From: Brian Holtz [brian@holtz.org] Sent: Saturday, October 26, 2002 11:18 PM To: Franklin Schmidt; LPSM-Discuss@yahoogroups.com Subject: RE: [LPSM-Discuss] Re: More comparisons between government and regular corporations Franklin Schmidt [mailto:fschmidt@digdb.com] wrote: > > A better alternative to limited liability might > > be some kind of requirement > > for liability insurance or having some > > minimum number of unlimited partners. > > Why not leave it to the partners to decide > if they want to buy liability insurance? My "or" was exclusive-or. (Isn't it annoying that English doesn't have separate words for normal disjunction and exclusive disjunction? We're forced to say "either/or" or(!) "and/or" to disambiguate these cases.) > the only way to evaluate and interpret data > is to compare it to personal experience. > [..] Without personal experience, I > couldn't judge the believability of second > hand information I think that the normal sorts of personal experience are sufficient for intelligently interpreting sociological and economic data. > today's rich are probably similar in character > to antebellum slaveowners and medieval aristocrats They obviously differ in their willingness to completely disenfranchise others. > > do you agree that people's own market > > behaviors is a better expression of > > their preferences and interests than > > your personal opinion is? > > Sure. > > > before limited-liability capital markets, > > the median standard of living was orders > > of magnitude less than now. You > > seem to have zero data points, and no > > serious economic analysis supporting > > your proposed enormous change to a status > > quo of unprecedented prosperity. > > You seem smart enough to realize that you > also have no data points. Despite your compliment, my argument above remains unrebutted. > The median standard of living has been going > up because of technology. Of course. And as I said -- and as reference texts on economic history agree -- limited-liability capital markets were necessary to finance the capital-intensive technologies of the industrial revolution. > The only way to argue this is by theorizing > about what would happen and I'm reluctant > to get into that kind of argument. Then we'll just have to agree to disagree. > The general Libertarian argument seems to be > to avoid government intervention unless > there is a clear need True for libertarians in general, but I don't see in the official Libertarian Party platform any clear or principled stand on whether (and why) government coercion should ever be allowed. > and I don't see a clear need for limited liability. I told you: because advanced technology requires scales of industrialization that cannot be financed if every investor shares unlimited liability for the firms they invest in. > as long as there is limited liability, > there is also a need for much more > government regulation for things like > consumer protection. No, consumer protection can be ensured by a combination of insurance markets, consumer information markets, and efficient tort adjudication. I don't know of any cases in which a reasonable tort judgement caused a corporation's share prices to hit zero (and thus bump up against the law against share prices being negative). > I would like to > see employees getting similar additional leverage. I too would like to see workers be compensated with equity in their companies, but there's no econometric data to motivate this from concern over workers not being fairly compensated. Indeed, I've read that the return to labor (vs. capital) is actually higher than labor's contribution to production. I can't find a direct reference offhand, but it says at http://www.ncpa.org/pi/taxes/bb10prin.html that "for every additional dollar of income produced by a larger capital stock, two-thirds goes to labor and only one-third to capital." > > > > > workers have no say. > > > > > This is sort of like living under > > > > > a dictatorship that allows > > > > > people to leave. You wouldn't > > > > > claim that citizens of such > > > > > a society have a say, would you? > > > > > > > > Citizens don't choose their dictators by > > > > free association, and employers don't > > > > have the arbitary political and > > > > economic power of dictators. > > > > > > employers do have the same arbitrary power over their > > > company that a dictator has over his country, which is > > > the whole point of the analogy. > > > > No, the point you tried to make was that > > employee is to employer as citizen is to dictator. > > By changing your analogy to > > company is to employer as country is to dictator > > you are admitting that your earlier analogy fails. > > I didn't change my analogy. Yes you did, when I pointed out that it's not the case that employees "have no say" about their working conditions. You then switched from employers having total "say" over the working conditions of their workers, to employers having total control of their companies, because the former claim is untenable. > For programmers, the direction would be > the direction described in Peopleware How do the practices described therein change the amount of "say" that employers have? Unless those practices are codified contractually, then you would have to consider them a charade, while I could cite them as examples of how employees already can have "say" under standard contractual conditions. > It's interesting that no significant advances > in software that I know of > were ever done under the > supervision of corporate management. Were they all done against the wishes of management? Of course not. > If programmers had more say over their > working conditions, they might be able > to make it tolerable enough to do > really creative work. If you're right, then what's stopping entrepeneurs who share this insight of yours from taking over the software industry? > > I've cited statistical data showing that > > compensation exactly tracks worker productivity. > > You mean that average compensation tracks average > productivity, not that each worker is compensated > according to his productivity. It's untenable to assume that the exact fit I graphed is a statistical fluke, and that there is any significant and measurable skew from the relationship that economists across the political spectrum agree holds true. > Corporate profits are the difference between > worker productivity and their wages. No, there is also a factor of production called "capital". > the disparity in programmer productivity > greatly exceeds the disparity in wages, > so the best programmers are far under-compensated. The vast majority of programmers are compensated in line with their productivity, and the existence of a few outliers does not change this fact. > It becomes "oppression" when the power is abused. I looked up > "oppress: to crush or burden by abuse of power or authority". "Crush" is metaphorical, and "abuse/burden" are vague. I still predict that you will always claim "abuse" whenever incentives to associate aren't precisely equal. > Homely men generally choose to marry homely women > rather than be oppressed by attractive women. No -- by your way of thinking, the mere act by attractive women of declining to associate is itself oppression. Homely men "have no say" in their associations with attractive women, and according to you "having no say" equals being oppressed. > Unfortunately, there is no such alternative > in the job market. Sure there is: I could go back to working at McDonald's if I were as upset as you are at the idea of working in a cube. > The human population vastly exceeds the > number of jobs available in industrialized > countries, so the supply of labor without > immigration control is essentially unlimited. It's extremely limited, by not only immigration controls, but also by language skills, unwillingness to relocate, financial inability to relocate, lack of technical skills, lack of experience, cultural incompatibility, etc. The Marxian theory of subsistence wages has been empirically falsified time and again. brian@holtz.org http://humanknowledge.net