There is a base line for materials and socially necessary labor. If you’re above that line, you can operate as a business.
Above this, there is a line on the accounting books that factors in elite aggrandization; it claims to be the base line but is clearly not; it includes services paid to the ruling class, whether inside or outside the company.
Above that is the level of profit on the books.
A business whose revenues fall below the third line is doing fine. A business whose revenues fall below the second line may or may not be under some pressure, but is still doing fine. A business whose revenues fall below the first line ends up quickly folding. Everything below the first line is a matter of viability; everything above the first line is a question of distribution (and class war).
This is all without even considering shareholders, because countless businesses are privately held. About half the economy is small businesses; the small fish have not been simply eaten by bigger fish. There are big fish eating small fish, certainly, but this is not a strict and unyielding rule across the economy.
You can have a company that makes zero profit because it is on the brink of insolvency, and you can have a company that makes zero profit because it pays a random rich guy millions of dollars to do something that is not market-rate. Call it cronyism, call it money laundering, call it whatever you like; there are viable and lucrative business models that do not turn a profit.
Some of the biggest companies often pay zero in taxes. They are not about to die in the bloody economic war though.
Back to the original argument. Capitalists are not forced by market dynamics to exploit proletarians; they exploit proletarians often directly. They have a large degree of control over what they allocate money to. They do it in a way that is “unfair” because they are self-serving, and have a psychological drive to distinguish themselves above other humans. It is possible to have an enterprise which does not favor a parasitic class, and is more competitive as a result, even while paying workers more than the typical rate.
Your purported model works accurately for Subway franchisees, but that is a tiny part of the economy.
There is a base line for materials and socially necessary labor. If you’re above that line, you can operate as a business.
Yeah it’s called profitability
This is all without even considering shareholders, because countless businesses are privately held
Countless privately held business have shareholders and every business has investors or an investment mechanism, the factor that draws in investment is called profitability, not “elite aggrandization”
There are big fish eating small fish, certainly, but this is not a strict and unyielding rule across the economy.
Yes it is, this is empirically how most businesses die or expand, what do you think the entire subsets in business theory concerning acquisitions, mergers, and market capture is talking about? You’re literally just denying observable facts about ANY given economy on this planet
You can have a company that makes zero profit because it is on the brink of insolvency, and you can have a company that makes zero profit because it pays a random rich guy millions of dollars to do something that is not market-rate. Call it cronyism, call it money laundering, call it whatever you like; there are viable and lucrative business models that do not turn a profit.
It’s clear you don’t understand what profit is, companies that make no profit but stay afloat can only do so because investors are making a bet on the future, they’re anticipating profits TO COME and engaging in a deferred competitive strategy to wipe out rivials and gain market they leverage for greater profit
There is no such thing as an enterprise that doesn’t have a postive profit plan, you actually believe capitalist are handing over capital to dick head ceos so they buy without the promise of imminent or future gains?
No, capitalists don’t care about cronyism as long as you generate positive profit rates, that’s all that matters, if you break that contract you end up like ENRON or that dummy from the Wolf of Wallstreet
A ceo who can’t deliver profit is simply a thief in the eyes of capitalists and while they can wait years, eventually they will come knocking for their money
Back to the original argument. Capitalists are not forced by market dynamics to exploit proletarians; they exploit proletarians often directly
I’m sorry but this is patent liberalism, the capitalists “are simply bad guys” is not theory or an argument, capitalists are forced to exploit workers for the simple fact there’s no other way to aquire surplus value, workers are not gonna hand it over themselves and since there’s more than one capitalist at any given time, they have to automatically compete for that value because there is a ceiling in terms of resources, time and labor
They have a large degree of control over what they allocate money to
Precisely, and capitalists only allocate money to enterprises they deem profitable, this also create competitive pressure because higher profit rates attract greater investments
Otherwise wtf would be the point of investing money that wouldn’t pay off, people own private property so they can profit from alienated labor, not because they didn’t learn the golden rule in Sunday school
It is possible to have an enterprise which does not favor a parasitic class, and is more competitive as a result, even while paying workers more than the typical rate.
Not under capitalism friend, private property automatically generates alienated labor and that labor can produce surplus value, the incentives under capitalism point in one direction
You try to break that contract and the capitalists will break you, that’s why we socialists are abolishers not reformers
I just spelled out profit for you. Breaking even and having a tiny amount of money to allocate to anything that is not absolutely essential to the bare-bones functionality of the company is not profit. It’s viability.
Net revenue is what is kept in the business’s coffer after the minimum reproduction of functionality has been achieved. After that point it is a power game, a contest of who gets what from the leftovers. Some of it is management, some of it is labor, some of it is reinvestment in the company, some of it is paid out to either private owners or shareholders. Only the last item is characterized as profit. Revenue minus viability AND reinvestment AND employee remuneration above minimum is equal to profit. I shouldn’t have to walk you through this more than once.
There is no such thing as an enterprise that doesn’t have a postive profit plan
You’ve never heard of a non-profit organization? They are enterprises with financial models. They make money, and they often exploit workers, independent of any fiduciary requirement to turn a profit. They distribute everything above a certain line to reinvestment in the enterprise, and sometimes add some to increased remuneration. They exist in the world and have not been flattened out of existence in the 3+ decades of Western capitalist unipolar hegemony. Workers’ cooperatives exist too. Your model says that either they cannot exist or will be disintegrated, especially after 200-400 years of capitalism being in place. You can’t just say patently wrong things and rationalize them away “because Marx”.
You are claiming that all wages and salaries have reached equilibrium, that there’s no possible way to have any agency in the economy as it is, and treating the economy as monolithic. This is fatalism, pure and simple, and is very close to the market-worship that the Austrian economists engage in, just inverted in its approach.
The equilibrium price for managerial labor is no higher than that of general labor. If a company was compelled to profit at all costs, they would pay their executives pennies. We do not see that happening; from this we conclude there is slack in the system.
Just because there are a few less banks than there were in 2007 doesn’t mean that every company has a knife to its throat. What you are doing is like applying general relativity to the flight of an airplane. Yes, it is acting on the system and has a big effect in the long term, but it is not the causative factor.
If you have confidence in your model, you should be able to make predictions based on it. For instance, the fraction of small businesses in the American economy has not detectably shrunk in the past 20 years; your model dictates that there is a constant and prominent force compelling this to happen. It has decreased since the 18th century, but that’s not a time frame that constitutes a coercive power on entities that make business decisions on a scale of months, quarters, and years. A broad incentive is not the same as a compulsion; that’s my thesis.
I have no patience for assertions that don’t have a basis in reality. Either back up what you’re saying with concrete empirical observation, or don’t respond at all.
Let’s start over from the top, cause it’s obvious you haven’t comprehended a word I’ve said
Capitalism is profit driven, and yes it is compulsive, you know why? Because it’s a systemic emergent phenomenon from the means of production being held as private property, capitalists aquire profit either thru labor or buying cheap and selling dear, either way you’re making profit and HAVE to compete with other firms to aquire a finite amount of surplus value, that is a COMPULSION, because YOU dont have a say in the existence of other firms and the amount of surplus value out there
Profitability is the SOLE determinant of viability under a capitalist economy, breaking even is not sufficient, you know why? Because your business starts eating costs, losing investors and taking on DEBT, something breaks, someone quits, you’re on the road to bankruptcy
Net revenue is what is kept in the business’s coffer after the minimum reproduction of functionality has been achieved. After that point it is a power game, a contest of who gets what from the leftovers. Some of it is management, some of it is labor, some of it is reinvestment in the company, some of it is paid out to either private owners or shareholders. Only the last item is characterized as profit
This sentence proves you don’t know what profit is, the net revenue IS profit, costs are automatically subtracted before its accounted for under the gains column in a balance sheet
Reinvestment and dividends are not costs lmao Jesus christ, they are the point of the enterprise, labor, equipment, and rents are filed under costs
You’ve never heard of a non-profit organization? They are enterprises with financial models. They make money, and they often exploit workers, independent of any fiduciary requirement to turn a profit.
Yeah it’s almost like they’re trying a make fuckin PROFIT, almost like the “non-profit” designation is a tax cheat scheme
Also you know perfectly well we’ve been talking about CAPITALIST enterprises this entire time, so don’t trot out the entirely of human organized activity as if that’s what I’ve been referring to, I’m not talking about your book club, your student council, your mutual aid org, or your online guild, I’m about entities that file capital gains with the IRS so spare me the disingenuous tangents
They exist in the world and have not been flattened out of existence in the 3+ decades of Western capitalist unipolar hegemony. Workers’ cooperatives exist too. Your model says that either they cannot exist or will be disintegrated, especially after 200-400 years of capitalism being in place. You can’t just say patently wrong things and rationalize them away “because Marx”.
You genuinely cannot be serious with this obtuse horseshit; worker cooperatives under capitalism ARE CAPITALIST ENTERPRISES, they compete under the same dynamic as capitalist led orgs, if they don’t make profit they go out of business, for the same reasons I described above and yes there is a ceiling to their existence UNDER CAPITALISM
Investors don’t like worker power so they don’t invest in cooperatives, which gives traditional capitalist enterprises a competitive advantage over coops, otherwise we’d be living in a coop utopia
that there’s no possible way to have any agency in the economy as it is, and treating the economy as monolithic. This is fatalism, pure and simple, and is very close to the market-worship that the Austrian economists engage in, just inverted in its approach.
Bro this genuinely fuckin hilarious, the delusional claim that you have agency under a capitalist economy is literally an Austrian school canard, you’ve moved on from neo-keynesianism to Virginia School public choice theory lmao
The right wing Virginia school claims the macro economy is unknowable (despite centuries of statical empirical work) and that only micro individualistic consumer behavior can be studied, you a right winger now? Do I need to explain concepts like input-output tables and interfirm networks?
The equilibrium price for managerial labor is no higher than that of general labor
Again here we go with the mangled keynesianism, there is no such thing as equilibrium of labor price, labor takes what it can fight for and capitalists pay labor what they can get away with, all it bound the overarching profitability model
This dynamic creates gigantic discrepancies across the globe in terms of the cost of labor and is the prime contradiction of capitalism
Also what is this bizarre idea of yours about CEOs being workers, do you know anything about corporate management? Owners dominate the leadership position of small businesses and in large firm shareholders or a board of investor representatives select the leadership from amongest themselves and pay primarily thru capital gain, options or shares, not a wage lmao
What you are doing is like applying general relativity to the flight of an airplane. Yes, it is acting on the system and has a big effect in the long term, but it is not the causative factor.
It’s actaully hilarious how you have this completely backwards, profitability isn’t gravity, it’s the fuel that keeps the plane in the air, THIS is the crux of your confusion because you have an idealistic conception of capitalism and not a materialist one
For instance, the fraction of small businesses in the American economy has not detectably shrunk in the past 20 years; your model dictates that there is a constant and prominent force compelling this to happen
Also the model does not imply the total number of businesses will shrink over time, a million businesses die and a million are born, again for the thousandth time what matters is their profitability, and that’s mediated through competition
I have no patience for assertions that don’t have a basis in reality. Either back up what you’re saying with concrete empirical observation, or don’t respond at all.
I have provided statistics, real world examples, systematic explanations, helpful metaphors and all I’ve gotten in return is willful ignorance, baseless assertions, non-sequiturs, and idealism
In this thread you have provided literally one statistic (“there are millions of capitalist firms” is obvious and doesn’t count), that “50% of businesses fail within 5 years”. Not only have you banked on it, your reliance on it shows how poorly you understand/interpret it. The fact that most businesses are run by a single person (proprietorships or single-operator LLCs) is enough to explain this. Extending this trend to 30 years, a standard career length, you have “98.94% of businesses will cease to exist within 30 years”. That is not news, it’s just people retiring or changing careers. Mechanisms matter, and you can examine them by critically thinking about the math. If you had something like 95% of businesses failing in the first year, that would be more of a smoking gun for an economy where competition is so tight and cutthroat that no one can afford to do anything else.
Trying to argue anything from that statistic alone is utterly meaningless. Please educate yourself in mathematics and statistical methods, it’s painfully obvious how lacking you are in that field despite your extensive repertoire of historical labels.
Here is another piece of data from the same source. After the small business share being over 80% in the early colonial period, it fell to 58% in the 1950s, 48% in the 60s, and then varying between 44% and 50% of the economy this century. If anything, this suggests an asymptotic minimum to how much of the economy will be captured by the most dominant entities.
Also the model does not imply the total number of businesses will shrink over time, a million businesses die and a million are born
I’m not talking about numbers of firms, I’m talking about their share of the economy. Tight competition absolutely does mean that the total number of businesses will shrink, you literally said in your previous comment “Yes it is, [big fish eating small fish] is empirically how most businesses die or expand”. If you have expansion as a constant requirement, you either have small firms that expand their share of labor faster than the larger ones do (which we do not see happening), or you have a reduction in the share of small firms as they are acquired or driven out of business by larger ones. So yes, the model absolutely implies that small firms’ share of the economy will decrease monotonically. You’re tripping over yourself, I hold to my point that for a substantial fraction of capitalist enterprises, competition is neither airtight nor a constant existential menace.
The distinction between profit and baseline break-even point matters for several reasons. One example is the leveraged buyout (LBO) model used from the 80s until today, where a capital management firm buys a company on credit for the specific purpose of maximizing their profits (shareholder profits), and doing this by cutting wages, salaries, material reinvestment like maintenance, upkeep, R&D, and everything else that keeps a company running. For a few quarters, you have record profits, and then the company goes bankrupt. That is the difference between profit and net revenue.
Are you asserting that salaries and upkeep and R&D, the same things that enterprises in non-capitalist societies engage in, are part of profit? I hope not, because you’re going to struggle either getting past an idiosyncratic definition of “profit”, or you’re going to have no basis for distinguishing capitalism from anything else.
In the real world, there is plenty of turbulence and contortion among capitalist enterprises; there are also plenty of businesses that just coast on an income flow without doing anything to actually make themselves more efficient in terms of process and technology.
I don’t deny that profit-seeking drives the capitalist economy. All I’m contesting is whether there is slack in it. From my experience in the workforce, paying close attention to the companies I’ve worked for, I have discovered that there is very much slack.
One example: A few years ago the CEO of the company I worked for suddenly gave everyone (minimum wage manual labor, most workers basically stuck either there or in the temp agency circuit, company revenue roughly $300k per worker, remarkably uncompetitive sector) a $2/hr raise. Can you come up with a “material” reason why he would have done that, instead of just keeping the surplus, and why he made it $2 instead of $1? I’ll be pleasantly surprised if you don’t resort to right-wing economic talking points.
Practically all I am saying is that a company on narrow margins can cut what it pays to managers or spends on its sweetheart deals or even reduce shareholder dividends, or else it’s not really on narrow margins and thereby not in a state of competitive coercion; costs of labor are not scientifically estimated but are subject to many particulars and whims; the income above minimum wage paid to higher-paid workers ($11T wages and salaries per BLS, minus ~$5T if the whole workforce was anchored close to minimum, so ~$6T) is something that is chosen to go to high-paid positions instead of to profits, not by material necessity, but for other reasons. In short, just like I said in my original comment, “drive for growth (including profit-seeking) has more of an effect on the economy than adversarial competition does”.
Business heads, from Brian Thompson to your local car dealer, are not doing a Project Cybersyn to calculate exactly how much money they can squeeze out of all minutiae, dude. Their hand isn’t forced. They’re trying to be big high rollers and pursue whatever life gratification “being the Rich Guy” entails, they’re usually in their position because of inheritance or shady tactics, and much of the time their employees have a better sense of how to run the company than they do. Obscene exploitation of proletarians by paying them subsistence wages is likely but not inevitable.
I’m not going to reply to the other verbose excruciating; you’re digressing and nit-picking words and appending names and assumptions because you really don’t understand my argument. A better analogy than the previous one I made is the insistence by social Darwinists, Hobbesians, essentialists, etc. who say that every living being is in a constant vicious struggle against every other being, and that it is a rule how every organism is compelled to be as selfish and ruthless as possible because that is the only way to survive and reproduce. Naturally, this is wrong, and based on the opinions of people that wanted to justify and perpetuate their privileged position. It is reactionary.
You are literally employing reactionary rhetoric, and pretending that because you spout your dogma over and over, that it makes you right (despite having no more than 1 piece of worthless evidence).
that would be more of a smoking gun for an economy where competition is so tight and cutthroat that no one can afford to do anything else.
See, here it is again, the crux of your confusion, competition IS NOT ALWAYS A DRAG on these people, it is also the means by which they acquire greater market share, YOU COMPETE TO WIN, it’s not simply a curse it’s the means of expansion, the stick also has a carrot, I know that blows your brain
you have “98.94% of businesses will cease to exist within 30 years”. That is not news, it’s just people retiring or changing careers
INCORRECT, you talk big about understanding statistics, yet here you are mashing two different statistics, while asserting a timeline that also has nothing to do with the original stat, the business failure statistic has NOTHING to do with INDIVIDUAL retirements or transfers, successful business people do not file for bankruptcy because they want to retire, YOU DIDN’T READ THE DATA ON THE SOURCE I PROVIDED Please educate yourself in mathematics and statistical methods, it’s painfully obvious how lacking you are in that field despite your extensive repertoire of nonsensical tangents
Here is another piece of data from the same source. After the small business share being over 80% in the early colonial period, it fell to 58% in the 1950s, 48% in the 60s, and then varying between 44% and 50% of the economy this century. If anything, this suggests an asymptotic minimum to how much of the economy will be captured by the most dominant entities.
You are all over the place, nothing in that source disproofs or conflicts with a single thing I’ve said, business failure is a constant, centralization of capitals is a constant, turbulent expansion is a general trend, these aspects of global capitalism ARE MEDIATED THROUGH COMPETITION-AS-WAR, did it click now, I’m running out of ways to describe basic ass concepts
I’m not talking about numbers of firms, I’m talking about their share of the economy
You didn’t say shit about the “share of the economy” you were explicitly talking about absolute numbers, don’t shift the goal post because you realize in retrospect how stupid your point was, because it never occurred to you that new businesses can be founded, that’s what happens when you’re to busy trying to score points rather than examining your priors and assumptions
Tight competition absolutely does mean that the total number of businesses will shrink
Here you are back to numbers, also no it doesn’t, competition-as-war only implies some firms will win and some will lose, that’s it, without data we can make no absolute further claims, firms that die are replaced by new firms, are you asserting there is no such thing as new businesses? I mean, please do, cause that’s hilarious
you either have small firms that expand their share of labor faster than the larger ones do (which we do not see happening)
Yes we do, it’s called Silicon Valley, like what world are you living in, small firms expand all the time, what do you think has been happening in China the last forty years?
or you have a reduction in the share of small firms as they are acquired or driven out of business by larger ones
Again happens all the time, what is Amazon, have you been living under a rock, also the most important factor you’re missing, large firms regulate each other too, preventing absolute monopolies and creating new market dynamic even small firms can take advantage of, real world example: Amazon in the early 2000s taking advantage of a maturing telecommunications industry that was dominated by enormous tech firms, now Amazon is the giant, huh I wonder how that happened, also notice how I’m backing my shit up with real life and you aren’t or can’t
I hold to my point that for a substantial fraction of capitalist enterprises, competition is neither airtight nor a constant existential menace.
Then provide an example of these hermetically sealed capitalist enterprises, where are these pristine Edens of easy capitalist accumulation?
One example is the leveraged buyout (LBO) model used from the 80s until today, where a capital management firm buys a company on credit for the specific purpose of maximizing their profits (shareholder profits), and doing this by cutting wages, salaries, material reinvestment like maintenance, upkeep, R&D, and everything else that keeps a company running. For a few quarters, you have record profits, and then the company goes bankrupt. That is the difference between profit and net revenue.
You haven’t articulated any distinction, you’ve confused a strategy with a paradigm shift, you’re just describing one method of profit making, yes capitalists increase their profits through cost-cutting, profit and net revenue are the same thing in that context, bankruptcy doesn’t change the fact they made record profits “for a few quarters” that’s why the LBO model IS COMPETITIVE
Are you asserting that salaries and upkeep and R&D, the same things that enterprises in non-capitalist societies engage in, are part of profit?
This is how I know you’re not reading my words; there is profit, costs and (re)investment, salaries and upkeep are costs, R&D is an investment that is subtracted from profit AFTER COSTS. But the question you should be asking yourself is WHY CAPITALISTS ENGAGE IN R&D, and the answer is pretty obvious, R&D gives firms a competitive edge in productivity, cost-cutting and the utility of commodities, if competition is not a factor, then there’s no reason to waste profit on new technology, since “break-even” and old accumulation methods would suffice. Well as we’ve seen throughout the history of capitalism it doesn’t suffice, because once a firm realizes some new tech can increase their sales, they gain advantage and their rivals see it immediately and respond in kind, generating the massive technical growth endemic to capitalism
Now go tell me capitalists engage in R&D because of cronynism or some dumb shit
Business heads, from Brian Thompson to your local car dealer, are not doing a Project Cybersyn to calculate exactly how much money they can squeeze out of all minutiae
lmao yes they are, you simply don’t understand the computer technology involved in the management of countless firms, what do you think modern inventory computer programs are doing? Why do you think firms of any serious scale have an IT department, hmm? My workplace literally uses a cybernetic program for inventory management, that calculates everything from damages, overstock, and single item sales
Legit dude, have you worked a single day in your life, these programs are literally everywhere across every economic sector, especially in manufacturing and retail
One example: A few years ago the CEO of the company I worked for suddenly gave everyone (minimum wage manual labor, most workers basically stuck either there or in the temp agency circuit, company revenue roughly $300k per worker, remarkably uncompetitive sector) a $2/hr raise. Can you come up with a “material” reason why he would have done that
I mean are you joking, it’s called retention, he was aware other firms in your industry had better offers and he made a cost-cutting bet to keep productivity stable, what do you think he did it because he liked you guys? There’s literally no reason (outside of labor struggle) for him to increase costs if not for competitive pressure, most Ilkley the trigger was him losing people he couldn’t afford to lose to other firms
they’re usually in their position because of inheritance or shady tactics, and much of the time their employees have a better sense of how to run the company than they do
Exactly, and because the new generation doesn’t know how to compete properly, they run once successful firms into the ground (Sears) and allow new players to raise to prominence, competition-as-war under a private property framework creates destructive and self-equalizing tendencies that runs counter to popular conceptions of monopoly
I’m not going to reply to the other verbose excruciating; you’re digressing and nit-picking words and appending names and assumptions because you really don’t understand my argument.
Friend, this is projection, cause this is all you’ve been doing, I mean just look at how you keep trying to nitpick the word PROFIT into total incoherence
The market is not a sentient being that needs to be appeased, rather than as an unconscious, turbulent sea of patterns driven by individuals and policies.
Capitalists have a degree of agency over the exploitation they engage in. It isn’t handed down as an order, it’s an opportunity that is actively taken, like speeding on a road.
The starting point for bourgeois economics is individual intentions, and even they recognize that a worker must sell their labor to an owner of capital and that capital must outcompete others on a market. Marxism, on the other hand, looks for objective necessities and tendencies in this very society. It’s objectively true that it is in a worker’s interest to be payed well and worked little. It’s also the case that the capitalist’s interest is to pay as little as possible for wages and for workers to labor as hard as possible under them. Capital only maintains and expands itself by feeding off living labor. We call this exploitation. If a capitalist pays too much or sells to high, they are at a competitive disadvantage and reap less value.
You express that exploitation is a moral evil, but insodoing, you imply a command to the capitalist to deny their own interest: make less money and be less competitive.
The point of Marxism is not to build a society with “fair” wages, but to abolish the wage labor system that pits people’s immediate material interests in such direct conflict. In capitalism, wealth needs poverty. The latter is not an immoral mistake.
If a capitalist pays too much or sells to high, they are at a competitive disadvantage and reap less value.
Right, but to be at a competitive disadvantage from paying their labor more, they’d have to be paying their labor a LOT more. That’s really the only contention I had.
When we repeat the assertion that “we are paid so little because the market forces the employer to do so”, we are adopting a fatalist acceptance that we will always be stuck at subsistence-level wages, instead of imagining and striving for the proportional share of the fruits of production that our labor generates.
They don’t pay less because they absolutely have to, they pay less because they choose to (and sure, this choice is a structural pattern that needs to be targeted and abolished).
Competition is only one (major) element. Every second someone works longer is an increase in labor time; every cent someone is payed less is an increase in relative surplus value extraction; every bit harder someone works is an increase in relative value of goods.
Exploitation is in capitalist’s direct interests and where I demand an end to the wage labor system, you call people to economistically struggle for a “better deal” which is of course at the expense of the capitalist. It doesn’t have to be this way, but it’s not changing without uprooting the source which is capitalism.
Value that goes into the reproduction and expansion of capital (not merely the fractional luxuries of the capitalists) is categorically surplus value, taken from workers in exchange for a much smaller wage by virtue of the capitalist owning the private property and the worker owning only their own ability to work. What needs to be abolished is private property, not mean property owners.
Nowhere did I suggest that unfair treatment by property owners was a sui generis thing. Nowhere did I suggest that the institution of private property didn’t need to be abolished.
I will, however, claim that there are ethical dimensions to the present world, and that abolition of capitalism and private property is absolutely an ethical stance.
And my original claim was that actors are not in a state of being maximally forced to squeeze themselves. I would argue that as long as the profit rate is substantially above zero, that there is generally room to breathe in the system.
Oh, I’m fully aware it’s a liberal moralist perspective you’re presenting. My post is Marxist and I’ve tried explaining the Marxist understanding but apparently you’d rather counterpose it to an individualist economism than listen.
Surplus value extraction is universal. Arbitrary cruelty is not. Surplus value extraction is fed into by the market but not a result of being maximally forced. It’s ironic mentioning profit rate given the decline of profit rate is one of the tendencies that objectively compel increased exploitation.
I am merely taking issue with “compelled”, and the implication that the compulsion is total: that the poor struggling business owners just can’t catch a break because the system they’re in takes away all their agency and forces them to do everything they do.
There is a large fraction of firms that may have a contingency plan for competitive pressure, and do lip service to the competitive model, but in practice are not even close to facing any real threat from competitors.
Surplus value extraction is fed into by the market but not a result of being maximally forced.
That’s tantamount to the point I was trying to make. It’s pointless to argue further.
There is a base line for materials and socially necessary labor. If you’re above that line, you can operate as a business.
Above this, there is a line on the accounting books that factors in elite aggrandization; it claims to be the base line but is clearly not; it includes services paid to the ruling class, whether inside or outside the company.
Above that is the level of profit on the books.
A business whose revenues fall below the third line is doing fine. A business whose revenues fall below the second line may or may not be under some pressure, but is still doing fine. A business whose revenues fall below the first line ends up quickly folding. Everything below the first line is a matter of viability; everything above the first line is a question of distribution (and class war).
This is all without even considering shareholders, because countless businesses are privately held. About half the economy is small businesses; the small fish have not been simply eaten by bigger fish. There are big fish eating small fish, certainly, but this is not a strict and unyielding rule across the economy.
You can have a company that makes zero profit because it is on the brink of insolvency, and you can have a company that makes zero profit because it pays a random rich guy millions of dollars to do something that is not market-rate. Call it cronyism, call it money laundering, call it whatever you like; there are viable and lucrative business models that do not turn a profit.
Some of the biggest companies often pay zero in taxes. They are not about to die in the bloody economic war though.
Back to the original argument. Capitalists are not forced by market dynamics to exploit proletarians; they exploit proletarians often directly. They have a large degree of control over what they allocate money to. They do it in a way that is “unfair” because they are self-serving, and have a psychological drive to distinguish themselves above other humans. It is possible to have an enterprise which does not favor a parasitic class, and is more competitive as a result, even while paying workers more than the typical rate.
Your purported model works accurately for Subway franchisees, but that is a tiny part of the economy.
Yeah it’s called profitability
Countless privately held business have shareholders and every business has investors or an investment mechanism, the factor that draws in investment is called profitability, not “elite aggrandization”
Yes it is, this is empirically how most businesses die or expand, what do you think the entire subsets in business theory concerning acquisitions, mergers, and market capture is talking about? You’re literally just denying observable facts about ANY given economy on this planet
It’s clear you don’t understand what profit is, companies that make no profit but stay afloat can only do so because investors are making a bet on the future, they’re anticipating profits TO COME and engaging in a deferred competitive strategy to wipe out rivials and gain market they leverage for greater profit
There is no such thing as an enterprise that doesn’t have a postive profit plan, you actually believe capitalist are handing over capital to dick head ceos so they buy without the promise of imminent or future gains?
No, capitalists don’t care about cronyism as long as you generate positive profit rates, that’s all that matters, if you break that contract you end up like ENRON or that dummy from the Wolf of Wallstreet
A ceo who can’t deliver profit is simply a thief in the eyes of capitalists and while they can wait years, eventually they will come knocking for their money
I’m sorry but this is patent liberalism, the capitalists “are simply bad guys” is not theory or an argument, capitalists are forced to exploit workers for the simple fact there’s no other way to aquire surplus value, workers are not gonna hand it over themselves and since there’s more than one capitalist at any given time, they have to automatically compete for that value because there is a ceiling in terms of resources, time and labor
Precisely, and capitalists only allocate money to enterprises they deem profitable, this also create competitive pressure because higher profit rates attract greater investments
Otherwise wtf would be the point of investing money that wouldn’t pay off, people own private property so they can profit from alienated labor, not because they didn’t learn the golden rule in Sunday school
Not under capitalism friend, private property automatically generates alienated labor and that labor can produce surplus value, the incentives under capitalism point in one direction
You try to break that contract and the capitalists will break you, that’s why we socialists are abolishers not reformers
I just spelled out profit for you. Breaking even and having a tiny amount of money to allocate to anything that is not absolutely essential to the bare-bones functionality of the company is not profit. It’s viability.
Net revenue is what is kept in the business’s coffer after the minimum reproduction of functionality has been achieved. After that point it is a power game, a contest of who gets what from the leftovers. Some of it is management, some of it is labor, some of it is reinvestment in the company, some of it is paid out to either private owners or shareholders. Only the last item is characterized as profit. Revenue minus viability AND reinvestment AND employee remuneration above minimum is equal to profit. I shouldn’t have to walk you through this more than once.
You’ve never heard of a non-profit organization? They are enterprises with financial models. They make money, and they often exploit workers, independent of any fiduciary requirement to turn a profit. They distribute everything above a certain line to reinvestment in the enterprise, and sometimes add some to increased remuneration. They exist in the world and have not been flattened out of existence in the 3+ decades of Western capitalist unipolar hegemony. Workers’ cooperatives exist too. Your model says that either they cannot exist or will be disintegrated, especially after 200-400 years of capitalism being in place. You can’t just say patently wrong things and rationalize them away “because Marx”.
You are claiming that all wages and salaries have reached equilibrium, that there’s no possible way to have any agency in the economy as it is, and treating the economy as monolithic. This is fatalism, pure and simple, and is very close to the market-worship that the Austrian economists engage in, just inverted in its approach.
The equilibrium price for managerial labor is no higher than that of general labor. If a company was compelled to profit at all costs, they would pay their executives pennies. We do not see that happening; from this we conclude there is slack in the system.
Just because there are a few less banks than there were in 2007 doesn’t mean that every company has a knife to its throat. What you are doing is like applying general relativity to the flight of an airplane. Yes, it is acting on the system and has a big effect in the long term, but it is not the causative factor.
If you have confidence in your model, you should be able to make predictions based on it. For instance, the fraction of small businesses in the American economy has not detectably shrunk in the past 20 years; your model dictates that there is a constant and prominent force compelling this to happen. It has decreased since the 18th century, but that’s not a time frame that constitutes a coercive power on entities that make business decisions on a scale of months, quarters, and years. A broad incentive is not the same as a compulsion; that’s my thesis.
I have no patience for assertions that don’t have a basis in reality. Either back up what you’re saying with concrete empirical observation, or don’t respond at all.
Let’s start over from the top, cause it’s obvious you haven’t comprehended a word I’ve said
Capitalism is profit driven, and yes it is compulsive, you know why? Because it’s a systemic emergent phenomenon from the means of production being held as private property, capitalists aquire profit either thru labor or buying cheap and selling dear, either way you’re making profit and HAVE to compete with other firms to aquire a finite amount of surplus value, that is a COMPULSION, because YOU dont have a say in the existence of other firms and the amount of surplus value out there
Profitability is the SOLE determinant of viability under a capitalist economy, breaking even is not sufficient, you know why? Because your business starts eating costs, losing investors and taking on DEBT, something breaks, someone quits, you’re on the road to bankruptcy
This sentence proves you don’t know what profit is, the net revenue IS profit, costs are automatically subtracted before its accounted for under the gains column in a balance sheet
Reinvestment and dividends are not costs lmao Jesus christ, they are the point of the enterprise, labor, equipment, and rents are filed under costs
Yeah it’s almost like they’re trying a make fuckin PROFIT, almost like the “non-profit” designation is a tax cheat scheme
Also you know perfectly well we’ve been talking about CAPITALIST enterprises this entire time, so don’t trot out the entirely of human organized activity as if that’s what I’ve been referring to, I’m not talking about your book club, your student council, your mutual aid org, or your online guild, I’m about entities that file capital gains with the IRS so spare me the disingenuous tangents
You genuinely cannot be serious with this obtuse horseshit; worker cooperatives under capitalism ARE CAPITALIST ENTERPRISES, they compete under the same dynamic as capitalist led orgs, if they don’t make profit they go out of business, for the same reasons I described above and yes there is a ceiling to their existence UNDER CAPITALISM
Investors don’t like worker power so they don’t invest in cooperatives, which gives traditional capitalist enterprises a competitive advantage over coops, otherwise we’d be living in a coop utopia
Bro this genuinely fuckin hilarious, the delusional claim that you have agency under a capitalist economy is literally an Austrian school canard, you’ve moved on from neo-keynesianism to Virginia School public choice theory lmao
The right wing Virginia school claims the macro economy is unknowable (despite centuries of statical empirical work) and that only micro individualistic consumer behavior can be studied, you a right winger now? Do I need to explain concepts like input-output tables and interfirm networks?
Again here we go with the mangled keynesianism, there is no such thing as equilibrium of labor price, labor takes what it can fight for and capitalists pay labor what they can get away with, all it bound the overarching profitability model
This dynamic creates gigantic discrepancies across the globe in terms of the cost of labor and is the prime contradiction of capitalism
Also what is this bizarre idea of yours about CEOs being workers, do you know anything about corporate management? Owners dominate the leadership position of small businesses and in large firm shareholders or a board of investor representatives select the leadership from amongest themselves and pay primarily thru capital gain, options or shares, not a wage lmao
It’s actaully hilarious how you have this completely backwards, profitability isn’t gravity, it’s the fuel that keeps the plane in the air, THIS is the crux of your confusion because you have an idealistic conception of capitalism and not a materialist one
lmao you’re pulling my leg right? You think I pulled the 50% of businesses fail within 5 years stat out my ass or something, that’s a real statistic which is why I used it https://www.chamberofcommerce.org/small-business-statistics/
Also the model does not imply the total number of businesses will shrink over time, a million businesses die and a million are born, again for the thousandth time what matters is their profitability, and that’s mediated through competition
I have provided statistics, real world examples, systematic explanations, helpful metaphors and all I’ve gotten in return is willful ignorance, baseless assertions, non-sequiturs, and idealism
YOU DONT KNOW WHAT YOURE TALKING ABOUT
In this thread you have provided literally one statistic (“there are millions of capitalist firms” is obvious and doesn’t count), that “50% of businesses fail within 5 years”. Not only have you banked on it, your reliance on it shows how poorly you understand/interpret it. The fact that most businesses are run by a single person (proprietorships or single-operator LLCs) is enough to explain this. Extending this trend to 30 years, a standard career length, you have “98.94% of businesses will cease to exist within 30 years”. That is not news, it’s just people retiring or changing careers. Mechanisms matter, and you can examine them by critically thinking about the math. If you had something like 95% of businesses failing in the first year, that would be more of a smoking gun for an economy where competition is so tight and cutthroat that no one can afford to do anything else.
Trying to argue anything from that statistic alone is utterly meaningless. Please educate yourself in mathematics and statistical methods, it’s painfully obvious how lacking you are in that field despite your extensive repertoire of historical labels.
Here is another piece of data from the same source. After the small business share being over 80% in the early colonial period, it fell to 58% in the 1950s, 48% in the 60s, and then varying between 44% and 50% of the economy this century. If anything, this suggests an asymptotic minimum to how much of the economy will be captured by the most dominant entities.
I’m not talking about numbers of firms, I’m talking about their share of the economy. Tight competition absolutely does mean that the total number of businesses will shrink, you literally said in your previous comment “Yes it is, [big fish eating small fish] is empirically how most businesses die or expand”. If you have expansion as a constant requirement, you either have small firms that expand their share of labor faster than the larger ones do (which we do not see happening), or you have a reduction in the share of small firms as they are acquired or driven out of business by larger ones. So yes, the model absolutely implies that small firms’ share of the economy will decrease monotonically. You’re tripping over yourself, I hold to my point that for a substantial fraction of capitalist enterprises, competition is neither airtight nor a constant existential menace.
The distinction between profit and baseline break-even point matters for several reasons. One example is the leveraged buyout (LBO) model used from the 80s until today, where a capital management firm buys a company on credit for the specific purpose of maximizing their profits (shareholder profits), and doing this by cutting wages, salaries, material reinvestment like maintenance, upkeep, R&D, and everything else that keeps a company running. For a few quarters, you have record profits, and then the company goes bankrupt. That is the difference between profit and net revenue.
Are you asserting that salaries and upkeep and R&D, the same things that enterprises in non-capitalist societies engage in, are part of profit? I hope not, because you’re going to struggle either getting past an idiosyncratic definition of “profit”, or you’re going to have no basis for distinguishing capitalism from anything else.
In the real world, there is plenty of turbulence and contortion among capitalist enterprises; there are also plenty of businesses that just coast on an income flow without doing anything to actually make themselves more efficient in terms of process and technology.
I don’t deny that profit-seeking drives the capitalist economy. All I’m contesting is whether there is slack in it. From my experience in the workforce, paying close attention to the companies I’ve worked for, I have discovered that there is very much slack.
One example: A few years ago the CEO of the company I worked for suddenly gave everyone (minimum wage manual labor, most workers basically stuck either there or in the temp agency circuit, company revenue roughly $300k per worker, remarkably uncompetitive sector) a $2/hr raise. Can you come up with a “material” reason why he would have done that, instead of just keeping the surplus, and why he made it $2 instead of $1? I’ll be pleasantly surprised if you don’t resort to right-wing economic talking points.
Practically all I am saying is that a company on narrow margins can cut what it pays to managers or spends on its sweetheart deals or even reduce shareholder dividends, or else it’s not really on narrow margins and thereby not in a state of competitive coercion; costs of labor are not scientifically estimated but are subject to many particulars and whims; the income above minimum wage paid to higher-paid workers ($11T wages and salaries per BLS, minus ~$5T if the whole workforce was anchored close to minimum, so ~$6T) is something that is chosen to go to high-paid positions instead of to profits, not by material necessity, but for other reasons. In short, just like I said in my original comment, “drive for growth (including profit-seeking) has more of an effect on the economy than adversarial competition does”.
Business heads, from Brian Thompson to your local car dealer, are not doing a Project Cybersyn to calculate exactly how much money they can squeeze out of all minutiae, dude. Their hand isn’t forced. They’re trying to be big high rollers and pursue whatever life gratification “being the Rich Guy” entails, they’re usually in their position because of inheritance or shady tactics, and much of the time their employees have a better sense of how to run the company than they do. Obscene exploitation of proletarians by paying them subsistence wages is likely but not inevitable.
I’m not going to reply to the other verbose excruciating; you’re digressing and nit-picking words and appending names and assumptions because you really don’t understand my argument. A better analogy than the previous one I made is the insistence by social Darwinists, Hobbesians, essentialists, etc. who say that every living being is in a constant vicious struggle against every other being, and that it is a rule how every organism is compelled to be as selfish and ruthless as possible because that is the only way to survive and reproduce. Naturally, this is wrong, and based on the opinions of people that wanted to justify and perpetuate their privileged position. It is reactionary.
You are literally employing reactionary rhetoric, and pretending that because you spout your dogma over and over, that it makes you right (despite having no more than 1 piece of worthless evidence).
See, here it is again, the crux of your confusion, competition IS NOT ALWAYS A DRAG on these people, it is also the means by which they acquire greater market share, YOU COMPETE TO WIN, it’s not simply a curse it’s the means of expansion, the stick also has a carrot, I know that blows your brain
INCORRECT, you talk big about understanding statistics, yet here you are mashing two different statistics, while asserting a timeline that also has nothing to do with the original stat, the business failure statistic has NOTHING to do with INDIVIDUAL retirements or transfers, successful business people do not file for bankruptcy because they want to retire, YOU DIDN’T READ THE DATA ON THE SOURCE I PROVIDED Please educate yourself in mathematics and statistical methods, it’s painfully obvious how lacking you are in that field despite your extensive repertoire of nonsensical tangents
You are all over the place, nothing in that source disproofs or conflicts with a single thing I’ve said, business failure is a constant, centralization of capitals is a constant, turbulent expansion is a general trend, these aspects of global capitalism ARE MEDIATED THROUGH COMPETITION-AS-WAR, did it click now, I’m running out of ways to describe basic ass concepts
You didn’t say shit about the “share of the economy” you were explicitly talking about absolute numbers, don’t shift the goal post because you realize in retrospect how stupid your point was, because it never occurred to you that new businesses can be founded, that’s what happens when you’re to busy trying to score points rather than examining your priors and assumptions
Here you are back to numbers, also no it doesn’t, competition-as-war only implies some firms will win and some will lose, that’s it, without data we can make no absolute further claims, firms that die are replaced by new firms, are you asserting there is no such thing as new businesses? I mean, please do, cause that’s hilarious
Yes we do, it’s called Silicon Valley, like what world are you living in, small firms expand all the time, what do you think has been happening in China the last forty years?
Again happens all the time, what is Amazon, have you been living under a rock, also the most important factor you’re missing, large firms regulate each other too, preventing absolute monopolies and creating new market dynamic even small firms can take advantage of, real world example: Amazon in the early 2000s taking advantage of a maturing telecommunications industry that was dominated by enormous tech firms, now Amazon is the giant, huh I wonder how that happened, also notice how I’m backing my shit up with real life and you aren’t or can’t
Then provide an example of these hermetically sealed capitalist enterprises, where are these pristine Edens of easy capitalist accumulation?
You haven’t articulated any distinction, you’ve confused a strategy with a paradigm shift, you’re just describing one method of profit making, yes capitalists increase their profits through cost-cutting, profit and net revenue are the same thing in that context, bankruptcy doesn’t change the fact they made record profits “for a few quarters” that’s why the LBO model IS COMPETITIVE
This is how I know you’re not reading my words; there is profit, costs and (re)investment, salaries and upkeep are costs, R&D is an investment that is subtracted from profit AFTER COSTS. But the question you should be asking yourself is WHY CAPITALISTS ENGAGE IN R&D, and the answer is pretty obvious, R&D gives firms a competitive edge in productivity, cost-cutting and the utility of commodities, if competition is not a factor, then there’s no reason to waste profit on new technology, since “break-even” and old accumulation methods would suffice. Well as we’ve seen throughout the history of capitalism it doesn’t suffice, because once a firm realizes some new tech can increase their sales, they gain advantage and their rivals see it immediately and respond in kind, generating the massive technical growth endemic to capitalism
Now go tell me capitalists engage in R&D because of cronynism or some dumb shit
lmao yes they are, you simply don’t understand the computer technology involved in the management of countless firms, what do you think modern inventory computer programs are doing? Why do you think firms of any serious scale have an IT department, hmm? My workplace literally uses a cybernetic program for inventory management, that calculates everything from damages, overstock, and single item sales
Legit dude, have you worked a single day in your life, these programs are literally everywhere across every economic sector, especially in manufacturing and retail
I mean are you joking, it’s called retention, he was aware other firms in your industry had better offers and he made a cost-cutting bet to keep productivity stable, what do you think he did it because he liked you guys? There’s literally no reason (outside of labor struggle) for him to increase costs if not for competitive pressure, most Ilkley the trigger was him losing people he couldn’t afford to lose to other firms
Exactly, and because the new generation doesn’t know how to compete properly, they run once successful firms into the ground (Sears) and allow new players to raise to prominence, competition-as-war under a private property framework creates destructive and self-equalizing tendencies that runs counter to popular conceptions of monopoly
Friend, this is projection, cause this is all you’ve been doing, I mean just look at how you keep trying to nitpick the word PROFIT into total incoherence
It’s not “either or.” The market demands exploitation and capitalists themselves have an interest in exploitation.
The market is not a sentient being that needs to be appeased, rather than as an unconscious, turbulent sea of patterns driven by individuals and policies.
Capitalists have a degree of agency over the exploitation they engage in. It isn’t handed down as an order, it’s an opportunity that is actively taken, like speeding on a road.
The starting point for bourgeois economics is individual intentions, and even they recognize that a worker must sell their labor to an owner of capital and that capital must outcompete others on a market. Marxism, on the other hand, looks for objective necessities and tendencies in this very society. It’s objectively true that it is in a worker’s interest to be payed well and worked little. It’s also the case that the capitalist’s interest is to pay as little as possible for wages and for workers to labor as hard as possible under them. Capital only maintains and expands itself by feeding off living labor. We call this exploitation. If a capitalist pays too much or sells to high, they are at a competitive disadvantage and reap less value.
You express that exploitation is a moral evil, but insodoing, you imply a command to the capitalist to deny their own interest: make less money and be less competitive.
The point of Marxism is not to build a society with “fair” wages, but to abolish the wage labor system that pits people’s immediate material interests in such direct conflict. In capitalism, wealth needs poverty. The latter is not an immoral mistake.
Right, but to be at a competitive disadvantage from paying their labor more, they’d have to be paying their labor a LOT more. That’s really the only contention I had.
When we repeat the assertion that “we are paid so little because the market forces the employer to do so”, we are adopting a fatalist acceptance that we will always be stuck at subsistence-level wages, instead of imagining and striving for the proportional share of the fruits of production that our labor generates.
They don’t pay less because they absolutely have to, they pay less because they choose to (and sure, this choice is a structural pattern that needs to be targeted and abolished).
Competition is only one (major) element. Every second someone works longer is an increase in labor time; every cent someone is payed less is an increase in relative surplus value extraction; every bit harder someone works is an increase in relative value of goods.
Exploitation is in capitalist’s direct interests and where I demand an end to the wage labor system, you call people to economistically struggle for a “better deal” which is of course at the expense of the capitalist. It doesn’t have to be this way, but it’s not changing without uprooting the source which is capitalism.
Value that goes into the reproduction and expansion of capital (not merely the fractional luxuries of the capitalists) is categorically surplus value, taken from workers in exchange for a much smaller wage by virtue of the capitalist owning the private property and the worker owning only their own ability to work. What needs to be abolished is private property, not mean property owners.
Nowhere did I suggest that unfair treatment by property owners was a sui generis thing. Nowhere did I suggest that the institution of private property didn’t need to be abolished.
I will, however, claim that there are ethical dimensions to the present world, and that abolition of capitalism and private property is absolutely an ethical stance.
And my original claim was that actors are not in a state of being maximally forced to squeeze themselves. I would argue that as long as the profit rate is substantially above zero, that there is generally room to breathe in the system.
Oh, I’m fully aware it’s a liberal moralist perspective you’re presenting. My post is Marxist and I’ve tried explaining the Marxist understanding but apparently you’d rather counterpose it to an individualist economism than listen.
Surplus value extraction is universal. Arbitrary cruelty is not. Surplus value extraction is fed into by the market but not a result of being maximally forced. It’s ironic mentioning profit rate given the decline of profit rate is one of the tendencies that objectively compel increased exploitation.
I am merely taking issue with “compelled”, and the implication that the compulsion is total: that the poor struggling business owners just can’t catch a break because the system they’re in takes away all their agency and forces them to do everything they do.
There is a large fraction of firms that may have a contingency plan for competitive pressure, and do lip service to the competitive model, but in practice are not even close to facing any real threat from competitors.
That’s tantamount to the point I was trying to make. It’s pointless to argue further.