From: Brian Holtz [brian@holtz.org]
Sent: Tuesday, October 29, 2002 8:05 AM
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:

> > I think that the normal sorts of personal 
> > experience are sufficient for
> > intelligently interpreting sociological 
> > and economic data.
> 
> What basis do you have for saying this?

Because it's untenable to say that abnormal personal experience is 
necessary for intellgiently interpreting sociological and economic 
data. I'd be happy to debate epistemology with you, but I can tell 
you ahead of time that we won't end up contradicting my statement above.

> > > today's rich are probably similar in character
> > > to antebellum slaveowners and medieval aristocrats
> >
> > They obviously differ in their willingness 
> > to completely disenfranchise others.
> 
> My view is that differ only their 
> ability to completely disenfranchise
> others

Your view is sufficiently at odds with reality that I'm not going to 
bother demonstrating to you why it is such.

> > 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.
> 
> Please give me a reference for this.

Encyclopedia Britannica, in the article "limited liability": "The legal 
inadequacies regarding extended partnerships and unincorporated joint-stock 
companies and the need for larger and larger amounts of capital gradually 
led to the acceptance of the corporate form of enterprise."  In the article 
"corporation": "Strong impetus for this fusion of the two forms arose from, 
and was intensified by, the spread of new capital-intensive technologies of 
production and transportation. In particular, the construction of railroads, 
a matter of pressing national importance for all industrializing nations in 
the late 19th century, required large sums of capital that could be secured 
only through the corporate form and, in fact, only with many innovations in 
the development of financial and debt instruments within the corporate form. 
Moreover, the railroads made possible, and in some cases made necessary, an 
enormous expansion of existing industries (notably steel and coal) that the 
corporate form alone could support."

> what you have to prove is that capital 
> markets couldn't have
> worked without limited liability.  
> If you can't show this, then 
> you have no data points.

Sorry, but my inability to perform time-travel counterfactual historical 
experiments does not constitute an absence of data.  The facts I've cited 
to you remain historical facts.

> Insurance isn't relevant since it is for 
> the producer, not the consumer.

Insurance is relevant because it means the consumer can sue for more than 
the book value (or even market cap) of the tortious corporation.

> Consumer information and buying decisions are 
> not sufficient since buyers don't have time to 
> be an expert at everything that they buy.

Of course not; acquiring perfect information is inefficient, since acquiring 
it costs more than what is saved by having it. But information markets can 
arrange that the information consumers generally need is generally available 
to them.

> Eliminating limited liability would make 
> tort effective enough to justify removing 
> government consumer protection laws.

If that's so, then why don't you cite 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)?

> > there's no econometric data to motivate this from concern
> > over workers not being fairly compensated.
> 
> "econometric"?  Maybe you should spend more time 
> reading Dilbert and less reading abstract economists.

Argumentum ad dilbertem?  Congratulations, you just invented a new logical 
fallacy. :-)

> The topic here wasn't wage compensation, but
> rather working conditions

Compensation is a part of working conditions, and you still have not cited 
a single measurable aspect of working conditions that does not track worker 
productivity.

> If workers did have more leverage, I would 
> expect that the practices described in Peopleware 
> would be more common.

Would these "practices" be written into employment contracts?  What would 
the contractual language be, and how would it be enforced?  The truth here 
is that, to the extent that such practices can reliably deliver more benefits 
than costs, programmers and their employers would already tend to use them.

> > Were they all done against the wishes of management?
> 
> No.  So?

So maybe the management in question realized that research should be managed 
differently than product development.

> My point is that working condition for 
> programmers in corporate american are abysmal.

All of my personal experience (at Sun and Yahoo), and all of my information 
from secondary sources, says otherwise.  You keep making claims like this, 
but you've cited no specific conditions aside from cubes (oh the horror!) 
and H1-B visas (which are a government construct and not a consequence of 
free markets).  

> > If you're right, then what's stopping 
> entrepeneurs who share  this insight of
> > yours from taking over the software industry?
> 
> Because success in business isn't just based
> on programmer productivity.

So you admit that your definition of "best programmer" is something other 
than most productive in the sense of contribution to the bottom line?  This 
seems like just another case of a leftist replacing the market's determination 
of value with his own personal opinion.

> More important traits are the ability to lie and cheat.

Obviously false.

> An entrepreneur who would tend to treat programmers 
> well would probably not be able to sell the
> great product that his programmers wrote.

Having not made your case about programming, you here simply switch to 
marketing with a non sequitor "probably".

> > "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.
> 
> Please define "oppress".

Huh? You claim to diagnose corporate oppression, but don't have a specific definition for it?

For our purposes, I would make "oppression" a synonym of "aggression", 
which in my book I define thus: "Aggression is the violation by a person 
of another person's rights, and consists only of: personal injury, damage 
to property, infringement of resource rights, coercion, fraud, anti-competitive 
monopoly, or inducement or deceptive incitement of third parties to any of these. 
Coercion is compulsion of one person by another through force or threat of aggression. 
Fraud is any attempt to profit by deceiving a person into making a choice intended 
to cause him economic harm relative to what would have been his undeceived choice."

> there is no oppression without a serious 
> relationship, because only in a
> relationship does one submit to someone else's 
> power.

So a conspiracy not to hire blacks is not oppression?  That's an odd position for 
a leftist to take.

> > > Unfortunately, there is no such alternative
> >
> > I could go back to working at McDonald's
> 
> This isn't a reasonable alternative.

Where "reasonable" is defined as "contrary to the worker's fondest wishes"? Is it 
oppression if I buy a lottery ticket and don't win?  The bottom line here is that 
you will always claim oppression if your array of choices does not include whatever 
you want it to include.

> But there is no reasonable 
> alternative to the cube for a programmer

The cube itself is a "reasonable alternative".

brian@holtz.org
http://humanknowledge.net