Is capitalism exploiting you?

[simon12]

Here's the video saying it is:

Here's my response:
The employee is exploiting the capitalist's capital to maximise the value of there labour which would be worthless without the capitalists money/capital that they had to risk and likely alot of there own labour which they have not yet got any payment for. The employee can just walk in and demand a regular wage they get even at times the capitalist could be making a loss, they even get holiday and sick pay. They are also exploiting the serving staff etc to make there labour be worth anything the capitalist has to put there time in to organise it all so that everyone labour is worth more than it could be without them and there capital, they get all there accounts, tax and red tape done for them to further maximise the value of there labour. They get to use a kitchen and equipment made by other peoples labour.
I'm not saying that the employees are truly exploiting anyone just that if there are (and there are) problems with capitalism using a 1 man owned burger restaurant is a terrible example as basically the owner is maximising all there employees labour value and are the only person taking a serious risk. Specifically in this very over simplified video the employee could just save $1000 and do it all themselves.
Just wondered what you all think of the video and my thoughts.

 

[chthon]

A one man owned burger restaurant: The Krusty Krab?

 

[Chippy_Tea]

I think we all know we get screwed but thankfully the minimum wage was introduced which helped the ones being screwed without the lubricant!

 

[Argentum]

The capitalist is not forcing you to work for a given wage. You do that voluntarily. There is no theft or exploitation.

The capitalist does not rob the bank accounts and/or property or life of employees when a business loss is suffered.

If you don't work, you must parasitically exploit those who do.

If you work for a wage via anyone or any organization or government at any level that does not have a profit motif you are de-Facto parasitically exploiting those who do work for companies that seek profits.

 

[Nicks90]

How can it be exploitative when 2 people enter in to a mutually beneficial contract voluntarily.
Party1 a provides a skill and labour for a set number of days/hours and party2 (or company) pays you a monetary compensation and benefits for the delivery of those services.
If party1 fails to deliver to the contracted terms and standards, party2 can terminate the contract. If party2 does not fulfil the compensation conditions (and that compensation often includes work environment), then party2 can terminate the contract. There can be legal recourse to either party if the contract is breached.
It's no different to you buying a pint at a pub. There is an implicit understanding that for £4 (insert local price here), you are entering in to a voluntary contract that the barman will pour you a pint that is a) what you ordered b) of a quality as laid down in various food and beverage standards and c) give it to you in a timely fashion.
If you dont pay, you're likely to get a kick in the teeth. If the beer doesn't tien up or is off, you'll get your money back.

All these whinging gits need to get a grip. Don't like your job/the Co tract you voluntarily entered in to? Leave

 

[dad_of_jon]

How can it be exploitative when 2 people enter in to a mutually beneficial contract voluntarily.
Party1 a provides a skill and labour for a set number of days/hours and party2 (or company) pays you a monetary compensation and benefits for the delivery of those services.
If party1 fails to deliver to the contracted terms and standards, party2 can terminate the contract. If party2 does not fulfil the compensation conditions (and that compensation often includes work environment), then party2 can terminate the contract. There can be legal recourse to either party if the contract is breached.
It's no different to you buying a pint at a pub. There is an implicit understanding that for £4 (insert local price here), you are entering in to a voluntary contract that the barman will pour you a pint that is a) what you ordered b) of a quality as laid down in various food and beverage standards and c) give it to you in a timely fashion.
If you dont pay, you're likely to get a kick in the teeth. If the beer doesn't tien up or is off, you'll get your money back.

All these whinging gits need to get a grip. Don't like your job/the Co tract you voluntarily entered in to? Leave

fair enough, it's a 2 way street. I have a choice many I suppose don't. What I find unfair is doctor vs mechanic. both potentially have your life in their hands. yet a doctor earns more than a mechanic. A mechanics single mistake could lead to a larger loss of life than a doctor. I do know a doctor has to study for longer but if there weren't many mechanics their salary would perhaps surpass doctors? - supply & demand doesn't always equate to the usefulness of an individual.

 

[simon12]

fair enough, it's a 2 way street. I have a choice many I suppose don't. What I find unfair is doctor vs mechanic. both potentially have your life in their hands. yet a doctor earns more than a mechanic. A mechanics single mistake could lead to a larger loss of life than a doctor. I do know a doctor has to study for longer but if there weren't many mechanics their salary would perhaps surpass doctors? - supply & demand doesn't always equate to the usefulness of an individual.

In this country the NHS decides what the pay of a doctor is (at least most of the time) not the free market. I also would say that I agree the fault of a bad mechanic could cause a bigger single incident but a bad doctor would cause more death over time. Also this has nothing/little to do with the original post but I do like your thinking.

 

[foxy]

Here's the video saying it is:

Here's my response:
The employee is exploiting the capitalist's capital to maximise the value of there labour which would be worthless without the capitalists money/capital that they had to risk and likely alot of there own labour which they have not yet got any payment for. The employee can just walk in and demand a regular wage they get even at times the capitalist could be making a loss, they even get holiday and sick pay. They are also exploiting the serving staff etc to make there labour be worth anything the capitalist has to put there time in to organise it all so that everyone labour is worth more than it could be without them and there capital, they get all there accounts, tax and red tape done for them to further maximise the value of there labour. They get to use a kitchen and equipment made by other peoples labour.
I'm not saying that the employees are truly exploiting anyone just that if there are (and there are) problems with capitalism using a 1 man owned burger restaurant is a terrible example as basically the owner is maximising all there employees labour value and are the only person taking a serious risk. Specifically in this very over simplified video the employee could just save $1000 and do it all themselves.
Just wondered what you all think of the video and my thoughts.

Couldn't disagree more with Wolff, without capitalists there wouldn't be jobs, not everyone can become a capitalist it is left to the minority. Large corporations depend on investors, investors want a return on their money. If the return isn't lucrative the investments go elsewhere. Wolff himself is exploiting everyone who watches his video. I think Kevin Bridges sums it up nicely, it isn't the rich who keep the economy going it is the working class. Who buys the burgers? The working class. The rich are the careful ones when spending money, they try not to spend it. Kevin Bridges 'The Whole Different Story' towards the end.

 

[Binkei Huckaback]

The rich are the careful ones when spending money, they try not to spend it.

And the very rich spend their money on accountants who come up with clever wheezes to avoid paying their taxes.

 

[foxy]

And the very rich spend their money on accountants who come up with clever wheezes to avoid paying their taxes.

Of course, but not illegal. Opportunity is there for everyone to grasp. Just have to take the chance, if you don't just suck it up.

 

[MickDundee]

And the very rich spend their money on accountants who come up with clever wheezes to avoid paying their taxes.

Which is one of the reasons I stopped working in accounting practice.

All these whinging gits need to get a grip. Don't like your job/the Co tract you voluntarily entered in to? Leave

Aye, because it’s that easy just to walk away from an employer that treats you like ***** without another job to go to. You aren’t even entitled to benefits for 6 months if you voluntarily leave a job.

 

[DCBC]

I have a huge amount of time and respect for Prof Wolff and I have been following his Economic Update podcast for a few years now. I don't expect many in this forum to agree especially given some of the debates there have been recently but my 2 cents anyway!

The problem with the (very reasonable sounding) argument that the burger restaurant's capital investment and risk and that the employee is actually the one who has the job security is twofold.

Firstly, the more money you have, the more likely you are to be able to take a risk, and the more you will be able to throw at a failing venture to turn it around:

Wealth begets wealth. If I inherit a million pounds and decide to open a burger restaurant I can seed it with more capital, spend more on marketing and influencers, and critically, I can keep investing in it if it has not been profitable for much longer than my friend who has an equally good (or better) idea and has to borrow in order to start his, or invest everything he has in the hope. How often have we read 'success' stories on news sites where the (now) multi-million/billion dollar business was within days of folding before they got the break they needed ... and "the rest is history". The more capital a business can attract the more likely it is to succeed. This is before we even start thinking about chain restaurants. The likes of McDonalds operate such tight supply chains with such economies of scale they they only need to make a few pence on the pound in profit in order to be able to be successful. Most cannot compete. That's not because McDonalds burgers are better than others, they are about the worst you can buy, but they have the wealth behind them that it's easy to open more and more restaurants and squeeze everyone else out. Opening a new restaurant is simply not a meaningful risk to them anymore, and hasn't been for a very long time.

What this means in reality is that my friend who works for someone else for not very much money who has the great idea for a restaurant of his own doesn't even bother to open one. He knows the chances of success are so low and the startup costs so low that he can't afford to put himself and his family at that much risk. This traps people in the employment of others as a whole (of course individuals can break out of the cycle, but few do and it's getting harder) and we know that real world wages are shrinking. Today’s average hourly wage in the USA has just about the same purchasing power it did in 1978 despite the economy increasing in size many times over. This simply isn't sustainable. Less real-world money in the pocket coupled with rising house prices, shrinking pensions and less job security traps people in crap jobs which pay nothing because they can't take the risk of missing even a month's pay because it may only be that pay between them and their family becoming homeless. For the same reason, very few people can afford to simply 'walk away' from a job.

Secondly, and relatedly, job security to many is hardly a luxury. If my burger restaurant is struggling, I have many levers I can pull to try to improve profitability. I can raise prices, negotiate better wholesaler or rent rates, freeze salaries. I can take out a loan to invest to hopefully improve profits in the future... or I can make redundancies. Quite simply, I can put people out a job in order to keep my own business going. That's perfectly legal in our society, but you can't argue that the risks of my business are falling on me alone. The meaningful risks inherent (loss of income) in my business model are much more likely to hit my employees and their earnings before they ever hit mine.

 

[foxy]

I have a huge amount of time and respect for Prof Wolff and I have been following his Economic Update podcast for a few years now. I don't expect many in this forum to agree especially given some of the debates there have been recently but my 2 cents anyway!

The problem with the (very reasonable sounding) argument that the burger restaurant's capital investment and risk and that the employee is actually the one who has the job security is twofold.

Firstly, the more money you have, the more likely you are to be able to take a risk, and the more you will be able to throw at a failing venture to turn it around:

Wealth begets wealth. If I inherit a million pounds and decide to open a burger restaurant I can seed it with more capital, spend more on marketing and influencers, and critically, I can keep investing in it if it has not been profitable for much longer than my friend who has an equally good (or better) idea and has to borrow in order to start his, or invest everything he has in the hope. How often have we read 'success' stories on news sites where the (now) multi-million/billion dollar business was within days of folding before they got the break they needed ... and "the rest is history". The more capital a business can attract the more likely it is to succeed. This is before we even start thinking about chain restaurants. The likes of McDonalds operate such tight supply chains with such economies of scale they they only need to make a few pence on the pound in profit in order to be able to be successful. Most cannot compete. That's not because McDonalds burgers are better than others, they are about the worst you can buy, but they have the wealth behind them that it's easy to open more and more restaurants and squeeze everyone else out. Opening a new restaurant is simply not a meaningful risk to them anymore, and hasn't been for a very long time.

What this means in reality is that my friend who works for someone else for not very much money who has the great idea for a restaurant of his own doesn't even bother to open one. He knows the chances of success are so low and the startup costs so low that he can't afford to put himself and his family at that much risk. This traps people in the employment of others as a whole (of course individuals can break out of the cycle, but few do and it's getting harder) and we know that real world wages are shrinking. Today’s average hourly wage in the USA has just about the same purchasing power it did in 1978 despite the economy increasing in size many times over. This simply isn't sustainable. Less real-world money in the pocket coupled with rising house prices, shrinking pensions and less job security traps people in crap jobs which pay nothing because they can't take the risk of missing even a month's pay because it may only be that pay between them and their family becoming homeless. For the same reason, very few people can afford to simply 'walk away' from a job.

Secondly, and relatedly, job security to many is hardly a luxury. If my burger restaurant is struggling, I have many levers I can pull to try to improve profitability. I can raise prices, negotiate better wholesaler or rent rates, freeze salaries. I can take out a loan to invest to hopefully improve profits in the future... or I can make redundancies. Quite simply, I can put people out a job in order to keep my own business going. That's perfectly legal in our society, but you can't argue that the risks of my business are falling on me alone. The meaningful risks inherent (loss of income) in my business model are much more likely to hit my employees and their earnings before they ever hit mine.

Disagree with that, it isn't just those with capital behind them. I would say the majority start a business on borrowed money. This would mean that the collateral involved is at risk if the business fails. Some and often most put up their family home to start a business . I have seen many lose the lot, having the confidence in their ability to succeed is what drives a business forward, nothing else. The majority of people will not take the chance, that is why there will always be leaders and followers.

 

[Binkei Huckaback]

Of course, but not illegal. Opportunity is there for everyone to grasp. Just have to take the chance, if you don't just suck it up.

Just because you can, doesn't mean you should. And no, the opportunity to avoid taxes legally isn't open to everyone.

And I wouldn't mind betting you are completely outraged by people the media label as 'benefit cheats'.

 

[The-Engineer-That-Brews]

I have a huge amount of time and respect for Prof Wolff and I have been following his Economic Update podcast for a few years now. I don't expect many in this forum to agree especially given some of the debates there have been recently but my 2 cents anyway!

The problem with the (very reasonable sounding) argument that the burger restaurant's capital investment and risk and that the employee is actually the one who has the job security is twofold.

Firstly, the more money you have, the more likely you are to be able to take a risk, and the more you will be able to throw at a failing venture to turn it around:

Wealth begets wealth. If I inherit a million pounds and decide to open a burger restaurant I can seed it with more capital, spend more on marketing and influencers, and critically, I can keep investing in it if it has not been profitable for much longer than my friend who has an equally good (or better) idea and has to borrow in order to start his, or invest everything he has in the hope. How often have we read 'success' stories on news sites where the (now) multi-million/billion dollar business was within days of folding before they got the break they needed ... and "the rest is history". The more capital a business can attract the more likely it is to succeed. This is before we even start thinking about chain restaurants. The likes of McDonalds operate such tight supply chains with such economies of scale they they only need to make a few pence on the pound in profit in order to be able to be successful. Most cannot compete. That's not because McDonalds burgers are better than others, they are about the worst you can buy, but they have the wealth behind them that it's easy to open more and more restaurants and squeeze everyone else out. Opening a new restaurant is simply not a meaningful risk to them anymore, and hasn't been for a very long time.

What this means in reality is that my friend who works for someone else for not very much money who has the great idea for a restaurant of his own doesn't even bother to open one. He knows the chances of success are so low and the startup costs so low that he can't afford to put himself and his family at that much risk. This traps people in the employment of others as a whole (of course individuals can break out of the cycle, but few do and it's getting harder) and we know that real world wages are shrinking. Today’s average hourly wage in the USA has just about the same purchasing power it did in 1978 despite the economy increasing in size many times over. This simply isn't sustainable. Less real-world money in the pocket coupled with rising house prices, shrinking pensions and less job security traps people in crap jobs which pay nothing because they can't take the risk of missing even a month's pay because it may only be that pay between them and their family becoming homeless. For the same reason, very few people can afford to simply 'walk away' from a job.

Secondly, and relatedly, job security to many is hardly a luxury. If my burger restaurant is struggling, I have many levers I can pull to try to improve profitability. I can raise prices, negotiate better wholesaler or rent rates, freeze salaries. I can take out a loan to invest to hopefully improve profits in the future... or I can make redundancies. Quite simply, I can put people out a job in order to keep my own business going. That's perfectly legal in our society, but you can't argue that the risks of my business are falling on me alone. The meaningful risks inherent (loss of income) in my business model are much more likely to hit my employees and their earnings before they ever hit mine.

Very thoughtful reflections there

 

[foxy]

Just because you can, doesn't mean you should. And no, the opportunity to avoid taxes legally isn't open to everyone.

And I wouldn't mind betting you are completely outraged by people the media label as 'benefit cheats'.

But it is open to everyone! If you chose to work and make someone else rich that is your choice. There are those who wish the opposite to employ those who wish to be employed and enjoy the fruits of their labour. That is how the system has worked for hundreds of years, why change it. There will always be the employer and employee.

 

[DCBC]

Very thoughtful reflections there

Thanks :) I wasn't meaning to make it that long, still, I don't wade into these sorts of debates much so I've just been saving up my words maybe!

 

[MickDundee]

But it is open to everyone! If you chose to work and make someone else rich that is your choice. There are those who wish the opposite to employ those who wish to be employed and enjoy the fruits of their labour. That is how the system has worked for hundreds of years, why change it. There will always be the employer and employee.

Your “average Joe” doesn’t have the means to enter into most of these tax avoidance schemes though.

The only thing that is open to them if they have their own business is to structure their company so that they take their personal allowance in salary and the rest in dividends (or even better through the “repayment of directors loan”).

But these people are usually small business owners with a handful of employees and aren’t saving tens, or even hundreds, of thousands in tax like those were able to who sign up to the likes of the K2 scheme (that’s the one that was all the rage when I left accounting practice that Gary Barlow and Jimmy Carr got bad press over) in the past.

In fact many small company owners who set themselves up as a company in that way got scuppered through COVID because they could only claim furlough/support on their salaries and not the dividend element.

 

[marshbrewer]

Quite simply, I can put people out a job in order to keep my own business going. That's perfectly legal in our society, but you can't argue that the risks of my business are falling on me alone.

I would argue that is a misunderstanding of employment, and business risk. Employment is a contract between employer and employee that the employee will receive 'x' in benefits (wages, pension, whatever) for 'y' amount of work. If an employee is made redundant, they are not loosing anything for work carried out, the contract is terminated and no future work / benefit relationship exists. Whilst this is unpleasant for many employees, it isn't the same as business risk, where a business owner will invest resources in the hope that they will flourish and increase in value, but risks loosing all or some of them if the business fails.

So you can argue that the risk falls on the business owner alone.

 

[The-Engineer-That-Brews]

When I was at Uni about a gazillion years I shared digs with a mate doing Politics and Modern History, focussing on the history of political thought. We had a lot of late and beer-fuelled evenings talking about this stuff, and I read a few of the books on his syllabus.

One thing's for sure, it's a subject that's been driving philosophy and debate for a very long time and will continue to do so for the foreseeable future - especially as the nature of work and people's expectations around it are evolving so rapidly. I also learned that the historical background was a heck of a lot more complicated than I'd previously imagined; and I wish that I'd been taught more about this at school instead of endless date-learning about the Napoleonic wars (yawn).

IMHO a lot of the best reflections on this whole question of the wants and needs of individuals versus the power of employees and the State, come from the early days back when many European nations were struggling with the evolution from monarchies founded on feudal agrarian systems. This was the time of the early industrial revolution, where vast numbers of people were migrating from the land to work in the factories. This caused some fundamental re-alignments in the dynamics between state, society and the church that are still playing out. There are some cracking books and essays dating from that time - I'd particularly recommend Leviathon by Thomas Hobbes and On Liberty by John Stewart Mills - or even just a quick scan of their Wikipedia entries (linked).