16 Oct 2012, 11:01 am
16 Oct 2012, 11:31 am
16 Oct 2012, 12:54 pm
TM wrote:
marshall wrote:
I thought supply and demand always set wages to match productivity. Therefore if you're poor it's because you're unproductive.
It does, but you're oversimplifying. The demand for people who can perform a heart transplant is higher than for people who can grab their junk, because the ability to perform a heart transplant is in lower supply than people who can grab their junk.
I may not be as well versed in all the details of textbook neoclassical economics as you (I'm in the process of learning) but I'm not an idiot.
Your statement is true when we are talking about skilled professions that are in demand. This is because through demand, skilled professionals have the bargaining power to be their own agent. Before the industrial revolution the economy was dominated by skilled craftsmen who had the bargaining power to be their own agent. Mass production changed all this, shifting the bargaining power to those who own capital, placing more and more people into jobs that could theoretically be done by a robot. Does neoclassical economics somehow derive that an owner or CEO may be a hundredfold times more productive than an average wage earner? I've heard some make this claim and I would assume it holds up even in the case of the infamous absentee landlords during the Irish Potato famine.
16 Oct 2012, 1:14 pm
marshall wrote:
TM wrote:
marshall wrote:
I thought supply and demand always set wages to match productivity. Therefore if you're poor it's because you're unproductive.
It does, but you're oversimplifying. The demand for people who can perform a heart transplant is higher than for people who can grab their junk, because the ability to perform a heart transplant is in lower supply than people who can grab their junk.
I may not be as well versed in all the details of textbook neoclassical economics as you (I'm in the process of learning) but I'm not an idiot.
As I've recently had a couple of discussions that went haywire, in part I'm sure to my tendency to assume that everyone knows what I do and think like me, I'm trying to take precautions.
Marshall wrote:
Does neoclassical economics somehow derive that an owner or CEO may be a hundredfold times more productive than an average wage earner? I've heard some make this claim and I would assume it holds up even in the case of the infamous absentee landlords during the Irish Potato famine.
I'm not entirely sure if the following is from neoclassical economics or another school (sorry haven't slept for 36 hours so I do apologize if this is somewhat incoherent at times) but it goes something like:
A capital owner (in this case an factory owner, a land owner etc) is productive through delaying his own gratification (gained from spending money now) in order to receive more at a later time (through allocation of capital to a productive activity) due to this part of the resulting production can be attributed to the owner.
I can elaborate later, but right now I need some sleep as I can't really think straight.
