AX: Capitalism and Profit

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Axiom: Every employee of the same trade everywhere in the world gets the same wage. To simplify more: Companies face exactly the same expenses anywhere from hiring a worker of the same trade. Countries don’t influence these expenses. The wage of everyone is adjusted to the levels of the current developed countries, and the job description is a deciding factor on the amount of wage paid. /axiom

How would this affect the global economy? What would happen to the prices of products, and employment rates?

 
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Employment rates would be appalling for many sectors of the economy. Doctors? Who would want to be a doctor when working at Wal-Mart gives you the same salary? We’d have less and less doctors as decades progress, eventually leading to chaos as high-importance public sector jobs have no incentive to be worked for. What would be the incentive to work as a garbageman, as a miner, etc.?

 
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Then I misworded somewhere. I meant that every employee in the same profession gets the same wage everywhere. Employees of the different professions would still have different wages.

 
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Jaume: A doctor and a wal mart employee is not the same trade. Read the axiom more carefully.

OP: It would immediately cripple countries that employed sweat shop labor, child labor, or slavery.

 
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It won’t affect sweatshops. Since they are found in developing economies only, anyway, it makes sense that their prices are set by their local businesses – they remain the same as they are. The same for professions not currently paid. It sets the worldwide wage to not paid, the same as currently, and changes nothing.

 
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Originally posted by vikaTae:

It won’t affect sweatshops. Since they are found in developing economies only, anyway, it makes sense that their prices are set by their local businesses – they remain the same as they are. The same for professions not currently paid. It sets the worldwide wage to not paid, the same as currently, and changes nothing.

I read the axiom to mean that everyone in a given trade gets a wage, and that wage is the same. I didn’t see where everyone gets the same, and that wage is 0.

 
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The wage is the same, for all others of a trade. In the case of slavery, the wage is 0. So, if we equalise the wages worldwide, the position of slave still carries a wage of 0, the same as it did before. Nothing has changed.

Another position that earns a $0 wage, is that of a charity volunteer. Equalising the wages of all charity volunteers across the globe, still produces a wage of $0. Nothing changes.

The only time this will change anything, is when members of a profession in one country, say Greece, are paid markedly less than members of the same profession in another country. Germany, say.

Right now, a neuroscientist in Greece is paid far less than a neuroscientist in Germany, so this equalisation of wages would level the playing field. Right now, a neuroscientist in Greece, gets something like the equivalent of $20,000 per annum, whilst the same professional working in Germany will draw somewhere in the region of $100,000 per annum. It is an example of the type of disparity which needs to be corrected.

 
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But “sweatshop” isn’t a trade. “Sewing” would be the trade, and if the people sewing in sweatshops made the same as all sewers in the world, than the economy relying on those sweat shops would collapse.

 
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It won’t work like that, as you full well know. The employers will decide the job title of their employees, and if the mandatory wage for sewing is too high, they’ll assign a different job title, and include in the job description ‘duties to include sewing’ along with a bunch of other normal daily activities typically unrelated to the sewing profession.

This gives them the necessary wiggle-room to define the job as something else, with a different wage. It’s a system most firms make common use of, even now.

A lot of them also get around it with cash-in-hand, and don’t put the employee through the books formally. There’s no record of the employee existing on their system, so no employee to pay. It comes out of ‘misc expenses’ instead, or from income that never makes it as far as the books.

The point is, however you set the laws, those who make money by gaming the system, will continue to exploit loopholes and cheat the law, to get ahead. Standardising wages will do nothing to change the business practices of illegal or simply underhand workforces. Even if you close one down, another will spring up soon enough. For their populations, they’re usually the only work option available. Faced with crap work or no work, most choose crap work.

 
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The main idea behind my axiom was that everyone would get a fair wage from their profession. Maybe I should develop my axiom to “The wage is raised to the levels of developed countries”, meaning no more workers in Vietnam working for 1,5 dollars a month in a furniture factories, for example.

I fear this will become very complicated for me to define the axiom the way I meant to.

 
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“as you well know” – Been making use of your mind reading machines vika?

But, I digress, it wouldn’t “work” at all. There is no organization nor government capable of making such sweeping reforms to the world. This is a hypothetical axiom. It’s stating if X, than X. It’s saying that every employee in X trade DOES make X amount of money. When you argue that every employee in X trade WOULDN’T make X amount of money because companies would play semantics games, you are arguing against the AX.

Originally posted by TuJe:

The main idea behind my axiom was that everyone would get a fair wage from their profession. Maybe I should develop my axiom to “The wage is raised to the levels of developed countries”, meaning no more workers in Vietnam working for 1,5 dollars a month in a furniture factories, for example.


I fear this will become very complicated.

It’s not complicated at all. Some people just have difficulty accepting AXs. It happens in every AX thread. They always say “well the AX wouldn’t happen because X”, or “yeah, the AX, but not if X”. You just have to grin and reaffirm the AX.

 
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Originally posted by TuJe:

I fear this will become very complicated.

Yea, it always does. Your argument is sound Tuje. The problem is, it won’t help at the bottom end, where it is most desperately needed. In order to help those people, you need to concentrate on making more work available in the vicinity of the sweatshops. Nobody wishes to work all day for peanuts, so if there are other, standardised wage jobs also available, the sweatshops will be forced to up their own wages for ‘job:misc labor’, else they will go out of business due to lack of available employees.

In order to do so, they would have to redefine their jobs to one your centralised agency recognises as having a higher wage, and accept the hit on their profits. So your idea could help, but alone it is not enough to have any impact.

 
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Maybe another thing I should add in the AX is “the wage worker gets is based on what they do, not what the job is called”. So there would be no loopholes in my AX. Job description would be the deciding factor on the amount of wage paid.

And my interests weren’t only on improving the living of the poor, but also to inspect what kind of effect would this have to consumers of current developed countries, and what this would do to capitalist system as a whole. How it would affect globally.

Added more things to AX.

 
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meaning no more workers in Vietnam working for 1,5 dollars a month in a furniture factories, for example.

The reason a Vietnamese worker earns such a pittance is that he can afford to live on it. Not much of a life I agree, but he can get by. To raise his wages to European levels implies that the entire vietnamese economy would have been raised to those levels. If he earned £500 a week, he could live like a king in Vietnam, but the economy in its present state could not afford to pay him that much. It’s much the same with vika’s example of Greek neuroscientists; with the Greek economy as it is now, they are lucky if they are being paid anything. To put all the world’s workers on a level playing field would mean equalising all the world’s economies. If somehow an internatiional law was passed that all similar workers would be paid the same everywhere, countries like China and India would collapse overnight, and the cost of consumer items in the west would rocket.

 
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Also, I think this removes incentive for quality work. If a garbage man makes the same as all other garbageman, regardless of work quality, what incentive is there to do quality work?

 
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Originally posted by MyTie:

Also, I think this removes incentive for quality work. If a garbage man makes the same as all other garbageman, regardless of work quality, what incentive is there to do quality work?

Hopefully they would be fired if such was noticed.

 
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this would lead to mass starvation. here’s why:

if everyone gets payed as much as we do now, per puchase parity, then there would be so much consumption, no amount of production can weigh up to it. there just isn’t that much to go around.

of course, then you could say this increases inflation, but that would mean we wouldn’t be payed the same anymore, because it would necessitate devaluation of our salary. that, or 1930s Germany style hyper-inflation.

furthermore of course, no more excessively cheap overseas labour for corporations would mean the return of factory and agraric work into the modern world. i would think that any country high up in this list would see either massive emigration or massive starvation…or perhaps more likely than that militaristic expensionism, which is likely to mess up the axiom anyway.