brains behind the movement for unregulated corporate trade, the elimination of public services and the eradication of organized labor.

Klein begins in the 1950s, the depths of the Cold War, when Friedman refined his theory of pure capitalism as a counter to the threat of communism and a radical alternative to the mixed checks-and-balances system that was installed under the influence of economist John Maynard Keynes to combat the Great Depression. Under Friedman's precise mathematical theorem, the only functions permitted for government are police and armies. Everything else should be privatized.

With eager financial support from corporate interests, Friedman's theories made the Chicago school the powerhouse of academic economics in the U.S. The search for a live test laboratory -- a nation to erase and re-create from scratch -- did not take long.

When Augusto Pinochet's military junta prepared for the takeover of Chile in 1973, Friedman's students handed him a complete plan of economic reform in advance. Friedman himself visited the new dictator, urging him to press even harder -- by dint of troops, tanks and death squads -- at selling state-owned property, utilities and services to American corporations. The plan also included eliminating public medical care, education and transportation; arresting, torturing and executing labor leaders, social workers, academics and other troublemakers; and throwing hundreds of thousands out of work. The aim was to shock the entire population into stunned acquiescence to the new corporate economic policies. The term in use was "shock therapy."

The effect was to impoverish the majority of the population while enriching those in power. International corporations, being on the plush end of the equation, were delighted. The Chicago Boys, as Friedman's students were known, were ready for similar actions in Argentina, southern Brazil, Bolivia and beyond. By the 1980s large segments of Africa and Asia also had submitted to Friedman's shock treatment...**

Source: Caution, 'Disaster Capitalism' at Work | Naomi Klein

 

[phoenyx]

I don't -always- agree with wikipedia, but you just putting up its Communism article means I don't have to- you haven't shown that it differs from the above essay on the difference between communism and socialism.

"In political and social sciences, communism (from Latin communis, "common, universal")[1][2] is a social, political, and economic ideology and movement whose ultimate goal is the establishment of the communist society, which is a socioeconomic order structured upon the common ownership of the means of production and the absence of social classes, money,[3][4] and the state.[5][6]"

Note the words: "whose ultimate goal". Which means that, prior to that, there could indeed be social classes, a state, and money. The USSR clearly never got past that stage.

The thing is, Bernie is not advocating that kind of socialism. Bernie would state that he's a democratic socialist. An article in Forbes magazine from a European author named Tim Worstall states that Bernie is not actually a democratic socialist, or a socialist at all, but a social democrat, and that that can be a good thing, if done right. He doesn't think that Bernie could have done it right, but I think he was being overly pessimistic. Here's his stated reason why he doesn't believe Bernie could have pulled it off:
**But the reason I really think social democracy won’t work in the U.S. is because people don’t understand what it is that makes those Nordics tick in an economic sense. They don’t do it, as Bernie seems to think can be done, by taxing the heck out of the rich to pay for everything. Instead they tax everyone through a VAT to pay for everything. Their tax systems are very much less progressive than that of the U.S., especially at the federal level. The only U.S. commentator I’ve seen actually get this is Lane Kenworthy, which is exactly why he proposes a VAT for the U.S., to raise 10% of GDP, in order to pay for those wonderfully socially democratic programs.

The second point is that the Nordics are notably more free market than the U.S. Whether you use the Fraseror the Heritage rankings this is so.**

Encouraging Unionism is not 'free market', and as explained, those social programs are the biggest part of the problem. Raising minimum wage, again, would not solve it.

Ironically, I actually agree that forcing the minimum wage to be raised won't solve the problem. The problem is that the rich hold too much of the money and the lower classes hold too little. What use is a high minimum wage if those with money aren't hiring? The problem is in who has most of the money, and why they have so much of it.

 

[CultureCitizen]

And businesses being rich is a problem how? They earned it. People will always be poor, and it's their own faults.

Catch-22
Economy follows a circular flow. If workers do not earn enough money they will not be able to buy enough goods and services to continue an expansion. Eventually this leads to a recession (though it is not the only cause of a recession).

 

[AnCap'n_Murica]

And businesses being rich is a problem how? They earned it. People will always be poor, and it's their own faults.

Catch-22
Economy follows a circular flow. If workers do not earn enough money they will not be able to buy enough goods and services to continue an expansion. Eventually this leads to a recession (though it is not the only cause of a recession).

Nice job of vamping, but it doesn't answer the question.

To put it another way; what does a rich person being rich take away from the working class and/or the poor?

 

[Pumpkin Row]

And businesses being rich is a problem how? They earned it. People will always be poor, and it's their own faults.

Catch-22
Economy follows a circular flow. If workers do not earn enough money they will not be able to buy enough goods and services to continue an expansion. Eventually this leads to a recession (though it is not the only cause of a recession).

I already said that. That's why businesses pay employees enough by default.

 

[Pumpkin Row]

Who generally finances politicians' campaigns? Who lobbies them? The general population or the rich?

Certain corporations, but as I detailed before, they can't be prevented from doing that. The best method is to keep the Federal Government from being large enough that it's a problem. Making the State Governments more powerful than the Federal Government again, and reigning the Federal Government back would solve the problem.

Do you have evidence to support that assertion?

Trade Unions / Sweden / Countries / National Industrial Relations / Home - WORKER PARTICIPATION.eu
Details percentage of Union involvement.

About what you'd expect from Regressivism.

No, it doesn't. Capitalism needs to be managed, just like any other economic system.

It does, and I explained how. If a business does something inherently bad, or destructive, people will go to their competition. Sell people poisoned food? They won't be buying from you anymore, you'll likely never get business again. Same with defective medicine. They also can't pay employees too little, because they'll either work for someone else, or won't be able to afford that business's goods and services, which will damage the business. If a business's employee gets hurt, they can be sued. So safety of employees isn't an issue, either. Businesses don't need the government to regulate them.

I'll include an excerpt from an article that gets my point across:

Klein's indictment revolves around Milton Friedman, the Nobel Prize-winning guru of the University of Chicago School of Economics and the brains behind the movement for unregulated corporate trade, the elimination of public services and the eradication of organized labor.

Klein begins in the 1950s, the depths of the Cold War, when Friedman refined his theory of pure capitalism as a counter to the threat of communism and a radical alternative to the mixed checks-and-balances system that was installed under the influence of economist John Maynard Keynes to combat the Great Depression. Under Friedman's precise mathematical theorem, the only functions permitted for government are police and armies. Everything else should be privatized.

With eager financial support from corporate interests, Friedman's theories made the Chicago school the powerhouse of academic economics in the U.S. The search for a live test laboratory -- a nation to erase and re-create from scratch -- did not take long.

When Augusto Pinochet's military junta prepared for the takeover of Chile in 1973, Friedman's students handed him a complete plan of economic reform in advance. Friedman himself visited the new dictator, urging him to press even harder -- by dint of troops, tanks and death squads -- at selling state-owned property, utilities and services to American corporations. The plan also included eliminating public medical care, education and transportation; arresting, torturing and executing labor leaders, social workers, academics and other troublemakers; and throwing hundreds of thousands out of work. The aim was to shock the entire population into stunned acquiescence to the new corporate economic policies. The term in use was "shock therapy."

The effect was to impoverish the majority of the population while enriching those in power. International corporations, being on the plush end of the equation, were delighted. The Chicago Boys, as Friedman's students were known, were ready for similar actions in Argentina, southern Brazil, Bolivia and beyond. By the 1980s large segments of Africa and Asia also had submitted to Friedman's shock treatment...**

Source: Caution, 'Disaster Capitalism' at Work | Naomi Klein

First, a dictatorship is exactly what I'm arguing AGAINST, I don't care how 'capitalist' a country is, if the government is too powerful, well, it's too powerful. If anything, this is a perfect argument against your suggestion of government expansion, and only shows that regardless of what system you have, expanding the government too much will cause a disaster. I also didn't say that other government functions should be given to corporate executives, in fact, I'm advocating a method to STOP them from deciding what the government should do. In the end, your article does not help you.

 

[Pumpkin Row]

Note the words: "whose ultimate goal". Which means that, prior to that, there could indeed be social classes, a state, and money. The USSR clearly never got past that stage.

Also note that those are core components, which Soviet Russia never implemented, meaning they were never Communist. If those things are needed to be Communist, and they were never achieved, they were never Communist. The fact that the Government owned Industry, which is a Socialist component, and wealth was redistributed to make people more equal, which is a Socialist Component, makes it obvious that they were Socialist.

Ironically, I actually agree that forcing the minimum wage to be raised won't solve the problem. The problem is that the rich hold too much of the money and the lower classes hold too little. What use is a high minimum wage if those with money aren't hiring? The problem is in who has most of the money, and why they have so much of it.

"The Rich" keeping the money they earn isn't a problem, nobody should care how much money someone has. Every level of business is hiring and expanding, and as long as they do that, how much money they have isn't a problem. They ARE hiring, it's just that regressive policies are preventing them from hiring as much.

 

[CultureCitizen]

And businesses being rich is a problem how? They earned it. People will always be poor, and it's their own faults.

Catch-22
Economy follows a circular flow. If workers do not earn enough money they will not be able to buy enough goods and services to continue an expansion. Eventually this leads to a recession (though it is not the only cause of a recession).

I already said that. That's why businesses pay employees enough by default.

Allways pay employees enough by default?
No, they don't. They pay market prices which are not allways fair.
At some point of time employing kids was a sound business practice. This, of course , meant they couldn't go to school, which prevented them from getting better jobs.

 

[Pumpkin Row]

And businesses being rich is a problem how? They earned it. People will always be poor, and it's their own faults.

Catch-22
Economy follows a circular flow. If workers do not earn enough money they will not be able to buy enough goods and services to continue an expansion. Eventually this leads to a recession (though it is not the only cause of a recession).

I already said that. That's why businesses pay employees enough by default.

Allways pay employees enough by default?
No, they don't. They pay market prices which are not allways fair.
At some point of time employing kids was a sound business practice. This, of course , meant they couldn't go to school, which prevented them from getting better jobs.

Working part time doesn't mean you can't go to school.
As I explained before, employers have to pay their employees 'enough', or nobody can afford their goods or services, which damages the circulation. Federal aid allows them to pay their employees less, which forces people to obtain it. You can thank the government for that, businesses aren't at fault for taking advantage.

 

[CultureCitizen]

And businesses being rich is a problem how? They earned it. People will always be poor, and it's their own faults.

Catch-22
Economy follows a circular flow. If workers do not earn enough money they will not be able to buy enough goods and services to continue an expansion. Eventually this leads to a recession (though it is not the only cause of a recession).

Nice job of vamping, but it doesn't answer the question.

To put it another way; what does a rich person being rich take away from the working class and/or the poor?

That a person is rich doesn't necesarily mean it has taken away something from the working class. A great innovation can make people rich making everyone else better off, but that is not allways the case.

So, let's just assume the situation is one in which a rich person has a successfull company that pays his employees an amount below the poverty level ( $10 per day at year 2000 ). He would then be robbing them the oportunity to have a healthier life and to have a new generation that is better educated an better off.

 

[CultureCitizen]

And businesses being rich is a problem how? They earned it. People will always be poor, and it's their own faults.

Catch-22
Economy follows a circular flow. If workers do not earn enough money they will not be able to buy enough goods and services to continue an expansion. Eventually this leads to a recession (though it is not the only cause of a recession).

I already said that. That's why businesses pay employees enough by default.

Allways pay employees enough by default?
No, they don't. They pay market prices which are not allways fair.
At some point of time employing kids was a sound business practice. This, of course , meant they couldn't go to school, which prevented them from getting better jobs.

Working part time doesn't mean you can't go to school.
As I explained before, employers have to pay their employees 'enough', or nobody can afford their goods or services, which damages the circulation. Federal aid allows them to pay their employees less, which forces people to obtain it. You can thank the government for that, businesses aren't at fault for taking advantage.

Lad, do some reading, we'll discuss later.

Child labor in Factories During the Industrial Revolution

 

[Pumpkin Row]

And businesses being rich is a problem how? They earned it. People will always be poor, and it's their own faults.

Catch-22
Economy follows a circular flow. If workers do not earn enough money they will not be able to buy enough goods and services to continue an expansion. Eventually this leads to a recession (though it is not the only cause of a recession).

I already said that. That's why businesses pay employees enough by default.

Allways pay employees enough by default?
No, they don't. They pay market prices which are not allways fair.
At some point of time employing kids was a sound business practice. This, of course , meant they couldn't go to school, which prevented them from getting better jobs.

Working part time doesn't mean you can't go to school.
As I explained before, employers have to pay their employees 'enough', or nobody can afford their goods or services, which damages the circulation. Federal aid allows them to pay their employees less, which forces people to obtain it. You can thank the government for that, businesses aren't at fault for taking advantage.

Lad, do some reading, we'll discuss later.

Child labor in Factories During the Industrial Revolution

Children don't currently work, how is this relevant? Children also likely didn't negotiate, businesses knew they wouldn't, and they weren't considered consumers.

You failed to address my other point, which still stands, especially since child labor has been banned for many years. You clearly don't know how the economy works.

 

[CultureCitizen]

Catch-22
Economy follows a circular flow. If workers do not earn enough money they will not be able to buy enough goods and services to continue an expansion. Eventually this leads to a recession (though it is not the only cause of a recession).

I already said that. That's why businesses pay employees enough by default.

Allways pay employees enough by default?
No, they don't. They pay market prices which are not allways fair.
At some point of time employing kids was a sound business practice. This, of course , meant they couldn't go to school, which prevented them from getting better jobs.

Working part time doesn't mean you can't go to school.
As I explained before, employers have to pay their employees 'enough', or nobody can afford their goods or services, which damages the circulation. Federal aid allows them to pay their employees less, which forces people to obtain it. You can thank the government for that, businesses aren't at fault for taking advantage.

Lad, do some reading, we'll discuss later.

Child labor in Factories During the Industrial Revolution

Children don't currently work, how is this relevant? Children also likely didn't negotiate, businesses knew they wouldn't, and they weren't considered consumers.

You failed to address my other point, which still stands, especially since child labor has been banned for many years. You clearly don't know how the economy works.

Yes, but it has done so because rules were introduced in the market system which regulated child labour.
Which is my point. The fact that the US has a functional society that is because rules and regulations exists.
You want to know how unfettered capitalism looks? Well , take a look at the working conditions of the early industrial revolution.
And no, at that time companies didn't have to pay their employees enough, because england was going through and export boom and companies were not interested in having their products bought by their employees.

Now, given the oposite situation: IF ( and this is a big if) employees have enough to buy a home, feed their children, educate them and give them medical care, and have some vacations then I have no problem with some people getting richer.

I do have a problem when this doesn't happen and when household debt rises and average wages and employment ratios start to fall.

 

[Pumpkin Row]

I already said that. That's why businesses pay employees enough by default.

Allways pay employees enough by default?
No, they don't. They pay market prices which are not allways fair.
At some point of time employing kids was a sound business practice. This, of course , meant they couldn't go to school, which prevented them from getting better jobs.

Working part time doesn't mean you can't go to school.
As I explained before, employers have to pay their employees 'enough', or nobody can afford their goods or services, which damages the circulation. Federal aid allows them to pay their employees less, which forces people to obtain it. You can thank the government for that, businesses aren't at fault for taking advantage.

Lad, do some reading, we'll discuss later.

Child labor in Factories During the Industrial Revolution

Children don't currently work, how is this relevant? Children also likely didn't negotiate, businesses knew they wouldn't, and they weren't considered consumers.

You failed to address my other point, which still stands, especially since child labor has been banned for many years. You clearly don't know how the economy works.

Yes, but it has done so because rules were introduced in the market system which regulated child labour.
Which is my point. The fact that the US has a functional society that is because rules and regulations exists.
You want to know how unfettered capitalism looks? Well , take a look at the working conditions of the early industrial revolution.
And no, at that time companies didn't have to pay their employees enough, because england was going through and export boom and companies were not interested in having their products bought by their employees.

Now, given the oposite situation: IF ( and this is a big if) employees have enough to buy a home, feed their children, educate them and give them medical care, and have some vacations then I have no problem with some people getting richer.

I do have a problem when this doesn't happen and when household debt rises and average wages and employment ratios start to fall.

If their products aren't bought by their employees, they lose money, and also if employees aren't paid enough, they can work for their competition. Any way you look at it, they have no reason to treat employees badly.

The government didn't need to abolish it, it at least helped keep their family out of debt when needed, the parents just needed to help negotiate pay.