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Daniel Marques

Biomedical Scientist,

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Should/Could a maximum wage be introduced; A limit to how high the highest earners can make?

The gap between the highest earners and the lowest is too great. John S Lewis said, "Capitalism has done enormous good...but the perversion has given us too unstable a society. Differences of reward must be large enough to induce people to do their best but the present differences are too great."

Some humans are paid (or pay themselves) over 1000 times the wage of their workers, and orders of magnitude greater still than the vast majority of the world. The risk and effort of such jobs have been attributed to some of the reasons to this but I argue that these people would not suffer too greatly if they did not give themselves or were given millions of pounds. Further more, I don't believe any individual human, from their actions, is deserving of such vast amounts of wealth (short of saving the planet from certain extinction).

Perhaps a maximum wage could stop situations where greed consumes those who are after the next big bonus, no matter what effect their decisions may have on others.

What seems like a reasonable maximum? £200,000, £500,000 a year perhaps?
I know there will be some who are strongly against this. But even if the amount was more, setting a limit may help reduce the enormous wage gaps of CEO's/ managers and their workers which is grossly unfair. Consider it for a moment, or perhaps a similar idea is available.

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    Sep 20 2011: There's a difference between State capitalism and Free market capitalism but thats another subject anw. Having a cap of any sort is violating the freedom of an individual and just that is Wrong. It's like telling a high jump athlete to not break the world record because he will make the other athletes look small or less competent.
  • Aug 25 2011: No because they earned that pay.
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      Aug 25 2011: ceo more or less inherit more than earn.
      • Aug 25 2011: CEOs had a small start too y' know.
      • Aug 27 2011: How does one EARN Billions? Once one acquires enough wealth via the ordinary method of working hard, and accumulates enough capital to play the "free" [highly manipulated and unfree] market, they can them almost geometrically develop their wealth, without doing anything except leveraging a man made unnatural store of wealth. If a man starts with ten grand, and makes ten commodities bets, and doubles his money each time, and walks away with 10 million, did he EARN THAT? It is my opinion, that it is only our lack of far better mechanisms via which consumers/cityzens can coalesce and leverage their tremendous collective wealth, that leaves us to rely on the large purely capitalistic BETS of very small numbers of men who've accumulated historical fortunes, who in return for guessing correctly about our otherwise unfulfilled WANTS otherwise, can then walk away with tremendous sums of money. If a man wins the lottery, and hires 100 dirt poor geniuses, then patents 36 fine ideas that they found while working for him, did he EARN that? EARNING is one thing. LEVERAGING what one earns in a twisted system which bends all logic and reason and is largely for ssale, is dissimilar, and far less legitimate, imo.
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          Aug 27 2011: making a decision that makes even more money to the company. but to earn a billion, you need to do a long series of good decisions.
    • Aug 25 2011: Right on Lin,

      What a lot of people don't grasp though is that there is this thing called the "free market." It should mean that a company can determine how much to charge for its products and how much it should pay its CEO independent of the government.

      If people do not like the salary of a CEO, do not buy shares of the company or use its products. That is how you punish the company.

      Do you not think Steve Jobs is worth his salary?
      • Aug 25 2011: Well he only takes (now took) 1$ as his pay no? However he does earn what his company makes in stocks. I do think he is worth his salary. He started out working with Woz in his garage and now look where he is!
      • Aug 25 2011: While we can often do something to prevent cooperate abuses of power though boycott, it is not always a feasible method of resistance. Many vital services are dominated by monopolies or oligopolies which place consumers in positions of economic powerlessness.
        The real question here is whether or not a maximum wage would be socially beneficial. I think it might be. Tiered wages would still provide incentive to those whose productivity rests on capital reward and it would prevent the self-indulgent billionaires from using their power in immoral ways.
        • Aug 25 2011: "it would prevent the self-indulgent billionaires from using their power in immoral ways."

          You missed my other post. This would not prevent anything. People willing to break the law, will not follow rules. A wage cap will not generate morals in these people.

          I'm not going to go into a long winded tirade with links to all the negative aspects of price floors and ceilings such as rent controls because I'm tired and lazy. Suffice it to say, whenever people try to artificially control prices, there are larger negative reactions. (research it)

          People should be less concerned about other peoples finances and more concerned about their own.
      • Aug 26 2011: Corporations themselves go against the principle of a "free market." A corporation is a legal fiction, the creation of which is enabled by statute. Corporations enjoy benefits and protections other businesses don't. They are an example of the government controlling how business is conducted - a socialist/communist concept!

        CEO's do not "earn" their high incomes. They get them because corporations are given ARTIFICIAL rights and privileges under the law. What is working really well here is government legislation, not the free market.

        ---

        Krisztian: yes companies would always exist, however it is impossible for other types of companies to become as large as corporations. You say that CEO's "find ways for the company to survive," but the law already gives them advantages in that regard. Small business owners take more risk and get less pay.
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          Aug 26 2011: wow, the first paragraph is quite an apt observation. basically companies are islands of central planning in the ocean of capitalism. they only do good things because they have to, or consumers will leave them. but please note that companies would exist in a free market world, only they would be more or less different.

          the second paragraph is a little off though. what does that mean they don't earn it? they certainly do quite often, as they find ways for the company to survive. look at bill gates for example. he created one of the world's biggest company out of nothing. this is quite a feat, and surely deserves a huge compensation for this.
        • Aug 27 2011: Exactly, Lee.

          People seem to forget that in a truly competitive and free marketplace, profit margins would be incredibly low. A billionaire is not the product of a free market - it is the product of legislative manipulation. People too often confound private enterprise with private gain.

          SEP
        • Aug 27 2011: You apparently misunderstood the statement. "...OTHER men to manipulate the market." For reference, see Jeffrey Immelt, Kenneth Lay, and Dick Fuld. But, while we are here . .

          Look into the $100 million tax break Microsoft received from the Feds last year. Tax break = not having to pay taxes that other companies and individuals do = manipulation of market in their favor.

          OR

          Look into the tax breaks given to Apple by the state of North Carolina. They actually wrote a law to give ONE, SINGLE company, Apple, a competitive advantage.

          That is how Steve Job, Bill Gates, and other corporate henchmen manipulate the market.

          Any more brain busters?

          SEP
      • Aug 27 2011: I see a lot of people jumping in to defend Bill Gates and Steve Jobs - no doubt while typing a report in Microsoft Word and jamming to Apple's iTunes.

        Does anyone wish to stand up for Jeffrey Immelt - the CEO of GE? You know, the guy who managed to 'earn' a 100% tax break for his company last year? He really had to hustle to get that done, y'know.
        Or does anyone want to sing the praises of Ken Lay - the ex-CEO of Enron?
        Or Joseph Cullman, the CEO of Philip Morris, who assured a pregnant mother that smoking was indeed safe?
        How about standing up for Dick Fuld, the infamous CEO of Lehman Brothers, who went out of his way to shelter his 'earned' wealth from the shareholders when his company went belly-up?

        Bill Gates and Steve Jobs do not justify the system that allow other men to manipulate the market (and their stock holders) in order to secure high incomes for themselves, year after year. The people who really earn their incomes are those that imagine and engineer the products that these companies produce - not their egghead CEO's.

        SEP
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    Sep 21 2011: But that athlete is not jumping 500 feet higher. And that athletes jumping is not taking risks, for example, that will result in the government having to use tax money to bail them out of trouble. In any case the main argument i was trying to get across is that these extreme rates of pay are at such a high that no amount of work in a day, week, month etc merits the individual getting it. In certain circumstances, such as an innovator who has helped millions of people, I can understand them receiving millions. But so many are just coming out of education, joining a bank, and because they make a few lucky decisions, make the bank money and recieve extravagant bonuses or a very high rate of pay anyway. That extra money made for the bank could go to the state and help the people, fund research etc.

    Instead that money goes to the top bosses, who proceed to spend the millions on boats, houses and cars. Just doesn't seem right. Shouldn't a line be drawn somewhere?
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      Sep 21 2011: yes they are. that's why they are paid that much. everyone earns approximately his marginal revenue product. a manager makes decisions that increases profits by millions of dollars. you are free to deny this, and refuse the idea that managers actually have a productivity. but there is a good reason they are there, and you are making fuss here, and not vice versa. and even if they don't deserve the money, it is not your loss, it is the owner's loss.

      government bailouts is a shame, and you should think twice before voting next time. but bailouts are not going to be fixed with a salary cap. rather, a central budget cap and a monetary base cap. don't blame the bailouts on corporations. blame the government, they did it.
  • Sep 19 2011: I eat once a day, typcally chicken, fish or a pasta each one cost approx. $8. I earn 35,600 a year. I own my own home (1100)sq. ft. My mother lives with me as does my best friend, niether work. I own a car needed for my job My mother has her own bedroom and my friend sleeps on the couch, he hasn't worked in two years and has nowhere to go, He has lived with me for the last 4 years and I've never charged him rent because he just doesn't have it.
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      Sep 19 2011: 1100 sq ft for 3 person (let it be 4 if you have a wife/gf) is luxury in most parts of the world. you could sell this house, and rent a small flat, you could spare some money.

      i was wrong, you earn a little less than me. my income is around 37000, varies. but as i said, i earn like 4x the average here, and even the average has nothing to worry about.

      you haven't convinced me. i still believe that the "just" wage level is USD20000 per year. anything above that is exorbitant luxury. so either define the cap there, or nowhere.
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          Sep 20 2011: i object too. my point is that people agree only to a limit above their income, for some "miraculous" reason. i'm trying to provoke some deeper thinking on how could we fundamentally determine the right cap. the more one thinks about it, the less appealing the idea is. at least that is what i hoped.
  • Sep 19 2011: No, I struggle to keep food on the table, I'm trying to support three people. If I were in Nepal then perhaps I could give 60% of my income away and probably would. Your perception of how the average american lives is distorted. When I get payed I bareley have enough to keep going to work. I work, I sleep, I eat there isn't much time to do anything even if I did have the money to do it
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      Sep 19 2011: can i ask you to give us a picture about what do you eat? say, a typical day of food, and its price. also i don't see your income, as i requested. size and type of your living place would also be informative.

      until further information, i have to assume that you earn more than i do, and i can assure you, my income is way above the average in my country. prices differ not very much.
  • Sep 19 2011: I never implied that my life was the right way to live and compared to the countries you named I do not wish to tell you my salary. I do not live in luxury and wonder where your anger is coming from.
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      Sep 19 2011: what makes you think i'm angry? you are interested in my persona or my mood, rather than answering my questions? believe me, i'm not that interesting. much more interesting is the motivation and thinking behind your wish to have a salary cap, coincidentally way above the level you earn.

      would you agree with a worker in rural nepal that your income is way above the necessary level, and actually you waste most of your money on luxury goods? and that you need to give 60% to charity?
  • Sep 19 2011: I don't think capping the wages is necessary.

    I personally don't mind having people earning excessive amount of money, as long as they do their job correctly. Because yes he earns way more than what he needs, but there are also hundreds, or thousands of families who are depending on the stability of the jobs this one guy is managing. And for the sake of all these people, I say there's no problem being a bit incentive and making sure this guy has everything he needs.

    Usually everybody agrees that with great power comes great responsibilities. But it's exactly as you said, I also feel that today's big CEOs have all the power, but their decisions have no more consequences on their own life. They can act irrationally, screw up, send hundreds of families on the streets, and still get away with a nice shinny golden parachute.

    I think we shouldn't limit the wage, but calculate the wage every month depending on the results. When things are going great, give them all the money they want if they believe it will make them happy. And sometimes, when things are going wrong because of a bad decision, give them a negative wage, or hold back his wages until lights are green again.

    The other thing about limitations is that I fear it would incite them to find some other shady ways to make more money.
  • Sep 19 2011: I agree that here should be a cap and any money earned over that should go to the human services.
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      Sep 19 2011: the cap is above or below your income?
      • Sep 19 2011: Hi Kriszti'an
        I am one of the working poor in America so to answer your question it is far above. I was thinking along the lines of 1 billion dollars and the rest to social services of which I do not collect.
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          Sep 19 2011: as a "working poor", what is your annual income? and what is the number if we add government services, like police and public roads? do you own a car? a flat or a house? flat TV? do you cook or eat processed food or eat in restaurants?

          average income in nepal is USD 2000. in india, 2500. in china, 5000. in madagascar, 900. both values are per year. in the year 1800. this was USD2000 in the US. in hungery, my country, average salary is around USD10000.

          what makes you think that your lifestyle is the "correct" one, and does not fall in the outrageous luxury category? what is the "normal" level, and why?
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    Sep 6 2011: I thinking fixing minimum wage is more important becausing fixing maximum wage will not ensure people living in poverty level or below to get anything extra
    Good taxing system can take care of maximum wage easily.
  • Aug 31 2011: Yes, reducing wages with a wage cap would put a stop to CEO's insane strategies to temporarily raise profits so that they can get obscene bonuses by scuttling the company, something which should be a crime but isn't because their fellow CEO's cover their backs until the whole thing blows up like ENRON. The money would instead go to higher profits that would increase investor return. Of course this still does not make it a done deal. CEO's will find other ways to profit themselves. Perks and company expenses are not wages and will certainly be misused to fill in their wage gaps.

    CEO's are more concerned with their pockets than with company finances. This is because they actually don't do much. They decide on a strategy and then bet the whole company on it. If it works they get huge bonuses, if it fails they get huge bonuses. They don't actually have much control over company profits but they do have control over their own profits. If CEO's were doing their jobs right the world would be filled with Steve Jobses and Apple like companies. Yet most companies are doing business as usual. Do CEO's make that much of a difference?
  • Aug 30 2011: From initial glance at this question (without reading the conversation below) wouldn't it be more considerate to not limit with a number but a percentage more than the employee's of the company be a better way to close a gap?
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    Aug 30 2011: I like the idea. I would suggest a marginal-utility function would be a great way to set income limits.

    Utility (happiness) increases with income. The amount of utility gained decreases with each unit of income increase, meaning a poor person gets more satisfaction from $100 than a millionaire. This graph approaches a flatline at high incomes.

    You could set a point on this graph as a ceiling, somewhere high, towards the flatline- perhaps $1 million per year. The highest current earners now receive this as their income. You then create a function that scales their earnings to that point simultaneously scaling every other income to a point on the marginal-utility/income function. Every level of earnings corresponds to an income on the graph.

    The beauty is that current low-earners would hardly be scaled down at all.

    As Seth points out the implementation is much much harder. This would cause massive immediate deflation, and those with savings would be kings. I'm missing a transitional step...
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      Aug 30 2011: there is a serious logical error in your reasoning.

      for one specific person, each quanta of money gives less and less satisfaction, according to the diminishing marginal utility law.

      but different people have different utility curves. so it is not adequate to say that the 5000th dollar for certain person worth more than the 10000th dollar for another person. it can be quite the opposite. we could just as validly argue that an additional dollar to a drunk is less valuable than an additional dollar to bill gates, as he might buy a book, or give to charity, instead of just wasting it on another sip of alcohol. but that reasoning would be just as wrong. the truth is, we can't compare values inside different people's heads. value is personal, and non-quantifiable.
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        Aug 30 2011: Sure Krisztián, you're right there. What I'm trying for is an approximation, same as any method of progressive taxation. We would have to work from an aggregate utility function. For people who demand more income for the same level of satisfaction they would have to work longer and harder (or smarter).
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      Aug 30 2011: oren, it does not even work as an approximation. approximation needs data. we don't have any tools to measure satisfaction or joy. so this is a wild guess at best.

      what if i present you this reasoning?: the very fact that some people have more money, but still put effort in getting more, indicates that they value money more. their utility function is such that they want more money to offset the disutility of work. more to that, we can observe that some CEOs and stock brokers work so much they ruin their private lives. we can safely assume that they value money higher than a worker who works 8 hours and does nothing else.

      beware! i'm not saying that this is a valid reasoning. i say that this is just as valid as your assumption that rich people gets less utility out of an additional sum of money. it can be either way, we have no idea.
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        Aug 31 2011: Krisztián, when you say "we don't have any tools to measure satisfaction or joy" I am interpreting that as you meaning you don't like the tools. A google search will dismiss the literal interpretation. There have been hundreds of studies of the utility/income function and the majority have provided us with evidence that "rich people gets less utility out of an additional sum of money", hence the shape of the function in text books.

        You have good reason to not like the tools, as I don't either. They are all qualitative. There are far too many co-variates like the ones you describe to be considered scientific. I wouldn't even hazard the assumption that those who work long hours "value money higher than a worker who works 8 hours" due to other motives; some people love their jobs.

        That said, I still think there is enough data coupled with common sense to make a better approximation of the utility/fuction than assuming it is a linear relationship.
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      Aug 31 2011: methods to measure and quantify joy? comparable between to different people? so we can for example say that one man likes baseball three times as much as another person likes beer? show me that result.

      ps: no, i won't google it for myself. if you don't want to make a point, don't. but i won't make your point for you.
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    Aug 28 2011: A maximum wage and a maximum net worth may be a good idea but the haves may not want to give up what they have even if it is more than they will need in a lifetime, for several generations or even what a small country would need for a year. Wars are fought over how to distribute or redistribute wealth. People amassing enormous wealth should voluntarily help others and use their money effectively rather than hoard it in the bank vault. We need to look at and question what we are valuing in life. Why is gold, gems and diamonds wanted so much? It is pretty and is made into beautiful jewelry but it is not essential for life and the process of extracting these materials and making them into jewelry are harmful to the environment. We should judge establish a new measure of wealth and that would be based upon how much good we have done for the world and the environment.
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    Aug 28 2011: I am mainly referring to the conversation between those talking about CEO's 'earning' their pay. Steve Jobs and Bill Gates have been mentioned as fantastically skilled entrepreneurs who apparently did earn every penny. This is the crux of my argument.
    Doctors will save perhaps thousands of lives throughout their career. A soldier will put his/her life on the line for their country. A teacher may devote their entire life to educating generation after generation, some of whom will go on to achieve fantastic feats of achievement. Scientists and engineers will continue to push the boundaries of human capabilities mentally and physically.

    These are just some of the philanthropic activities that are truly deserving. And yet not one of these people will receive anything close to what gates or jobs have received through their ventures of selling products. These two in particular have changed tech in our time significantly for the better (in my opinion) yet i can't see how one individual has been seen to be deserving of so much! we only accept it because we have been born into this society. Jobs, Gates or anyone else could not have got to this point without the hundreds of supporting staff carrying out their dreams.

    My feelings are that even though it does happen, I think we should be seeing the value of an individuals work in the context of what they have physically done. Yes great ideas deserve incentive and encouragement, but the incentive has become so unregulated that the gap between lowest and highest incomes are through the roof...so to speak.

    Why do you think so much money is deserved?
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      Aug 28 2011: in the free market, you are payed proportionally to your contribution, whatever it is. save lives, come up with an idea, or just assemble machines, does not matter. only your contribution to the company counts. a CEO makes decisions. if she makes good decisions, and the company starts to reap ginormous profits, she can ask for great sum of money in return. the owner will pay it happily. that is what "deserve" means in a free society. i don't "deserve" my salary in any ethical ways. i simply create value to the company.

      how would one attack that reasoning? either you say, no, after a certain level, the owner, who is a free person, can not give the employee, who is a free person, any amount of money of his own, even if the contributions of that person resulted in much greater profit.

      or you say it is impossible that anyone would create such a large value, so these big payments are surely phony. in this case you deny that leaders of microsoft or google created unthinkable amount of utility to literally billions of people.
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    Aug 28 2011: Not that I agree with the idea at all, but I think there are practical barriers anyway.
    Rich folk don't make their money on salary.... a. if employees, it's stock options, return on their investments etc from the money they've made along the way. b. they're folks who own businesses, who tend to take money in the form of capital gains when they sell the business, as opposed to dividends, salary etc annually.
    You talk about wealth in the question. Generally, wealth creation is a god thing, because it is genuinely wealth that has been created, a bit like magic.
    So, don't at all agree with the notion, but in any case salary cap doesn't really address the issue you have in mind.
    • Aug 29 2011: When I first saw the question posited (several days ago), I had basically the same reaction. Whether or not it might do one (or the community/state/nation) good, it has too many practical barriers in place to be successfully implemented. Moreover, I wasn't convinced at all that such a policy would improve anything..

      Now, having thought through it for a few days, I cannot come up with a single objection to it other than the actual implementation (which would be damn near impossible). So I am going to ignore the implementation aspect for a minute and try to persuade you solely on economic grounds that this proposal would be beneficial and is worth considering.

      The main aspect that I want to focus on is monetary inflation (or price deflation). By placing a ceiling on one's earnings (we can debate later if this should be an hourly wage, yearly salary, or lifetime accumulation) you would quickly begin to see prices drop. There is a host of reasons for this, mainly less disposable income (as all wages fall) and also, the lower labor cost would be passed onto the consumer as lower product costs. This would be a temporary phenomena, but it would raise the value of any savings that you may have. Of course, this would adversely affect anyone with outstanding debt, or that is dependent on equity for their lifestyle. It would discourage the borrow and spend trend we have seen develop in America over the last 30 years.

      This would actually lead to a new generation of 'wealth creation.' First, as I said before, one's savings would accumulate value and have more spending power. Also, with deflation, the initial cost of establishing a business would become lower, and much more affordable for our middle class citizens. More small business = more competition = more dynamism = growing economy = wealth creation. CEOs are not the only people who get the economy moving. I say empower the working class. In the end, that empowers everybody.

      SEP
    • Aug 29 2011: With that said, the implementation would be a nightmare. Capital flight controls, a corporate legal overhaul, elimination of the minimum wage, etc. But, it would be worth it.

      SEP
  • Aug 25 2011: Daniel,
    You can not place this question in a vacuum. Would you lower or raise the minimum wage in response? Would the minimum wage be eliminated? (That is an interesting idea I am going to have to brainstorm - no min. wage but a max. wage and the wealth distribution that could cause.) Assuming you would leave the minimum wage the same or raise it, I can easily see deflation quickly occurring. This would lead to lowering wages and (if the minimum wage is still at it's current level) higher unemployment. That is the exact opposite of what I feel you are after - the empowerment of the working family and a fair distribution of wealth.

    I think you are really onto something, though. A ceiling for wages would cause deflation - a general strengthening of the currency - which would favor any working individual so long as they are not burdened by debt payments. (That's another nook you have to explore. Not every working man/consumer is the same, and different policies will affect them differently. Are you willing to put short-term pain on those families with debt - there are a lot of them - for the higher goal of achieving a just marketplace?) As long as a minimum wage doesn't restrict a man from working now economically viable wages, then a wage ceiling could be a good thing.

    How would labor unions react to all of this? That is a political aspect you have to consider. You also would need to determine the unit of labor measurement (hour, year, lifetime, etc.). Like I said, great question, but it should not be asked in a vacuum. You have to possess a full understanding of the ramifications before a conclusion is warranted.

    SEP
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    Aug 25 2011: If you want to cut down CEO salaries fairly first you should define a maximum annual net revenue limit for company stake holders. For example if I am the CEO of Coca-Cola and company owners take a billion net revenue annually I wont settle down for less than 2 percent of that revenue. If stake holders will have to donate rest of their profit in case they pass that specific revenue limit then CEOs will get a long with the system. Otherwise it is an unfair ''I earn you spend'' situation.

    ( here my English will suffer surely but I will still try)
    And for your information it is not CEOs' fault to have ridiculously high salaries. It is stakeholders greed to put one man to top with big salary in order to exploit thousands of men at the bottom as they are slaves with low salary.
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    Aug 25 2011: oh my old favorite topic. 7th time.

    here is my take: yes. take the world's median income, multiply by 10, and let it be the maximum wage.

    what is not acceptable is to take your own salary, and tweak the system so the limit will be a little higher than that. this would be a selfish behavior to to that.
    • Aug 25 2011: 'Take the world's median income, multiply by 10, and let it be the maximum wage."

      How did you engineer this formula? Do you mean median wage? Or did you mean maximum income?

      As of 2005, the world median income was $1700. That would place the highest wage at $17,000/hr. Is that what you are intending to say? Or are you saying $17000 should be the maximum income one could earn in a year? Either way, the formula seems completely arbitrary. How long dd you spend forming your 'take' on this subject?

      Let's assume you meant $17000 was the highest yearly income one could make. As I have stated above, this could have the opposite affect on society that I think you are intending. Deflation in this scenario would be extremely rapid - to the point that the entire global economic infrastructure simply could not cope. Wars would ensue. To have covered the topic seven times (it would seem) you have a startlingly flippant attitude towards the real-world implications of such a policy. Maybe it is a blessing you are revisiting it now.

      SEP

      Let's
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        Aug 25 2011: wow. check your data again. the median is USD1700 per year, not per hour. so my proposal is: set the maximum income at USD17000 per year. do you have any fundamental objections to this?

        "you are intending" is strange, because i didn't come up with this. my position is to back off, and don't make claims on my money. clean and simple.
        • Aug 26 2011: "wow. check your data again. the median is USD1700 per year, not per hour."

          Right, but you originally said "the maximum wage" which is not typically denoted for an entire year, which is why I asked if you meant income. Apparently you did. And yes, I do have a fundamental objection to this, for the reasons stated above. Do you have any reason to suppose USD1700 is an appropriate maximum income level?

          SEP
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        Aug 26 2011: do any of you have any reason to suppose any maximum level is an appropriate level? because of course i'm not serious. i just want people to think about it. if your income is above the proposed level, the idea becomes less compelling.
        • Aug 27 2011: "Do any of you have any reason to suppose any maximum level is an appropriate level?"

          The appropriate level should be determined based on what the objective of the policy is. Once the goal has been set, we could no doubt program algorithms to test the purchasing power distribution of any number of levels and then progress from there as to what the appropriate level could be. I am not saying it ought to be done, but I approached the topic with serious consideration and assumed you had too. Now I understand your sarcasm.

          "If your income is above the proposed level, the idea becomes less compelling."

          Perhaps for adolescents or the economically illiterate, but I think the majority of adults have a pretty sound (if not intuitive) understanding of the way the market works and would not mind seeing their wage lowered so long as the purchasing power of their currency increased at the same rate (or faster) over the same time period. Because of the sticky nature of prices (as well as numerous other factors which I described in my initial response to Daniel) this would be difficult to achieve. Difficult, but not impossible and i think the proposal does deserve some serious consideration.

          Are you opposed to the proposal solely on ideological grounds?

          SEP
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        Aug 27 2011: nobody talked about increasing the purchasing power of money. it makes the proposal pretty much impossible, because it would basically mean to rise the purchasing power of people's income greatly on average, which is simply not possible with the same output. policies can't produce more output, they can just redistribute it.

        i'm opposing such solutions mainly on ethical grounds. if i decide to give a sum of money to a person, it is only my and that person's business, and nobody else has a say about it. that is the very idea of ownership: i command my own money, my own company, my own stocks.
        • Aug 29 2011: "Nobody talked about increasing the purchasing power of money.."

          Right. It was not initially mentioned, but as a logical consequence of the policy in question, I included it in my own analysis. And no, this would not 'rise the purchasing power of people's income' it would rise the purchasing power of their currency, which they will now have less of, since the introduction of a maximum wage will force all wages to lower (just as the introduction of a minimum wage has caused all wages to rise).

          Right now, you cannot pay someone less than $7.25 per labor hour in America. That is an existing statute that already infringes upon your right to command your own money. All I am saying is that by eliminating the minimum wage, and instead instituting a maximum wage, the overall monetary policy would be improved, and there would NOT be any new degree of financial restriction than there is now.

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        Aug 29 2011: it is not a logical consequence of the proposal. there are much less rich men around, so if you redistribute their income above a level, it means a little increase in the income of the masses.

        guess what, i'm against minimum wage too. minimum wage does not increase wages in the long run. it just forces some people out of the labor market. minimum wage is one of the primary reasons why we have unemployment.
        • Aug 30 2011: I understand (hope) you are not an economist. But you can still do better than this. The reason "minimum wage does not increase wages in the long run" is because the cost of the labor increase is passed on to the consumer through price rsises (inflation). This raises the cost of living for the worker, and deflates the value of the currency paid to anyone making a wage above the minimum.

          THEREFORE, to eliminate (as you argue to do) the minimum wage (alleviate labor costs) and to install a maximum wage (to ensure that the savings were not simply condensed to the top few, CEOs and such) this would lead to an overall DECREASE in prices (deflation). Deflation, or the lowering of prices, is the same as an increase in the purchasing power of the currency. If you have an increase in the value of the purchasing power then any reserves of the currency (savings) would increase in value. Also, as wages fall, the burden of any outstanding debts would become greater, as your income drops but your interest rate remains the same. If my logic is faulty here, please explain how.

          "there are much less rich men around, so if you redistribute their income above a level, it means a little increase in the income of the masses" I am not talking about redistributing anyone's income. Do you smell a Marxist in every foxhole? The proposal would benefit the rich tremendously. The purchasing power would increase for everybody. I have mentioned the income DISTRIBUTION of such a proposal, i.e. how such a model would allocate total income across the the economic scale. It does not involve taking someone's earned wealth and giving it to anyone else. Calm down.

          Here is an idea, and another LOGICAL CONSEQUENCE of the proposal - If you are so hell-bent on compensating somebody more than the maximum limit (whatever it might be), hire one of their family members.

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        Aug 30 2011: seth, i hope you are not en economist. when we talk about wages, we talk about real wages, that is, inflation adjusted. minimum wage laws can cause inflation, if in a lot of cases firms are unable to quickly fire workers whose marginal revenue product is below the minimum wage. but in the long run, they will find the way to get rid of that person.

        i have to repeat that if you place the maximum wage at the proposed level, that is, high enough, it will only slightly affect the price level directly. because rich men are few. also because rich men tend to consume less and save more (in percent).

        yes, you do talk about redistributing income. any production goes to somewhere. if you limit how much a person can take, other's will take the excess amounts. exactly as you described, through changes in prices. if less 5 story yachts are sold, less steel will be used, steel price falls, cars become slightly cheaper, people can have more cars. that is nothing else than redistribution. resources that otherwise would go to rich people now goes to middle class people.

        the remark "calm down" is inappropriate, and probably you are the one that needs to calm down.

        and the last paragraph is hilarious. you say that the proposal is okay, since we can easily work around it? i thought it is the hungarian way of thinking, but seems universal. there is a term for laws that are acceptable because they can be circumvented. the term is "bad".
        • Aug 30 2011: So your argument is that such a proposal would not cause deflation? Do you see it having any affect on monetary policy at all?

          Income distribution is not the same thing as income redistribution. The first is a characteristic of any given economic model; the second is a tax policy. Having "less 5 story yachts sold" is not the same thing as confiscating the wealth earned through the sale of said yachts and put into a government account to be given to the 'disadvantaged'.

          I just want to understand though - you prefer the model which allocates resources towards the 5 story yacht, as opposed to more cars for the middle class? I guess we can just have an honest disagreement there. It seems to me that a strong nation is dependent upon a strong working middle class, and that such a proposal would empower the middle class. You seem to concede the point, but still favor the system which overcompensates the highest percentage of society.

          I don't think hiring a family member is necessarily a way to circumvent the proposal (most people wouldn't do it), or that it is indicative that the proposal is bad; each and every law is exploited for it's loopholes. The reason that a law is typically exploited is to save a company/individual money - can you explain how hiring an additional family member is going to SAVE the firm money? Above all, a maximum wage would be good for the firm.

          The question still remains at what level to place the ceiling at, and at what increment to measure it. Since these two components have yet to be stipulated, it seems misguided to base your critique in the ceiling being too high to affect prices. At what level do you think it begins to affect prices in a meaningful way? A $2 million salary, a $450,000 salary, a $50million lifetime cap, etc. ??

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        Aug 30 2011: ah, i think i know where the misunderstanding comes from. for some reason i thought you are talking about the original proposal, which was like USD500000 or more a year. i believe if you maximize the income at that level, it won't have dire consequences to the price level. but in fact you are talking about my proposal, setting the maximum level near the middle range. surely, that would most likely result in massive deflation.

        however, that deflation won't stop even the economically literate people to agree to that. at least not in the western world, where most people would be on the losing side, even after the deflation. that is because there are more income in the range from 17000 to the western average than in the range from western average to bill gates.

        and finally, no, i don't think that 5 story yacht is better for society than cheaper cars to the middle class. however, i also don't think that it is worse. what i think is good for the society is very very strict protection of personal property. and i also don't think that the middle class is the backbone of society. i believe that stable property rights is the backbone of society.
        • Aug 30 2011: No, as I said before, your initial proposal of USD17000 was completely arbitrary and way too low - the deflation would be too tremendous and too rapid. I am not proposing any hard number, I am trying to reason through what would be an effective level, as well as an appropriate length of time to measure earnings. But alright, at least we now agree deflation will be a result of such a proposal, and now we just have to determine to what degree a given level will cause deflation and to what extent the deflation might help/harm the overall economy.

          I do not understand the line of thinking in your second paragraph. Not that it's wrong; I just don't see it. How would people in the 'western world' (I am actually approaching the proposal in the context that one country adopts it, not the entire world) not benefit from such deflation? Or how would they end up net losers of value? Please explain further.

          I would agree that stable property rights are a foundation to society, but do not see how such a proposal is a restriction to them. Your entire argument lies in that, when told you cannot pay someone above, say USD500000 yearly, you adamantly declare you have a RIGHT to pay him a million. It is absurd and unrealistic. It would do nothing to make your company more competitive (actually the opposite), it does not save you money, it does not benefit you at all - it is a pure ideological argument that has no basis in the real world. Though I respect your position, I believe you are grasping at straws.

          You know there are real-world objections to the proposal, particularly in the implementation process as well as the affect it would have on tax revenue. These problems still need to be addressed.

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        Aug 30 2011: this is getting to fall apart. my point was: if you introduce a wage cap that is way below the wage of a certain individual Mr X, Mr X will surely oppose that. even if Mr X understands that deflation follows, he also probably understands that the deflation will not be enough to offset his loss. only those who are close to the limit, might benefit from the action (they take more from the rich than they give up for the poor).

        property rights declare that if you have a property, you can do whatever you please with it, unless you violate other people's property rights. it means that if my desire is to give you two million dollars of my own, i can do that. the proposal forbids that.
        • Aug 31 2011: Yes, this is beginning to fall apart. One of us is having a scientific/economic discussion. The other is stating and then re-stating ideological positions.

          You and I both know full well that "if you have a property, you can do whatever you please with it" is NOT an acceptable or working definition of property rights. I am all for practical property rights (indeed, I would die to defend them) but your theoretical and blatantly obtuse conception of the idea is a perversion of the Western tradition.

          OK, Mr. Pinter, good back and forth - enjoyed it. Have a good one.

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        Aug 31 2011: so science and economics are not ideologies?

        the difference is more like one of us using philosophy/economics, and the other is using insults/ignoring points/wild assumptions.

        my idea of economic liberalism is the western tradition. people knew it, a hundred years ago. this knowledge somehow faded away in the last century. now everyone can say with a straight face that this is some kind of new age lunacy, and not the tradition.
        • Aug 31 2011: One hundred years ago being.. right after the Roosevelt administration. And his trust-busting policies. I guess Teddy was practicing a 'new age lunacy.' One hundred years ago was also right before the World War, and the rationing that ensued. Not sure how these realities match with your ideology, or how they substantiate your claim that "my idea of economic liberalism is the western tradition. people knew it, a hundred years ago."

          But you are right - One of is making wild assumptions and ignoring factual points.

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        Aug 31 2011: my pick of the year is quite good. 100 years ago you can see all, the past and the future. back than, the size of the government was a fraction of what we have today. most areas were unregulated, tax was low, and most people payed no taxes at all. but the seeds of descent were in the ground already. the guilded age was a memory, and the progressive era set certain forces in motion. fast forward hundred years, and what the government fought to lay a hand on back then, now some of us try to fight back. at that time, the size of the current government would be unthinkable. today, the size of that government is unthinkable for most.
        • Sep 1 2011: You have outdone yourself. "My pick of the year is quite good. 100 years ago you can see all". Except for the fact that you initially referenced one hundred years ago to highlight a point in time where people better understood the 'Western tradition.' Now that I have illustrated that it does not, you change the objective. Good one.

          "Most areas were unregulated." In what sense? True, many of the regulations we face today were not yet in existence - this is because those aspects of life had not yet come into existence. As of 1911 business activities, imports/exports, food, drugs, banking, farming, unions, and much more was already under regulation.

          "Tax was low." Again, in what sense? True, income taxes did not exist at the time, but tariffs still did. Now, we have an income tax and no tariffs. Do you wish to go back to paying import duties?

          "Most people payed no tax at all." This is because, as I just explained, tax revenue was generated from import duties and tariffs. They were still paying the tax, through the cost of business, it was just hidden from them by a few degrees of separation. This is also because many women and minorities were not included in the work force. They were not expected to reap the benefits of government spending, and were thus not expected to pay taxes and the tax code did not hone in on their economic activities.

          "But the seeds of descent were in the ground already." This is what I mean by an ideological sentence. It says nothing about the topic, it says something about you. But that you think this way does not make it so.

          "what the government fought to lay a hand on back then, now some of us try to fight back." Apparently without any historical understanding or appreciation as to why they chose to 'put a hand on' certain areas, and to lay off other areas (such as tariffs). You seem to have missed the trade-off completely. Or just blindly ignored it - since it does not reinforce your opinion of government.

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        Sep 1 2011: yeah, and 100 years ago is exactly a time when people understood very well that government should not touch personal property. most businesses were private, transportation was private, healthcare was private, railroads were private. and total tax was way way below of todays levels in terms of GDP. total government spending was way way lower than today in terms of GDP. regulations were nowhere near today's level. there was no federal reserve.

        the federal government in size, in budget, in influence grew enormous in the last 100 years.

        anyone interested in the topic, i recommend the following reading:

        Robert Higgs: Against Leviathan
        • Sep 2 2011: Do you even remember what it is we are discussing?

          You made the initial claim that property rights could be defined as being able "to do whatever you want with" your property. I responded that that was a perversion of the concept. You then rebutted that "people knew it [this] one hundred years ago." Then I reminded you that one hundred years ago was right after the Roosevelt administration and his trust busting policies. This would seem to indicate the opposite of what you claimed, that property rights is the ability "to do whatever you want with" your property, as well as disproving your claim that people agreed with you one hundred years ago. in response, you offer this -

          "the federal government in size, in budget, in influence grew enormous in the last 100 years"

          That may be true, and it might be a good argument if we were discussing the size of government. But we were debating the definition of property rights and if the concept has ever entailed you being able to do "whatever you want" with your property. i agree the scope of the government has grown during the last century. i still disagree with your assertion that property rights allow you to do whatever you want. i am also still waiting for you to provide some proof of the claim. Saying that "most businesses were private, ..." does NOT define property rights, nor does it help illustrate how them being private allowed them to do "whatever they want" with their capital. As I have pointed out twice now, by 1911 the Roosevelt administration had passed anti-trust legislation which LIMITED what the firm could do with their capital and how they could consolidate operations.

          Maybe you want to change the claim to "the range of liberties granted to the individual under the category of property rights has contracted throughout the last century." ?? Or better yet - just keep doing what you are doing since you obviously have this all figured out.

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        Sep 2 2011: it seems that you don't remember, and i feel behind it there is no lack of understanding but actually defiance. you already know that i can not be right, so you don't really listen. i'll give it another try anyway.

        in 1911 people would never accept government taking over private businesses because of the interest of the nation. they would not seek for government intervention to fix prices, or limit services. remember, we are in the era of change. politicians and other similar figures started their quest for power. but it was a long and bloody struggle. liberties were taken one by one, when they saw opportunity. and the two wars plus the great depression were good opportunities.

        however, i'm especially baffled with your struggle against my definition of property rights. how else we could define it other than i use my property as i want to. if i can't use it in any way i like, it is not fully my property.
        • Sep 4 2011: "I feel behind it there is no lack of understanding but actually defiance." I apologize. I feel that I have been more than accommodating to your positions, and have even asked you to further explain several points. If I have come across as dismissive, it has been unintentional.

          Your second paragraph offers a unique portrayal of the last century. The imagery was vivid and the tone of violence was more than appropriate.

          "..my definition of property rights. how else could you define it other than i use my property as i want to." This is a theoretical definition of property rights. I am attempting to have a real-life economic discussion. A real-life description of property rights might go something like this -

          Property rights are, first and foremost, a by-product of LAW. In other words, your property rights are contingent upon someone's natural rights (someone stronger than you, more influential than you) being LIMITED. This is done by the government. In order for you to have any 'rights' at all, you must have the government limit another man's ability to over power you, coerce you, etc. If everyone could do "whatever they want to" with their property, you would not have any 'property rights.' Therefore, property rights, as the Western tradition has practiced them, are best understood and discussed with the understanding that they are a RANGE OF LIBERTIES GRANTED, or a matrix commonly agreed upon.

          Once again, if you can point to ANY historic time where men were allowed to do "whatever they wanted" under the name of 'property rights', please inform me. You may favor a very wide range of liberty; I may prefer a smaller one. But the dynamic must be understood - 'rights' are being limited to preserve 'rights.' In a real world discussion, we can only argue to what degree of limitation we should pursue and what actions to restrict. And I would like to continue with that discussion, whenever you are ready.

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        Sep 4 2011: property rights are not a byproduct of law. property rights predates law by far. it is a concept that was always in the human mind, as far as we can remember. it was rectified and clarified by thinkers throughout the human history. and it has found its way into law from time to time. just like land is not a legal term, but since it is important to our life, law also has a definition and attached rights to it. not the law makes the land what it is. rather, the law reflects to what we think about land.

        don't use natural law as you did. it is a term already in use, and guess what, it is used to denote, among others, strong property rights. the term natural right was first used to separate the man made law from the god given law. today, sometimes it is used to separate man made law from universal law.

        also beware of the wording, and hints of meaning. when you say "is done by government", you refer to the current state of affairs, while hinting that it is something logical, fundamental. it is not. it can be done in other ways. also you say rights are granted by government. it is not the case in my eyes. governments have their power granted by people. pity, today people authorized the government to limit other people's rights unjustly. i'm trying to convince them not to do that.

        also please note that i assume a certain level of cooperation from my opponent. when i say "i can do everything i want", it obviously means unless i damage other people's property, or limit their use in a physical, present way. i cannot use my axe to cut down my neighbor's tree. it is simply because my neighbor has the right to use his tree as he wants to, and if i cut it down, he obviously will not be able to use it.

        another error of yours is that you confuse the idea with the realized implementation. i didn't say 100% pure property rights where ever realized. but the idea was widely known, and accepted. not anymore. today freedom is understood as "given by state".
        • Sep 5 2011: "property rights are not a byproduct of law. property rights predates law by far. it is a concept that was always in the human mind, as far as we can remember" For the THIRD time now, if you can point to any historical time where this is the case (property rights without corresponding law) I want you to submit it. If not, stop making claims that you can not back up. YOU may feel property rights have always existed, but as far as practical discussion goes, you have not offered any evidence other than that you feel that way. This is not how you convince people.

          "it can be done in other ways" How?

          "please note that I assume a certain level of cooperation.." I have asked time and time again for you to clarify your statement, since it is incorrect. You have refused, and instead offered nonsensical observations which you believe support your assertion. Now suddenly I am supposed to have gleaned your intended message from...what? My intuition? When I ask you to clarify a point and you do not, I am bound to assume you mean what you say.

          You do understand that, given your definition of property rights and your conception of the Western tradition, the US Constitution would have read something like "You guys do whatever you want." Notice it does not say that. Rather, it lists liberties granted to individuals and responsibilities demanded of the government. This would seem to suggest that MY definition is, as I already put it, a superior WORKING DEFINITION of property rights. "i didnt say 100% pure property rights where ever realized." Yes, you have tried to claim that. You even tried to say it was true one hundred years ago. Now that you see it is a futile argument, you are changing your objective. You admitting that 'pure property rights' have never existed calls into question why you even mention them or continue to talk about them. Since we both agree 'pure property rights' are a fiction, can we move on now?

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        • Sep 5 2011: Two more points - "today freedom is understood as 'given by the state'" In your opinion, do the two phrases 'a by-product of law' and 'given by the state' describe the same phenomenon? One would be wise to ask why any government would give such rights, if they were in sole possession of them. Rather, as I have already stated, rights ought to be viewed as a matrix of behavior commonly agreed upon, and then codified into law. In other words, the government did not possess the rights to grant, the individuals did not possess the rights to exercise, they came into existence as a by-product of law.

          "i'm trying to convince them not to do that.." This is, i think, the main issue to be resolved. I am trying to have a discussion; I do not need you to enlighten me. For some reason you seem to think an aptly placed smart ass remark will suddenly open my eyes to the truth of your position. Are you used to debating with 13 year-olds? I can assure you that I, too, have read Ayn Rand and understand the position behind your argument - i still do not agree with it. If you would like to continue debating, I am happy to - but let's actually debate about real-world topics with real-world arguments. Go join an Objectivist forum if you want people to simply reinforce your obtuse and purely theoretical ethics. Otherwise, shape up your arguments, include a little proof or logic or even simple persuasion in your posts, and STOP assuming that your sarcastic, ideological statements constitute an argument worth replying to. I have just about lost my patience waiting for you to get serious.

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        Sep 5 2011: i won't repeat points i've made clearly earlier. instead, let's just elaborate a little on the egg and the chicken issue.

        let us consider the following statements. let us focus not on the truthfulness, but merely the validity of the statements. that is, are they nonsensical, or they represent valid points.

        1. country X has a legal system that recognizes private property
        2. the law should protect private property
        3. in dictatorships, private property rights are often disregarded

        i claim that these statements are both perfectly valid statements. we can discuss their rightness or wrongness. they are not nonsensical, nor self-evident.

        the point here is that these statements has zero meaning if property laws are created by the state through the legal system. for statement 1, it is a tautology. property rights ARE what the law lists, so if the term exists at all, it certainly recognized by the law. statement 2 is a self contradiction. it is impossible for a state to change its legal structure to conform to itself. any kind of law conforms itself, but no change can be self-conforming. the very essence of change is that the new law does not conform the old law. such a proposal is nonsensical. statement 3 is also nonsensical, since if the law of that dictatorship allows the state to confiscate property, for, say, not worshiping the emperor, then this IS the private property right in this country, and it IS perfectly regarded by the law.

        in fact the relationship, again, is the other way around. we DO have a concept about property rights, just as we have a concept of human rights. a specific legal system should reflect to these concepts, in accordance with the will of the people. the law is NOT the source of justice. it is just a codification of it. and state is not the source of any rights. state is just an agent appointed by the people.
        • Sep 6 2011: You are still discussing property rights in theory. I admit the theory of property rights can exist without corresponding law. I have been, and am still trying, to discuss property rights in practice. Property rights cannot be practiced without corresponding law. Therefore, practical property rights are by-products of the law, as they can only be guaranteed through the law.

          Once again, and for the fourth time, can you point to any point in history where this was not the case?

          Also, you stated in your previous post that property rights COULD be guaranteed in other ways other than the government. When I asked how, you ignored it. I'll ask again - how else can property rights or justice be guaranteed but through the State?

          Moving forward - stop talking about the theory of property rights. I understand the proposal of a maximum wage interferes with your theory of property rights. i understand that you do not wish to say any law that is not 100& theoretically pure. But, let's look at this from a legal standpoint (since we are not going to make head way in a philosophical debate). Would the proposal (coupled with the elimination of the minimum wage) present any new contraction of the rights of the firm, in the legal sense? Or would the range of movement be the same, with just a shifting of the boundaries from the bottom to the top?

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        Sep 5 2011: some minor notes:

        "Are you used to debating with 13 year-olds?"

        certainly i feel so quite often.

        "I, too, have read Ayn Rand"

        on the contrary, i haven't. and i'm not even planning. i read real stuff instead, mises, rothbard.

        "I have just about lost my patience"

        you have lost it for quite some time now. i pretend not to notice.
        • Sep 6 2011: Well might I suggest a little less Rothbard and a little more von Mises.

          I am more interested in the American Founding Fathers. Paine, Jefferson, Adams, Burr, Hamilton, Franklin, etc. Though i do enjoy von Mises and liked Rothbard when I was a teenager. I have never met someone with such a fanatical view of the free market and property rights that did not consider himself an Objectivist, and Rand really isn't any less shallow than Rothbard. I do not know why you would dismiss her work as not being 'real.'

          But things are becoming more clear - you are upholding the 'Western tradition' with philosophies engineered in the 20th century. And you are trying to project those philosophies backwards into history - or more accurately, you are ignoring historical facts so that your philosophy cannot be challenged by the actual Western tradition that it promises to uphold.

          No wonder you won't answer my questions pertaining to the historical record, or use any historical evidence to back up your claim - you are in a bind.

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        Sep 6 2011: you can talk about the so called "in practice" property rights, but then it is a non-sequitur, since i was talking about the concept of property rights. actually that was my original proposition:

        "what i think is good for the society is very very strict protection of personal property."

        then i also claimed that

        "my idea of economic liberalism is the western tradition. people knew it, a hundred years ago."

        so it is kind of obvious that i'm not talking about the current legislation of a given country, but concepts. next time, don't waste our time with talking about something else than the actual topic at hand. since i brought that into the conversation, let me choose the actual meaning of my own words. thank you.

        you want me to point a historical moment in which property rights granted by law was not granted by law. i'm afraid that is not possible :) i can on the other hand show you a historical moment in which property rights were not originated in law. every place and every time is an example of this. since the relation is always the other way around. property rights are codified in actual law.

        "Would the proposal [...] present any new contraction of the rights of the firm, in the legal sense?"

        yes and no. no new *kinds* of violations are introduced. but more violations are introduced in *quantity*. there will be cases in which i could use my property as want by the old law, but not by the new law. it would have a distorting effect on the economy *compared* to the free market case, which is the only ethical arrangement in my view. in that regard, such a system is unethical.

        merging the two threads:

        i recommend this writing about rand by rothbard: http://www.lewrockwell.com/rothbard/rothbard23.html

        on top of that, rand had a romantic view on entrepreneurs, which is of course false. and i also don't think that we need a new philosophy. mises gave us a very clean treatment of it in his book "theory and history".
        • Sep 6 2011: Your theory of property rights states you can "do whatever you want to" with your property. The proposal would violate your theory of property rights. Therefore, you are against the proposal. I understand now. Like I said, I was trying to have a practical as opposed to theoretical discussion on the implications and advantages/disadvantages of the proposal. No need to do so.

          Going further, do you believe that a 'free market' has ever existed (in practice, not in theory)? And if so, when?

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  • Aug 25 2011: "Perhaps a maximum wage could stop situations where greed consumes those who are after the next big bonus, no matter what effect their decisions may have on others."

    Do you not understand greed?

    If someone is consumed by greed, they will break every law they can to get more of what they want. No law can stop those willing to do whatever it takes to get what they want.

    Ohhh... life is not fair. Trying to make it fair will and has never worked.
    • Aug 27 2011: So we should just give up then? I don't believe we should. All systems have flaws, but some function better than others.

      If you don't care about the working poor, consider how the current system effects the success of the corporations themselves. CEO's can make enough money to retire in a very short time. Consequently they don't have to think about the long-term health of the company. Follow business news and you'll find that every time a big corporation has a major issue, the CEO suddenly decides it's time to step down. "Well, this isn't fun anymore, so I'm off to Maui!" Must be nice.