Originally Posted by wibblefox
I wondered why you had made the subtle change to unions, now I see why, your argument hinged on it being a union.
We are talking about a government mandated pay rise, you can't barter with the gov't over this one. If they are pushed in to the red, then they are pushed in to the red.
If they can magically increase their producitivity to somehow stay afloat, they are free to do that lol.
To be totally clear, I never was talking about mandatory minimum wages as the means by which wages were increased. You guys made the switch when I was talking about unionization, I just replied as if you never decided to switch what we were talking about.
Originally Posted by wibblefox
Unfortunately that's unrealistic. What you actually do is steal money from people that have already invested (aka the only people who are likely to invest).
What's not realistic? That was all well within the bounds of possibility. If you mean to say you don't agree with the moral tone I had when I wrote that bit of the hypothetical scenario, just say that instead of trying to argue what I said isn't realistic.
It's interesting when people say "steal" as if you broke into their house and lifted their piggybank, when in reality it's market forces and the consent of the entirety of society that causes inflation.
That aside, I don't know if I understand what you're trying to get at. You don't think that people invest to shield their savings from inflation? How does inflation make investment less likely, as you imply?
It doesn't, and you're just trying to frame reality to fit your moral values.
Originally Posted by wibblefox
Quite an assumption.
The purchasing power of the dollar decreases, wage costs increase, yet somehow profit margins stay the same? Not really possible.
I suppose this can be ignored, since my entire scenario was around the unionization of a factory and not a centralized minimum wage hike.
Originally Posted by wibblefox
Again, you assume that J can simply increase production despite now making less money and that money being worth less. Even if they are somehow in the green, that margin is decreased. They could try and scrape by with new hires, but it is not a good situation at all.
Except that their profit margins per product were reduced, and they NEEDED to make more sales because inflation had devalued the dollar.
This too.
Originally Posted by wibblefox
The idea that producers can infinitely increase production and infinitely reduce spending is ridiculous.
I know right, that'd be fucking insane lmao. Anyone who actually believes that must be an absolute dunce.
You really like extrapolating everything you hear to infinity, don't you?
Imagine you can make 50 loafs of bread in a single 8 hour day, but since you will only be able to sell 20 of them you don't. Then, for various reasons, business picks up and you begin buying the necessary materials to make 50 loafs. Productivity increased, but it wasn't magic. The potential was always there, but there was no sound financial reason to make the extra 30 loafs.
Of course the idea of infinitely reducing spending is a silly notion ( 50-infinity is =
), but I never relied on that kind of trick to make my scenario work, and I never implied it was possible. It should go without saying that nothing is perfect, so it should seem pretty reasonable that the average small business could, when pressured, make some alternate spending decisions and change the way their business operates in order to be more successful. Can I just say, like I mentioned to Surf in my last post, I bit because this seemed like an interesting conversation to have. It is an extreme buzzkill when you do silly things like extrapolate very reasonable situations and concepts to absolute infinity, be totally dishonest, and argue entirely on semantics and meaningless points, instead of my big picture claims. There's no reason we can't come away from this with different perspectives.
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hey you know this really has nothing to do with the presidential election at all, should we make some sort of current events megathread or something
Last edited by pouffy; Oct 3, 2016 at 04:07 AM.
Reason: <24 hour edit/bump
Originally Posted by Surfings
By infinitely reducing, it doesn't mean "50-infinity" (because infinity isn't a number, it's a concept). It means that 50 will infinitely decrease, never hitting zero but constantly going lower (refer to asymptotes).
I'm a bit busy, sorry for the short replies, but this part just stuck out to me.
no worries, it was supposed to be a dumb joke. i'll never use
seriously. I was just poking fun at the idea that pig thought I ever intended to imply that they could infinitely reduce spending
Originally Posted by wibblefox
Perhaps you did a poor job of expressing that you were talking solely about unionisation if everyone thought we were talking about raising the minimum wage and it took a dozen posts for you to correct anyone...
Your initial statement was poorly worded but I can see what you were trying to say.
"at the same time that the country is heavily de-unionizing...when the little men get together to try getting better working conditions/compensation from the big man, it works. That's also why when the little men don't get together, they get lower wages and increased benefits."
I think I was pretty clear. Sorry about the confusion, anyway.
Honestly after discussing this with you I'm convinced against federal minimum wage hikes. I had ambivalent feelings about them before, but I'd much prefer heavy unionization. Equalizing the power both parties (employer and employees) have and letting the market take care of the rest is bound to be more effective and efficient than mandating wages from an apathetic city in the sky. So yeah, don't mistake me as arguing for it.
Originally Posted by wibblefox
Do you think that realistically the average person invests in stocks and bonds?
Uh... yeah. I know less people that invest in bonds than stocks, but yeah. I mean, the average person currently doesn't, but I know pretty average people who do, if that makes sense.
Besides, that's neither here nor there. Arguing that average people don't invest instead of arguing against the idea that inflation drives investment is kinda silly. It's a separate issue entirely, and I don't think it's beyond the bounds of reality to suggest that we could teach people about stocks and bonds.
Originally Posted by wibblefox
You also assume prices won't rice, currency won't inflate, and that the job person B does can support his now increased wage with no associated increase in productivity.
They won't, because just the one factory is unionizing right now. If another factory unionized later, it wouldn't happen then either. I mention this later, but the companies don't exist in a vacuum. They might be able to increase prices a little, but if they increase them too much then they can't stay competitive. So, they really do just have to accept decreased profit margins. (which isn't the worst thing in the world)
Originally Posted by wibblefox
Not true, it is stealing.
Since you don't get how this scenario works, let me give you a simpler one:
Say you want to buy a house, you save for 5 year and have $500,000 - just enough for your dream house. The government then decides to print more money, inflation rises. Now the house you want costs $1,000,000, you got fucked by the government, but is it stealing?
In short, money has value because it can purchase things. The government is using their newly printed money to buy things. Since the actual purchasing power of the system has not decreased, the government has essentially stolen money from everyone and used it for their own purposes.
Deliberate inflation is stealing, and it is stealing from people who are saving money. Deliberate inflation does not encourage saving.
Don't forget that the increase in the money supply only led to inflation because that was in line with the spending preferences of the country. If people saved that money, inflation wouldn't have happened. If they used that money to utilize non-working resources in the country, inflation wouldn't have happened.
Also, who in the world saves money to buy a house in cash? The vast majority of people would go into debt to buy the house, which wouldn't at all be a problem for me if I had the job to support saving for a half a million dollar house anyway. In short: I'm an idiot because I tried to save half a million dollars to buy a house instead of going into debt.
Let's also not forget that the biggest driver for change in the money supply is actually fractional reserve, which means that the money supply really only significantly increases (or decreases) when that increase is in line with the spending and debt preferences of the country. Who's the thief then? Can society at a whole be a thief, or is that then just natural forces of the economy that you were blind to?
Originally Posted by wibblefox
Same thing applies.
If you increase the cost of running a factory, then to maintain the same profit margins they need to either increase the price of their wares, or increase productivity.
As it is generally accepted that a factory already tries to maximise productivity, you cannot simply raise it indefinitely. As a result, anything the factory produces needs to be more expensive or, worst case, they need to take drastic measures eg closing down, downsizing, selling the company, etc.
The purchasing power of the dollar hasn't actually gone anywhere - the one factory unionized, and because they don't exist in a vacuum, they ate the profit margin decrease because they needed to stay competitive. There are other car manufacturers too, don't forget, so the forces of the free market still applies.
They didn't maintain the same profit margins, but they didn't need to. They were well off before. I'm sure products became slightly more expensive from that one factory to try to make up for some of the profit margin loss, but there's on the whole there's no mass increase in prices.
You're pretending like it's a decree from god that profit margins need to be totally static, when it's not. There's 0 inflation if wages increase and the company eats smaller margins. There might be some short term inflation later when the velocity of money picks up in that area, but not directly.
It's not realistic to wish for that scenario, but it's not impossible and does't have to be done to that scale (it is possible to increase wages more than you increase prices - nothing has to be done in absolutes)
Originally Posted by wibblefox
This is called proof by induction - can it be done once? Can it be done twice? Can it be done infinitely. If you want to make the argument that you can simply increase production (aka doing more work for the same money) to eat costs of increased labour, you need to realise that it is not a general solution.
I can make 2 baseballs in a day, okay I can make 4 baseballs a day, okay I can make an infinite amount of baseballs a day...
The US government can run a half a trillion dollar surplus one year... then the next year... then infinitely...
oh wait, neither of those work. The first two actions on each are totally possible, but I run out of hours in a day for the first one and the country's population is eventually left with absolutely no government IOUs in the second one. What happened
Been a couple years since I'd taken a proper math course so I had to google it, yeah that doesn't apply to every real world situation and you know it.
Although tbh actually don't know if I put that kind of action into my scenario at all. With manufacturer I I had them marginally increase production and increase price by N... (I also included that they would need to hire person D or something if they wanted to increase production more). I included that person E tried to do that with his business and went under... Where are you pulling this from? Is this a strawman based on your insistence that I'm talking about unionizing the entire city at the same time (when I'm in fact not)?
Originally Posted by wibblefox
Maybe in some cases you can increase production, but in the vast majority of cases you cannot. Almost every business hires what they need, they do not have a spare X% of production underutilised without reason. Sure during crunch they will go above and beyond, but you cannot do this forever.
For most businesses, they work at capacity. Even a normal real world bakery has as many staff as they need, and no more. And by the way you seem to think bakery work is piss easy and can scale indefinitely, not sure where you got that idea from :L
Hell nah dude, I know people who work at a bakery and making bread for the family is a hobby of mine. Can take a while. I live in a pretty small town (~10,000 population), though, so I based my scenario off that scale. Should be pretty realistic for a one man show to have relatively variable production.
Again, I never implied it could continue forever, just that it could continue until point x, where I even noted that hiring would need to happen for it to continue past point x.
Another example is that I work the front end at a grocery store right now. What would happen if 20% more customers walked in the doors this month than last month? It'd be much busier up front, the store would need to order more from the manufacturers. Is that sustainable? Sure, absolutely it is. There's a ton of idle time up front because rushes come and go. If more people came, the rushes would be extended and it might be hella hectic for a few minutes, but ultimately people would just wait a few minutes longer in line with their groceries and we'd have less idle time before the next rush. Obviously after a point we'd need to have more cashiers on shift, but grey areas are everywhere.
Originally Posted by wibblefox
Ok, but you are forgetting something here aren't you?
Originally Posted by PouffywallThen, for various reasons, business picks up
If you only bake 20 because you can only sell 20, then just because you now need to bake 50 bread to break even, doesn't mean you actually can. You need to be able to sell that bread.
Originally Posted by PouffywallThen, for various reasons, business picks up
Realistically if you only have demand for 20 loaves of bread, that is all you will produce, and that is all the staff you will have. You will have someone work mornings part time. You will not have them work all day 8 hours doing nothing 60% of the time.
Originally Posted by PouffywallThen, for various reasons, business picks up
Do you get this? Just because you now need to make money, does not mean that there is more money to be made. If you can only sell 20 loaves of bread, then it does not matter if you make 50. However even if you don't make 50, you make 20 which you can sell, you lose profit - because the wage you pay has now increased.
Originally Posted by PouffywallThen, for various reasons, business picks up
How are you going to get back to your margin? The only way to do it is to increase the price of bread. And guess what? Everyone else is increasing the price of their products too, because even if they work in a market where there is infinite demand, and they can infinitely increase production, they want to not get fucked over by the increased cost.
Sorry, was probably a common mistake but I couldn't help having a bit of fun with it. Business picking up as in you're getting busier, as in there's increased demand for your product, as in your current demand supports making 50 loafs. This isn't really relevant either, though. Just to quote my original point.
Originally Posted by Pouffywall
Production increased, but it wasn't magic. The potential was always there, but there was no sound financial reason to make the extra 30 loafs [before]Originally Posted by Pouffywall,for various reasons, business pick[ed] up
Originally Posted by wibblefox
An average person <> The average person
If you base your argument around assuming people will act a certain way, you should be able to show that the behaviour is at least on average correct.
Do you do this on purpose? If I were a less agreeable person this entire post would just be me quoting myself to you.
You said it wasn't realistic that this average joe invested in stocks. I told you it was and that I knew average joes with the same behavior. The entire example was a cherry on top of my argument that inflation drives investment, anyway, so again: This is irrelevant.
Originally Posted by wibblefox
For many companies that means going out of business or outsourcing, as we have seen many times in the past.
As so is how the cookie crumbles. That's the free market for you. I'm all for supporting businesses all we can, but throwing the people under the bus because companies are supposed to be some sort of protected class is idiotic.
Originally Posted by wibblefox
Again such behaviour is not realistic. Even people that do save will not save indefinitely.
Though I think that inflation is inherent in the situation not resultant of specific spending habits...
Any behaviour that devalues currency steals from savings. I should think you know enough to answer your own question.
mv=pq
Total money supply * average number of times a dollar is used = average price of consumer good (sold) * total number of consumer goods sold
If M increases and V decreases, P, price, stays the same. Inflation doesn't happen. If M increases and Q increases, P, price, stays the same. Inflation doesn't happen. Ergo, if M increases then inflation happens as a result of the spending preferences of the country. Doubly so, since fractional reserve increases the effective money supply as people want to spend & go into debt more.
Very very basic macroeconomics, trying to troll here just makes you look silly.
Originally Posted by wibblefox
Thanks for the irrelevant comment
Only as irrelevant as your moral argument against my argument that inflation drives investment.
It also goes to show that since debt can be taken on and that you can retrospectively 'save' at the same time you reap the benefits of past investment, this is all kinda meaningless.
Originally Posted by wibblefox
Of course profit margins don't have to remain static, but you should realise that what you are doing is objectively bad for businesses. Profit made by the company will be put to use, it's not just sitting there. What's more you again fail to realise that not all factories can just eat loss like that.
Originally Posted by wibblefox
Of course they don't work, which is why I'm telling you that it is wrong to say that factories can infinitely increase productivity or infinitely decrease spending.
It is unprofitable at best, and the company will move elsewhere or dissolve.
I'm sick of telling you that I agree and that this argument has no bearing on absolutely anything I've argued, so I'll just stop replying to stuff like this.
Originally Posted by wibblefox
You based your scenario of a sale of 20 loaves off a town of 10,000?
rofl, no I based the first scenario off the scale of a town of 10,000. As in the very first one, as in person A.
Originally Posted by wibblefox
Sure, if you assume that business will pick up then it all works out..........
...what are you even arguing against?
first there was demand for 20 loaves, and then there was demand for 50 loaves. He could always have made 50 loaves if he wanted to, but they would have went to waste and he would have lost money. Productivity increased because the demand for product rose. Ta-da.
Originally Posted by wibblefox
where exactly is the link between unions demanding higher wages and increase in business? There is none, that's just fantasy....................................
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I'm sorry but it's way too late for me to bite (almost 4 am!!!), ask again tomorrow
Originally Posted by wibblefox
I don't buy that the baker could have been selling 50 loaves all the time but just couldn't be bothered lol.
He couldn't have pig, nobody would come in the doors because meanies like you were shittalking his business
meanie
Wow guys, that's a lot of wasted time and efforts trying to make sense out of something that doesn't. Just let it die.
