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Notes -
Thanks to everyone who answered my hypothetical about the startup.
General opinion seems to come down to ‘you don’t owe them anything but a decent sum of money would be a gentlemanly / ladylike show of gratitude. Which seems about right to me.
One of the reasons I’m interested in the question is that much social conflict comes from the discrepancy between the market value of labour (determined primarily by the number and type of people able to do the work) and what you might call the utility value (determined by how important it is that the work gets done. For example, @PutAHelmetOn’s code saves hundreds of thousands in processing costs, farmers stop everyone dying of famine, longshoremen make it possible to have international trade (modulo automation).
I would say the primary economic conflict of the last two hundred years is that the employees think in terms of the utility of their work while customers and employers think in terms of the market value.
Trade unions and guilds have historically been used as a method of arbitrage between these two values, limiting competition to drive market value closer to utility value. And the communist states show pretty clearly to my that trying to base your society on something other than the market value causes problems. I suppose the welfare state is basically ‘we don’t owe you this money but we’re going to give some of it to you anyway’.
Would like to write an effort post but this is what I have for now.
(Meta: is it obnoxious to do multi-top-posts like this? I didn’t want to talk about these ideas right away because I felt it would bias the replies, but at the same time it seems like a waste to write this as a second level reply in an old thread just before the new CW thread opens up).
The idea that utility value and market value are different is a fundamental economic misconception.
Market prices reflect real resource shortages and tradeoffs. "Important" jobs are often paid low because many people can do it.
Or as Dr. Kersten points out, there are many positions which are necessary but not important, like a gear in a watch -- vital yet easily replacable.
I think what Corvos is calling "utility value" is price at which consumer surplus reaches zero. That's definitely different than (and much higher than) "market value".
Yes, and it has to be this way because anyone providing me a necessary service must be paid less per person that I am paid. Otherwise I can’t afford those necessary services.
For example, I am dependent on food (farmers, truckers, shelf stackers etc.) to live. If those people are too well paid, I can’t afford to eat. So it seems that, most of the time, it’s a prerequisite for civilisation that people doing necessary jobs are paid less than people doing unnecessary jobs. Which is very awkward for society.
Err, no. This would only be true if those people were providing you AND ONLY YOU the necessary service. In actual fact, farmers, truckers, and shelf stackers provide services to many people.
Sorry, I’m thinking out load and so not always clearly. What I mean is that I physically can’t spend more than my total salary on basic necessities. Society requires that basic necessities be cheaper than skilled/intellectual work - if they aren’t cheap, society doesn’t function and everyone has to be a subsistence farmer.
The more fundamental the work, the more we have to drive the price down for our civilisation to remain functional. More physical work is resistant to automation is various ways (robots can’t interact with complex objects / human environments so no robot nurses, truckers, shelf stackers etc.) and the end result is that you have many low-paid physical labourers who notice that they are being paid badly for doing very necessary jobs while others are being paid better for sending emails. Before, of course, these jobs were done by peasants and slaves, so you had the same problem.
I can’t see a better solution but it always causes problems for social cohesion imo.
The requirement is that the cost of the basic necessities for a person is less than their pay. This says little, however, about the pay of those providing the basic necessities. And it is certainly not true that that work is particularly resistant to automation -- the work that remains perhaps is, but that's purely survivorship bias. We provide a lot more necessities with a lot fewer people (farmers especially) than we did in the past.
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