Oceans Yet to Burn

Who captures a wage subsidy?

Basically every benefit we give to the working poor ends up being an indirect subsidy for business - see, for example, employers telling their employees how to obtain food stamps.

One of the complaints about a wage subsidy over a higher minimum wage is that it will just be captured by employers, who will pay their employees less by that amount. That’s also potentially true of a basic income, and with a minimum wage, employers may opt to gain non-monetary compensation (e.g. terrible hours).

Now, here’s where the limits of my economics education probably show a bit, in that I’m not familiar with the literature on how, empirically, this works out. (Maybe @xhxhxhx can chime in.)

I realized that this is actually related to the marginal productivity of labor - how much revenue (and thus, potentially, profit) does each additional employee bring in, across the whole economy? There are limits to this based on the amount of equipment/capital needed for a marginal employee or marginal hours, including facility size, as well as the potential customers it might bring in (e.g. why haven’t they hired additional labor already?).

The reason for this is that to determine the leverage of a low-wage employee under a wage subsidy system, we need to know how many potential jobs our wage subsidy can create, and at what quality. How easy is it for an employee to just walk right out of the store, walk right in to another store, and get a new job? Even if the pay is somewhat lower, this creates a much stronger incentive against bad hours, bad bosses, and unsafe practices, about which employees will then either demand higher pay, or just tell the employers to knock it off.

However, that increase in leverage only occurs if enough potential jobs emerge, and this is more or less an empirical question.

The greater the marginal increase in the number of jobs per marginal decrease in minimum wage prior to subsidy, the more of the subsidy that will be captured by the workers. However, if cutting the minimum wage creates no new jobs, then leverage doesn’t change much at all and employers capture the majority of the subsidy.

If the leverage is high enough, wages may even be driven higher than they were prior to the subsidy, depending on employer margins that they were exploiting leverage over against employees.

However, since employers capturing part of the subsidy is potentially true for all subsidies for the working poor, even rental vouchers or healthcare, it has to be compared with other alternatives (such as basic income).

(For my preferred implementation, the accompanying decrease in minimum wage should be lower than the wage subsidy, and the wage subsidy should be paid directly to the employee, thus at least not resulting in a decrease in effective income even if the entire subsidy is captured.)

the invisible fist the iron hand economics flagpost policy

ranma-official

Source: klubbhead the red hammer the invisible fist

bambamramfan

So in the discussion over whether internet companies can deny hosting to Nazis (such as here and here), I admit I see both sides. I understand the concerns that this grants too much discretionary power to large establishments about what speech is allowed on the internet, and I understand that “Nazis marching in the streets with torches and the organizing thereof is different and inimical to civil society.”

My question is, can anyone offer an argument for why private companies should get to choose this?

Like on the anti-Nazi side, everything they say makes a case for why it should just be illegal to host this violent, reactionary rhetoric.

And on the pro-free-speech side, everything they say makes a case for why no gatekeeper is pure enough to decide who does and doesn’t get to speak.

But what’s the logic for “maybe Nazis get to organize online, maybe they don’t, and that decision should be up to the rich people who control internet companies?”

shieldfoss

It goes like this:

“Nazis can do whatever they want on their own time but this is my server that I’ve purchased with my money so therefore it’s me that gets to decide what pages are hosted on it.”

It becomes significantly more cloudy when we get to registrars like godaddy. They are a government-monopoly-by-proxy through ICANN.

bambamramfan

Okay so I thought people weren’t going to take the naively deontic argument here, which is why I skipped it. But very well.

One, as @mitigatedchaos these aren’t really about “your property,” in as much as the CEO’s making these decisions often are not the shareholders, but managers entrusted to make the shareholders money (or other complicated legal entities”. These people have a ton of leniency in those decisions, but “what speech should be expressed” is generally not in the CEO job description. Maybe they make good decisions or bad, but I have trouble seeing fundamental property rights being worked up for the managers making these decisions. If it was a vote of shareholders that would be different.

But two, more importantly, I assume I am talking with people who think the internet should be largely content neutral. People who do not want Google to stop listing supporters of Bernie Sanders. People who don’t want Twitter blocking any criticism of feminism. People who’d be afraid if TWC stopped delivering content about either the Democratic or Republican parties. Maybe you wouldn’t be sure such actions are illegal, but you sure as hell would feel they are unethical.

Most people who are comfortable with Nazi’s getting deplatformed this way are so because they believe Nazi’s (or at least their current rioting actions) are different than just another point of view.

If you think a web company should continue to host political opinions they disagree with, but not that of Nazis organizing armed rallies, which I really do think is a reasonable point of view, then why do you think that question should be up to the CEO of the company?

(Or, to avoid the hot button topic of government regulation - I can see the argument for all hosts are open to Nazis, and the argument for no hosts being open to Nazis, what’s the argument for some hosts being open to Nazis?)

mitigatedchaos

I’m not sure I would agree even if it were a shareholder vote.

Limiting legal liability is an absolutely extraordinary concession on the part of the state, not only to CEO but also to shareholders. The ability to even get the right-of-ways necessary to even construct those cable lines also depends on state power.

Especially as institutional size increases, the potential damage from legal liability also increases.

Therefore, in my opinion, “but it’s my server” has only fairly weak standing as a moral argument for large or even mid-size corporations.

(There are, of course, other considerations, too. Corps resisting warrantless surveillance of customers in the US is overall a good thing, for instance.)

the invisible fist the iron hand

shieldfoss

bambamramfan

My question is, can anyone offer an argument for why private companies should get to choose this?

Like on the anti-Nazi side, everything they say makes a case for why it should just be illegal to host this violent, reactionary rhetoric.

And on the pro-free-speech side, everything they say makes a case for why no gatekeeper is pure enough to decide who does and doesn’t get to speak.

But what’s the logic for “maybe Nazis get to organize online, maybe they don’t, and that decision should be up to the rich people who control internet companies?”

shieldfoss

It goes like this:

“Nazis can do whatever they want on their own time but this is my server that I’ve purchased with my money so therefore it’s me that gets to decide what pages are hosted on it.”

It becomes significantly more cloudy when we get to registrars like godaddy. They are a government-monopoly-by-proxy through ICANN.

mitigatedchaos

Limited Liability Corporations are government constructs that receive very powerful special protections (it’s in the name), and thus I don’t see it as the same as a personal server.

Source: bambamramfan the invisible fist

poipoipoi-2016

the-tls.co.uk

poipoipoi-2016

It’s a real pity the thesis is so insane, because a lot of the supporting arguments are both accurate and quotable.

mitigatedchaos

What a fascinating take.

politics the invisible fist the iron hand

shieldfoss

Anonymous asked:

"God is sending you messages, but you aren’t checking your phone." Dude, you should've written the Bible.

anarchyinblack answered:

Perhaps one day a time will come when I will be bored enough to release my own version.

“And the LORD said unto Cain, Where is Abel thy brother? And he said, I know not: Am I being detained?”

“Jesus saith unto him, I am the way, the truth, and the life, and know the gate, and am the gate: no man cometh unto the Father, but by me, for I am the key and the guardian of the gate.”

“But Jesus beheld them, and said unto them, With central planning, this is impossible; but with the market all things are possible.”

shieldfoss

Bet you they have central planning in heaven.

Source: anarchyinblack the invisible fist queue

One of the classic problems around requiring regulations is that people just don’t have, and cannot easily obtain, that much information about businesses sometimes, which is required for markets to actually work.

(Even when information is free or nearly-free, the Market pays people to sabotage it, just like it pays people to sabotage Market competition through buying politicians.)

This is part of my interest in substituting mandatory insurance schemes for explicit regulations, provided the insurance regulations are themselves well-designed. The customer may not know much about the safety of the business, but the insurance company, which has a long-standing relationship with the business, does.

And the less the insurance company knows about the business, the more money it charges for insurance, offsetting some of the risk of harm and potentially communicating risk information to customers.

the invisible fist policy politics the iron hand

argumate

The purpose of BigCorp diversity training is to show where the lines are that you aren’t supposed to cross, and nerdboi crossed them, openly, then said loudly why do we even have those lines.

mitigatedchaos

The purpose of BigCorp diversity training is to limit legal liability and quiet down outside politicals that might protest BigCorp.

the invisible fist

Look, I know I’m not an economist, but even I know buying secondhand goods drives up their price, making people more likely to buy new, since the difference in price between new and used shrinks, making the difference in quality (in terms of wear) more relevant.

the invisible fist

mitigatedchaos

Here, bonus hot take @ranma-official might agree with:

Actually, employees burning out or dying is an externality.

The company profits from the temporary boost in productivity while destroying the future economic value of up to an entire lifespan, denying other companies and the economy as a whole future production. As employers do not own employees, this creates a Tragedy of the Commons situation, justifying the existence of state interference. (etc)

shieldfoss

“Externality” is not just a word that means “bad thing” you buffoon, you fool,

mitigatedchaos

Ssssh, I’m trying to sneak ultracaps into admitting employment laws may potentially be Good.

mitigatedchaos

Anyhow, the purpose of this hot take is to point out that while it is in the interests of every company to induce burnout and risk death if they can pass the costs of dealing with that onto someone else to get more productivity - families, society, the state, other future companies - much like it is in the interests of every company to emit pollution if they can do the same, it is in fact economically destructive in ways that may not be adequately represented, and, while not an explicit subsidy, could have effects like one.

If one dude would generate three million dollars in economic activity over his life but dies one third of the way through his career, two million dollars of economic activity is not generated. This is very often due not to being genuinely suicidal for the job but due to a mismatch in negotiating leverage.

Considering what a spectacular waste of resources this is, it could make sense to require employee death insurance to ensure that the costs - to everyone else - of getting dudes killed is reflected in the price of goods and services. (After all, the State spent a lot of money educating that guy, his family spent a lot of money raising him, humans depend on generations, etc, so goods from Sparky’s McDeath Factory should only be chosen over Reasonably Cautious Joe’s Factory goods if they really do present enough of an advantage to outweigh this.)

It also matters why people get killed. Some jobs are just more risky, but without labor protections it’s likely often because some power-tripping bastard did something stupid and ignored obvious warning signs. People might die but at least let’s not be stupid about it.

the invisible fist

See, that’s what the app is perfect for.

Who captures a wage subsidy?

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