Re: Wal-Mart and Wages?

From: wilfred (wilfred_at_europe.com)
Date: 07/22/04 

Date: Thu, 22 Jul 2004 21:48:45 +0100

"Albert" <alwagner@tcac.net> wrote in message
news:20040722104054.2dbe0d43@lfs.mydomain.com...
> "wilfred" <wilfred@europe.com> wrote:
>
> > "Albert" <alwagner@tcac.net> wrote in message
> > news:20040721173958.6b2efa3e@lfs.mydomain.com...
> > > "wilfred" <wilfred@europe.com> wrote:
> > >
> > > >
> > > > "Albert" <alwagner@tcac.net> wrote in message
> > > <snip>
> > > > > It's, of course, up to the individual firm to decide what
> > > > > is the greatest good: (1) A bigger slice of the existing
> > > > > pie(probably spit in) or (2) a smaller piece of a bigger
> > > > > and better pie.
> > > >
> > > > For the individual firm, the largest slice. Why should we
> > > > expect firms to be altruistic, especially in competative
> > > > situations?
> > >
> > > I am not arguing for altruism. I am arguing for cooperation
> > > and justice in distribution of earnings. Income should be in
> > > proportion to contribution to production. Are you going to
> > > make the lame argument that dumb, lazy workers need the
> > > intelligent, enthusiastic capitalists to supply them with
> > > cushy jobs?
>
> Let's back up a moment and clarify. I suspect that we are closer
> that this dialog indicates.
>
> > No. I'm arguing that firms will inevitably choose the 'largest
> > bit of pie' under a market system.
>
> I agree with a qualification: firms with short term goals will
> indeed choose the larger piece of the current pie; However, a
> longer term strategy would, in some cases, yield more profit
> overall, even if that greater dollar amount was a smaller piece
> of a larger pie.

Okay, largest slice over a given time frame.

> The reasons for the current predominance of short term goals is
> another worthy topic.

Uncertainty over long term strategy? Firms aiming to maximise share price
rather than revenue/market share or good old sustained profit? There's no
end of explanations, but there we're going into armchair psychology, rather
than predominantly institutional explanations.

> > You've gone from arguing
> > that increased wages leads to increased production (without an
> > upper boundary),
>
> True, I didn't specify an upper boundary, though you are correct
> that there must logically be one. However, knowing that there is
> an upper boundary is not an argument for not moving as far in
> that direction as is possible.

Subject to maintaining the maximum level of profit, the question of
wages/productivity should be second order. To argue that simply raising
Wal-Mart's wages would neccesarily increase their profits *without caveat*,
as has been stated, is nonsensical.

> > to arguing that firms ought to consider their
> > effects on the wider economy, which is an unrealistic
> > assumption unless this increases their own returns.
>
> Yes, as a matter of survival, a firm ought to consider their
> effect on the wider economy. As an artifice allowed, subsidized
> and chartered by the host community, they are under a moral
> obligation to play by rules that have a net benefit to the host
> community. When a firm becomes a net liability to the host
> community, then they no longer have any justification for
> existence. They have thereby become a parasite reducing overall
> productivity of the host. The fact that cancer cells are
> cooperating with each other and are thriving within the host is
> no justification for giving them carte blanc.

Ethics, not economics. Not my beef.

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