Ayn Rand fans: Help decide her fate
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The economic principles of stupidity
You seem to think professional basketball in the United States is the same as, say, manufacturing wall padding for high school basketball gymnasiums. The latter was part of my father's business when I was growing up, and certainly a freshman econ textbook could easily explain the most part of his numbers.
However, you're off the mark when trying to make the point about Michael Jordan. In the first place, pro sports contracts, like Hollywood contracts, are somewhat about what one thinks he can get away with. What about Liar Liar warranted a forty-million dollar payout for Jim Carrey? It certainly wasn't the "cost of labor".
Likewise, the NBA salary cap is determined not by the costs of training and maintaining a professional basketball player, but as a percentage of league revenues. Last season, the cap was $53,135,000 per team. This season, it's $55,630,000. The cap actually dropped from the '01-'02 season to '02-'03. Additionally, they have a formula whereby rookies are paid according to their place in the draft order. If we look to baseball, what, exactly, determines that Alex Rodriguez costs $28,000,000 a year? What are the factors that determine the cost of labor to be so drastically different from city to city? After all, the Yankees are spending over $209 million dollars on their opening day roster. In Detroit, ranking second on the list, it only costs a bit under $138.7 million. The Florida Marlins (Miami Gardens, Florida) are drastically less expensive. They're the cheapest opening day roster in the league at a bit over $21.8 million.
My point is that the Rand cultists at Capitalism.org are full of crap when they use professional athletes—especially a premiere name like Michael Jordan—to illustrate "Labor Wages under Capitalism". In fact, I suspect you might have skipped the page in order to rush to your argument about textbook econ, because I highly doubt you would assert that most doctors are paid as much as Michael Jordan: "Under capitalism ones wages depend on how much one can produce. That is why Michael Jordan -- or a doctor -- gets paid millions of dollars more then the minimum wage."
Now, perhaps freshman econ books these days talk about demand, and how people will have bidding wars for something they want, and then turn around and try to figure out how to justify the expense. But in this case, "If the cost of labor goes up, the cost of goods go up, and people get fired" is inaccurate. At best, it reflects an artificial inflation of the "cost" of labor.
It seems to me that if one wishes to demonstrate how an issue applies most commonly, one should choose examples that reflect the common application. Oh, right. Economics is supposed to be counterintuitive.
Roman said:
You seem to think professional basketball in the United States is the same as, say, manufacturing wall padding for high school basketball gymnasiums. The latter was part of my father's business when I was growing up, and certainly a freshman econ textbook could easily explain the most part of his numbers.
However, you're off the mark when trying to make the point about Michael Jordan. In the first place, pro sports contracts, like Hollywood contracts, are somewhat about what one thinks he can get away with. What about Liar Liar warranted a forty-million dollar payout for Jim Carrey? It certainly wasn't the "cost of labor".
Likewise, the NBA salary cap is determined not by the costs of training and maintaining a professional basketball player, but as a percentage of league revenues. Last season, the cap was $53,135,000 per team. This season, it's $55,630,000. The cap actually dropped from the '01-'02 season to '02-'03. Additionally, they have a formula whereby rookies are paid according to their place in the draft order. If we look to baseball, what, exactly, determines that Alex Rodriguez costs $28,000,000 a year? What are the factors that determine the cost of labor to be so drastically different from city to city? After all, the Yankees are spending over $209 million dollars on their opening day roster. In Detroit, ranking second on the list, it only costs a bit under $138.7 million. The Florida Marlins (Miami Gardens, Florida) are drastically less expensive. They're the cheapest opening day roster in the league at a bit over $21.8 million.
My point is that the Rand cultists at Capitalism.org are full of crap when they use professional athletes—especially a premiere name like Michael Jordan—to illustrate "Labor Wages under Capitalism". In fact, I suspect you might have skipped the page in order to rush to your argument about textbook econ, because I highly doubt you would assert that most doctors are paid as much as Michael Jordan: "Under capitalism ones wages depend on how much one can produce. That is why Michael Jordan -- or a doctor -- gets paid millions of dollars more then the minimum wage."
Now, perhaps freshman econ books these days talk about demand, and how people will have bidding wars for something they want, and then turn around and try to figure out how to justify the expense. But in this case, "If the cost of labor goes up, the cost of goods go up, and people get fired" is inaccurate. At best, it reflects an artificial inflation of the "cost" of labor.
It seems to me that if one wishes to demonstrate how an issue applies most commonly, one should choose examples that reflect the common application. Oh, right. Economics is supposed to be counterintuitive.
invert_nexus:
Pshaw, every philosopher knows their own work to be exempt from their own criticism. How would we know to burn our books if he burned his? Be realistic now.
Pshaw, every philosopher knows their own work to be exempt from their own criticism. How would we know to burn our books if he burned his? Be realistic now.
There is only one Jim Carrey. And high demand. Relatively straight forward, no?
The fact that 1) people want to watch him play and 2) are willing to pay for it. If someone's willing to pay for it, it's definitionally worth that much.
Nor did the Randists assert that most doctors earn as much a Michael Jordan. They claimed that a doctor and Jordan are both paid millions more than minimum wage. A simple thought experiment will show how this can be a true statement without both earning the same amount. If you have trouble, I'll try to work it out for you.
Demand and cost are linked. Jordan could would have never been paid the amount he did playing in, say, Europe. Over there, they pay a lot of money for soccer players.
It's a type of argument where one... oh forget it. You enjoy being ignorant. I shouldn't try to persuade you otherwise.
The hopeless and desperate
And?
You seem to miss the point that what you're describing is a different process than what determines the wage of the average laborer. It's also a bit different than the basic formula you described: "If the cost of labor goes up, the cost of goods go up, and people get fired."
Especially when it's an actor like Jim Carrey, or a professional sport without a salary cap.
A doctor makes millions more? Perhaps in lifetime earnings. But that's a bit deceptive. What professional athletes and the average doctor earn aren't even in the same league.
About the only thing you're proving about capitalism with that argument is its weakness. And that weakness is humanity itself. That actors and athletes are "worth" more than teachers, doctors, sanitation workers, journalists, or a host of other vital occupations is a testament to the priorities of our society.
Ah, yes. The last resort of the desperate. It's okay, we won't ridicule you for admitting that the difference between capitalistic theory and practice is massive. We won't condemn you for finally admitting that Rand made the same mistake so many idealists make in presuming that humanity wouldn't waste its opportunities on frivolity.
There's no shame in admitting that capitalism is just as starry-eyed as any other idyllic assertion.
Roman said:
And?
You seem to miss the point that what you're describing is a different process than what determines the wage of the average laborer. It's also a bit different than the basic formula you described: "If the cost of labor goes up, the cost of goods go up, and people get fired."
Especially when it's an actor like Jim Carrey, or a professional sport without a salary cap.
A doctor makes millions more? Perhaps in lifetime earnings. But that's a bit deceptive. What professional athletes and the average doctor earn aren't even in the same league.
About the only thing you're proving about capitalism with that argument is its weakness. And that weakness is humanity itself. That actors and athletes are "worth" more than teachers, doctors, sanitation workers, journalists, or a host of other vital occupations is a testament to the priorities of our society.
Ah, yes. The last resort of the desperate. It's okay, we won't ridicule you for admitting that the difference between capitalistic theory and practice is massive. We won't condemn you for finally admitting that Rand made the same mistake so many idealists make in presuming that humanity wouldn't waste its opportunities on frivolity.
There's no shame in admitting that capitalism is just as starry-eyed as any other idyllic assertion.
The funny thing is that minimum wage legislation was introduced in the UK quite a few years ago now. It was one of only 2 or 3 genuinely lefty things done by the neo-conservative government of Tony Blair.
Since its introduction, we have in fact required to import more labour to the UK to keep up with the demand for labour. I think that falsifies your childishly simple outlook on wages and demand.
Oh, and as for government protected industry, they all are to some extent or another, given that the gvt supplies the courts and enforces patent law and suchlike. Otherwise we end up with anarcho-capitalism, which to give her her due, Rand was not one of.