You're right, I forgot about dividends. That money comes from IBM's profits, to me.
I still have a hard time figuring out how buying IBM stock (and therefore increasing IBM's stock price) benefits IBM (the company, not its individual execs) or creates jobs, though. Maybe IBM speculates in its own stock, that would do it.
Or maybe it's all indirect; Pfizer invests its spare cash in IBM stock, so my propping up of IBM's stock price makes money for Pfizer, who can then spend it on factories or something.
My point is that most stock is owned by rich people (I think the source was concentrationofwealth.blogspot.com, hardly unbiased, of course), and our economic system is pretty much set up to keep stock prices driving up at the expense of all else. This means transfer of wealth from the working class (in the form of offshored industries, consumer-unfriendly terms and conditions (like banks, cell phones and credit cards)), to shareholders (mostly rich).
Even though the economy isn't a zero-sum game, neither is it infinite-sum. I also don't see what prevents massive concentration of wealth, if anything. Perhaps I can be enlightened. Since, barring some major shifts that would eliminate economics as we know it, we'll always have scarcity, that means (by definition) there won't be enough for everybody. Since I'll never be rich, I'd rather not live in a society where the only options are filthy rich or dirt poor. Unfortunately I also don't see any factors working against that. I can certainly attempt to participate by buying stock, and have done so to a small extent. Most people can't afford that, and I'll never be able to afford to speculate in the stock market enough to make a living.
Okay... maybe "local" was an overstatement. Let's replace it with "non-U.S." in the scenario below. My point is basically that, despite what boards seem to think, American executives aren't going to be able to compete with their cheaper offshore counterparts, once the offshoring has come up to their level of the food chain.
Assume I'm in Korea. I want to buy some widgets.
There's an American company selling them - they consist of American management, design in India and fabrication in China.
There's a Vietnamese-managed company, selling similar widgets. They do design through the same company in India, and fabrication through a different company in China.
The Vietnamese company is going to be cheaper because they don't have the overhead of American executive salaries. (At least until the American economy collapses). They win.
I've pushed and pushed before to try to get orders in writing (or even email) (not because they were illegal, but because they were a Bad Idea).
I've never been successful. I do passive-aggressive resistance instead ("sure, I'll put that on my to-do list") - the bosses are too busy to keep badgering me about every little thing.
We're approaching the point where the time a skill is economically viable is going to be less than the time it takes to learn it. How will we survive with less than a 50% working-to-education duty cycle?
Yep. The executives enjoy the high standard of living of the U.S., but are too stingy (of course, the market and "the system" are set up so they have to be this way) to allow their employees the same luxury.
Of course, their actions are going to destroy the U.S. economy, so hopefully they will starve along with me.
Notice how nobody has moved any management offshore, or moved entire companies offshore - just the "little people".
(rolls eyes) Exactly what American stuff will foreigners buy?
By the time foreign countries get rich enough:
At best, all U.S. companies will only consist of a board and executives in the U.S., with all production offshore. This means that buying "American" stuff only lines the pockets of the execs, and doesn't produce any productive American jobs.
At worst, the phase above will have been going on for a few years, consumers worldwide will realize they needn't pay extra for the overhead of American executives, and will instead buy from the local companies, who can buy from the same (local) suppliers that actually make the stuff.
My personal experience is that our Indian office solves all problems by throwing massive amounts of bodies at it. My company thought they'd avoid that by eschewing contracting firms in favor of opening their own office. They appear to ahve been mistaken.
Again, in my experience, this tends to mean that many more people who we have to explain basic things to (yes, "volatile" is there for a reason, and, no, you can't substitute "strcpy(foo, NULL)" for "memset(foo, 0, sizeof(foo))").
This could be because of the tech boom in Hyderabad - we can't hire anyone willing to do tech support, for example.
Really? So then what are people going to do when their toilet stops working? Shit on the floor?
Pretty much. Just because something's necessary doesn't mean you can afford it. That's essentially the definition of "poor" - not being able to afford necessities. (I thankfully didn't go short on food growing up, but did live without health insurance, and definitely without auto mechanics (all work was done ourselves)).
Once all of the non-service jobs have left, service jobs will start dying out, because nobody's bringing in money by actually making anything. Because of savings, credit, and inertia, an economy might limp along for a while. Once everyone but plumbers are unemployed, there's nobody who can afford plumbing services (plus a rush of people getting their toilet-repair certifications in a desperate attempt to feed their families).
Once local standards of living collapse to Third World levels, then jobs will start coming back. Eventually an equilibrium will be reached, where all nations must maintain their standards of living at current-Third-World levels. (If a nation starts demanding higher wages, *whoosh* all the jobs leave, until the wages come back down).
As long as there's some poor, hungry nation somewhere, we'll all have to be poor and hungry.
The execs sure like living in the nice suburbs of the U.S, but don't want to be held accountable to that society as a result.
I'd like to think that they'll get theirs once they've "tragedy of the commons"-ed society to death, but something tells me they'll be living well in fortified BurbClaves and will have barely noticed the starving throngs outside.
Where do you think the money goes? Into mattresses? No -- it goes into investment, which creates more jobs.
Not necessarily. Stock is bought "used" unless it's from an IPO. When I buy IBM stock, IBM doesn't see a penny of that money; some goes to middlemen, and the rest goes to a former IBM stockholder.
Since 86% of stock is owned by the wealthiest 10%, money speny buying stock (or stock-price appreciation caused by businesses) goes pretty much to the rich, accelerating the concentration of wealth.
I have trouble imagining what kind of economic efficiency, or society, we will have when a (relative) handful of people own everything, and the rest of us are serfs.
The money is paid by employers to the state, as a percentage of total payroll. The rate depends on the company's historical layoff rate. This is a Good Thing; it internalizes what would be an externality, (some of) the cost of businesses treating employees disposably.
(We actually had a couple of "dumping" cases here; that's when a company creates a shell company, and transfers its employees to it; the employees are now employed by the "new" company that doesn't have a layoff history, so they get a lower tax rate. The state government was not amused).
The difference is not so much in wages, it's in standards of living.
Basically, it's going to be cheaper to bribe someone for whom $100 would be two month's rent, than someone for whom $100 would be a couple of dinners. This lowers a barrier to entry of criminal organizations; they can get the info they need for less from people in the Third World.
Such a day will be great for Microsoft - if they time it when a Palladium-"enhanced" version of Windows is available. Once the Internet is melting down, they can come in and claim that the DRM in Trusted Computing will eliminate spam and viruses, and people will eat it up.
It seems that current trends are all pointing to the constant expansion in both economic and legal power of individual businesses. (We're enacting laws to protect the profits of particular industries, as a result of their lobbying, to borrow from the "open source molecules" thread). They're gaining the muscle to erect barriers to entry (there's no realistic way anyone could start a business that competes with Wal-Mart, for example).
Is there some real-world, observable factor counteracting this? If not, it seems like the biggest of companies will eventually swallow everything else, and "tragedy of the commons" society to death.
It would be nice if there was some counteracting factor that I could look to when the future seems this bleak. The only factor anyone's been able to come up with so far is a disruption of our current economic system (e.g. extremely cheap energy creates a "society of plenty") but that seems awfully deus ex machina.
Note that all non-IPO stock is bought "used". When I buy IBM stock, IBM doesn't see any of that money. The money goes to "market maker" middlemen, then from there to a former IBM stockholder.
Since the top 10% own 86% of all stock, most likely this is a rich person. Therefore, money put in the stock market is (mostly) circulating amongst some small number of rich people. (There are some ineeficiencies, like the middlemen and that 14%, that will slowly drain some money out of them).
Anyway, I digress; that was just to poke at the "but stockholders' gains will just be reinvested, and that creates more wealth" mentatlity.
The upper bound comes from free trade, and the assumption that no one group of humans has more capabilities than another group.
Americans don't magically work harder or are any more capable than anybody else. Our higher standard of living persists because of good infrastructure and because of trade barriers (not necessarily artificial trade barriers).
Once trade barriers go away, good infrastructure is our only advantage. How long can that last?
Once any production can be done anywhere on the planet, why would any place have a better standard of living than anywhere else? Assuming everyone gets an equal share of the pie, that would lead to the population-weighted average. History and current trands suggest that what would actually happen, instead of equitable distribution, is that a very small upper stratum of society would own pretty much everything, and the rest of us will just fight for tiny scraps.
Once standards of living equalize out (an inevitable consequence of free trade - standards-of-living differences are caused by economic inefficiencies after all), we'll all have:
At best, the population-weighted average standard of living of the world today.
At worst, the same standard of living as the poorest place that currently exists in the world, with no possibility of ever going up.
The worst-case above comes about from the race-to-the-bottom feedback loop: jobs all move to the lowest-cost area, other areas drive down their standards of living to compete, jobs reach an equilibrium, some group attempts to increase their standard of living, *whoosh* all jobs leave that area, standard of living returns to the bottom.
In either event, suicide seems preferable. I don't really see how "hard work" and/or "ingenuity" will save you when the best you could hope for is to not sleep in the rain.
That's the problem with the "privatize everything" mentality - private companies can do anything cheaper than the government. Many believe they can do anything better than the government (because of a cheaper == better belief?)
The problem, as you bring up, is that not everything is profitable, and even fewer things are profitable when done in a socially beneficial way. Private business can't do anything that's not profitable (in the long term at least).
Two, government is much more wasteful than an informed consumer.
Is this actually true?
Private, for-profit comapnies have an awful lot of overhead the government does not - executive salaries that dwarf everything in the public sector, and an obligation to provide ever-increasing profits to their shareholders.
Governments have bureaucracies that create inefficiency. So do companies of that size (I'm a former IBMer - trying to buy things out of the Purchasing catalog was enlightening).
Governments have corruption, and so do private companies. (How many companies buy stuff from suppliers run by executives' nephews?)
Governments sponsor many projects that turn out to be huge wastes of money. We know about them because of open-government laws. Companies also throw away lots of money on useless projects (how many/.ers have seen their employers spend gazillions of dollars on enterprise software that doesn't work?) We don't know about those unless we're involved (the company is under no obligation to disclose the boondoggle).
Of course, it's not just security software - all software is racing to the bottom.
It's a failure of our market system... what makes a successful software company, and what makes a "good" product in an engineering sense (qualities such as functionality, robustness, etc.) are not the same.
It's financially better (especially in the short term) to rush out a crappy product than to provide something that works. Brand reputation isn't a quality motivator anymore, because the executives (who make these kinds of decisions) will be at a different company in a few years; why should they care if their current company is bankrupt by then?
This is what makes Open Source software better in an engineering sense; there are no "successful software company" types of contraints imposed upon it.
This is why I have a preference for hand-rolled OSS solutions instead of firewall / email-scanning / security "products". Unfortunately, our IT guy doesn't have enough development experience to be this cynical about commercial software, so he'll never understand why my Linux boxes are more trustworthy than commercial security products.
What if record keeping was good enough (nevermind the privacy issues etc) that your taxes, no matter how complex, could be computed for you without any effort of your own?
Great! The amount of tax that any person owes, given their income and transactions, is, today, in the U.S., a fixed amount set by law. If you don't like the amount of tax you owe, get the law changed (never mind the impracticality of getting laws changed if you're not rich).
Having pre-filled-out forms, with instructions, that you look over and sign, would be great in that case. The financially anal-retentive amongst us would audit our own returns to guard against mistakes / corruption. People who don't care as much about the exact amount of taxes they owe (due to wealth and/or laziness) will just pay what the paper says.
so I can control how much money is spent on the roads by controlling how much I use them
Gasoline taxes and license-plate fees already go towards road-building... so you can today control, to some degree, how much you spend on road-building.
Society in general has some interest in there being a functioning road system, though... even if you walk to the grocery, the food has to get there. This would represent the part of road-building paid for by general revenue.
Larry isn't going to put it under his bed - he's going to invest it, and other people can use it to generate more goods and services
There's a mild flaw in this, that I honestly don't know if people see. It's because most everyone buys their stock used.
When you invest money in the stock market, unless you're buying into an IPO, you're not investing in a company. For example, when I buy IBM stock, IBM doesn't see a dime of that money; via some "market maker" middlemen, the money goes to a former owner of IBM stock.
Given the stats I've seen (top 10% own 86% of stock) the money likely just goes to another wealthy person's account. (There is, of course, some inefficiency, such as the middlemen themselves, and the 14% of stock owned by the non-wealthy. Because of that, some money does indeed trickle out).
It's true that money has to eventually be spent to do anyone any good. However, the more money that concentrates to the rich, the more delay there is in getting that money into the economy. It might happen quickly (they donate money to start a library) or slowly (they use the money on lawyers when the grandchildren get old enough to get busted for drug posession).
People who live paycheck-to-paycheck don't delay (they can't!) in getting their money into the economy.
My federal refund this year was bigger than I asked for by (IIRC) 11 cents. Looking over my tax forms, I realized this was because I could have rounded my tax liability to the nearest dollar (eliminating 40 cents or so of it), but didn't. The IRS saw the opportunity to save me a little on taxes and took it.
I'd filled out a paper form (actually the fill-in pdf 1040 long form); this correction happened (presumably) automatically because the refund only took 3 weeks or so.
Be careful with using a Linux box as a firewall - if you don't have experience hardening such systems, you could end up with a much better chance of it becoming a bot that your Linksys box (which is neither i386 nor runs a well-known Linux distro).
You definitely wouldn't want to do a default install of any distro I know of (except Debian, that doesn't install much of anything except what you ask for).
I have a house that requires a key on both sides...ie, you can get locked in. how dumb is that?
My house has 4 outside doors, all also like this (with deadbolts that key on both sides). This is to close a security hole; the doors contain windows, which, if they were broken, and we used single-cylinder deadbolts, would lead to a trivial entry method.
(These deadbolts would also be useful to prevent a toddler from waking up and heading outside while we sleep, if there were any toddlers in the house.)
I've mitigated the "gotta get out of a locked house quickly in the event of a fire" risk by keeping a key hanging up near (but not within too-easy reach of, or exterior sight of) each door. It lessens the security slightly, though (a determined attacker could use a long wire or something to fish out the key, if they knew where it was. However, it'd be easier to brute-force the door or a window).
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I still have a hard time figuring out how buying IBM stock (and therefore increasing IBM's stock price) benefits IBM (the company, not its individual execs) or creates jobs, though. Maybe IBM speculates in its own stock, that would do it.
Or maybe it's all indirect; Pfizer invests its spare cash in IBM stock, so my propping up of IBM's stock price makes money for Pfizer, who can then spend it on factories or something.
My point is that most stock is owned by rich people (I think the source was concentrationofwealth.blogspot.com, hardly unbiased, of course), and our economic system is pretty much set up to keep stock prices driving up at the expense of all else. This means transfer of wealth from the working class (in the form of offshored industries, consumer-unfriendly terms and conditions (like banks, cell phones and credit cards)), to shareholders (mostly rich).
Even though the economy isn't a zero-sum game, neither is it infinite-sum. I also don't see what prevents massive concentration of wealth, if anything. Perhaps I can be enlightened. Since, barring some major shifts that would eliminate economics as we know it, we'll always have scarcity, that means (by definition) there won't be enough for everybody. Since I'll never be rich, I'd rather not live in a society where the only options are filthy rich or dirt poor. Unfortunately I also don't see any factors working against that. I can certainly attempt to participate by buying stock, and have done so to a small extent. Most people can't afford that, and I'll never be able to afford to speculate in the stock market enough to make a living.
Assume I'm in Korea. I want to buy some widgets.
There's an American company selling them - they consist of American management, design in India and fabrication in China.
There's a Vietnamese-managed company, selling similar widgets. They do design through the same company in India, and fabrication through a different company in China.
The Vietnamese company is going to be cheaper because they don't have the overhead of American executive salaries. (At least until the American economy collapses). They win.
I've never been successful. I do passive-aggressive resistance instead ("sure, I'll put that on my to-do list") - the bosses are too busy to keep badgering me about every little thing.
We're approaching the point where the time a skill is economically viable is going to be less than the time it takes to learn it. How will we survive with less than a 50% working-to-education duty cycle?
Of course, their actions are going to destroy the U.S. economy, so hopefully they will starve along with me.
Notice how nobody has moved any management offshore, or moved entire companies offshore - just the "little people".
By the time foreign countries get rich enough:
Again, in my experience, this tends to mean that many more people who we have to explain basic things to (yes, "volatile" is there for a reason, and, no, you can't substitute "strcpy(foo, NULL)" for "memset(foo, 0, sizeof(foo))").
This could be because of the tech boom in Hyderabad - we can't hire anyone willing to do tech support, for example.
Once all of the non-service jobs have left, service jobs will start dying out, because nobody's bringing in money by actually making anything. Because of savings, credit, and inertia, an economy might limp along for a while. Once everyone but plumbers are unemployed, there's nobody who can afford plumbing services (plus a rush of people getting their toilet-repair certifications in a desperate attempt to feed their families).
Once local standards of living collapse to Third World levels, then jobs will start coming back. Eventually an equilibrium will be reached, where all nations must maintain their standards of living at current-Third-World levels. (If a nation starts demanding higher wages, *whoosh* all the jobs leave, until the wages come back down).
As long as there's some poor, hungry nation somewhere, we'll all have to be poor and hungry.
I'd like to think that they'll get theirs once they've "tragedy of the commons"-ed society to death, but something tells me they'll be living well in fortified BurbClaves and will have barely noticed the starving throngs outside.
Since 86% of stock is owned by the wealthiest 10%, money speny buying stock (or stock-price appreciation caused by businesses) goes pretty much to the rich, accelerating the concentration of wealth.
I have trouble imagining what kind of economic efficiency, or society, we will have when a (relative) handful of people own everything, and the rest of us are serfs.
The money is paid by employers to the state, as a percentage of total payroll. The rate depends on the company's historical layoff rate. This is a Good Thing; it internalizes what would be an externality, (some of) the cost of businesses treating employees disposably.
(We actually had a couple of "dumping" cases here; that's when a company creates a shell company, and transfers its employees to it; the employees are now employed by the "new" company that doesn't have a layoff history, so they get a lower tax rate. The state government was not amused).
Basically, it's going to be cheaper to bribe someone for whom $100 would be two month's rent, than someone for whom $100 would be a couple of dinners. This lowers a barrier to entry of criminal organizations; they can get the info they need for less from people in the Third World.
Such a day will be great for Microsoft - if they time it when a Palladium-"enhanced" version of Windows is available. Once the Internet is melting down, they can come in and claim that the DRM in Trusted Computing will eliminate spam and viruses, and people will eat it up.
It seems that current trends are all pointing to the constant expansion in both economic and legal power of individual businesses. (We're enacting laws to protect the profits of particular industries, as a result of their lobbying, to borrow from the "open source molecules" thread). They're gaining the muscle to erect barriers to entry (there's no realistic way anyone could start a business that competes with Wal-Mart, for example).
Is there some real-world, observable factor counteracting this? If not, it seems like the biggest of companies will eventually swallow everything else, and "tragedy of the commons" society to death.
It would be nice if there was some counteracting factor that I could look to when the future seems this bleak. The only factor anyone's been able to come up with so far is a disruption of our current economic system (e.g. extremely cheap energy creates a "society of plenty") but that seems awfully deus ex machina.
Note that all non-IPO stock is bought "used". When I buy IBM stock, IBM doesn't see any of that money. The money goes to "market maker" middlemen, then from there to a former IBM stockholder.
Since the top 10% own 86% of all stock, most likely this is a rich person. Therefore, money put in the stock market is (mostly) circulating amongst some small number of rich people. (There are some ineeficiencies, like the middlemen and that 14%, that will slowly drain some money out of them).
Anyway, I digress; that was just to poke at the "but stockholders' gains will just be reinvested, and that creates more wealth" mentatlity.
The upper bound comes from free trade, and the assumption that no one group of humans has more capabilities than another group.
Americans don't magically work harder or are any more capable than anybody else. Our higher standard of living persists because of good infrastructure and because of trade barriers (not necessarily artificial trade barriers).
Once trade barriers go away, good infrastructure is our only advantage. How long can that last?
Once any production can be done anywhere on the planet, why would any place have a better standard of living than anywhere else? Assuming everyone gets an equal share of the pie, that would lead to the population-weighted average. History and current trands suggest that what would actually happen, instead of equitable distribution, is that a very small upper stratum of society would own pretty much everything, and the rest of us will just fight for tiny scraps.
- At best, the population-weighted average standard of living of the world today.
- At worst, the same standard of living as the poorest place that currently exists in the world, with no possibility of ever going up.
The worst-case above comes about from the race-to-the-bottom feedback loop: jobs all move to the lowest-cost area, other areas drive down their standards of living to compete, jobs reach an equilibrium, some group attempts to increase their standard of living, *whoosh* all jobs leave that area, standard of living returns to the bottom.In either event, suicide seems preferable. I don't really see how "hard work" and/or "ingenuity" will save you when the best you could hope for is to not sleep in the rain.
The problem, as you bring up, is that not everything is profitable, and even fewer things are profitable when done in a socially beneficial way. Private business can't do anything that's not profitable (in the long term at least).
Private, for-profit comapnies have an awful lot of overhead the government does not - executive salaries that dwarf everything in the public sector, and an obligation to provide ever-increasing profits to their shareholders.
Governments have bureaucracies that create inefficiency. So do companies of that size (I'm a former IBMer - trying to buy things out of the Purchasing catalog was enlightening).
Governments have corruption, and so do private companies. (How many companies buy stuff from suppliers run by executives' nephews?)
Governments sponsor many projects that turn out to be huge wastes of money. We know about them because of open-government laws. Companies also throw away lots of money on useless projects (how many /.ers have seen their employers spend gazillions of dollars on enterprise software that doesn't work?) We don't know about those unless we're involved (the company is under no obligation to disclose the boondoggle).
It's a failure of our market system... what makes a successful software company, and what makes a "good" product in an engineering sense (qualities such as functionality, robustness, etc.) are not the same.
It's financially better (especially in the short term) to rush out a crappy product than to provide something that works. Brand reputation isn't a quality motivator anymore, because the executives (who make these kinds of decisions) will be at a different company in a few years; why should they care if their current company is bankrupt by then?
This is what makes Open Source software better in an engineering sense; there are no "successful software company" types of contraints imposed upon it.
This is why I have a preference for hand-rolled OSS solutions instead of firewall / email-scanning / security "products". Unfortunately, our IT guy doesn't have enough development experience to be this cynical about commercial software, so he'll never understand why my Linux boxes are more trustworthy than commercial security products.
Having pre-filled-out forms, with instructions, that you look over and sign, would be great in that case. The financially anal-retentive amongst us would audit our own returns to guard against mistakes / corruption. People who don't care as much about the exact amount of taxes they owe (due to wealth and/or laziness) will just pay what the paper says.
Society in general has some interest in there being a functioning road system, though... even if you walk to the grocery, the food has to get there. This would represent the part of road-building paid for by general revenue.
There's a mild flaw in this, that I honestly don't know if people see. It's because most everyone buys their stock used.
When you invest money in the stock market, unless you're buying into an IPO, you're not investing in a company. For example, when I buy IBM stock, IBM doesn't see a dime of that money; via some "market maker" middlemen, the money goes to a former owner of IBM stock.
Given the stats I've seen (top 10% own 86% of stock) the money likely just goes to another wealthy person's account. (There is, of course, some inefficiency, such as the middlemen themselves, and the 14% of stock owned by the non-wealthy. Because of that, some money does indeed trickle out).
It's true that money has to eventually be spent to do anyone any good. However, the more money that concentrates to the rich, the more delay there is in getting that money into the economy. It might happen quickly (they donate money to start a library) or slowly (they use the money on lawyers when the grandchildren get old enough to get busted for drug posession).
People who live paycheck-to-paycheck don't delay (they can't!) in getting their money into the economy.
I'd filled out a paper form (actually the fill-in pdf 1040 long form); this correction happened (presumably) automatically because the refund only took 3 weeks or so.
You definitely wouldn't want to do a default install of any distro I know of (except Debian, that doesn't install much of anything except what you ask for).
(These deadbolts would also be useful to prevent a toddler from waking up and heading outside while we sleep, if there were any toddlers in the house.)
I've mitigated the "gotta get out of a locked house quickly in the event of a fire" risk by keeping a key hanging up near (but not within too-easy reach of, or exterior sight of) each door. It lessens the security slightly, though (a determined attacker could use a long wire or something to fish out the key, if they knew where it was. However, it'd be easier to brute-force the door or a window).