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Comment by andrewjl | Hacker News Reader

Why were American firms not able to use their advantage to compete against the upstarts? This comment reads to me as implying American companies are uncompetitive compared foreign firms and are doomed to lose simply by being subject to competitive forces.

What are these other companies doing that we are not? What can we do to make ourselves more competitive such that each employee has enough productive capacity to easily receive $24/hr or equivalent? The peak of 1973 is gone and not coming back, we have to look to the future now.

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Arguably American firms have been incredibly competitive since the 1970s; its American labor that hasn’t been.

And/or the fruits of globalism have not been fairly shared. Depending on whom you ask.

The fruits of globalism aren't shared equitably amongst labor, post-1970's labor earnings have done exceptionally well for the upper tranches of the labor pyramid. Why are those more competitive than the rest? There are factors like differential productivity gains due to globalization, technology, etc but I'm not convinced. Especially when one takes Baumol's cost disease into account. There was a change in during the 1970s, but I don't believe globalism was it.

The surprising thing about the current era is just how little wealth is inherited and how much has been largely generated during the owner's lifetime, in many cases due to labor and receiving compensation in the form of stock. The vast inheritances we read about from the 19th century aren't there this time, barring a few exceptions. Thomas Piketty wrote about this in Capital.

https://www.fastcompany.com/90550015/we-were-shocked-rand-st...

What do you think about that? Did they make any errors?

Labor in the top 1% is still labor was my point. I never argued that inequality doesn't exist or didn't get worse. I just think the capital vs labor rhetoric is a distraction.

Edit: Also, from the link, this is very fishy to me. You could argue the medical benefits they exclude aren't meaningful because of healthcare inflation not being linked to better health outcomes. You can't make that argument for capital gains. It's likely not be meaningful because there are indeed severe inequalities among Americans in capital assets holdings, it is still an omission however.

> And it takes into account capital gains but, due to certain technical constraints, only for those above the 90th percentile.

"Labor in the top 1% is still labor"

I have an issue with this. By some definition, of course. But there is still something very different about the kind of labor which goes on there. Class, opportunity, connections, access to capital, and access to political influence further entrenching their position. It's almost like the nobility of yore.

I find pointing to the 1% labor as some kind of redeeming quality of the system, is instead a distraction from capital vs labor. For the regular labor to have a chance to enter the top 1% of labor, is just as much of a pipe dream as them falling into Big Capital.

Is a family physician labor, or a capitalist?

I think that’s kind of what the OP you responded to was getting at. I know professors at large state universities making $100,000+ in medium to low cost of living locations. Some make even more. They aren’t 1% but they might be top 10%.

I guess what’s piqued my interest here is, at what point do we consider labor to be labor?

If you get a nice UAW job for 30 years and plow money into the market, are you not a capitalist?

Is a surgeon not labor since he or she may not own the hospital? Sure they may make $700,000/year, but... aren’t they working for a living?

The Meritocracy Trap is a great book I’d recommend that’s related to this question/issue. Wealth and the bourgeoisie used to just hang out all day and go for walks in the park. Now they work 120 hours/week.

These are great examples, here's another good read on the topic:

https://www.theatlantic.com/business/archive/2016/09/the-fre...

A salient quote:

'Elite men in the U.S. are the world’s chief workaholics. They work longer hours than poorer men in the U.S. and rich men in other advanced countries. In the last generation, they have reduced their leisure time by more than any other demographic. As the economist Robert Frank wrote, “building wealth to them is a creative process, and the closest thing they have to fun.”'

Re-reading this piece [1] (also see my reply to the sibling comment) should clarify what this trope hides, which is that there's a deep, structural differential in productivity in the current economy it cannot explain. Why do the rich choose to work so much? That flies in the face of all logic since they can just kick back and exploit their class, opportunity, etc. Yet they don't because the work is fun. Counter to that, why do the poor choose to work less even if there are clear avenues of advancement? In the article you'll find some interesting speculation.

We need to fix our relationship with work, especially for the sake of those currently unable to do "fun" jobs that pay well. I don't think working less or a redistribution scheme via the government is an honest solution.

Instead, a much higher minimum wage coupled with retraining and temporary economic assistance that can spur a mass automation of "drudgery"-type jobs is a better answer. This in turn would allow society to redesign work so that it is more humane and more valuable. I also don't buy the belief that only some are capable of creative work.

[1] https://www.theatlantic.com/business/archive/2016/09/the-fre...

From the macroeconomic perspective, since the US dollar had reserve status and unlimited foreign demand, it just becomes more efficient to print and export dollar bills and import real goods than to actually exert physical labor to produce goods to export and balance trade. Once this realization sets in, the optimal game theory outcome is to reorganize the economy around this structure of print-and-export-dollars debt-based system. Debt only becomes a problem when other people don’t want to hold it anymore.

That's true. The US dollar reserve status is a contingent factor however.

How do we maintain it? An obvious factor is our military capacity. That means defense spending. Under a capitalist system that also requires a competitive commercial defense sector and also a strong economy capable of sustaining such a sector via tax revenue.

Most tax revenue comes from individuals. In an era of mobile capital, corporate taxation is sub-optimal. So the economy's health is linked to the prosperity of individuals, in aggregate. Prosperity can come from competition, but the most durable forms of prosperity are tied to increasing productivity.

Continuing on this first principles trajectory should lead to a stable structure. It's not one that is dominated by "print-and-export-dollars"-style industries.

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