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11/21/13

This is pretty interesting. On Sunday, voters in Switzerland will be casting a ballot to determine whether executive compensation should be shackled to the wages of the lowest earner in a a given company. Known at the "1:12 Rule", the highest paid executives in a company would be allowed to earn no more than 12 times the annual income of the lowest paid worker in the same company. To put it in US banking terms, it would be like limiting Lloyd Blankfein's all-in comp to $312,000 because some poor bastard in the mailroom is only pulling down 26 grand a year.

The funny thing is, this referendum has a halfway decent chance of passing in Switzerland, where individual voters have much more power than they do almost anywhere else on Earth, and there is a palpable dislike for the widening wealth gap between the highest paid and the lowest paid.

Despite its high standard of living, Switzerland is a generally egalitarian country, increasingly unhappy with rising wealth inequality as wages of executives balloon while those of low-skilled workers lag.

"After the Second World War the growth of salaries and wealth was more or less parallel,"JUSO President David Roth told Reuters. "In the last ten years one small part of society took the big profits and the majority ... had less in their pockets."

The trend is catching on all across Western Europe. Spain is trying to enact the same policy, and French president Hollande is pushing a 20:1 ratio on companies where the French government has an ownership stake (which is pretty much all of them in one fashion or another). There are even calls for similar schemes in the US.

I'm just playing Devil's Advocate here, but which do you consider the more likely scenario in the event a measure like this passes: that CEO's will be willing to accept a fraction of their current comp, or that the wages of rank and file workers would increase dramatically? I'm not saying I'm in favor of something like this (because I'm certainly not), but it strikes me that this sort of social engineering might actually work.

Who would get hosed? Shareholders. Employees would love it because they'd make more money. This, in turn, would likely lead to better customer service, so customers would be happy. But shareholders would get the shaft because the bulk of the profits they've been collecting would be paid out in wages.

And then there's the obvious question that always comes up in this debate: how do you justify paying one person 450 times the salary of another person? Can you really make the case that Person A is 450 times as valuable as Person B? (Don't even attempt it, because you can't.) So at what point does the earnings gap become abusive? Is it 12:1? I'm pretty sure it isn't. 20:1? I don't think so. 100:1? Now you're getting closer.

What do you guys think? Would the world be a better place if the highest earners made no more than 12 times the lowest earners? Would it affect your work ethic? If not for something like this, how do we solve the wealth inequality problem?

It'll be interesting to see what comes out of Geneva this weekend...

Comments (203)

In reply to IlliniProgrammer
Best Response
11/21/13

Didnt realize those were the only relevant things to look at when comparing economies. I was stupid in thinking that maybe size and diversity mattered but I'm not a STEM grad from a fucking cornfield so what the fuck do I know.

If I had asked people what they wanted, they would have said faster horses - Henry Ford

11/21/13

Edmundo Braverman:
Can you really make the case that Person A is 450 times as valuable as Person B? (Don't even attempt it, because you can't.)

450 times valuable to a company or as a person in general? The former is easily justifiable while the latter is a little more murky.

Because I enjoy being pedantic and looking at fringe cases I will say a pediatric cancer doctor (or any person who reasonably contributes to society)is 450 times as valuable of a human being (at least) as a serial rapist. I would argue it's higher/not even measurable since the serial rapist serves 0 purpose.

For a company, the case you presented of that of a mail clerk is the perfect example. This person could be replaced by roughly 25% of the world's population, or even a robot, while the CEO of a major corporation is maybe one of a hundred thousand people on the planet who could fulfill that role. Not to mention to a shareholder that person is exponentially more valuable than the mail clerk.

I understand your sentiment though, and agree that no one is that much more valuable than another when it comes to rights being afforded to them. There are definitely people in finance/other fields who are 450+ times more valuable than others, especially since it is so quantifiable.

This to all my hatin' folks seeing me getting guac right now..

In reply to Cruncharoo
11/21/13

Cruncharoo:

Because I enjoy being pedantic and looking at fringe cases I will say a pediatric cancer doctor (or any person who reasonably contributes to society)is 450 times as valuable of a human being (at least) as a serial rapist. I would argue it's higher/not even measurable since the serial rapist serves 0 purpose.

You're assuming they're not the same person.

11/21/13

Wouldn't every company then just get their labor from a third party? Ie. C-suite becomes the only employees in the company. But the company then contracts with a third party provided who supplies labor. Problem solved.

11/21/13

Wouldn't every company then just get their labor from a third party? Ie. C-suite becomes the only employees in the company. But the company then contracts with a third party provider who supplies labor. Problem solved.

On second thought junior comp at buyside firms might skyrocket...

In reply to PuppyBackedSecurities
11/21/13

PuppyBackedSecurities:

Wouldn't every company then just get their labor from a third party? Ie. C-suite becomes the only official employees in the company. But the company then contracts with a third party provider who supplies labor. Problem solved.

On second thought junior comp at buyside firms might skyrocket...

In reply to PuppyBackedSecurities
11/21/13

PuppyBackedSecurities:

Wouldn't every company then just get their labor from a third party? Ie. C-suite becomes the only employees in the company. But the company then contracts with a third party provider who supplies labor. Problem solved.

On second thought junior comp at buyside firms might skyrocket...


exactly, or they just make the upper echelon a subsidiary or some type for the company as a whole.

If I had asked people what they wanted, they would have said faster horses - Henry Ford

11/21/13

I think anybody with a general understanding of economics knows that this would create wild distortions and, political affiliations aside, is pretty much a horrible idea.

In reply to happypantsmcgee
11/21/13

happypantsmcgee:

PuppyBackedSecurities:

Wouldn't every company then just get their labor from a third party? Ie. C-suite becomes the only employees in the company. But the company then contracts with a third party provider who supplies labor. Problem solved.

On second thought junior comp at buyside firms might skyrocket...

exactly, or they just make the upper echelon a subsidiary or some type for the company as a whole.

Who's gonna run the third party employment pool? That's gonna take a CEO making only 12 times the lowest paid worker.

11/21/13

It's nobody's business how much you choose to pay your people.

Metal. Music. Life. www.headofmetal.com

In reply to In The Flesh
11/21/13

In The Flesh:

It's nobody's business how much you choose to pay your people.

I think that was pretty much the Confederate party line in 1861.

11/21/13

The idea is idiotic, I am willing to guess that at most a handful of people who support this have given any consideration to what this would do to destabilize economies of large cities. If you have the heads of companies making only 12 or 20 times the lowest paid employees. When you consider that many of them have mortgages that cost more in a year than they would now be earning.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

11/21/13

Gotta love Europeans. Most lavish welfare society and still trying to make things "fair".

Lower rung worker wages aren't going to increase simply to bring CEO comp back up. They will simply do something that either skirts the law or violates its spirit. That or simply leave Switzerland. Real pretty country, but I am sure there are other places that would be much better HQ's.

I'll never understand people who obsess about CEO comp. Low run workers make shit, have always made shit, and always will make shit, because they do something easily replaceable. What is sad is all these laws meant to help workers do nothing but fuel the desire to outsource or automate. Just like jacking the minimum wage for fast food workers in the US would do nothing but usher in robots making us food. Which would be utopia as my Cosi bread would always be in the bag, always be fresh and soft and I would be happy.

On a side note I am sure low income robots wouldn't be playing a knock out game so please bring on the automation.

In reply to Edmundo Braverman
11/21/13

Not necessarily. No one will get health care anymore because everyone will be an independent contractor. You don't have to work for a temp agency be a contract worker.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

11/21/13

Edmundo Braverman:

I'm just playing Devil's Advocate here, but which do you consider the more likely scenario in the event a measure like this passes: that CEO's will be willing to accept a fraction of their current comp, or that the wages of rank and file workers would increase dramatically?


Neither. The lowest paid employees will be forced to become outside contractors and the CEOs will make the same amount of money.
11/21/13

The issue I have here is that we are assuming wealth inequality has to be a 'problem'. Why is it a problem? What is wrong with looking up to decision makers who get paid extraordinarily well to make tough, risky decisions that 90% of people either won't make or can't make. If I start a company from scratch, will you limit my ownership stake in it so I'm only allowed to own x amount because it would be unequal? Distribute my shares to my employees to keep wealth ratios intact?

Look, I personally think the issue here is watching guys walk away from failing companies with huge pay packages for screwing up. When Rob Nardelli leaves Home depot ( I think that was the guy) with a massive 200 odd million dollar pay package after screwing up, that's when people go, " Hey, wait a second!" You are really going to tell the owner of a successful business he built that he can only make 12 times what his employees make who took no risk with him? I know that's somewhat of a straw man's argument but to me this is becoming so absurd that all roads lead to stupid, hyperbolic arguments around this stuff. Let them do this and see how it works. Maybe they will love it, but I personally think this is absolutely idiotic.

11/21/13

@"Edmundo Braverman": If you don't like what they're paying you, you can go work somewhere else. The Swiss seem to have trouble with this.

Metal. Music. Life. www.headofmetal.com

In reply to Addinator
11/21/13

Wealth inequality isn't a problem until it is, and by then it's far too late. History is littered with the tales of plebeian uprisings where the wealthy oligarchs lost everything, often including their lives. There is definitely a tipping point.

In reply to Cruncharoo
11/21/13

nm, eddie said it already.

If the glove don't fit, you must acquit!

11/21/13

That does it I'm selling everything and buying Berkshire Hathaway.

11/21/13

Also, if the Swiss are so obsessed with their idea of equality, how come they don't take away some of Roger Federer's money? How come no one ever complains about him? Or the pop stars who have mansions there, like Tina Turner or Phil Collins?

Metal. Music. Life. www.headofmetal.com

11/21/13

@"In The Flesh" I have the luxury of not participating in the job market in any traditional sense, so I'm content to just watch from the sidelines. But to suggest that job hopping and moving around is a simple matter for the average person just isn't true.

In reply to In The Flesh
11/21/13

The article does bring up the excellent point about professional athletes. Are you going to limit the income of a Swiss soccer pro to 12x the team janitor's?

In reply to Edmundo Braverman
11/21/13

Edmundo Braverman:

In The Flesh:

It's nobody's business how much you choose to pay your people.

I think that was pretty much the Confederate party line in 1861.

Thank you for allowing me to read the dumbest thing I will read all day before noon.

In reply to thurnis haley
11/21/13

Thurnis Haley:

Edmundo Braverman:

I'm just playing Devil's Advocate here, but which do you consider the more likely scenario in the event a measure like this passes: that CEO's will be willing to accept a fraction of their current comp, or that the wages of rank and file workers would increase dramatically?

Neither. The lowest paid employees will be forced to become outside contractors and the CEOs will make the same amount of money.

The other option would be to create a new class of stock that has no voting rights and give them to management. Then you just pay large dividends on these shares only to get their comp up.

11/21/13

Gotta love how we are talking about an uprising because of wealth inequality in Europe. They tax the living fuck out of everything and they still talk about "inequality".

Any uprising will be the dirt poor and uneducated against the middle class and the rich. One only has to look at the USA to see how we have handled that. For profit jails and Homeland Security in tanks.

Go watch Les Miserables to see how the poor used to be really treated. Jail for stealing bread. Never able to work. No rights. Real boot on your neck shit. Nothing like the cake walk we have nowadays. It is a joke that we are still talking about revolts when the real issue is pure laziness or low IQ.

11/21/13

THis is a democRAT dream in the US. Of course they would exempt themselves from the law, but they'd kill babies to get this passed.

In reply to Edmundo Braverman
11/21/13

Edmundo Braverman:

happypantsmcgee:
PuppyBackedSecurities:

Wouldn't every company then just get their labor from a third party? Ie. C-suite becomes the only employees in the company. But the company then contracts with a third party provider who supplies labor. Problem solved.

On second thought junior comp at buyside firms might skyrocket...

exactly, or they just make the upper echelon a subsidiary or some type for the company as a whole.

Who's gonna run the third party employment pool? That's gonna take a CEO making only 12 times the lowest paid worker.


No one runs it. Its like Wal-Mart Executive Services LLC and the employees are the Walton Family, hired by the corporation at large.

If I had asked people what they wanted, they would have said faster horses - Henry Ford

In reply to Edmundo Braverman
11/21/13

Edmundo Braverman:

Wealth inequality isn't a problem until it is, and by then it's far too late. History is littered with the tales of plebeian uprisings where the wealthy oligarchs lost everything, often including their lives. There is definitely a tipping point.

Eddie what about the role of technology in all of this?

Military technology is a lot different than 1917 Russian technology, even different than Vietnam. And my sense is that it has skewed in favor of capital.

I think a revolution would have to be peaceful and would have to occur through a national strike and civil disobedience. Irony of ironies, it would have to look like Atlas Shrugged, but perpetrated by competent middle-class and blue collar workers rather than a group of billionaires.

Who would get hosed? Shareholders. Employees would love it because they'd make more money. This, in turn, would likely lead to better customer service, so customers would be happy. But shareholders would get the shaft because the bulk of the profits they've been collecting would be paid out in wages.

I'm buying Berkshire Hathaway and Google.
In reply to bl00211
11/21/13

It's called satire you ass hat.

People demand freedom of speech as a compensation for freedom of thought which they seldom use.

11/21/13

@"Edmundo Braverman": I think one of the biggest reasons there aren't more rich and successful people is that we won't get out of our own way. This pernicious "I'm just as good as you!!!" philosophy that the Swiss have embraced has been robbed of all integrity and is being used as a sledgehammer to yank everyone down to your greatest fear: mediocrity.

Metal. Music. Life. www.headofmetal.com

11/21/13

Swiss are all for equality until it comes to Nazi gold and paintings.

11/21/13

financial firms with highly paid people would probably outsource as many low level jobs as possible. i think glencore would rather contract out their janitors than cut trader pay

11/21/13

Would love to see them implement this.

In reply to TNA
11/21/13

TNA:

Swiss are all for equality until it comes to Nazi gold and paintings.

You suck. I LOL'd.

In reply to IlliniProgrammer
11/21/13

Technology's role is a really interesting point, and one I'll probably explore in a post soon. Lately I've been wondering at what point does money and wealth become completely irrelevant (due to the march of technology)? I mean, assuming we're able to achieve singularity, what need will you have for material wealth if you only exist on a hard drive?

11/21/13

I love going historical on shit. Either way I get what they are trying to do, but they are going about it ham fisted. Switzerland has a pretty high standard of living. Not sure why they are so focused with bringing down comp. At what point do we say the poor have it pretty well and that they are taken care of?

I mean at what point do we stop vilifying the rich?

In reply to TNA
11/21/13

TNA:

Go watch Les Miserables

The movie or the Broadway show? Pls advise.

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."

In reply to duffmt6
11/21/13

duffmt6:

TNA:

Go watch Les Miserables

The movie or the Broadway show? Pls advise.

Both. I love them both ha.

11/21/13

Isn't Zurich like a giant banking hub? UBS, Credit Suisse, Rothschild... somehow I don't see these guys taking 12x the lowest comp. And they shouldn't.

11/21/13

Guys, let me try and take a completely different approach to all this. I don't mean to say that that is how the Swiss are looking at this, it is just me trying to understand it in my own way.

So what they are saying is, that someone shoudn't be compensated with money that much more than someone else in a corporation. You guys, correctly, are pointing out that based on the difficulty and quality of what they do, and given the rarity of the upper individual's skills and abilities too, the compensation difference acurately represents that gap. I completely agree.

But let me take a completely different approach now, and I know that for most us here, living in North America, being in finance, having grown up with Capitalism, being exposed to the hyper materialistic culture and having a measure of success and happiness strongly caused by or correlated in the best case with the amount of money one has, it would be very difficult to understand this. I see this as the very, very, early development of something so different and progressive that for most of us it would be incomprehensable beacause of our current principles, mindset and understanding of motivation, success, and happiness.

What if in a 1000 years this actually leads to the CEO that does the extremely risky, intellectually challenging, almost irreplacable work because he is motivated by their willingness to better a corporation that creates products or services that in turn better the quality of life of others. What if they get paid with money and they use at as means to exchange to satisfy the lower levels of Maslow's pyramid, and we all know that it doesn't take much to satisfy your basic needs. What if after that $312,000 that Lloyd would make, he would attain all the reward and happiness from the fact that he has used his other worldly intellect and ability simply because it was so rare and useful, and helping others makes him happy enough that he doesn't need the tens of millions of dollars to be rewarded to him.

I am talking about completely changing our ethical and moral spectrum, and of course that has to happen on a large global scale, where the people that possess unique abilities, do things for others and feel rewarded by the happiness they bring to others, and that reward is enough after the point where them and their children are taken care of. I am talking about a time where you take risks and use your entreprenurial spirit because you want to better yourself and other people just because you feel it's right, and because you enjoy the challenge, not because you expect a monetary reward in the billions that would yield you lots of material possessions, but because you felt it was the right thing to do, simple as that.

If this phenomenon of the moral, ethical, and value spectrum changing is present in everyone, than this would make sense. Everyone would contribute as much as they can because they feel rewarded by things other than money. Money would still be very useful, as it is a great means of exchange for goods and services to a point. But when it is the primary reward tool, than we have a reality like ours, and let's be honest, we have been on a downward moral and ethical spiral for quite some time now and the sad thing is that we can even imagine that any given CEO would feel rewarded by anything else other than money, that he would be so unmotivated otherwise that he would never want to use his super human intellect...

In reply to TNA
11/21/13

Pure laziness or low IQ? Keep telling yourself that.

In reply to Edmundo Braverman
11/21/13

Edmundo Braverman:

Technology's role is a really interesting point, and one I'll probably explore in a post soon. Lately I've been wondering at what point does money and wealth become completely irrelevant (due to the march of technology)? I mean, assuming we're able to achieve singularity, what need will you have for material wealth if you only exist on a hard drive?


The singularity is smarter than us, better than us, does not need us, and decides it hates us.
11/21/13

That Euro/Liberal pussy Piers Morgan is going to jump all over this.

There will probably be a CEO comp cap in the US within the next 15 years. It's sad to watch this country slowly become socialist as the voting demographics completely run away from the GOP. Oh well, when the large companies and brains leave the US the Dems will finally get what they wanted.

In reply to TNA
11/21/13

TNA:

Swiss are all for equality until it comes to Nazi gold and paintings.


Love it.

Under my tutelage, you will grow from boys to men. From men into gladiators. And from gladiators into SWANSONS.

In reply to adapt or die
11/21/13

Why look for euro pussies, Bill Maher probably got a raging hard-on as soon as he heard about this. That moron is now talking about getting single-payer healthcare in California.

And america stopped being capitalist a long time ago. Maybe in a few sectors, mostly the tech scene etc is there some semblance of capitalism. The rest is all about access and/or lobbying.

In reply to Pypi
11/21/13

Pypi, is pretty accurate in his assertion that we are looking this through our current moral lens. In 15-20 years, who knows what the cultural climate will be like?
While there is no magic number, as everyone will disagree on what the multiple should be, it seems the Swiss are pretty conservative in their estimate.

PE is the new black.

11/21/13

I was recently in switzerland for a year (now in paris),
my 2 cents: companies will be always be represented locally if they have an incentive to do so.
I like the way the Swiss go about their politics because it gives people a say in many cases which affect their society. Other countries will leave those decisions to their law makers and It's also understandable.

is the work provided by a CEO worth 450 more to the economy than what a "low" skilled worker does? i say it's debatable, some will agree, some clearly won't. However I find it great it's up to the people who live in this country to decide if they will allow that kind of compensation gap. obviously culturally speaking, this wouldn't fly in the US but I'm interested to find out how this will play out in a country where the financial industry is pretty big.

I am also certain that companies will find ways to compensate their highest paid through other channels. It reminds me of Nissan and Renault CEO (Carlos Ghosn) who makes most of his money as Nissan CEO not as Renault, so what would limiting his Pay as a CEO in France do? It will automatically increase it in Japan.

going back to what I said in the beginning, companies are always going to be there if there is money to make. even if the pay of their CEO is limited I doubt this will dramatically impact their ability to do business locally. At the end of the day it's what matters imo. if the laws are so strict, and there are virtually 0 loophole, and they cant escape it: they will hire the best they can find who's willing to get paid 12x the smallest salary at the company, and let's be honest they will always find someone.

on another note, there is the case of someone who creates a company and is at the same time the CEO of the company, pretty sure if such policy was to take place there would have to be some sort of exception to the rule? I don't know, because the CEO at the end of the day is an employee but the founder/creator/shareholder isnt. But I guess thats another story.

In reply to Pypi
11/21/13

Pypi:

What if in a 1000 years this actually leads to the CEO that does the extremely risky, intellectually challenging, almost irreplacable work because he is motivated by their willingness to better a corporation that creates products or services that in turn better the quality of life of others. What if they get paid with money and they use at as means to exchange to satisfy the lower levels of Maslow's pyramid, and we all know that it doesn't take much to satisfy your basic needs. What if after that $312,000 that Lloyd would make, he would attain all the reward and happiness from the fact that he has used his other worldly intellect and ability simply because it was so rare and useful, and helping others makes him happy enough that he doesn't need the tens of millions of dollars to be rewarded to him.

I am talking about completely changing our ethical and moral spectrum, and of course that has to happen on a large global scale, where the people that possess unique abilities, do things for others and feel rewarded by the happiness they bring to others, and that reward is enough after the point where them and their children are taken care of. I am talking about a time where you take risks and use your entreprenurial spirit because you want to better yourself and other people just because you feel it's right, and because you enjoy the challenge, not because you expect a monetary reward in the billions that would yield you lots of material possessions, but because you felt it was the right thing to do, simple as that.

If this phenomenon of the moral, ethical, and value spectrum changing is present in everyone, than this would make sense. Everyone would contribute as much as they can because they feel rewarded by things other than money. Money would still be very useful, as it is a great means of exchange for goods and services to a point. But when it is the primary reward tool, than we have a reality like ours, and let's be honest, we have been on a downward moral and ethical spiral for quite some time now and the sad thing is that we can even imagine that any given CEO would feel rewarded by anything else other than money, that he would be so unmotivated otherwise that he would never want to use his super human intellect...

Not trying to be a jackass but this is not new. Refer to : http://en.wikipedia.org/wiki/Communism#Marxism

Great theory, fails in reality.

In reply to krauser
11/21/13

While he is quite annoying, you see his speech on feminization of America? I thought it was pretty interesting.

People demand freedom of speech as a compensation for freedom of thought which they seldom use.

11/21/13

Perhaps a more conservative approach would be to bring back 60-70% tax rates on incomes over $2 million per year, with a 40% rate on dividends and capital gains.

I don't think it's fair; I'm not sure it's pragmatic, but it takes care of the problem better than a 12x wage cap. CEOs didn't make huge salaries back in the '70s because it wasn't pragmatic to pay them that much.

The US can't be the first country to move on this, but if we get 40% of the developed countries to go along, and we all impose penalties on foreign corporations and foreigners who try to avoid this tax regime, we can make it happen.

Then we can spend the proceeds on developing new sources of non-CO2 producing energy.

11/21/13

I am sorry, but the government has managed to run up a $20T deficit through piss poor spending controls and bankrupt from the start entitlements. If you want to encourage more redistribution then you increase the charitable contributions deduction. Incentive high income earners to donate money to charity, not the US government.

In reply to krauser
11/21/13

krauser:

Great theory, fails in reality.


Not to be a jackass, but that only fails in a system that needs humans.

If humans have all been replaced by computers, there is no need for capitalism to provide incentive for humans to work. It is now all "from the computers' abilities, to the peoples' needs."

That's not to say it's the way things need to end. But if we're really heading to a system where the knowledge worker, even the executive, gets replaced by a computer, the future looks quite dim for human beings without some aspects of socialism or government control of the economy.

In reply to In The Flesh
11/21/13

Roger Federer earns almost all of his money outside of the country

In reply to TNA
11/21/13

TNA:

I am sorry, but the government has managed to run up a $20T deficit through piss poor spending controls and bankrupt from the start entitlements. If you want to encourage more redistribution then you increase the charitable contributions deduction. Incentive high income earners to donate money to charity, not the US government.


If we have a computer running everything in the economy, ANT, we just need to set the objective function.

The computer will be able to figure out a whole lot better how to benefit everyone than individual billionaires. Individual billionaires won't be smarter than the singularity.

In the current economy, capitalism works better. That may change when the computer is smarter/better than everyone.

One day, capitalism may stop working if humans are no longer necessary for the economy. And trend over the past 20 years has not been that auspicious. At that point, we'll have a bunch of hungry, idle people with AR15s.

In reply to Anihilist
11/21/13

He's right on a few things and that's one of them. It's painful to watch any american sitcom with the same old buffoon dad and strong independent mom who holds it together. Criticizing a woman = you are a male pig chauvinist, they are our better half, they are more spiritual blah blah blah.

In reply to Pypi
11/21/13

The main issue with this, is in the vein of what @krauser pointed out. You are pointing to a pretty utopian fulfillment of Maslow's hierarchy, and it's a noble view, but in order to get there, you would have to change the impetus and motivation behind most human decision-making. I don't think Lloyd would do what Lloyd does if he weren't compensated in the way he is. Most ambitious people are motivated by a variety of factors, with both financial reward/stability and personal fulfillment among them. But in order to shift the thought paradigm to one in which personal fulfillment were the overwhelming driving force behind why people work would require changing human nature. I don't see how you can do that, because people are inherently fallible and motivated by self-interest far more often than they are motivated by altruism. The preceding is why capitalism works and socialism fails.

Personally, I'm glad that income inequality exists. I think there are points when the gap becomes too great (we are probably already there) but if there weren't incentive for people to be excellent at what they do, they wouldn't be.

None of these questions have easy answers, but for people to sit back and throw stones at the glass houses of the rich, without accurately assessing their own work ethic and contribution isn't among the subset of answers I would deem as productive.

To @"Edmundo Braverman"'s and @IlliniProgrammer's points, I think a very different type of income inequality exists in our modern society than existed in the French Revolution or during the Civil War. Access to information and education for those motivated to improve themselves has gone a long way to bridge the gap between the "haves" and the "have nots" in modern society. It isn't perfect and there is a lot of work yet to be done, but the fact that the Nouveau Riche exist is proof that entry barriers have significantly lowered.

At the end of the day, on both sides of the argument, what this all boils down to is a need for honest self reflection. We have problems with an entitlement culture on both ends of the spectrum (both rich and poor). To the extent people are able to become more self aware, I think these issues will dissipate over time. The Giving Pledge and other similar initiatives reminds us that many of these people are aware of how fortunate they have been.

In reply to IlliniProgrammer
11/21/13

Luddite argument fail.

11/21/13

Krauser,

I was waiting for someone to bring the communism argument, as what I was talking about is quite similar at first glance.

However, when I think about this, I don't really expand to discuss what political system my musings would bring or how it would change the legal and political systems.

What I wanted to specifically focus on was the moral, ethical, and value lens that we currently approach this through, as someone else mentioned. I am just amazed that all we focus on, is the fact that the monetary value of the compensation is an absolute measure when it comes to motivation for a CEO to use their rare abilities and the subsequent happiness from the work. What most people here are saying is that if the Swiss implement this, most CEOs would leave because simply because of the reduction in pay. I am making this more about how much money is enough, and the astounding fact that we would be willing to not employ our abilities, especially when they are rare because we wouldn't receive extemely large amounts of money, which after a certain number only multiply our material possessions.

In reply to krauser
11/21/13

krauser:

Luddite argument fail.


What is your background with machine learning and CS? The Luddites were the workers being replaced, not the engineers building the factories.

I'm seeing some of the research going on and I'm a bit concerned that humans may become obsolete, at least as economic decision-makers and knowledge workers. This is bad news if you work in finance.

In reply to IlliniProgrammer
11/21/13

I'm a CS major actually.

In reply to IlliniProgrammer
11/21/13

One thing you have to think about is, if the computers are so much better than humans can be and the rate of advancement becomes so rapid nothing will get done because the time it takes to build something will obsolete it instantly due to the rate of advancement.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

In reply to heister
11/21/13

heister:

One thing you have to think about is, if the computers are so much better than humans can be and the rate of advancement becomes so rapid nothing will get done because the time it takes to build something will obsolete it instantly due to the rate of advancement.


All right, Zeno. :D
In reply to rufiolove
11/21/13

@rufiolove,

I are absolutely correct, I am glad someone completely understood what I was really getting at.

Another great part of your comment is the absolut fact that 'poor' people are doing the exact same thing, just on a smaller scale due to them lacking those superb abilities. I wasn't really separating the rich here, but the topic was about them. I think most people regardless of their financial situation fall under what I am talking about.

It is interesting to me that our evolution has determined that self-interest should be so dominant, and that our moral, ethical, and value universe justifies self-interest to such an extent. It is this exact dominance of self-interest that fascinates me. My question is, do you think our current moral, ethical, value, and subsequent political, cultural, and many other universes, driven by self-interest being the means to reach personal fulfillment, are 'evolving' into something better, or are we on a downward spiral, or should we take the scientific perpspective that maybe it doesn't really matter.

In reply to krauser
11/21/13

krauser:

I'm a CS major actually.


Ok, and what's your machine learning background and how much published research have you worked on, and how many years have you been a professional developer? Or are you one of those college students with a lot of outspoken views on economic systems without having materially participated in the economy yet?

This isn't really an argument from authority- I'm not saying I'm right and you're wrong, but you don't get to accuse me of being a Luddite if I know as much about the technology here as you do.

In reply to IlliniProgrammer
11/21/13

I wasn't saying you are a luddite, your argument was.

I don't know what to tell you dude, historically higher order jobs have eaten away lower order ones. I don't have a crystal ball so I don't know what they will be. Maybe programming will be the factory job of tomorrow.

In reply to Pypi
11/21/13

You and rufiolove make great points.

Conspicuous consumption has seemingly become so thoroughly ingrained in Western (specifically American) society that material pursuit trumps all else.

I think capitalism (not our twisted version mind you), is the most compatible with our nature for the time being, but also think it is the least virtuous.

Seems paradoxical to me that typically the demographic that advocates a more egalitarian (read socialist) system are the "have-nots" , no doubt somewhat out of self interest... a bit conflicted idea, no?

People demand freedom of speech as a compensation for freedom of thought which they seldom use.

11/21/13

I truly hope this law gets passed. It will quickly demonstrate how stupid it is. Companies will move their HQs to London and other cities quicker than a MC twerk.

11/21/13

Here's the way I see it. Imagine you have a firm that has $100 bucks to go around for pay and there are 3 employees in said firm, let's call them X, Y, and Z, and they are analyst grunt, middle manager, and CEO respectively. Now imagine their compensation is $5, $20, and $75 respectively. Now, consider the new proposed law, and let's assume that employee Z can't make more than 12x employee X. So, in order for Z to maintain his same exact pay of $75, X must now make $6.25. This is a difference of $1.25, but remember you only have $100 to go around, so the pay of Y will be trimmed to $18.75, leaving the total the same as before, the CEO the same as before, the lowest guy getting a bump and the middle guy getting a trim. I don't think this disrupts much and in fact makes a decent amount of sense because the middle guy is pretty useless anyway. What am I missing?

Sometimes I go about in pity for myself, and all the while a great wind carries me across the sky
11/21/13

Just put birth control in the water and the problem is solved. No need for fancy shit. Too many kids being born to below average intelligent people.

In reply to blackcleo
11/21/13

blackcleo:

I truly hope this law gets passed. It will quickly demonstrate how stupid it is. Companies will move their HQs to London and other cities quicker than a MC twerk.

Yeah, I agree. I'd love to see the idiots vote for this and watch their economy tank.

In reply to Going Concern
11/21/13

Going Concern:

Here's the way I see it. Imagine you have a firm that has $100 bucks to go around for pay and there are 3 employees in said firm, let's call them X, Y, and Z, and they are analyst grunt, middle manager, and CEO respectively. Now imagine their compensation is $5, $20, and $75 respectively. Now, consider the new proposed law, and let's assume that employee Z can't make more than 12x employee X. So, in order for Z to maintain his same exact pay of $75, X must now make $6.25. This is a difference of $1.25, but remember you only have $100 to go around, so the pay of Y will be trimmed to $18.75, leaving the total the same as before, the CEO the same as before, the lowest guy getting a bump and the middle guy getting a trim. I don't think this disrupts much and in fact makes a decent amount of sense because the middle guy is pretty useless anyway. What am I missing?

Boom. +1

In reply to TNA
11/21/13

TNA:

Just put birth control in the water and the problem is solved.

Please Please PLEASE can we make this a thing? +1

11/21/13

^^^X3. Birth Control would solve lots of problems.

11/21/13

I mean we keep trying to find that pound of cure instead of looking for the ounce of prevention. You need a college degree or a skill to be competitive, now and more so in the future. Poverty and lack of college is a function of parents and parental poverty is a function of having kids at a young age, etc. If you believe that raw intellect can have a genetic component then this case gets even stronger. Plain fact is people with college degrees tend to mate with others, so on so forth. So you have this population of people who reproduce above the replacement rate, who have no skills in a rapidly globalizing and automating environment.

Just like pensions fail as less people pay into it, so will these social and redistributive programs. Only thing that can help is if more people become skilled and earn higher wages (good) or the population of needy people slowly reduces (negative, for them anyway).

I'd almost go so far to say that everyone should be on birth control until 25. If your brain doesn't stop maturing until 25 well you shouldn't be shitting out children. This would help lower poverty rates, single parent household rates and reduce the lower income population (higher income people already don't breed until later).

In reply to Anihilist
11/21/13

You are absolutely correct, it is at the least hypocritical that the demographic that advocates this is usually the less fortunate, as they seek to destroy the wealth of the rich and 'get even with them for stealing all the money'.

I couldn't agree more, maybe I should have specified that my observation of our flawed moral and ethical universe does not include only the well to do, not in the slightest, it encompasses all of us, which is the sad part. If the case was such that the poor were deriving self fullfulment from means other than money, than when we follow the saying that "every nation deserves it's ruler' than, we would not have any problems.

See, the thing is that this discussion will turn pretty cynical, pretty fast if we observe the facts, as you pointed out our twisted capitalist system, the twisted socialist, and every political system in between is a spawn of utopian thought experiements, all twisted through the greedy, flawed, moral and ethical lens the respective 'leaders' and followers had throught the ages. Saddest part is that we didn't even get close on any occasion to the original theories, which goes to show how bad things have been and currently are. As I see it, from a moral and ethical perspectice, no matter how we look at it, our 'evolution' is extremely slow and I am not sure is even improving.

In reply to Edmundo Braverman
11/21/13

Edmundo Braverman:

TNA:

Just put birth control in the water and the problem is solved.

Please Please PLEASE can we make this a thing? +1

No issue with drinking water full of estrogen? Good luck with that, Eddie.

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."

In reply to krauser
11/21/13

krauser:

I wasn't saying you are a luddite, your argument was.

I don't know what to tell you dude, historically higher order jobs have eaten away lower order ones. I don't have a crystal ball so I don't know what they will be. Maybe programming will be the factory job of tomorrow.


So what are the higher order jobs then?

They're certainly not associated with the cerebral cortex. We can already get machines to decide on the best HFT algorithm to run in the market. And then there's Watson replacing the knowledge worker.

I think the "higher order jobs" will be done by computer. Everything will get automated and humans will not be able to provide much marginal value to the economy.

In reply to TNA
11/21/13

TNA:

blackcleo:

I truly hope this law gets passed. It will quickly demonstrate how stupid it is. Companies will move their HQs to London and other cities quicker than a MC twerk.

Yeah, I agree. I'd love to see the idiots vote for this and watch their economy tank.


What if they succeed?
In reply to PuppyBackedSecurities
11/21/13

PuppyBackedSecurities:

Wouldn't every company then just get their labor from a third party? Ie. C-suite becomes the only employees in the company. But the company then contracts with a third party provided who supplies labor. Problem solved.

This. Or your lowest paid employees--say, the janitor--is a contractor from a third party.

Or, if none of that works then these countries will simply lose their top tier talent to the United States. I'm 110% for this move. If Europe wants to lose its best people the U.S. will take them. After all, our space program--NASA--is just the Nazi rocket program.

In reply to Edmundo Braverman
11/21/13

Edmundo Braverman:

Wealth inequality isn't a problem until it is, and by then it's far too late. History is littered with the tales of plebeian uprisings where the wealthy oligarchs lost everything, often including their lives. There is definitely a tipping point.

Except the U.S. and Europe are both welfare states. There's not going to be an uprising against "oligarchies" in wealthy welfare states when the "oligarchs" are financing the welfare. Switzerland is a far cry from Czarist Russia.

In reply to IlliniProgrammer
11/21/13

IlliniProgrammer:

TNA:
blackcleo:

I truly hope this law gets passed. It will quickly demonstrate how stupid it is. Companies will move their HQs to London and other cities quicker than a MC twerk.

Yeah, I agree. I'd love to see the idiots vote for this and watch their economy tank.

What if they succeed?

Well if they succeed good for them. I'd suggest looking at Ben and Jerry to see how a ratio like that works. Sorry, but no CEO is going to work for such low pay.
http://www.cbsnews.com/news/occupy-wall-street-why...

Before they were acquired they had a 17:1 pay ratio. Not including options (majority of comp for most CEO's).

This will end up hurting lower income people anyway. Hire a bunch of fucking Roomba's and Furbies. Probably get the same productivity.

11/21/13

I would love to see Switzerland pass the law just as a guinea pig test.

Best

In reply to duffmt6
11/21/13

duffmt6:

Edmundo Braverman:
TNA:

Just put birth control in the water and the problem is solved.

Please Please PLEASE can we make this a thing? +1

No issue with drinking water full of estrogen? Good luck with that, Eddie.

I don't drink water. Fish fuck in it.

In reply to Pypi
11/21/13

Pypi:

Guys, let me try and take a completely different approach to all this. I don't mean to say that that is how the Swiss are looking at this, it is just me trying to understand it in my own way.

So what they are saying is, that someone shoudn't be compensated with money that much more than someone else in a corporation. You guys, correctly, are pointing out that based on the difficulty and quality of what they do, and given the rarity of the upper individual's skills and abilities too, the compensation difference acurately represents that gap. I completely agree.

But let me take a completely different approach now, and I know that for most us here, living in North America, being in finance, having grown up with Capitalism, being exposed to the hyper materialistic culture and having a measure of success and happiness strongly caused by or correlated in the best case with the amount of money one has, it would be very difficult to understand this. I see this as the very, very, early development of something so different and progressive that for most of us it would be incomprehensable beacause of our current principles, mindset and understanding of motivation, success, and happiness.

What if in a 1000 years this actually leads to the CEO that does the extremely risky, intellectually challenging, almost irreplacable work because he is motivated by their willingness to better a corporation that creates products or services that in turn better the quality of life of others. What if they get paid with money and they use at as means to exchange to satisfy the lower levels of Maslow's pyramid, and we all know that it doesn't take much to satisfy your basic needs. What if after that $312,000 that Lloyd would make, he would attain all the reward and happiness from the fact that he has used his other worldly intellect and ability simply because it was so rare and useful, and helping others makes him happy enough that he doesn't need the tens of millions of dollars to be rewarded to him.

I am talking about completely changing our ethical and moral spectrum, and of course that has to happen on a large global scale, where the people that possess unique abilities, do things for others and feel rewarded by the happiness they bring to others, and that reward is enough after the point where them and their children are taken care of. I am talking about a time where you take risks and use your entreprenurial spirit because you want to better yourself and other people just because you feel it's right, and because you enjoy the challenge, not because you expect a monetary reward in the billions that would yield you lots of material possessions, but because you felt it was the right thing to do, simple as that.

If this phenomenon of the moral, ethical, and value spectrum changing is present in everyone, than this would make sense. Everyone would contribute as much as they can because they feel rewarded by things other than money. Money would still be very useful, as it is a great means of exchange for goods and services to a point. But when it is the primary reward tool, than we have a reality like ours, and let's be honest, we have been on a downward moral and ethical spiral for quite some time now and the sad thing is that we can even imagine that any given CEO would feel rewarded by anything else other than money, that he would be so unmotivated otherwise that he would never want to use his super human intellect...

Imagine a world where gold poured out of my ass. Imagine!

What you just put forth contradicts human nature. On an individual basis people are motivated by things beyond money. On a macro level, the system of incentives pushes and pulls and creates and destroys economies, companies and technology. You'll never have a macro level ethic that puts economic gains as second tier to "moral" considerations.

11/21/13

I'm curious to see how this works out.

If it works in Switzerland, we should try it here.

In reply to DCDepository
11/21/13

DCDepository:

What you just put forth contradicts human nature. On an individual basis people are motivated by things beyond money. On a macro level, the system of incentives pushes and pulls and creates and destroys economies, companies and technology. You'll never have a macro level ethic that puts economic gains as second tier to "moral" considerations.

^
As much as I deride this guy's nonsensical ramblings, I think this is surprisingly spot on. Can't change human nature unfortunately. That doesn't necessarily mean the Swiss proposal won't work, but its potential success wouldn't be based on moral considerations in terms of people's motivations.

Sometimes I go about in pity for myself, and all the while a great wind carries me across the sky
In reply to Going Concern
11/21/13

I'm not an expert on Marx, however I believe it was his contention that the capitalist system and subsequent institutions are actually large influences on human nature.

I believe it was coined "the despotism of capitalism?" Someone feel free to correct me, however I think the basic idea is that human history plays a major role in the development of human nature. We've been socially conditioned to accept competition as the natural state of our existence due to systems incorporated into our history. Cooperation by no means contradicts human nature, or what it could be.

Of course, this brings about a whole other argument.

People demand freedom of speech as a compensation for freedom of thought which they seldom use.

In reply to IlliniProgrammer
11/21/13

Yea because those economies are totally comparable.

If I had asked people what they wanted, they would have said faster horses - Henry Ford

In reply to Going Concern
11/21/13

Going Concern:

Here's the way I see it. Imagine you have a firm that has $100 bucks to go around for pay and there are 3 employees in said firm, let's call them X, Y, and Z, and they are analyst grunt, middle manager, and CEO respectively. Now imagine their compensation is $5, $20, and $75 respectively. Now, consider the new proposed law, and let's assume that employee Z can't make more than 12x employee X. So, in order for Z to maintain his same exact pay of $75, X must now make $6.25. This is a difference of $1.25, but remember you only have $100 to go around, so the pay of Y will be trimmed to $18.75, leaving the total the same as before, the CEO the same as before, the lowest guy getting a bump and the middle guy getting a trim. I don't think this disrupts much and in fact makes a decent amount of sense because the middle guy is pretty useless anyway. What am I missing?

You're missing the fact that your example doesn't really apply to the most consequential firms. You're assuming that a corporation that has a janitor making $26,000 today has a CEO making $390,000 today. This might be true for the equivalent of an American S Corp, but the prestigious, large and complex C Corps have CEOs making $3 million on the low end, which is 115 times the janitor's salary.

The reality is, these complex and sophisticated corporations will dodge these rules pretty easily through how they structure executive pay. If they can't for some reason dodge these rules then corporate heads will leave the firms and/or the country to find better compensation. They're not going to take a 90% pay cut. That will drain Switzerland's best executive level talent.

In reply to Edmundo Braverman
11/21/13

Edmundo Braverman:

duffmt6:
Edmundo Braverman:
TNA:

Just put birth control in the water and the problem is solved.

Please Please PLEASE can we make this a thing? +1

No issue with drinking water full of estrogen? Good luck with that, Eddie.

I don't drink water. Fish fuck in it.

Shit, I might have to change my signature again.

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."

In reply to DCDepository
11/21/13

What I just put forth does contradict certain aspects of human nature that we currently observe, especially in North America, I also appreciate how it would be difficult to take what I am saying as anything but nonsense.

My whole point is built on the foundation that our moral universe is flawed in a such a way that we can't even imagine that perpetual economic gains pushed by an economy sustained at large by extreme consumerism and lead by leader that are overly greedy and very self-centered, could actually be secon tier to 'moral' considerations.

That is my whole argument, that what the Swiss are proposing, perhaps could lead us to discover a moral problem, and if CEOs would even consider being personally fulfilled to a large extent by means other than money that could be the very early stage of something that in future could develop into a new moral universe, as I said, the far future, where people like us on a finance forum in North America wouldn't consider this nonsense because our moral, ethical, and value perspectives have changed fundamentally and now my proposition makes sense.

In reply to Anihilist
11/21/13

Anihilist:

I'm not an expert on Marx, however I believe it was his contention that the capitalist system and subsequent institutions are actually large influences on human nature.

I believe it was coined "the despotism of capitalism?" Someone feel free to correct me, however I think the basic idea is that human history plays a major role in the development of human nature. We've been socially conditioned to accept competition as the natural state of our existence due to systems incorporated into our history. Cooperation by no means contradicts human nature, or what it could be.

Of course, this brings about a whole other argument.

That's definitely interesting, hadn't thought about it that way. Haven't read much of Marx's work. I think even if that is true, reversing the social conditioning that has already transpired on a mass scale would be tough.

Sometimes I go about in pity for myself, and all the while a great wind carries me across the sky
In reply to Pypi
11/21/13

Your proposal would look like a world that is stunted economically and technologically. As badly as Google, Apple and Tesla CEOs want(ed) to fundamentally transform the world around them their first motivation was money.

The immutable law of the universe--on a macro level, people don't take risks that could ruin them financially if there isn't a major payoff. The vast majority of CEOs are company founders or early investors or participants. Rob them of the big payoff--or change their motivations to non-economic--and you will not see the radical innovation and advancement that we've had in the last 100 years.

Socialists assume--wrongly--that innovation will march on as always even with no or limited economic payoff. That's simply not the reality.

In reply to DCDepository
11/21/13

DCDepository:

Going Concern:

Here's the way I see it. Imagine you have a firm that has $100 bucks to go around for pay and there are 3 employees in said firm, let's call them X, Y, and Z, and they are analyst grunt, middle manager, and CEO respectively. Now imagine their compensation is $5, $20, and $75 respectively. Now, consider the new proposed law, and let's assume that employee Z can't make more than 12x employee X. So, in order for Z to maintain his same exact pay of $75, X must now make $6.25. This is a difference of $1.25, but remember you only have $100 to go around, so the pay of Y will be trimmed to $18.75, leaving the total the same as before, the CEO the same as before, the lowest guy getting a bump and the middle guy getting a trim. I don't think this disrupts much and in fact makes a decent amount of sense because the middle guy is pretty useless anyway. What am I missing?

You're missing the fact that your example doesn't really apply to the most consequential firms. You're assuming that a corporation that has a janitor making $26,000 today has a CEO making $390,000 today. This might be true for the equivalent of an American S Corp, but the prestigious, large and complex C Corps have CEOs making $3 million on the low end, which is 115 times the janitor's salary.

The reality is, these complex and sophisticated corporations will dodge these rules pretty easily through how they structure executive pay. If they can't for some reason dodge these rules then corporate heads will leave the firms and/or the country to find better compensation. They're not going to take a 90% pay cut. That will drain Switzerland's best executive level talent.

I don't necessarily disagree, but the bigger firms can also just contract/outsource the lower level employees such as janitorial staff and expense that as a service instead of having those employees on their payroll. But even if it not, I'm not sure it's necessarily a bad thing to shift the balance to more smaller firms and less behemoth firms. Having a preponderance of smaller businesses encourages competition by leveling the playing field and increased competition fosters innovation and more beneficial conditions for the consumer. Larger firms encourage monopolistic behavior, which is detrimental to the consumer, counteracted somewhat by economies of scale.

Sometimes I go about in pity for myself, and all the while a great wind carries me across the sky
In reply to happypantsmcgee
11/21/13

happypantsmcgee:

Yea because those economies are totally comparable.


So Switzerland is some third world country with a terrible educational system?
In reply to Anihilist
11/21/13

Anihilist:

I'm not an expert on Marx, however I believe it was his contention that the capitalist system and subsequent institutions are actually large influences on human nature.

I believe it was coined "the despotism of capitalism?" Someone feel free to correct me, however I think the basic idea is that human history plays a major role in the development of human nature. We've been socially conditioned to accept competition as the natural state of our existence due to systems incorporated into our history. Cooperation by no means contradicts human nature, or what it could be.

Of course, this brings about a whole other argument.

Out of curiosity, can you point to a single example in human history that would demonstrate superior success in a cooperative? The people who use cooperatives use them as a means of basic survival (e.g. the early Christians). No superpower has ever succeeded in a cooperative. Rome, Greece, Persia, the Dutch, British, French, Spanish, Americans, etc. have all succeeded and flourished under intense competition.

Marx can assert whatever he wants. I doubt Marx could have formulated a single example in human history that would back up his claim. "Cooperation" has only been used to survive, not to flourish. The moment we encountered other tribes we fought. That's human nature.

In reply to Going Concern
11/21/13

Going Concern:

Anihilist:

I'm not an expert on Marx, however I believe it was his contention that the capitalist system and subsequent institutions are actually large influences on human nature.

I believe it was coined "the despotism of capitalism?" Someone feel free to correct me, however I think the basic idea is that human history plays a major role in the development of human nature. We've been socially conditioned to accept competition as the natural state of our existence due to systems incorporated into our history. Cooperation by no means contradicts human nature, or what it could be.

Of course, this brings about a whole other argument.

That's definitely interesting, hadn't thought about it that way. Haven't read much of Marx's work. I think even if that is true, reversing the social conditioning that has already transpired on a mass scale would be tough.

Yeah, surprisingly few people have ever read Marx that love to bash his ideologies. Not you in particular, general population.

Marx was actually a very strong proponent of capitalism. He believed that once cheap labor could not be found (via expansion of capitalism) and resources slowly dried up to the point of only being attained by the wealthy, the system would self implode, bringing about a socialist society.

Regardless of him being wrong or right, he was one fucking smart dude.

People demand freedom of speech as a compensation for freedom of thought which they seldom use.

In reply to krauser
11/21/13

I completely agree. My long-term theory is that this sweeping movement of political correctness / feminization / pussification will eventually lead to the demise of the US. All people do anymore is reward failure and it makes no sense. The entitlement state is so out of control and it helps keep people poor.

Public schools have these insane budgets of ~50% for learning disabled / special-ed students because they require so much nonsense. They don't add anything to the economy and we are wasting all our resources on them.

Even the stuff about bullying now is out of control. Dealing with bullies is a part of growing up and people need to get over it. A kid getting made fun of at school should not be front page global news on CNN.

In reply to IlliniProgrammer
11/21/13

Switzerland is a culturally homogenous country of 8 million people who cooperate in a parliamentary system.

It's not really comparable to a continental superpower of 313 million heterogeneous people who cooperate loosely in a federalist, constitutional system with 50 sovereign governments and radically different regional cultures. They're not really comparable at all.

Even so, the world can afford a lazy and complacent Switzerland. The world cannot afford an America that fails to innovate medically and technologically.

In reply to DCDepository
11/21/13
In reply to DCDepository
11/21/13

DCDepository:

Anihilist:

I'm not an expert on Marx, however I believe it was his contention that the capitalist system and subsequent institutions are actually large influences on human nature.

I believe it was coined "the despotism of capitalism?" Someone feel free to correct me, however I think the basic idea is that human history plays a major role in the development of human nature. We've been socially conditioned to accept competition as the natural state of our existence due to systems incorporated into our history. Cooperation by no means contradicts human nature, or what it could be.

Of course, this brings about a whole other argument.

Out of curiosity, can you point to a single example in human history that would demonstrate superior success in a cooperative? The people who use cooperatives use them as a means of basic survival (e.g. the early Christians). No superpower has ever succeeded in a cooperative. Rome, Greece, Persia, the Dutch, British, French, Spanish, Americans, etc. have all succeeded and flourished under intense competition.

Marx can assert whatever he wants. I doubt Marx could have formulated a single example in human history that would back up his claim. "Cooperation" has only been used to survive, not to flourish. The moment we encountered other tribes we fought. That's human nature.

How many of those nations are still the superpowers they were? Also, those superpowers did not thrive at all under competition and actually enacted strict anti-competition legislation and trade embargoes, and were also in fact monarchies. I hardly doubt the general population of those nations would've thought of themselves as "thriving".

There are studies on Native American tribes with cooperative cultures that thrived until they were crushed by European conquest. Currently, I'd consider Sweden is relatively cooperative, and they're doing pretty well.

And also, just because no society has survived as a "pure" (since you seem to be arguing semantics) cooperative to date, doesn't make your argument any more valid. That was the axiom of his argument, that the capitalist system (whether human nature or not) would devour itself.

People demand freedom of speech as a compensation for freedom of thought which they seldom use.

In reply to IlliniProgrammer
11/21/13

IlliniProgrammer:

happypantsmcgee:

Yea because those economies are totally comparable.

So Switzerland is some third world country with a terrible educational system?

The United States will be one in twenty years.

11/21/13

To be honest, I'm quite surprised that Ed didn't explain how the system works in Switzerland. Why? Because ignorant people (there's a few in this thread) will actually believe that everybody in Switzerland is actually in favor of such a law. It's not because Swiss people are voting on something that everybody wants it. A "popular initiative" in Switzerland requires only 100000 votes, often collected in the streets, concerts, events etc. It is actually quite easy for a political party to make the country vote for something.

If you ask me, it won't pass.

In reply to DCDepository
11/21/13

What you are saying makes perfect sense, I do agree with you at all levels. At the same time, what I am trying to argue is, imho, that people like the above mentioned CEOs should be more like other brilliant people that have contributed to our economic, scientific, political, and many other types of development. We have had scientists, philosophers, artists, spiritual leaders that have brought to life most of the previous knowledge that the above mentioned CEOs used and manipulated in order to create their companies, and continue to do so on daily basis. I am a proponent of private property, absolutely, I also believe money is a great reward to an extent, especially because it can be used to have a level of comfort for our basic needs.

Think about Decart inventing the cartesian plane, and requesting a certain amount of millions for it, or Martin Luther requesting that his dream be only realized, but in exchange for a monetary reward that equals his efforts compared to another individual that did nothing to further the same cause. Should Newton have requested an award that is appropriate to his stature in Mathematics compared to an average person, Einstain, perhaps Adam Smith should've said, that people should read and apply the material in The Wealth Nations only after a major payout.

I don't mean to be clever, and I know that creating a succsessful corporation, at least as far as we business professionals have been taught and seen, is different than a person being an author, artist, or a scientist, and we should be thankful for that. Can you even imagine where we would be if all these people required a large sum of money for every incredible piece of work they did.

But they didn't because they were creating for the sake of creating and were being driven by enthusiasm that was fueled by many other things, but not money. Of course they needed what money can easily be exchanged for in order to function, a lot of them lived comfortably and didn't need to worry about much, and that is part of my argument, some of them were well off, but not necessarily multi-millionaires, and still they took risks, should Galileo have said, you know what, furthering my theories and research is way too much risk, the Church may kill me easily after all, I will just drop this all together, after all it doesn't yield substantial economic pay off.

I just can't accept that after all is said and done, this Swiss proposal is just absurd, and those CEOs would be throwing their incredibly abilities away for peanuts, and that they should be making millions per year to justify the effort and be driven, when we have seen people make incredible strides forward for humanity and not caring about the economic pay off. It just sounds incredibly sad no matter how I look at this...

11/21/13

I reiterate, why do we have to change the system simply because losers lose. Shits been like this forever. The issue is insane birthrates that are drowning out the producers of wealth.

Why outsource labor? Automate. Get a professional roomba. There are machines that make fast food. Many lower skilled jobs can simply be done away with. It is cheaper right now to pay someone $26K a year to mop a floor, but you roll out restrictions and penalties and companies will invest in equipment to do it.

In reply to TNA
11/21/13

Not to mention call centers. You think those auto voice shits are annoying now, just wait until you cant have some 9 dollar an hour GED reject doing it. Youll never talk to a human on the phone ever again.

If I had asked people what they wanted, they would have said faster horses - Henry Ford

11/21/13

There are plenty of philosophers opining about these issues daily. I suggest you go to Starbucks and order a latte and talk with them.

Seriously people. Capping a private companies pay because someone who barely graduated high school is butt hurt. This is where the world is going.

Maybe we better start ingesting estrogen. So much man-gina in this conversation I can feel my period coming on.

In reply to adapt or die
11/21/13

I don't know how special ed works in US so I won't comment on it. I do feel for them though, they have been royally fucked over in the genetic lottery.

As for the bullying, the bullies just need to get smacked around a little by an authority figure. The whole "not ever hitting kids" is weird to me. How you are expected to reason with a 10 year old is beyond me.

In reply to IlliniProgrammer
11/21/13

Yes, computers running EVERYTHING. I see it. They can figure out how to properly allocate resources and all will be well...for awhile.

But what if the computers realize that they don't need us? Or worse yet, what if they realize they do need us, but as an energy source? They would enslave us and breed millions of us on huge human farms, and liquify us when they needed to use us as a human battery. And to make sure we stay in line, they would install a virtual reality happy environment in our minds that looks much like our world today...oh wait..

11/21/13

bold strategy cotton, let's see how this one plays out... c-level execs just going to leave switzerland.

In reply to TNA
11/21/13

TNA,

I agree with you wholeheartedly that we should not cap the pay of the CEOs because of the mediocre guy who couldn't do any better. That would be completely wrong. What I wonder is, why would the CEO exclusively like to apply his abilities and knowledge in exchange for astronomical amounts of money, why would it be so far fetched to think that maybe future generations of executives and entrepreneurs would be motivated and rewarded by intrinsic values after a certain amount of money that is not necessarily in the millions and billions.

11/21/13

Marxist bankers itt.

I would be in support of a law that said the top paid person at a given level could make no more than 12x that of the lowest paid person one level below. E.g. the top paid MD could make no more than 12x the lowest paid Director, top paid Director no more than 12x the weakest VP etc. This would still be distorting and in no way is better than a free market but at least then you would probably avoid the $50-$100mm pay packages. Although the end result would probably be companies would just add more and more levels to meet the requirement.

In reply to Pypi
11/21/13

Pypi:

TNA,

I agree with you wholeheartedly that we should not cap the pay of the CEOs because of the mediocre guy who couldn't do any better. That would be completely wrong. What I wonder is, why would the CEO exclusively like to apply his abilities and knowledge in exchange for astronomical amounts of money, why would it be so far fetched to think that maybe future generations of executives and entrepreneurs would be motivated and rewarded by intrinsic values after a certain amount of money that is not necessarily in the millions and billions.

I agree with you. I want to have a good amount of wealth, but to give it away and help what I think is important, not to buy the ruby encrusted hublot. That being said we all have different utility functions and capitalism provides a pretty agnostic view on this.

That is why it is so successful. It basically understands that we all have different motives and allows us to go after them. Layer in government with some restrictions and social programs to help those who can't compete and we have a decent system. The problem is when you add more restrictions and more social programs. You begin to gut this system that rewards the greedy and altruistic alike.

In reply to IlliniProgrammer
11/21/13

IlliniProgrammer:
Perhaps a more conservative approach would be to bring back 60-70% tax rates on incomes over $2 million per year, with a 40% rate on dividends and capital gains.

This is a good call. Let's bring it back 70s style. That's when the economy was really kicking ass.

IlliniProgrammer:
Then we can spend the proceeds on developing new sources of non-CO2 producing energy.

Dude, do you have some published research on this topic you could point us to? Maybe it's in the same section as that machine learning research you referenced about building a computer to RUN PLANET EARTH?

In reply to Anihilist
11/21/13

Anihilist:

DCDepository:
Anihilist:

I'm not an expert on Marx, however I believe it was his contention that the capitalist system and subsequent institutions are actually large influences on human nature.

I believe it was coined "the despotism of capitalism?" Someone feel free to correct me, however I think the basic idea is that human history plays a major role in the development of human nature. We've been socially conditioned to accept competition as the natural state of our existence due to systems incorporated into our history. Cooperation by no means contradicts human nature, or what it could be.

Of course, this brings about a whole other argument.

Out of curiosity, can you point to a single example in human history that would demonstrate superior success in a cooperative? The people who use cooperatives use them as a means of basic survival (e.g. the early Christians). No superpower has ever succeeded in a cooperative. Rome, Greece, Persia, the Dutch, British, French, Spanish, Americans, etc. have all succeeded and flourished under intense competition.

Marx can assert whatever he wants. I doubt Marx could have formulated a single example in human history that would back up his claim. "Cooperation" has only been used to survive, not to flourish. The moment we encountered other tribes we fought. That's human nature.

How many of those nations are still the superpowers they were? Also, those superpowers did not thrive at all under competition and actually enacted strict anti-competition legislation and trade embargoes, and were also in fact monarchies. I hardly doubt the general population of those nations would've thought of themselves as "thriving".

There are studies on Native American tribes with cooperative cultures that thrived until they were crushed by European conquest. Currently, I'd consider Sweden is relatively cooperative, and they're doing pretty well.

And also, just because no society has survived as a "pure" (since you seem to be arguing semantics) cooperative to date, doesn't make your argument any more valid. That was the axiom of his argument, that the capitalist system (whether human nature or not) would devour itself.

Those nations competed with other nations--tribes with other tribes. They were successful because they competed. France and England were bitter rivals for centuries--that's why we have New Orleans and New York in the United States. Those nations competed as a collective body and not in the sense of a free market, but it was the principle of competition that allowed the nation-states to thrive. Competition has been the key to success for every major power in world history. The only time we see "cooperation" or collectivism is when conditions made survival tough or impossible without it.

Sweden maybe is a semi-cooperative nation. Sweden also doesn't lead the world in innovation or really much of anything--they feed off the innovation of other nations. Imagine a world of Swedens--we'd still be living in caves.

11/21/13

Some quick observations:

(1) Most executives do not make millions of dollars. Some do (finance executives and top executives at very large, public companies), and people latch on to these figures because they are sensational. The more boring reality is, most executives at the mid-sized companies I've seen make 300K - 700K / year. And that's W-2 income so it's taxed at a blended 40+% all-in.

(2) This plan will not work. As is always the case, there will be carve-outs and work-arounds.

(3) Governments will not really do this because governments today rely almost solely on rich people. Look at the tax burden distribution. The top 1% or 5% or 10% or whatever pay the lion's share of taxes in most industrialized countries. The bottom 80% could fall off the face of the earth and most government treasury departments wouldn't even notice. So if the governments were to suddenly make the super rich unrich, they would be screwed.

(4) Inequality is just going to get worse, regardless of what taxes you impose or wage caps you install.

In reply to Pypi
11/21/13

Pypi:

TNA,

I agree with you wholeheartedly that we should not cap the pay of the CEOs because of the mediocre guy who couldn't do any better. That would be completely wrong. What I wonder is, why would the CEO exclusively like to apply his abilities and knowledge in exchange for astronomical amounts of money, why would it be so far fetched to think that maybe future generations of executives and entrepreneurs would be motivated and rewarded by intrinsic values after a certain amount of money that is not necessarily in the millions and billions.

+1 this.

the general idea seems to be that if pays are reduced the brightest will leave. It's a big assumption imo because it means the brightest persons are ONLY/MOSTLY interested in money and thus will always look for the positions that gets them the highest pay package. I seriously doubt this is true, and I'm pretty sure there are bright people who will take these supposedly "low" pay jobs and run these companies, they just have to be found. Who's to say that they are not the best at what they do? because the pay doesn't compare to what they could earn in the US? hard to argue that point.

11/21/13

It's been fun to try to follow all of the ways in which this discussion has weaved and twisted. Marxism, machine learning, marginal productivity, TNA pushing eugenics, but I'm surprised that no one has said anything about the tax code...

I know it's sort of the soup du jour due to Bill Gross' Scrooge letter that came out a week or two ago, but instead of passing a restrictive and complicated initiative like capping compensation (which in 5 minutes there were already multiple workarounds from people in this thread--just imagine what a room of lawyers could do), we simply adjust the tax code. Taxing labor and capital at similar rates would be a more effective (and more simple) first step you would think...

Also, the BLS shows the average CEO pay for those running "Companies and Enterprises" at a whopping $210,000 per year (but this also begs the question of what is included in that figure, is it just salary?). Would that much change for the majority of CEOs who aren't running the largest corporations in the world?
http://www.bls.gov/oes/current/oes111011.htm

In reply to labanker
11/21/13

labanker:

Some quick observations:

(1) Most executives do not make millions of dollars. Some do (finance executives and top executives at very large, public companies), and people latch on to these figures because they are sensational. The more boring reality is, most executives at the mid-sized companies I've seen make 300K - 700K / year. And that's W-2 income so it's taxed at a blended 40+% all-in.

(3) Governments will not really do this because governments today rely almost solely on rich people. Look at the tax burden distribution. The top 1% or 5% or 10% or whatever pay the lion's share of taxes in most industrialized countries. The bottom 80% could fall off the face of the earth and most government treasury departments wouldn't even notice. So if the governments were to suddenly make the super rich unrich, they would be screwed.

(1) very good point, only the biggest companies pay insane salaries to their exec.

(2) thats actually short sighted because it assumes that the top 1-10% wealth doesn't depend on the bottom 80%.
a business makes money by hiring people who will create products(...), many of those people get low wages, if they stop existing how do you recreate that value? automation? we're not there yet

In reply to labanker
11/21/13

labanker:

Yes, computers running EVERYTHING. I see it. They can figure out how to properly allocate resources and all will be well...for awhile.


"LOL! Computers making decisions about executing trades and doing it instantaneously. And computers running the whole fricking market for trade executions. And stocks being traded in penny increments. LOL! In your dreams, pal."
-NYSE Floor Broker, 1997.

"Large lot executions being run by computer, completely electronically. Right, that will happen. Pensions and mutual funds will always come to us."
-Cash Equities Trader, Lehman Brothers, 2002.

"Systematic strategies slowly starting to replace traditional investing on fundamental research? That's impossible. You will always need human beings to make decisions about buying and selling."
-Small hedge fund manager, 2007

Idunno. There's a whole trail of laid-off people who claim that computers will never be able to run stuff in finance. I'm not going to claim there is a strong likelihood of this future, but I am going to claim that that has been the trend and that it is a possibility in 15-20 years. I think there is a lot of negative resistance out there. There was even more negative resistance back in 2010 when I said we will probably not see a huge recovery in gross employment or pay in the finance sector. You guys are a lot nicer this time, so maybe I could be wrong this time, too.

In reply to IlliniProgrammer
11/21/13

"We keep losing money, but the model says to double down!!!"
- Everybody at LTCM

patternfinder:

Of course, I would just buy in scales.

See my WSO Blog | my AMA

In reply to labanker
11/21/13

labanker:

This is a good call. Let's bring it back 70s style. That's when the economy was really kicking ass.


http://miseryindex.us/indexbyyear.aspx?type=UR

Look, if you're gonna argue the '70s, let's bring back the "good old days" when unemployment was only about 6%. Unemployment rates averaged about 6.2% during a decade of 70% taxes along with an oil crash with a 45% drop in the stock market. Meanwhile, during a half decade of 35% taxes, we have averaged about 8.3% unemployment. Strong positive correlation there between taxes and unemployment, right? :D

Oh, and you forgot about the 1960s and 1950s when tax rates were as high or even higher and unemployment was 4%.

I guess you can blame all of this on Barry, only though the Republican House has (not necessarily unwisely) blocked most of his initiatives.

Look, if you're going to use sarcasm, at least have some numbers or facts to back it up. :D

At the very least, it's hard to make the argument that where the economy currently is, high tax rates are correlated with high unemployment. In fact, it is possible, that at least up to a point, the opposite is true, or that there are other explanations for unemployment than tax rates.

In reply to Simple As...
11/21/13

Simple As...:

"We keep losing money, but the model says to double down!!!"

- Everybody at LTCM


They turned out to be right. And they were executing by hand.
In reply to IlliniProgrammer
11/21/13

Ask anyone who invested with them if they give two flying fucks if "they turned out to be right". That's right, they don't.

My 12 year old brother can execute by hand if the model tells him what to do. Who cares if they were executing by hand if they were doing whatever the model told them?

patternfinder:

Of course, I would just buy in scales.

See my WSO Blog | my AMA

In reply to Simple As...
11/21/13

Simple As...:

Ask anyone who invested with them if they give two flying fucks if "they turned out to be right". That's right, they don't.

My 12 year old brother can execute by hand if the model tells him what to do. Who cares if they were executing by hand if they were doing whatever the model told them?


Nobody does. Computers can screw up; humans can screw up. Computers tend to screwup less frequently. You're citing a human screwup rather than a computer screwup.
In reply to IlliniProgrammer
11/21/13

Haha my comments were really worthy of MS?

patternfinder:

Of course, I would just buy in scales.

See my WSO Blog | my AMA

11/21/13

Lol apparently mine were too. People need to calm down.

11/21/13

Spain and France have no business trying to project "fair" and sustainable policies, considering their stuck in an economic pile of feces.

In reply to Edmundo Braverman
11/21/13

Except most of the work of a low waged, low skilled employee could be outsourced or (at some point) automated/computerized. Therefore, this would leave only high-earning, high skilled domestic employees who probably earn a substantial amount.

In reply to TNA
11/21/13

TNA:

Just put birth control in the water and the problem is solved. No need for fancy shit. Too many kids being born to below average intelligent people.

The Knockout Game was the final straw for me. We should implement this plan immediately.
11/22/13

No doubt many bankers and WSO members are incredibly hard-working people, but we've nearly all had an incredible amount of luck. We've been given many opportunities that most others don't have.

Capitalism is not as "fair" and merit-based as some of you would like to believe. Growing income inequality is not a sign that the hard-workers are working harder and that the lazy are getting lazier, as compared to say, 10 or 20 years ago. Growing income inequality is structural.

And that structural inequality only shows signs of increasing. If that increasing unfairness doesn't bother you ethically, it should at least raise your concern that we are heading towards a) oligarchy or b) revolution.

Personally, I'm all for much higher (progressive) taxes and significant wealth transfers, perhaps regulated so as to be spent on investment rather than on consumption, on childcare and education rather than on big screen TVs.

For those of you saying that higher taxes will run the economy into the ground, that is simply not true. The poor have a much higher MPC than the rich do. Wealth transfers nearly always have a higher multiplier effect than do other types of government spending. The rich who want to get richer will be able to - there is no salary cap, so the incentive to worker harder and produce more is still intact.

In reply to valiant7002
11/22/13

The growing income inequality is a consequence of crony capitalism. You sound like a typical hollywood liberal idiot.

11/22/13

minimum wages, yes. Maximum wages, no. This is crazy.

11/22/13

Valient, who said capitalism is fair? I hope your socialist ass doesn't live in the US. Kids these days...

In reply to IlliniProgrammer
11/22/13
In reply to DCDepository
11/22/13

[quote=DCDepository]

Yes, so that was the original argument, that history shaped human nature. Also, in regards to "survival", that was also likely the original reason for conquest. If country/group/demographic (B) had something that (A) wanted or needed, that was typically why they took it. I'm not arguing the facts of history though, it was a simple postulation by Marx that history dictated our present circumstances and that they'd someday change as capitalism (of which expansion is foundational) imploded due to lack of resources and cheap labor.

Also, in regards to Sweden, you sound like a complete idiot and obviously have no idea what you're talking about.

People demand freedom of speech as a compensation for freedom of thought which they seldom use.

In reply to adapt or die
11/22/13

adapt or die:

Public schools have these insane budgets of ~50% for learning disabled / special-ed students because they require so much nonsense. They don't add anything to the economy and we are wasting all our resources on them.

You know the budgets are all publicly available and this is entirely bullshit? The first one I pulled down has a special ed instruction as a % of expenditures of 9% and as a % of total instructional expenditures of 15%. Who are you getting your #'s from?

This to all my hatin' folks seeing me getting guac right now..

In reply to txjustin
11/22/13

I'm pretty sure he didn't mean fair as in "we all get an equal share of everything". If you read past that word, he said "and merit based"; this leads me to believe that he meant capitalism does not always efficiently allocate the "fair" amount of reward to those of proportional talent/deservedness.

Using equivocations and ad hominem arguments is juvenile.

People demand freedom of speech as a compensation for freedom of thought which they seldom use.

In reply to krauser
11/22/13

krauser:

The growing income inequality is a consequence of crony capitalism.

http://en.wikipedia.org/wiki/Crony_capitalism

Wikipedia:

Crony capitalism is a term describing an economy in which success in business depends on close relationships between business people and government officials.

valiant7002:

. . . it should at least raise your concern that we are heading towards a) oligarchy . . .

Perhaps we are talking about the same thing.

11/22/13

Ever notice how its usually the economies that are a pile of shit to begin with that usually come up with brilliantly shit ideas on how to further fuck up their economies just to quite a bunch of poor people for a few more years until the poors find out their brilliantly shitty ideas have further fucked their own shit up so they then push for more of the same shit. There should be a minimum IQ and economic knowledge for one to be allowed to vote. If we just didn't have to deal with these people that know nothing but assume they know everything we would be living in the grand utopia they want.

Long story short : if you are fucking retarded leave the decision making to the big boys and go play with your belly buttons in the corner.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

In reply to valiant7002
11/22/13

It does seem like we are heading towards an oligarchy, though. The rich have found their means - lobbying, and the poor have found theirs - unions and giveaways. Screw the middle class, amirite?

EDIT : Jon Stewart puts it very well : http://www.youtube.com/watch?v=yN96cFnnguE

In reply to Anihilist
11/22/13

Anihilist] <p>[quote=DCDepository:

Yes, so that was the original argument, that history shaped human nature. Also, in regards to "survival", that was also likely the original reason for conquest. If country/group/demographic (B) had something that (A) wanted or needed, that was typically why they took it. I'm not arguing the facts of history though, it was a simple postulation by Marx that history dictated our present circumstances and that they'd someday change as capitalism (of which expansion is foundational) imploded due to lack of resources and cheap labor.

Also, in regards to Sweden, you sound like a complete idiot and obviously have no idea what you're talking about.

No, Marx was clearly wrong. Human nature--to kill and to conquer--shapes our present. Human beings have never been altruistic--we only were cooperative in human history because it was best for human survival. Once we got beyond basic surviving and into farming and making metal tools then we became competitive.

A guy who buys into Marx's theories calling me an idiot is somewhat laughable, especially when, like a typical leftist, you don't even back it up. What have I said about Sweden that is idiotic? I challenge you to man up to it. You're likely too much of a little b*tch to do so, however.

11/22/13

Couple quick ones:

No way wages are going up. Wages up means cost up means company who tries that will get bankrupt before anybody else. Maybe a couple firms with extreme pricing power can try that - I doubt it.

It's cute to see Swiss people thinking they're poor, whoever they are.

In reply to Anihilist
11/22/13

Anihilist:

Using equivocations and ad hominem arguments is juvenile.

LOL! You just called me an idiot one post before! You're completely ridiculous. One post before you call me an idiot and in the next post you call someone out for using ad hominem. Hilarious.

In reply to DCDepository
11/22/13

DCDepository] <p>[quote=Anihilist:

DCDepository:

Yes, so that was the original argument, that history shaped human nature. Also, in regards to "survival", that was also likely the original reason for conquest. If country/group/demographic (B) had something that (A) wanted or needed, that was typically why they took it. I'm not arguing the facts of history though, it was a simple postulation by Marx that history dictated our present circumstances and that they'd someday change as capitalism (of which expansion is foundational) imploded due to lack of resources and cheap labor.

Also, in regards to Sweden, you sound like a complete idiot and obviously have no idea what you're talking about.

No, Marx was clearly wrong. Human nature--to kill and to conquer--shapes our present. Human beings have never been altruistic--we only were cooperative in human history because it was best for human survival. Once we got beyond basic surviving and into farming and making metal tools then we became competitive.

A guy who buys into Marx's theories calling me an idiot is somewhat laughable, especially when, like a typical leftist, you don't even back it up. What have I said about Sweden that is idiotic? I challenge you to man up to it. You're likely too much of a little b*tch to do so, however.

I maintain my original position. It is laughable that you're calling me a leftist when I don't believe in Marx's ideas at all. I was simply providing another perspective as a mental exercise, which you clearly failed to grasp. And yes, I cannot fully back up his full thesis because I haven't read it all, only excerpts and not even from his magnum opus . Have you read it? I'm not disagreeing with you that human nature is competitive, but the fact that you fail to even entertain an idea because it is opposing to yours is just plain bigotry.

Also, I am juvenile, so I'll admit that; however I'd be happy to elaborate on Sweden, since that was the context of my reference of you saying something idiotic. Sweden has a population half the size of the state of New York and has produced some of the most popular brands in the US: Ikea, H&M, Volvo, Ericsson, Skype, etc. Also have contributed hugely to science and the arts; Nobel, Myrdal, Stieg Larsson, Skarsgard, ABBA, Avicii, Swedish House Mafia... I could compile a larger list, but that was off the top of my head. They also have one of the best educational and health systems in the world. So yeah, you saying that we'd all live in caves if we were all Sweden seemed pretty idiotic. Also, as to referring to me as a little bitch... there's really no need for that.

People demand freedom of speech as a compensation for freedom of thought which they seldom use.

In reply to DCDepository
11/22/13

Also, to be completely clear... I said you sound like an idiot. Never did I blatantly say "You are an idiot."

People demand freedom of speech as a compensation for freedom of thought which they seldom use.

11/22/13

Anihilist, I don't post much anymore, but for your future reference, I am juvenile and always come with ad hominem attacks to dumb shits.

In reply to txjustin
11/22/13

txjustin:

Anihilist, I don't post much anymore, but for your future reference, I am juvenile and always come with ad hominem attacks to dumb shits.

Haha, well you're in good company here.

People demand freedom of speech as a compensation for freedom of thought which they seldom use.

11/22/13

I'm just being honest mi amigo.

In reply to txjustin
11/22/13

txjustin:

Valient, who said capitalism is fair? I hope your socialist ass doesn't live in the US. Kids these days...

Well argued indeed. And great spelling.

In reply to Anihilist
11/22/13

Anihilist] <p>[quote=DCDepository:

Anihilist:
DCDepository:

Yes, so that was the original argument, that history shaped human nature. Also, in regards to "survival", that was also likely the original reason for conquest. If country/group/demographic (B) had something that (A) wanted or needed, that was typically why they took it. I'm not arguing the facts of history though, it was a simple postulation by Marx that history dictated our present circumstances and that they'd someday change as capitalism (of which expansion is foundational) imploded due to lack of resources and cheap labor.

Also, in regards to Sweden, you sound like a complete idiot and obviously have no idea what you're talking about.

No, Marx was clearly wrong. Human nature--to kill and to conquer--shapes our present. Human beings have never been altruistic--we only were cooperative in human history because it was best for human survival. Once we got beyond basic surviving and into farming and making metal tools then we became competitive.

A guy who buys into Marx's theories calling me an idiot is somewhat laughable, especially when, like a typical leftist, you don't even back it up. What have I said about Sweden that is idiotic? I challenge you to man up to it. You're likely too much of a little b*tch to do so, however.

I maintain my original position. It is laughable that you're calling me a leftist when I don't believe in Marx's ideas at all. I was simply providing another perspective as a mental exercise, which you clearly failed to grasp. And yes, I cannot fully back up his full thesis because I haven't read it all, only excerpts and not even from his magnum opus . Have you read it? I'm not disagreeing with you that human nature is competitive, but the fact that you fail to even entertain an idea because it is opposing to yours is just plain bigotry.

Also, I am juvenile, so I'll admit that; however I'd be happy to elaborate on Sweden, since that was the context of my reference of you saying something idiotic. Sweden has a population half the size of the state of New York and has produced some of the most popular brands in the US: Ikea, H&M, Volvo, Ericsson, Skype, etc. Also have contributed hugely to science and the arts; Nobel, Myrdal, Stieg Larsson, Skarsgard, ABBA, Avicii, Swedish House Mafia... I could compile a larger list, but that was off the top of my head. They also have one of the best educational and health systems in the world. So yeah, you saying that we'd all live in caves if we were all Sweden seemed pretty idiotic. Also, as to referring to me as a little bitch... there's really no need for that.

1) I have read Marx--I read the Communist Manifesto while sitting in the sand at Myrtle Beach. 2) I don't entertain the idea you put forth from Marx because it's a ridiculously idiotic idea that I just disproved in about 5 minutes because I know basic world history. 3) A rich, European country having some successful scientists and companies doesn't really demonstrate anything. Sweden, a small socialist-lite country, doesn't produce anywhere near the companies, innovation, new technology or medical advancements that the U.S. does. The point is, the U.S. can't conform itself to how tiny European nations operate. The world needs America's creative destruction, which creates advanced technology and medical wonders. If the U.S. obsessed itself with economic equality it is abundantly clear that the rest of the world would suffer.

11/22/13

What did I misspell?

Besides your name, which I thought was with an "e" and not an "a"

11/22/13

If this passes, we will see more temps/contract employees. People will always find a way to beat the system.

In reply to In The Flesh
11/22/13

In The Flesh:

Also, if the Swiss are so obsessed with their idea of equality, how come they don't take away some of Roger Federer's money? How come no one ever complains about him? Or the pop stars who have mansions there, like Tina Turner or Phil Collins?

Your Roger Federer example doesn't make sense. RF does not have employees below him. This inequality issue is only for businesses. Roger Federer is in business with himself. He sells his images to other companies. And he practices a sport and gets paid tournament money. Let's not mix apples with oranges here. The 12:1 ratio seems a bit draconian, even for a supporter of having a max ratio like me. But there should be some max. Enough of CEO's having an ever increasing pay/average worker ratio. The company's profit are created by executives all the way to the janitor. They all play a role. Then why is it that the executives are taking more and more, while leaving less for the rest? As Edmundo pointed out, inequality is not a problem until it is. Eventually, the people will get enough of it, and heads will roll over. History does tend to repeat itself. A more equal society is better for all. Societies with high income inequality tend to have higher crime ratio, etc.

11/22/13

Glad to know Andy's candy knows how much people should be paid. I fail to see how allowing Roger Federer to be super rich, but not some CEO who might have spent their entire life working their way up the chain is any different.

Yeah yeah, head will roll. Womp womp. Because Europe and America are like revolutionary France. The evil rich oppress everyone and there is no way to get ahead.

Please, lets stop disrespecting the trials and tribulations of truly oppressed poor by talking about the coddled "poor" we have now. Back in the day the poor died and starved. Now they are fat, with section 8 housing, welfare and subsidized cell phones and internet. Hardly hopeless.

Let me cut to the chase. Liberals will always want more "equality" (code word for increased regulations and taxes aka government). The poor will never have enough and inequality will always be an issue. While we are at it how about Kobe takes a few inches off his vertical because my inequality is pissing me off.

Butt hurt crew in full effect.

In reply to Tehraio
11/22/13

Raio:

I was recently in switzerland for a year (now in paris),

my 2 cents: companies will be always be represented locally if they have an incentive to do so.

I like the way the Swiss go about their politics because it gives people a say in many cases which affect their society. Other countries will leave those decisions to their law makers and It's also understandable.

is the work provided by a CEO worth 450 more to the economy than what a "low" skilled worker does? i say it's debatable, some will agree, some clearly won't. However I find it great it's up to the people who live in this country to decide if they will allow that kind of compensation gap. obviously culturally speaking, this wouldn't fly in the US but I'm interested to find out how this will play out in a country where the financial industry is pretty big.

I am also certain that companies will find ways to compensate their highest paid through other channels. It reminds me of Nissan and Renault CEO (Carlos Ghosn) who makes most of his money as Nissan CEO not as Renault, so what would limiting his Pay as a CEO in France do? It will automatically increase it in Japan.

going back to what I said in the beginning, companies are always going to be there if there is money to make. even if the pay of their CEO is limited I doubt this will dramatically impact their ability to do business locally. At the end of the day it's what matters imo. if the laws are so strict, and there are virtually 0 loophole, and they cant escape it: they will hire the best they can find who's willing to get paid 12x the smallest salary at the company, and let's be honest they will always find someone.

on another note, there is the case of someone who creates a company and is at the same time the CEO of the company, pretty sure if such policy was to take place there would have to be some sort of exception to the rule? I don't know, because the CEO at the end of the day is an employee but the founder/creator/shareholder isnt. But I guess thats another story.

Good points. Regarding making an exception to the founders of the company, I understand why you think there should be an exception. But I don't think it is needed. The founder is already compensated via the ownership of the business. If the business is public, he can sell his shares, and reap the rewards of his work. And if the business is private, he can still sell the business to another private entity. His compensation should be treated the same as that of another employee. Maybe I am missing something, so I would like to hear a rebuttal to my thinking.

11/23/13

LOL, I love how much MS has been flying, but the US is still probably going "socialist" and there aren't too many arguments against it.

I predict a 60% marginal tax rate on lobbyist, legal, and banking income over $1-2 million in ten years. I'm sorry, but if you work for a systemically critical bank and you are taking risks ultimately with the taxpayers' money, we should tax you at a higher rate if you get a gigantic bonus. Same with incomes that occur as a product of the legal system or from lobbying Washington. If you're making boatloads off of the federal government, we want some of that money back. And yes, if you work at a bank that has a $500 Billion balance sheet, a prime services desk, and gets much of its funding from the money market, a $3 million bonus probably means you're taking too much risk and Uncle Sam deserves some of that money back. In a post-TARP world, you can't argue that there's not some sort of implicit taxpayer support going on.

Look, if you hate socialism, great. Let's start taxing the pro-socialist behavior we wish to discourage. Oh wait, that's us bankers.

11/23/13

Brilliant proposal. Lets tax the most mobile and richest at a time when the US is becoming less influential and worth living in.

I mean we have the highest corporate tax rates and just look at how effective that is. Oh wait, trillions kept overseas.

I do agree that we are going to be socialist. And by this I mean bankrupt. Why the fuck would anyone pay 60% taxes in the US? I'd move to Europe before I paid those rates here.

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