Author Topic: Living off of other people's work  (Read 73756 times)

Jamesqf

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Re: Living off of other people's work
« Reply #100 on: May 07, 2013, 01:23:00 PM »
I think the point of the placement of reproduction on the scale is the fact that we do, actually, need some people to reproduce. Without some people reproducing, our whole economy will fall apart and the whole species will go extinct shortly after.

But that scale is supposed to measure individual needs, not societal ones.  No one can eat or breathe for me, but I (or any person) will survive just fine if other people do the reproducing.

Think about some of the people who you think really influenced society: Einstein, Newton, Copernicus, Currie, Guttenberg, whoever. Now, of the people on your list, how many became great and influential by working 40 hours per week at a company for most of their lives until they were not healthy enough to do so? I'd wager that the percentage is small.

Not from your own list.  Einstein & (Marie) Curie were both salaried employees for most of their careers.  Newton was independently wealthy, while Copernicus worked as a secretary, and derived income from church positions.  Gutenberg was a small businessman, a goldsmith & lensmaker among other things.


Mr Mark

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Re: Living off of other people's work
« Reply #101 on: May 07, 2013, 01:45:32 PM »
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Is it ok to live off of other people's work?

I think you've phrased the question is a loaded way. Let me break it into two questions instead:

Is it OK to rent things that you own to other people?
I think pretty much everyone would agree that this is morally acceptable. The owner provided some item of value, the renter got to use it for a while, everyone wins.

Is it OK to rent out so many things that you can live off of the combined profits?
I have a hard time seeing how this could be wrong. If renting things is fine, then renting many things is also fine, and who cares what you do with the profits?

I'd also point out that this is what many businesses do, and nobody complains. Hertz will rent you a car. My apartment building rents an apartment to me. HomeDepot will rent tools to me. My local bike share (yay B-Cycle!) will rent a bike to me so I can ride to work. Seems plenty moral to me when they do it, why wouldn't it be moral when I do it? Why would it become immoral if I were so good at it that I didn't need to do anything else?
Us mustashians and our exploitative 'private property' eh? Tsk tsk!


GuitarStv

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Re: Living off of other people's work
« Reply #102 on: May 09, 2013, 11:39:37 AM »
Synopsis of this thread so far:


totoro

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Re: Living off of other people's work
« Reply #103 on: May 09, 2013, 11:45:14 AM »
Most excellent response so far.

Starstuff

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Re: Living off of other people's work
« Reply #104 on: May 09, 2013, 12:34:32 PM »
This is a fairly Objectivist discussion. I'm going to skip the economics for a second... If investment income is immoral to you, don't invest. There is no need to justify it. If it feels wrong to you, there is no need to force a paradigm change so you can do it. Buy a few houses with cash and rent them out at a fair price. Be a good, attentive landlord. That way, you're providing a service to your tenants by giving them a well-maintained house (and putting in work to maintain them), and they're paying you rent in return for that service.

(The following isn't intended to be complex. I'm not well-versed in economic theory... This is my very simplified opinion. Granted, I find our entire economy arbitrary, and don't find any work outside manufacturing basic goods/farming and health care productive.)

However... the way I see it, you've legitimately earned your principal through productive work, right? And the person you're lending it to-- company, individual, etc-- has asked to borrow it through a legitimate business transaction. In return for borrowing your legitimately earned money, they'll pay you "rent." That could be dividends earned by using your money, or it could be interest on a loan. You're living off the right to lend your earned money to someone who needs it more than you. I work in mortgages-- I consider the willingness of others to lend their money to be an essential service to our society. Mustachian? No. But just as you're free to live off work/rental income if investment feels wrong to you, others are free to choose if they feel that borrowing money and paying rent on it is alright. You are living off their work, yes. But not without their consent. There is the difference for me. It's not slave labor, at least not fundamentally. You aren't forcing non-consenting borrowers to take your money in order to live off their labor. Consent, for me, is the key. I don't consent to pay rent on money, and so forcing me to is immoral. My parents (and clients) do consent to pay rent on money. And so I don't consider someone making a profit off their choice immoral. Stocks are pretty much the same thing. If no one wants your stock, a company loses money quickly (see: Facebook). But by buying a companies stock, I'm giving them access to my money. In return, they consent to give me some of their profit. (Of course, this is a substantially more complex relationship, but that's my pre-101 take on it.)

So, broad economic theory aside, I'm giving my perspective. As in almost every aspect of life, consent is key. If they person paying you interest made that choice, cool. If you're assaulting cars at red lights, cleaning their windshields, and blocking their exit until they pay, not cool. I think investing in ethical companies, rather than indexes or mutual funds, may ease your conscience a little. I'd feel like a horrible person having stock in Exxon... but I'm just fine owning stock in companies that produce solar panels. Make sense?

brewer12345

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Re: Living off of other people's work
« Reply #105 on: May 09, 2013, 01:49:23 PM »
I'd feel like a horrible person having stock in Exxon... but I'm just fine owning stock in companies that produce solar panels. Make sense?

Do you own or drive a car?

Starstuff

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Re: Living off of other people's work
« Reply #106 on: May 09, 2013, 02:14:59 PM »
I'd feel like a horrible person having stock in Exxon... but I'm just fine owning stock in companies that produce solar panels. Make sense?

Do you own or drive a car?

My opinion isn't a challenge.... The fact that I don't want to own part of a hugely immoral company isn't an insult to you. This is rude, off topic, and completely unnecessary.

unitsinc

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Re: Living off of other people's work
« Reply #107 on: May 09, 2013, 02:40:32 PM »
I'd feel like a horrible person having stock in Exxon... but I'm just fine owning stock in companies that produce solar panels. Make sense?

Do you own or drive a car?

My opinion isn't a challenge.... The fact that I don't want to own part of a hugely immoral company isn't an insult to you. This is rude, off topic, and completely unnecessary.

I don't think he was attempting to be challenging. I can see it being taken that way. My guess would be that he would then go on to say that whenever you invest in a company, you actually help it very very very little compared to purchasing something it makes.

I don't have the numbers, but I recall reading something a while back that purchasing stocks essentially does nothing for the company. I'm sure someone could find an appropriate link.

I hope this did not come off as attacking your opinion, just wanted to expound a bit.

Starstuff

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Re: Living off of other people's work
« Reply #108 on: May 09, 2013, 02:58:20 PM »
I'd feel like a horrible person having stock in Exxon... but I'm just fine owning stock in companies that produce solar panels. Make sense?

Do you own or drive a car?

My opinion isn't a challenge.... The fact that I don't want to own part of a hugely immoral company isn't an insult to you. This is rude, off topic, and completely unnecessary.

I don't think he was attempting to be challenging. I can see it being taken that way. My guess would be that he would then go on to say that whenever you invest in a company, you actually help it very very very little compared to purchasing something it makes.

I don't have the numbers, but I recall reading something a while back that purchasing stocks essentially does nothing for the company. I'm sure someone could find an appropriate link.

I hope this did not come off as attacking your opinion, just wanted to expound a bit.

I buy gas minimally... used Prius, only for trips over 5 miles (I'm new, and improving, and live in a godawful bike city). Morally, to me, buying something nearly unavoidable is different than owning part of that company and using their dividends to finance my lifestyle.

brewer12345

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Re: Living off of other people's work
« Reply #109 on: May 09, 2013, 03:07:43 PM »
I'd feel like a horrible person having stock in Exxon... but I'm just fine owning stock in companies that produce solar panels. Make sense?

Do you own or drive a car?

My opinion isn't a challenge.... The fact that I don't want to own part of a hugely immoral company isn't an insult to you. This is rude, off topic, and completely unnecessary.

I don't think he was attempting to be challenging. I can see it being taken that way. My guess would be that he would then go on to say that whenever you invest in a company, you actually help it very very very little compared to purchasing something it makes.

I don't have the numbers, but I recall reading something a while back that purchasing stocks essentially does nothing for the company. I'm sure someone could find an appropriate link.

I hope this did not come off as attacking your opinion, just wanted to expound a bit.

I buy gas minimally... used Prius, only for trips over 5 miles (I'm new, and improving, and live in a godawful bike city). Morally, to me, buying something nearly unavoidable is different than owning part of that company and using their dividends to finance my lifestyle.

There, that wasn't so hard, was it?

AJ

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Re: Living off of other people's work
« Reply #110 on: May 09, 2013, 03:31:29 PM »
I don't have the numbers, but I recall reading something a while back that purchasing stocks essentially does nothing for the company. I'm sure someone could find an appropriate link.

This is correct. When you buy stocks, you are essentially buying them "second-hand". You are neither giving nor lending money to the company, you are giving it to another investor.

totoro

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Re: Living off of other people's work
« Reply #111 on: May 09, 2013, 03:43:27 PM »
"whenever you invest in a company, you actually help it very very very little compared to purchasing something it makes"

No. Without a system to raise funds, which is dependent on a market for the sale and transfer of stocks, these companies would not have been able to expand and grow.  The liquidity of the stock market is a key factor in this system.

AJ

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Re: Living off of other people's work
« Reply #112 on: May 09, 2013, 03:51:33 PM »
"whenever you invest in a company, you actually help it very very very little compared to purchasing something it makes"

No. Without a system to raise funds, which is dependent on a market for the sale and transfer of stocks, these companies would not have been able to expand and grow.  The liquidity of the stock market is a key factor in this system.

But owning stock in ANY company is contributing to the formation and liquidity of the market, not just the bad ones. You could refuse to buy the IPOs of immoral companies, that would make sense.

totoro

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Re: Living off of other people's work
« Reply #113 on: May 09, 2013, 04:28:15 PM »
Apples and oranges.  I was responding to the statement that buying stocks does not help a company.  Your question as which stocks you choose to buy based on company morals (do you mean ethics?) is different.

AJ

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Re: Living off of other people's work
« Reply #114 on: May 09, 2013, 04:55:46 PM »
Apples and oranges.  I was responding to the statement that buying stocks does not help a company.  Your question as which stocks you choose to buy based on company morals (do you mean ethics?) is different.

Ah, got it. Yes, I agree that participating in the market does help all companies (existing and yet to be established) by creating a very liquid place to raise capital. But the discussion originally arose when Starstuff suggested that his/her "morals" got in the way of buying stock in particular companies. To that end, buying a particular company's stock (with the notable exception of their IPO, or future offerings) doesn't directly help the company, whereas buying their product does. Or, at least, I am not aware of any benefits for the company. In fact, if the stock price dropped to below the original IPO price, a company could choose to buy their stock back at less than they were originally paid for it, in a way getting "free" money. And, owning stock in a company let's you vote on directors, giving you an infinitesimal say in how that company is run. I may very well be missing something, but I fail to see the logic in refusing to purchase second-hand stock in a particular company for moral or ethical reasons. If anything, it seems more logical to buy loads of the shares and vote out the shitty directors.

And you're right, I do mean ethics. I was just keeping the "morality" terminology from before for consistency, but at the cost of accuracy.

foobar

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Re: Living off of other people's work
« Reply #115 on: May 09, 2013, 09:26:12 PM »
Stocks are a currency.  By buying the stock, you raise the stock price and the company can then use that inflated currency to buy other companies or to compensate employees instead of having to pay them cash.  Or they can issue a secondary offering to directly raise cash.  It is a pretty minimal effect though.


I don't have the numbers, but I recall reading something a while back that purchasing stocks essentially does nothing for the company. I'm sure someone could find an appropriate link.

This is correct. When you buy stocks, you are essentially buying them "second-hand". You are neither giving nor lending money to the company, you are giving it to another investor.

Bakari

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Re: Living off of other people's work (Late to the thread)
« Reply #116 on: May 10, 2013, 04:57:22 PM »
I've been following this one a few days, but I've had jobs that went from late morning to to 8:30pm 3 days in a row, and haven't had time for what will inevitably be a long response.

This question was well timed for me, as this has been the exact topic of the next big blog essay that's been brewing in my mind.

I'll try to not turn this forum response into an essay, but there are so many points to respond to, and anyone who remembers my participation in the 5 past semi-related philosophical / political threads: 
http://biodieselhauling.blogspot.com/2012/12/comments-from-mmm-economics-philosophy.html
http://biodieselhauling.blogspot.com/2012/12/comments-from-mmm-forum-part-2-pursuing.html
http://biodieselhauling.blogspot.com/2012/12/comments-from-mmm-forums-part-3-lets.html
http://biodieselhauling.blogspot.com/2012/12/comments-from-mmm-forums-part-4.html
http://biodieselhauling.blogspot.com/2012/12/comments-from-mmm-forums-part-5-ows-99.html
probably realize that keeping this short isn't realistic :P

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Investment income is a portion of the value produced by work. But the investor does none of the work to produce the value he receives. It comes to him merely by virtue of the fact that he has legal title to some property.
I think that's a very good summary.  It, in and of itself, is not immoral per-say, however I think we can (and should) question whether or not the investor is morally entitled to wealth which he did not produce.

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I'm not so interested in criticizing capitalism as I am in wondering what should a moral person do who finds himself in a capitalist system?

I think questioning the system you are in - and questioning it publicly, to encourage others who ave grown up taking it for granted to question it as well - is one part of what a person should do, just as a moral person in the US south in the 1800s or in Germany in the 1930s might question the systems they were under.  It could be that when it is looked into deeper, we find there really is no problem, in which case no harm, no foul.  But if there is a problem, you will only find it by challenging the norms.

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But I'm wondering if the early retirement bit can be justified as a personal decision. Normally when people who are perfectly able to work live off of other people's labor, say through welfare or dubious disability claims, that is viewed negatively. But here, when a person does it by socking away a million dollars over 10 years, it is applauded.

You are equating two totally separate concepts which, while they fit together synergistically, are not at all necessary for each other.

1) investing large sums of money, and reaping the interest and dividends.
Plenty of people do this without being frugal and/or while continuing to work.

2) saving money to allow not having to work (or at least not full-time)
This can be done WITHOUT investing money in stocks or real estate.

Lets say you have a high middle-class salary of 100k.
Lets say you live on the very low, but totally possible, spending of 10k.
For every one year you work, you earn 9 years of freedom.  If you start working at 24, work for 8 years until age 32, and then never earn any income ever again, you have earned 800k, spend 80k, have 720 left, which will last 72 years, until you are 96, without ever earning a single cent in passive income.

(granted, in reality there is inflation - you would need to earn enough additional income or, say, interest from a savings account or bonds to keep up with inflation, but you would not need any profit from your capital)

Really, the specific numbers don't even matter - if you live on 1/10th your income, you buy 9 years of freedom for every year you work, making for a 10 year or shorter working career.  If you live on 1/5th your income, you only have to work 20 years.
Passive income, and its compounding interest, certainly makes the process go faster, but it is NOT a prerequisite for early retirement.

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I realize the investment of excess income is necessary for our economy (as a small business owner I depend on it)
I'm not sure that is really true.  Certainly for our "economy" as we know it, but assuming that the economy is here to serve the needs of actual individual people (and not the other way around) its not necessarily a good thing to expect individuals to sacrifice for "the economy".  More over, my theory is that if a business needs a loan, it is probably growing too fast.  Businesses are run by people, and so subject to the same issues as consumers.  Instead of taking out a loan for expansion or upgrades, a business (large or small) could save up all profit until it can afford it, just like a consumer can save instead of using credit cards.  Yes, that would mean slower expansion, but I would argue that that is perfectly ok, and would add more stability to the system.

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All that you see, know, and can know is a consequence of the society that you live in, the contributions of people around you, and the hundreds of thousands of years of human achievement before you. You might as well ask if it's moral to wear clothes, since you did nothing to discover farming, spinning, weaving, dying and sewing yourself. All of us live off of the fortune of human culture.
That's the difference between someone discovering an amazing new medicine, and sharing it with the world for the betterment of all, and you use that medicine; and your employee discovering a new medicine, and you made her sign a bunch of papers upon being hired that says her discoveries are really yours, and so you get to patent it, charge 100 times what the research cost, and keep all of the profit. 
We aren't talking about benefiting from the fact that people have done work, we are talking about taking a percentage of the value of someone's labor and keeping it for yourself - thereby depriving the person who actually did the work some of the value they earned.

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I am not asking about living on savings built through prior productive work...
This is the very definition of capital and how one gets investments.

Absolutely nothing in the word "capital" implies prior productive work.  It makes no difference where the money came from.  It could have been prior work, or it could have been theft or fraud, it could have been inheritance or gift or gambling winnings.  All it means is that you currently hold legal title to wealth.


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Example:  I was a substance farmer.  ...  I offer to rent him my tool in exchange for a share of his yield.  If he works 8 hours a day with the tool, he can grow the same as he did in 12 without the tool - just enough to feed him and his family, but now he'll have 4 extra hours a day.  I offer to rent him the tool if he works 2 hours a day in MY field, allowing me to permanently work less.  He's still better off (working at least 8 in his fields, plus 2 in mine is less than the 12 he used to have to do...

In the real world, in the absence of government enforced patents, everyone else in the village sees the brilliance of your invention, and make their own version.  With hundreds of people looking into it, instead of just you, it gets improved upon much faster.  If someone had been able to patent the wheel, or fire, we would probably have been set back centuries today. 

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"After several more rounds of this process (living below my means, spending time making tools, etc), I have 5 tools being rented out ... Each person is using my tools, that I worked very hard to make.  These tools allow them to live better lives, in exchange I now am able to lead a life of leisure.

Is this Moral?

Now, if you wanted to stop farming all together, and spend your days making tools and selling them, because as a specialist you can make them better and faster than someone who is just building the one, that might be one thing.  Each person is making an exchange of value produced by their labor for value created by yours.  I see no particular morality issue in a free market exchange, assuming perfect transparency, perfect competition, and equal power between both parties. 
But if the tools were truly so useful, with perfect market conditions no one would be willing to give you 2 hours a day (1/5th of his total income) rather than find a way to get his own.

I suppose if simply keeping track of all the tools, repairing ones returned broken, maintaining them all, was an ongoing effort in itself, you might have justification for rental income. 
But if you are now offering nothing by way of productivity, how are you entitled to keep getting income?  You aren't doing anything.  By what means did you achieve this absolute monopoly on technology?
In capitalism, the monopoly is achieved via government enforcement.

This brings me to the central issue with capitalism.

America, (and other, similar societies) seem to think the words "free market" and "capitalism" are interchangeable, two words for the same thing.
But they aren't.  More than that - they are incompatible.  Capitalism, by its very nature, corrupts the free market.  I'm talking Adam Smith's free market; again, no entry and exit barriers, perfect information, lack of monopolies, etc (http://en.wikipedia.org/wiki/Perfect_competition) - think of a literal marketplace, like a bazaar or flea market, a bunch of individuals selling stuff to other individuals, who negotiate each transaction price on the spot.  Those are the conditions that optimize utility and efficiency and prevents exploitation for everyone involved.
In contrast, the idea of capitalism is to use capital (regardless of how it was acquired) and leverage it to gain maximum advantage  - including advantage over the competition.  Think WalMart opening a store next to the bazaar, and offering prices below cost for a year in order to get all of the former bazaar shoppers, and then once the bazaar is closed down, returning prices to normal.

Capitalism, by its very nature, undermines a free market.  It encourages already large companies to become huge, which is the literal opposite of conditions of a free market.  It ensures that company's owners - be it sole proprietorship or the stock holders of a corporation, the "capital class" - have overwhelmingly disparate power compared to both their customers (consumers) and their employees (the labor class), and of course with grossly unbalanced power, they have the power to generate even more profit, and the cycle continues.


But in practice, since another condition of a free market, is property rights, how could we possibly prevent people from leveraging savings?

I propose a different way of looking at property rights.
I am not a fan of communism.  I believe it is because of decades of strong and repeated propaganda (originating from our own capitalist class with incentive to maintain the status quo) that we believe that the only alternative to our system of absolutely sacred and unlimited property rights is communism.

Some sense of property is what you could call "natural".  It is very common in non-human species for individuals to have a claim to their own territory, and aside from border disputes, or the occasional battle over mating or water rights, other individuals of the same specie will tend to respect territorial boundaries.
I think everyone should be entitled to purchase, and then own title too, the home they live in, the vehicle the use to travel, whatever possessions they actually use. 
What you won't ever find in nature is one individual claiming to own non-adjacent territories hundreds or thousands of miles away, and demanding that whoever lives there pay a tribute of food every month for the privilege of living somewhere - and further expecting all the other members of the specie to help enforce those rent payments.


Think about this:
would anyone feel it was reasonable or moral for one person to invent and build a giant machine (on their own property) which sucked in air and absorbed all the oxygen, and then sell that oxygen to people?  There would be nothing illegal about it.  We all use more than the oxygen we need to breath every time we drive a car (or buy anything which traveled by motor vehicle), the only difference would be scale, and that the oxygen was used up deliberately, instead of incidentally.  If someone has the means to build such a machine, and then profit by it, why shouldn't they be allowed to?  What if they charged a very reasonable price?  What if they had a sliding scale for poverty?  Would that make them charitable?
If this seems like a cartoon villain scenario, because oxygen is a vital life necessity, why do so few of us bat an eye about purchasing "water rights" in formerly communal water sources?  Why is it ok to buy investment property, and then make a profit by charging other people for the privilege of having some place to exist?

I propose that everyone has a right (morally) to buy and own land (and a house on it) - which they actually live in.  If you have paid fair market price to the previous owner, then no one should be able to take it away from you (unless to pay other debts perhaps), and you should be afforded the protection of law to enforce that right.
But that's it.  One piece of land.  Perhaps two, one for your business, one for home, if they need to be separate places.  A person should not be able to buy land for the sole purpose of charging someone else to stay there.

The argument goes that the landlord is providing a service, because the renter doesn't need the lump sum of a down payment to have a place to live.

Nearly 1/2 of all residential property is owned by investors.  Home prices are high BECAUSE of all of the speculative investment.  If every home currently being rented was put on the market, the supply doubles, and the prices plummet. But its more than just the effect of supply versus demand, because the price people pay for homes isn't linear with market price - the fact that its so high means people need 30 year loans, which means the interest ends up being anywhere from 50% to 300% the value of the home.  Many of the closing costs, PMI, property taxes, the cost of home insurance, all plummet or disappear when the sticker price drops.  When its no longer such a massive investment, with the next 30 years on the line, the need for agents and brokers lessens or disappears, so the price drops even further.   Now all of a sudden many more people can afford down payments, with 5 year loans, or entirely in cash, and the while there's still paperwork and disclosures involved, its more like buying a new car.

Students or others who are transient could still rent rooms in other people's houses, as well as having dorms and long term hotels and hostels and such, but there would be no such thing as "rental property".

And all the landlords would have to actually contribute some form of productive labor to society.

Everyone needs to live somewhere, just like everyone needs air and water.  It is reasonable to charge for the infrastructure and energy required to pump water directly into your house, but nobody gets to claim they own rain fall or the ocean.  All humans - all living things, really, have a natural right to water they can acquire without infringing upon anyone else.
Why is land different?  What entitles a major land owner to the land they "own"?  Sure, they bought it, but who did they buy it from?  How did that person get it?  Going back, of course, in the US it was literally stolen, via a long series of broken treaties, using military force, from the aboriginal inhabitants, most of whom thought of land like water and air (you can "own" that which is in your possession, but no more).  But lets go ahead and ignore that, and just pretend that the sovereign state of the United States was morally entitled to hold all land, and dole it out.

When it doled it out, the government did not divide the nations acreage by the population and give an equal parcel to all.  It did not even sell parcels at a "fair market price".  It sold land at below market price ($1.25 per acre), but only in
parcels of 160 to 640 acres, and only in cash, and the buyer had to make a certain minimum level of improvements (home, irrigation, 40 acres of new trees) within 5 years.  The working class didn't have the capital, so speculators and investors got the majority of this well-below-market rate land.  Similarly, railroads were given acres of land adjacent to their own tracks  - what would be the most valuable land, due to being on a railroad line, completely for free, ensuring, once again, that the already tremendously rich had on opportunity to become even richer still, far beyond the value of their contributions (they would have profited from the railroad line without the land grants).
None of this was by accident.  This was done deliberately for the specific purpose of keeping the laboring class from becoming land owners.

Bakari

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Re: Living off of other people's work
« Reply #117 on: May 10, 2013, 04:58:07 PM »
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Is it ok to live on another's work? Well, we all do that. I rely on the work a Farmer does to eat, since I do not do this labor myself. I rely on the work of the military and police to protect me and my belongings from harm - I cannot do that myself. I rely on bankers and investors to purchase my home - because I just didn't want to wait until I saved up enough myself to buy it with cash. So, we all rely on one another in some fashion.

That is a totally separate issue.  All of those are examples of an exchange.  The farmer does farm work, while you do whatever job you have, you each produce something of value to society, you use the cash you were paid (where cash is just a placeholder representation of the value of labor and goods) to exchange your labor hours for the farmers labor hours.  This is more convenient than trading a bag of oranges for an hour of bicycle repair, but it is the exact same thing.
The OP is asking about where you get some of the farmer's food, but you didn't do anything at all of value yourself.  You just sat there.  Maybe your great-uncle left his farm to you in his will.  Now every month you collect a rent check from the farmer, representing a portion of his labor, that you did literally nothing to earn.

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Then the question: Does work have value unto itself? Which is to say, should we all work as much and produce as much as we are physically/mentally/spiritually able?
Absolutely not!
It does only to the extent that it provides some value to somebody, that it makes you or others happier or better off in life (which is why someone is willing to pay you for it)

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Forty hours a week seems an arbitrary number to say every capable person should work.
It is because the early labor movement won some major concessions from government, enough to the point where people were (and are) pretty happy with working conditions, while at the same time pursuing a strong, consistent, and successful campaign against socialism and for capitalism, which has become so entrenched in the collective American consciousness that questioning the system has become a rare exception.

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Why don't we work 50 or 60?
We used to.  More, actually.  80-100 was common.

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Because there is more to life than work, that's why.
No, that's actually not why.  Its because 100s of thousands of Americans fought for decades to bring it down to 40.  Because entire cities, across all industries, and entire industries, across the entire country, would strike for weeks, sometimes months, bringing huge sections of America to a stand-still.  Its because private security, city police, and even the US military, were unable to consistently force people to work, even at gun point.  Its because socialists were increasingly winning elections around the country.  Its because unions started growing and networking with each other across race and gender lines, across industries and states.  Its because industry and government realized if they didn't make concessions that the capitalist system might not survive at all, so they created the 40 hour work week, overtime, OSHA, worker's comp, all the things that we so take for granted today that we think they just naturally formed, or are gifts from industry, or were always guaranteed by the government.

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We are all valuable to our fellow men - more valuable than simply our commercial output.
I agree entirely. 
But its a separate question.  The only relation I see is that we should dramatically lower the standard number of work hours, thereby restoring some semblance of balance between capital and labor, and allowing all people the chance to lay in the field thinking.


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Your post also seems to imply that there is moral superiority in creating additional productivity. Why?
The question was about living on other people's productivity, not whether or not one must themselves be productive.
For example, the monk who forgoes all earthly possessions and wanders in the woods for 20 years is not producing anything of value to society, but he is also not skimming a portion off of someone else's labor to sustain himself.

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my answer is unequivocaly YES.  In fact, I will go even further and say that not only is it ok, it is mandatory, and even further by saying that it is even charitable in nature.  For if I stayed employed even if I didn't have a need
Again, not being employed does not in itself imply you must skim money off of someone else's work.  You are hardly being charitable if you say to someone "you can have my job, but in return you have to give me 1/10th your salary, while I sit around and do nothing"
At first outsourcing one's own job was a joke:
http://www.theonion.com/video/more-american-workers-outsourcing-own-jobs-oversea,14329/
but then: http://www.deseretnews.com/article/865571184/Verizon-employee-caught-outsourcing-own-computer-programming-job-to-China.html?pg=all
and then: http://www.theregister.co.uk/2013/02/27/outsourcing_job_common/


If you don't have a need to be productive anymore, why do you need to invest?  If you are using investment to make yourself money from other people's productivity, that's something of a ponzi scheme- it wouldn't work if everyone did it, because someone has to do the actual work.

I think you are looking at the concept of employment wrong, but since this is already so long, I'll just refer to something I already wrote on American misconceptions of employment: http://biodieselhauling.blogspot.com/2012/06/poor-person-never-gave-me-job.html

Here is a much better alternative to make sure everyone who wants a job has one: Lower the point at which overtime begins.
http://biodieselhauling.blogspot.com/2011/10/dramatically-reduce-unemployment-by.html

The 40 hour work week was instituted in the late 1940s.
Since then, average productivity per worker (per hour) has increased approximately 450%.
This means that the same amount of work - the same amount of value creation -  that took 40 hours to accomplish in 1947 takes less than 9 hours today.

This might seem reasonable, since we live better lives than in 1947, but working hours is a separate  issue from technology, or the portion of overall GDP growth due to favorable trade arrangements - if each worker is producing, on average, 450% more, they should expect to be compensated 450% more, but they aren't.  wages have only gone up 200% over the same time period.
(you can check my numbers here: http://www.bls.gov/lpc/lpcover.htm#data )
What happened to that other 250% increase?
It is all skimmed off the top by investors.

How? 
Primarily by 3 mechanisms: labor saving and efficiency technology, including automation and computers, outsourcing and foreign natural resource exploitation, and corporate consolidation and buy outs.

When a new robot is invented, the factory owner uses his capital (earned by taking a cut of the value produced by each employee) to buy a couple robots, who work for a few cents of electric per hour, and lays off the entire assembly line.  His costs plummet, his income stays fixed, so he has a net profit.  At the same time, his dozens of workers are unemployed, need work, therefor are willing to work for less, therefor the price of average wages is driven down.  The same works for building a factory in Mexico or China - it is out of reach of the small independent business, giving a competitive advantage to already big companies, which get to then have below minimum wage labor costs (while avoiding all the other US labor and pollution laws), which driving up unemployment at home which in turn depresses wages.  When an enormous company buys out another, they can lay off half the staff of the bought company for redundant positions, gaining efficiency which becomes profit at the expense of labor - and of a functional free market, which depends on competition for efficiency.

What we, as a society, could choose to do, instead of giving 100% of the benefit of (for example) the new robot to the factory owner, is distribute the benefit to everyone. Instead of laying off everyone but one person to operate and maintain the robots, cut everyone's hours down to 2 hours a week.  Everyone has a shift to come in and operate or maintain the robot.  But pay them the same total take salary as before.  (In other words, a 20x raise per hour, but with the same take home pay at the end of the week).
Nobody loses anything in this scenario.  The owner still gets income without having to do any work.  The workers still get the same amount of money, and in addition they have plenty of free time.  They can choose to take another job, and make more money, or they can spend more time with their kids, or become artists, or try to invent the next great labor saving robot.

The ONLY reason this can't happen is that we, as a society, have decided the sacredness of the owner's property rights, to do whatever the hell he wants, even if it affects his employees, or even all of society, negatively, outweighs the well being of society as a whole.


Of course, nobody thinks of it that way.

We can recognize the limitations of property rights in circumstances where the affect on others is immediate.  You don't have the right to booby trap the path to your front door, even if it is on your property.  You don't have the right to own a fully function tank or rocket launcher, even if you promise not to use it.  You don't have the right to own another human being, even if you can afford it.
Even when the impact is less direct, but cumulative, most of us accept some restrictions of personal freedom to be reasonable: you can't dump toxins in the river that runs through your property, or burn your trash in a residential suburb, you can't buy a 2-stroke engine car, you can't buy gas or paint with lead in it, hairspray with CFCs, or a fridge that uses freon.  These limitations on personal freedom might look unreasonable if you only look at single individuals, but we all know that if one person is allowed, then everyone is allowed, and if everyone does it, we all end up losing.

But for some reason we seem to be totally blind to the fact that lots of little individual economic decisions add up to affect all of society just like environmental ones do.

The economy - labor, consumption, what gets made, when, how much of it, and for what price - makes up a huge portion of human activity.  Prices and wages affect everyone.  If we live in a "market economy", then the "market" makes many of the major decisions about how society runs.
In a democracy each individual has one vote, regardless of rank or class or color.
But in a market, money equals power - purchasing power takes the place of votes in determining important questions of how society is run.  If 9/10th the population of a town don't want a particular factory to be built, but the owner has enough money, it gets built.  That isn't democracy.  Just like capitalism undermines the free market, capitalism also undermines democracy. 
If price is determined by supply and demand, then each purchase you make is increasing demand, and therefore price.  Which means it isn't just a personal decision, its one that affects everyone.  In a small way, to be sure - just like one individual driving a car without a smog check affects the air quality in a tiny way, but it builds up, and ends up having a significant affect on everyone.

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simply by being part of the system in any capacity you are benefiting from others work and they are benefiting from yours.
As above, the question wasn't about a mutual exchange of the value of ones labor, it was about skimming some of someone else's labor from them, while offering nothing in return but the temporary use of "capital", while not offering any present labor or value of your own.


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But the only real way to escape that particular problem is true, complete, total self-sufficiency.
No, you could just avoid passive income.

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One thing that I would like to do is make sure that I invest in socially conscious companies whenever possible.  Companies that aren't union busters and treat their workers well would be important to me.]One thing that I would like to do is make sure that I invest in socially conscious companies whenever possible.  Companies that aren't union busters and treat their workers well would be important to me.
I think I might agree with you.  I'm doing that currently.  Its a complicated subject and I'm still working out the details...

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Capitalism is the worst system of all, except for all of the other ones that have been tried.  There is a reason the USSR is no more and China is Communist in name only. 
American style capitalism and USSR style communism makes for an excellent false dichotomy.  Really not the only two options.  How about the democratic socialism practiced by Scandinavia, and in varying forms by much of Europe, South America, and Asia?  I think you could make just as strong an argument that the US is "democratic" or a "free market economy" in name only.


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you're asking why people frown on welfare and disability fraud, but then turn around and endorse years of hard work and frugal living? Do you really not see those as two different things?
That assumes that every single person who receives passive income produced their capital entirely through hard work and frugal living.
That seems an extremely dubious implication to me.
In fact, I would say that is an EXTREMELY rare occurrence. 
If a person is investing the entire time they are working and living frugally, and allowing compound interest to build, adding principal until the point where investment returns pay for all living expenses, then interest income has been providing a significant portion of the final capital.
If a person starts a company, or "works their way up" to management, then they are earning a significant portion of their salary (if not all of it) by skimming it off the productivity of their employees.  If a person finances a rental home with just a down payment, their tenant is paying their mortgage for them.  The few people who get rich by some means other than having other people work for them are generally those whose creation has little or no marginal cost once made, but can be distributed to the entire human population (movies, music, sports, books, software) - a system than can only be sustained by the artificial "intellectual property rights" enforced by government copyright.  Outside of human society, and capitalism in particular, one can own the objects in your possession, but an idea, once it is out of your head, is public domain.

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The tycoons you cite didn't work for work's sake - they enjoyed the very activity that was profitable for them, and therefore continued to accumulate well beyond what they needed or wanted to spend. MMM does the same thing with this blog and his construction work

Not that we have to agree that everything Mr Money M. himself does is the Absolute Way that Everything Must be Done, but he, unlike Rockefeller or Buffet, has explicitly shown an understanding of the concept "enough".  He isn't growing a multi-billion dollar fortune and then giving away half (still leaving him a multi-billionair after the "charity) - he has a set amount he lives on, and has said he'll give away ALL of the income from the blog: http://www.mrmoneymustache.com/2012/09/29/weekend-edition-the-life-you-can-save/
and
http://www.mrmoneymustache.com/2012/06/21/i-just-gave-up-4000-per-month-to-keep-my-freedom-of-speech/comment-page-2/#comment-53161
as well as all Lending Club profit: http://www.mrmoneymustache.com/2012/09/24/the-lending-club-experiment/comment-page-1/#comment-129997
He just doesn't make a big deal over trumpeting that fact, perhaps to avoid distraction from the focus on buying less crap and driving less.  If you watch closely, you can see little hints of his ethics and politics, but by keeping it mostly on the down-low, he reaches a huge audience that would be instantly turned off reading the same words accompanied by theory such as I am writing here.
Very shrewd.
« Last Edit: May 11, 2013, 07:08:47 PM by Bakari »

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Re: Living off of other people's work
« Reply #118 on: May 10, 2013, 04:58:48 PM »
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Free from the work-a-day world, he is operating in his highest and best calling(s)
Wouldn't it potentially benefit the world even more if we did the same for everyone?

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The question implies that you think of investment as a free lunch. While it seems that way over the long term, in the short term it is not; there is no guarantee I will make another penny in the stock market this year. I'm taking risk by putting my money there. In the long run I am compensated for that risk by getting a positive return.
But would anyone think it was "unfair" to a lottery winner if she had to pay a 90% tax on the million dollar jackpot?  She still just got $100k for a $1 "risk" - she still gets 100k which she did absolutely nothing to actually earn.  But if that jackpot comes from the stock market, we feel the investor has somehow "earned" the money, and is therefore "entitled" to it.  But the risk is really much much lower, since gambling is rigged in favor of the house, but the market is rigged in favor of the investor - consider the multi-billion dollar tax-payer funded bail-out of private banks.
Exactly what value does that risk have?  What would happen to society if people stopped investing?  Growth would slow - but we are already big enough, and our rate of growth is unsustainable.  That growth goes almost entirely to the top of the top as it is (see 4 charts at the bottom of this post: https://forum.mrmoneymustache.com/welcome-to-the-forum/your-thoughts-on-the-we-are-the-99-blog/msg38222/#msg38222

Imagine taking our system to an extreme.  One man becomes extremely wealthy.  It doesn't matter how - it could be a combination of clever technical innovation plus savvy market manipulation like Mr. Gates, inheritance like the Walton children,  or via a violent drug cartel, like Mr. Guzman - once he has it, in our system it no longer matters how he got it (note, for example, than in the majority of white collar crime, whether by an individual or a corporations, the few times there is any penalty at all, the fine is almost always less than the amount stolen, and they get to walk away with the rest).  The way capitalism works, the more you have, the faster you can generate more, and as the graphs from my last link show, this has been accelerating exponentially.  Mr. Rich buys out all competition, buys congress, expands to new industries, and wealth keeps getting concentrated until their is only Mr. Rich, and everyone else.  He owns all property in the entire nation.  He didn't take it by force, like a king or dictator, he paid for each property.  Now everyone is a renter, and they all pay that rent to this one guy.  He owns all factories and companies and farms and mines, so everyone is his employee.  He owns all stores, so everyone buys from him.  100% of any increases in stock prices, in GDP, in "the economy", go directly to him.   You can choose not to deal with him - by leaving the country, or being entirely self-sufficient while living in a boat in public waters, or camping in national park land, or maybe in a balloon in the sky.

This would not be ok, right?  Yet we accept the dominance of all media by 6 corporations, communication by 3, personal software by 2, food by a few dozen, etc, as well as an extreme concentration of wealth based primarily on already being wealthy, as a natural consequence of capitalism.

Would we think the risk Mr. Rich is taking is benefiting society as a whole, compared to the conditions of a free market economy?

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This thread has the potential to explode, but I think challenging our own assumptions is a good thing regardless of where our beliefs fall and whether or not we ultimately adjust them. 

I agree 100%.
Although its important for all of us to be aware of the natural human tendancy to be close minded: http://youarenotsosmart.com/2011/06/10/the-backfire-effect/
Come to think of it, I probably should have encouraged anyone reading this to read that post FIRST...

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As long as both parties mutually benefit from the transaction, I don't really see the moral dilemma. 
Hitman and client both mutually benefit from their transaction, yet there is a moral dilemma.  The person selling a freon based A/C unit and the one buying both benefit from the voluntary transaction.  On the large scale, lots of little seemingly innocent things can add up to major societal problems.  Just because most people suffer Matrix-blindness to the big picture doesn't make the problem go away.


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if I live off investments (and I purchased those investments with money I earned, rather than inheriting or stealing them), I am not living off other people's work,
So then you acknowledge that it is possible to come by wealth which you did not actually earn.  The capital system does not make that distinction.

But the wealth you legitimately earned earlier is an entirely independent question of whether you are currently "earning" the wealth you get by leveraging your past wealth.  Suppose you hard worked at a job for a long time, lived frugally, and used the money to buy a tunneling auger and safe cracking equipment, and then you used the equipment - the value of which you legitimately earned - to rob a bank.  Did you earn the proceeds of the robbery any more (or less) because you earned the capital with which to buy the tools?  I don't see how it has any bearing on the issue at all. 
Should you be entitled to the value of that which you directly earn via your own labor?  Absolutely.  Should you be entitled to a share of value you did not produce, merely because (by whatever means) you currently hold legal claim to property you don't need?  You could argue that, but how you gained that property has no bearing on the question.

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Now if you want examples of people living off other people's work, we could start with the union worker: that is, a member of a gang which extorts more for their labor than it would be worth in a free market.
You are implying that without unions, each individual employee would hold equal power in determining the market for labor as does their employer. I am at a loss of how to respond to that, because it is such a remarkably ridiculous idea.  A free market means buyers and consumers are equals, and both are unlimited.  There would be 100% competition for labor and for jobs.  This is easily falsifiable: corporations make higher than 0% profit margin.  If the market were actually free (and not heavily tilted in corporation / capital's favor) then competition would drive wages up and prices down until each company was exactly breaking even.  They would still exist, because they would be providing value to society in the form of goods and services, as well as jobs.  The boss / CEO / owner would pay themselves a salary, which would be factored as part of the cost of labor, and provides them the incentive to not just close down.
If the power balance were not tilted in favor of the company, then every strike would succeed.  In fact, each person would be able to negotiate for better wages / hours / conditions up to the point that the company literally couldn't afford it.  In reality, if most people were to look at the companies profit, and demand a raise on that basis, they would be laughed at, and if they persisted, fired.  There are a lot more individuals who need employment than there are companies that need employees.  That makes it an employers market, always.  The more companies consolidate, the more that's true.  As I've said over and over so far, capitalism is the opposite of a free market.  If your boss works across the desk from you, you probably don't need a union.  If he works at the head corporate office in some other state, residing over 1000s of branches worldwide, how can you possibly think that there you and he are on equal footing as far as negotiations?  Corporations exist only via government granted charter - like all property rights that extend beyond what one individual could possibly personally defend, there is nothing natural or free about them, they are the result of an elite class designed a system to maintain their wealth and status.  Unions are one way of at least beginning to off-set that, and balance the power of employee and employer in a grossly-not-free-market.

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A few comments:
1.  Your first post to the board is a critique of the lifestyle?  Is this similar to going into a neighborhood bar and encouraging everyone to stop drinking alcohol?
Riding a bike to work, cutting cable TV, making your own food, and buying less stuff, all with the goal of needing less money to live on, does not inherently require investments.
Investment is at most a means to an end.  It is not a "lifestyle", nor has it ever been the primary focus of MMM's posts.

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One thing I know for a fact is that people who grow food are underpaid. Farmers are, for want of a better phrase, at the bottom of the food chain, yet without them we all starve. Web designers? Useful? Sure. Efficient? Sure. But necessary? No - why, then, should I earn $50 an hour doing programming stuff, but only $12 growing food?

There is no way for life to be fair.

Surely not, but there is a reason we humans decided to form civilization.

In the wild of nature, if you happen to be born short and weak, you get the least food, the least sex, the most uncomfortable shelter, if you don't just get killed or eaten outright, and that's just too bad for you.  But we, as a collective specie, have all decided its better to outlaw violence, protect both ourselves and each other from wild animals and disease, and generally work together to make life better than natural.  Beyond that we have police and courts and laws to prevent people from taking advantage of each other, in an attempt to make life as fair as possible.  Some people are born smarter than others.  Some people choose to work harder than others.  And those people deserve to be compensated for their greater contributions.  It only takes a few individuals taking advantage of everyone else to shut down a utopian hippy anarchist commune.  Neither a free-for-all whatever happens happens, nor a communist everything-belongs-to-everyone approach works in reality.  But we can - and do - take steps to make the world fairer, and we could do more than we do. 
Farmers, for example, make so little largely because of the economic strength of the major food companies which get to set prices solely because they are so large, as well as the issues with land ownership I've written about already above.  Like all the rest of how society is how it is today, it didn't "just happen" because of inevitable forces of the invisible hand.  One of the things you can buy with enough capital is advantageous policy that ensures you more wealth in the future.

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And perhaps unfortunately, our best intentions usually go awry: increasing, I don't know, benefits for the unemployed leads to more people going unemployed because it's easier than working (perfectly sensible, from an animal point of view!). Increasing the number of lanes on the motorway from Here to There does not make the commute easier; instead more people will drive.
Very good point.  Good policy needs to take human nature into account, but because the government is made up of humans, it rarely does (or when it does, its often to take advantage of our cognitive biases, not to correct for them).

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Capitalism is horrible (bankers, CEOs, getting many many many multiples of salary is just wrong, but what can you do?), but the best we can do at the moment. I worry most about corporate lobbying, the power of marketing, and human gullibility. Capitalism itself is not to blame, but human greed, ignorance and laziness might be.
But capitalism, more than any other system, plays up human greed, explicitly.  Many other societal systems attempt to reduce it, but ours attempts to increase it.  In fact, corporations have alegal responsibility to their shareholders to maximize profit at any cost. 
Think of the scene from "Fight Club": "if the cost of a recall costs more than the expected rate of failure times the cost of each settlement, we don't do a recall".
This would never be accepted by civilized human beings, accept under a system where we are all taught for a lifetime that profit is more important than anything, even human life.

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Maybe Zeb doesn't fully understand how much sacrifice it takes to achieve financial independence and therefore equates it with welfare.
Not everyone gets to FI the same way.  Furthermore, past sacrifices do not automatically justify all future choices.  If a sleeper agent had to make great sacrifices for the opportunity to strike, would that automatically make us more sympathetic to him?  One thing has nothing to do with the other.

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A free market allows collusion between individuals, whether it be workers' groups pushing up wage levels or a particular industry's employers all driving down wages
it actually doesn't, but at least you are recognizing that the two are different sides of the same coin.


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eing FI is different. You are compensated for risking your resources/capital, and you are being productive by making your resources available to use for further production.

If I buy a house that someone else built, and then charge rent for it, I am not being productive.  That house would be there whether I bought it or not.  If the renter had bought instead of me, they would still live there, they would just be paying a mortgage instead of rent - and getting home equity in return.
If I buy out my competing company, I didn't just "create" any jobs, nor am I creating more of whatever they made.  That company already existed.  Those jobs and their product were already there.  All I am doing is leveraging my capital to skim the company profits off the top for myself.  If it was a co-op instead of a sole-proprietorship, those profits would go to the employees.

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some versions of Islam do not allow for many types of interest-bearing investments
All Islam forbids interest, period.
But the interesting thing about that is that Christianity and Judaism do too.  They always have.  All 3 have some books of their own, but all 3 are based primarily on what Christians call the "Old Testament": Exodus 21-25  "If you lend money to one of my people among you who is needy, do not be like a money lender; charge him no interest."
Early Jews and Christians got around that by considering only themselves to be "my people", and charging each other interest, but not their own (which is where the stereotypes about Jews and money originally came from).  Its funny - a great many of the things Westerners condemn about Islam are things that all 3 religions very explicitly demand, but which modern practitioners of the other two inexplicably choose to ignore. http://biodieselhauling.blogspot.com/2012/03/book-10-in-which-i-list-my-favorite.html
and
http://biodieselhauling.blogspot.com/2012/04/portion-17-in-which-true-christians.html
I mean, if you get to pick and choose which of God's law to ignore, well... the 10 commandments were in the Old book too, so I guess that makes murder optional...
« Last Edit: May 11, 2013, 07:15:31 PM by Bakari »

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Re: Living off of other people's work
« Reply #119 on: May 10, 2013, 04:59:26 PM »
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  But alas, we have a Capitalist system, monetary and fiscal stimulus, a whole industry of complex derivatives, futures, etc...  Adam Smith long ago gave us hope that, on balance, Capitalism would leave a society better off when he explained a new concept called 'the invisible hand'.
You realize, don't you, that Smith was unambiguously opposed to all that sort of mumbo-jumbo, even in the more primitive forms it existed back then?

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So, is it moral for me to be self sufficient?  Yes.  Is it good for Capitalism?  No.  But then we get to the more difficult questions - Is it moral for me to stifle Capitalism?  Sounds a bit selfish, but...

Only if capitalism is good for society as a whole.  If capitalism is only benefiting Mr. Rich, and he has more than enough already, then you are making the world better by being self-sufficient.
And we are long past the point where the vast majority of any additional benefit of capitalism goes overwhelmingly to those who least need it, whose marginal utility is, in fact, zero.

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as a shareholder you employ directors to run a company. You are not living off someone else
Having someone else to do something for you, while you do nothing of your own, isn't that the definition of living of someone else?

The complexity of corporations makes it all very abstract, so lets use a much more simple example.

My girlfriend worked for a small independent landscaping company.  At some point the bookkeeper quit, and while the boss was looking for another one she filled in for a while.  It turns out that the employer was charging the clients $50 per hour for labor costs, and then tacking a 20% "overhead" cost on top of that, for a grand total of $60 per hour.  But she was only being paid $17 an hour.
20% overhead is reasonable - overhead covers costs of labor: unemployment and worker's comp insurance and employer paid payroll taxes, personal vehicle mileage - and while 20% is higher than average, its conceivable that it cost that much. But that 20% would be applied to the rate of pay, before any labor mark-up: 17+20%=$20
On top of that there was a 300% mark up to $60 per hour.  In other words, for every one hour the employee worked, the boss was making twice as money as them, after accounting for all costs (it was a home based landscaping business, no company vehicles, no power tools, so basically zero non-labor overhead)

None of the employees knew how much the boss was charging the client, and the clients didn't know how much the boss was paying the employees.  The boss worked a few hours a day, complained that the employees weren't working hard enough, decided to take a trip to Disney Land rather than pay her taxes, and ultimately defrauded my girlfriend out of about 3 grand.  (Needless to say, she know longer works there, and a lawsuit is pending...)

This boss was living off of other people's labor.  They had made some non-zero initial investment - business license, advertising, setting up workers comp etc, buying tools, etc etc; but does that really entitle a person to make $40 for every $20 the person doing the actual work makes, indefinitely for the rest of time?
That seems to be the argument all of those arguing for the status quo seem to be making.

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You just need to get over the whole morals thing.
well, like I said... choose to ignore some parts, and then hey, why not put murder back on the table?

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I don't know if you've got the whole "invisible hand" thing right there. The term as used in The Wealth of Nations doesn't describe how capitalism makes everyone better off, but how "an invisible hand" keeps capitalists from making the system so brutally efficient that all wealth consolidates and destroys the economy. (Smith, 1776, pp. 363-4) I'd interpret this to show how the whole economy automatically keeps the powerful in power and the poor not in power, which is actually to the detriment of the whole system.
OMG thank you!  Sometimes I feel so alone...

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Is it moral for me to work at my physically undemanding desk job while others risk their lives and break their backs working in coal mines, slaughterhouses, etc?
perhaps that risk should be factored into compensation.  I propose that if the labor market were actually competitive, it would be.

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Capitalism rewards some talents more than others, and some people are born with more valuable talents, so in that sense it is not fair. However, even the most disadvantaged people benefit immensely from capitalism.
don't confuse capitalism with technology, science, and education.  Not to mention the free market, which acts at the same time, although competitively with capitalism.  Consider that when they were colonies, all the red and blue countries were at the mercy of capitalist expansionists, and it was only upon gaining independence that they began to rise and catch up, not to mention how the nations at the top began to level off in the past decades, right around where the charts I posted for wealth inequality take off.

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Why?  I guess that it is like the news for me: I have no control other than my circle of influence so why would I engage in this with guilt instead of actions I can control?...  Do what you can and stop spending your time analyzing yourself into unproductive corners.
How would one even know what they should be trying to do without analyzing the world as it is, and figuring out what could be better?  If you just say "there's nothing I can do, I'm going to live my own life and not think about it", then nothing gets done.  The American Revolution, the ending of worldwide slavery, the labor movement, these things all had to start with people getting together and talking and thinking and figuring out what is moral and what isn't and how to affect change.  Nobody ever changes the world by saying "I don't want to feel guilty, its too complex to think about, I am too small to have any effect".  There is a big difference between millions of people voting republican, and millions voting Green party, or millions shopping at Walmart vs a local independent, or buying stock only in companies you believe in vs the ones that will make you the most money.

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It's worth it to note that if everyone tried to retire in 10 years and buy stocks, the system would break down because no one would be working. Modern capitalism requires workers and and consumption to run.
No more than raising minimum employment age from 12 to 18, lowering the retirement age from "until you die" to 55 and hours per week from 100 to 40 caused the system to collapse.

Total lifetime work hours, pre-labor movement: 240,000
Total lifetime work hours, post-labor movement: 77,000
Massive change, and yet the system continued without a hiccup.
There was already overproduction back then.  That was the whole reason for global expansion: opening markets to sell all the stuff we were making, because we had too much already.

The 40 hour week was established way back in the 1940s, and productivity has increased about 4.5 times, per worker, per hour.
If we each average a lifetime of about 77,000 work hours, that means our increase in productivity should allow us to work only 17,100 life time hours:
in other words, an 8 year working career at 40 hours per week, or a 40 year career with 8 hour weeks.
This means less would be produced, but that would be just fine, since people would be consuming less.  The only thing that would change is that the incomprehensibly enormous gaps in these 5 charts: https://forum.mrmoneymustache.com/welcome-to-the-forum/your-thoughts-on-the-we-are-the-99-blog/msg38222/#msg38222
would all be reduced to small, if non-zero, gaps.


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Yes I could own the school or gym, but maybe I just want to focus my energies on my work and let someone else own the tools. The immorality of the system comes from the lying and cheating that goes into keeping the public in fear and debt so that they're under control and coerced into producing excess value until they literally die.
part of it, but part is also the cumulative effects of the seemingly reasonable separation of work and capital of the employee who doesn't own the school or gym, on a societal wide level.

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Unfortunately, it seems like somewhere it's best to just get those jars from a factory, but with time I think it will be possible to source them from cooperatives or sustainable businesses or whatever.
I think it would be fairly easy to redesign a market economy that encouraged that, instead of making it so challenging that its the exception, but the first step is getting all the ordinary people who accept the current system to realize that there even could be an alternative, and then that maybe it would be better overall.

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The crux of this solution is to cultivate a food forest using perennial, edible plants and permaculture design principles
funny, you know that story I told about my girlfriend and her former employer?
When she quit, she started working on EXACTLY that: http://fffwest.blogspot.com/

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Quote from: No Name Guy on May 01, 2013, 12:31:11 pm

    Don't blame the "system" - hold up the mirror so folks can see where the problem usually is.


Occam's razor, man. What's more likely?

A. That the vast majority of our society here in North America, a people in general who are some of the most highly educated and enlightened humans who have ever lived, who often do incredibly difficult, demanding, and exacting jobs that require decades of training (and do them better than any collective group has done their work in the history of humanity) are all simply stupid and undisciplined and, through their own character faults and shortcomings condemn themselves to wage slavery.

Or:

B. That you have a system that has elegantly directed our focus away from the free and engaging activities that could make us happy in an effort to endlessly produce and consolidate that production in a way that civilizations have done since their very beginnings.

I mean, in the one case we have literally hundreds of millions, perhaps billions, of examples of different variables in intellect, career, culture, whatever that are all somehow producing the same result: wage servitude. In the other case, you have a relatively simple prospect with motive, countless historical examples, and perfectly understood processes.

I agree with what you are getting at, but its a false dichotomy.
Human nature causes cogninitve biases, see: http://youarenotsosmart.com/all-posts/ or http://danariely.com/tag/predictably-irrational/
And this has been very deliberately exploited by corporations and governments, see: http://www.youtube.com/watch?v=s7EwXmxpExw


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I think you've phrased the question is a loaded way. Let me break it into two questions instead:

Is it OK to rent things that you own to other people?
I think pretty much everyone would agree that this is morally acceptable.
I'm still thinking about that one, but as a universal generality, no, I don't think I could agree that this is always ok.  You shouldn't be able to "buy" air or water, and then rent it to people, and you shouldn't be able to buy the moon or the ocean, and then rent it to people either.  Just because we don't want full blown communism doesn't mean literally everything should be private property.
If one person has a completely monopoly on a necessary good, far more than they could ever use, and refuses to sell at any price because they make a greater profit by renting, I think that is immoral. 
Now, if its something most people rarely use, it has a high initial cost, and it takes you time to provide upkeep, then that's a different situation - you are providing a service.  If its something you own for personal use, and you rent it out when you aren't using it, that too is different. 
Its like asking if it is morally acceptable to own a gun.  Well, that question can't be answered without asking what you do with it, and why.

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Is it OK to rent out so many things that you can live off of the combined profits?
I have a hard time seeing how this could be wrong. If renting things is fine, then renting many things is also fine, and who cares what you do with the profits?
If taking one fish from the communal lake is fine, then taking 10 must be, and if taking 10 is fine, taking 1000 must be.  And if two or three people in town have the capital to buy a dredge fishing boat, they can take ALL the fish in a few months, but since each individual fish they took was ok, that must be ok too.
Or not.




As I expected, this has run enormously long (it took even longer for me to write than it took you to read just now)
I'm going to stop here at the end of page 1, at least for now.  I may come back to it after I get up and do stuff in the real world a little.
« Last Edit: May 11, 2013, 07:17:31 PM by Bakari »

brewer12345

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Re: Living off of other people's work
« Reply #120 on: May 11, 2013, 08:51:18 AM »
Wow, you guys are very lucky the House UnAmerican Activities Committee is no longer active...

Zeb

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Re: Living off of other people's work
« Reply #121 on: May 11, 2013, 10:11:34 PM »
Very interesting stuff Bakari, I look forward to more if you get a chance.

nktokyo

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Re: Living off of other people's work
« Reply #122 on: May 11, 2013, 11:29:17 PM »
People work hard and then retire. That's fair.

Some people save more and spend less than others, they get to retire sooner.

Others again create businesses that provide value and create jobs. They get to retire the soonest.

I'm missing the moral problem here.

tuyop

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Re: Living off of other people's work
« Reply #123 on: May 12, 2013, 06:00:36 AM »
People work hard and then retire. That's fair.

Some people save more and spend less than others, they get to retire sooner.

Others again create businesses that provide value and create jobs. They get to retire the soonest.

I'm missing the moral problem here.

You, my friend, need to define "work", "save", "spend", "retire", "create", and "value". Otherwise you can't even really argue what you said at all.

You could also define "moral" but good luck with that.

nktokyo

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Re: Living off of other people's work
« Reply #124 on: May 12, 2013, 05:45:29 PM »
People work hard and then retire. That's fair.

Some people save more and spend less than others, they get to retire sooner.

Others again create businesses that provide value and create jobs. They get to retire the soonest.

I'm missing the moral problem here.

You, my friend, need to define "work", "save", "spend", "retire", "create", and "value". Otherwise you can't even really argue what you said at all.

You could also define "moral" but good luck with that.

Yeah, it would be awesome if these boards had a responsive skin for phones.

I think of them as the following:

  • "Work" as exchanging time and energy in return for money and/or some other form of compensation (options, perks, etc).
  • "Save" is money you either keep or invest after living expenses. Hopefully I don't have to define invest
  • "Spend" is money you use to cover living expenses (essential or non)
  • "Retire" is when you stop working - there are varying degrees of retirement from the 4 Hour Workweek sort through to moving to Florida and taking up lawn bowls
  • "Creating value" is producing something that the market puts a value on and exchanging that for money. A business is a system that creates value, a worker is a person that creates value.
  • "Moral" refers to whether this is "right" or "wrong"

I'll use me as an example. I worked hard for 7 years in companies. I saved over half of my salary and invested it. I later started a company that has done well. I'm now "semi-retired" in that I spend maybe half a week on my company. I'm also financially independent because the investments have done OK too and keep growing because 80% of the company profits go directly into investments. My company provides value and between corporate tax, GST and income tax of myself and my employees contributes far more money to the bottom line of the country than I ever did as a worker and I've created 4 jobs in a bad economy.

I'm probably the type who is in the crosshairs of the guy who started this thread but I see myself as a net contributor to society and not the other way around.
« Last Edit: May 12, 2013, 06:48:25 PM by nktokyo »

Bakari

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Re: Living off of other people's work
« Reply #125 on: May 12, 2013, 08:10:17 PM »
ok, on to page 2...

The people who really "live off other people's work" are those who have never worked and who collect monies of various sorts from the government.  That is, those who have never really contributed to society in any way.

Not everyone who has never worked collects money from the government.
How about the person who inherits an apartment building, or a business, pays someone else to manage it, and just lives off the rent or profits?
They didn't build the building or create the business, so they didn't contribute in the past, and they aren't contributing now, except via capital that they legally own, but never actually earned.  Are they not living off other people's work? 

Now, another question: lets say someone actually works at a 9-5 job, they work really hard, they do a great job, they are compensated for their productivity.  Then they get laid off, get unemployment, and while unemployment they realize they can live just fine off of the lower amount, so why are they even trying to work?  So then, when unemployment runs out, they apply for the (hypothetical) welfare*, and never work another day in their lives. 
Does the fact that they did work in the past make it any better that they are living off of other's work today?


And now combine those two questions into one.  Assuming your answer to the first question is "yes", and the second is "no" - if a person worked hard to earn capital, and now leverages that capital to allow them a percentage of someone elses productivity, how are they not living off of others work?


Much of the wealth in developed nations is acquired through exploitation of developing nations and the environment.

I would argue that the "exploited" are better off for it. See Hans Rosling's data in the youtube video I linked to above. Their standard of living (life expectancy) has increased.

If it wasn't the best alternative available, nobody would take a job in a sweat shop.
If a corrupt 3rd world government decides to do a deal with a US company for personal gain, and it confiscates rural land in order to build a factory, the job in the sweatshop may become the best alternative available to any given individual.  Its not like one person can decide they don't want to work there and change the economic and political conditions they live under.  Not even a union has that much power, and both governments and corporations have and do respond to unions with everything up to and including deadly force.

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I'm not claiming it's fair, but the capitalistic system raises the standard of living for all (some much more than others). Look at China's incredible growth and prosperity over the past few decades.
Look at the prosperity of Scandanavia.  Capitalism isn't the only thing that determines the wealth of a nation.  Technology, education, government infrastructure, natural resources, all play a role.  It is faulty reasoning to say "x nation practices y economic system, they are prosperous, therefore y must be the best possible system".

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The concerning thing about capitalism and the fiat money system is it depends on exponential growth in order to pay all the interest. Seems like something will have to give eventually.
Yup.

  Life isn't fair*: get over it. ...
I've never quite understood why people who profess such concern for their ideas of "fairness" always seem to have it working in only one direction: that I should give up what I have for the benefit of others, but no one else should have to do a damn thing to improve my life.
Why have laws?  Why have courts?  Why have police?  No, reality isn't fair.  As a specie, we can choose to work together to make things more fair, or we can work together to make them less fair. 
Without government intervention, there would never be any such thing as "private property".  All there would be is those items in your own personal immediate presence which you can defend by force.

We already have a system that makes attempts at making things more fair.  The only thing I think some should potentially give up is wealth/property which they never earned in the first place.



So, some more questions. Is it ethically okay for indisputably disabled people to receive disability payments?
Hmm....
Very interesting question.  Guess that goes back to how we humans decide to set up civilization.
I can't really see an argument that says they are morally entitled to payments.  But would it be moral for the rest of us to just let them starve?  I suppose their inability to take care of themselves may factor in - few of us are willing to say that everyone is entitled to get the basic necessities of life without doing any work.
However, your question wasn't whether we owe them, it was if it is ethical for them to accept it.  That is less ambiguous.  It is being offered by society as a gift.  So they can accept it.  If, say, there was a government sequester, the disabled person would not be able to call the police and have them go arrest the people at the SSI office, nor could they sue and force the office to reveal its financial information in order that the disabled person could take their SSI check directly.
Therefore it is not analogous to the investor or landlord.  The landlord isn't being paid rent as a gift.  If the renter stops paying, they have the full force of the United States government to force compliance from the tenant.

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Is it ethically okay for a construction worker to sue a builder if unsafe working conditions at a building site led to an accident that deprives him of his livelihood?
Yes.  This is not skimming the value of the builder's work in exchange for nothing.  The builder has taken something of value from the construction worker (say, her thumb), regardless of whether the builder can actually use it, and regardless of whether it was deliberate.
Whether someone causes you to lose your property by theft, vandalism, or negligence, you have the exact same reasonable expectation of compensation.  The worker has a right to compensation for the thumb the builder took from her.

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Is it ethically okay for an elderly person to apply for and receive and a subsidized apartment from his or her municipality?
That's a tricky one.  On the one hand, property values are artificially inflated by speculation (see my last series of posts), zoning laws, building codes and HOA rules that are primarily aesthetic (minimum square footage, for example).  So, countering those anti-free-market forces seems reasonable.
On the other hand, I don't see any particular reason why people should have a "right" to live in any particular city.  If you can't afford to live in one area, move somewhere else.  The San Francisco area costs more than Detroit because everyone wants to live there, because its a nicer place to live.  But everyone can't live there.  Supply and demand means some markets cost more.

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Is it ethically okay for parents to raise severely impaired children who will never contribute economically to society?
Parents always provide for their kids, impaired or not.  Question is, should they continue to provide for them for their entire lives.  This one seems easier than the first, because the gift is coming from a specific individual by choice (as opposed to by taxes that everyone has to pay, even if they don't care about the disabled)

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Is it ethically okay to accept the winnings if you won the lotto?
I suppose... I just know I would not be ok with spending all the money on myself (or myself and friends/family) if I did

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Is it ethically okay for you to leave your children an inheritance?
Absolutely not.  http://biodieselhauling.blogspot.com/2012/03/article-11-in-which-inheritance-should.html

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For me, the answer to all of those is yes. Also for me, those situations are very, very far apart from people who abuse the welfare or disability system.
Why?
If using the disability system is ok, but abusing it is not, doesn't that imply that having the ability to earn your own way and be productive is relevant in the morality of accepting that which you did not earn?
If so, then shouldn't the same apply to payments from one's parents as does payments from society?  I.E. accepting an inheritance that takes care of you for life if you are permanently disabled is ok, but if you are not, it is an abuse.

Bakari

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Re: Living off of other people's work
« Reply #126 on: May 12, 2013, 08:10:33 PM »
"Government enforced ownership"?  "Deserve"...

Uhhhh.....more like the natural rights of man in private property. 
Nature: Someone breaks into your house to rob you, and you shoot him, so your property is still yours.  (However, if he shoots you first, it is now his.)  You have absolutely no way to defend your claim to any parcel of property you are not physically on at the moment, therefore it is not yours.
Government enforced ownership: You can call the police, or take someone to court, and the US government will back you up with force - including not only your right to use it, but also your "right" to collect rent on it.
ALL capital investment relies on government enforced ownership.
And ESPECIALLY "intellectual property".  Like I said in the last post, in your parable your neighbor just makes his own version of the tool, unless you have the government to enforce a patent.

welfare money is collected at the point of a gun from those producing the wealth.  Don't think this is true?  Try not paying your taxes and see if armed IRS agents show up and violently apply some coercion to gain compliance.  It's a far cry, and the polar opposite of charity, which is freely given and can be freely withheld.  Dividends (or profit from business) are paid out as the result of free exchange.  People choose if they're going to buy yarn from hippie organic free range sheep / yak wool shop (or it could be air time from AT&T, to be American / First World in the hypothetical) .  The profits earned from the latter have no guns nor coercion involved in the transaction - individuals are free to enter, or decline, as they see fit.  Person wants yarn (or minutes for their piece of I-Crap), another person provides it and earns profit, of which some is paid to those that provided the capital to build the cell tower, or buy / raise the initial batch of sheep & yaks and build a spinning wheel.  Distilled to is basics:  Welfare = violence & coercion.  Dividends = peaceful free exchange.  No one forces me to hand money to AT&T (or hippie yarn shop), but someone is pointing a gun to my head for welfare.

Rent and loan interest is paid at the barrel of a gun just as much as taxes (actually, neither is - they will just take money from your bank accounts or garnish your wages, there are no "IRS police").  One can choose not to buy cell phones and yarn, but you can not choose to not live somewhere, eat food, drink water, or own clothes.  If the people producing those things are all for profit, then the economic exchange by which you acquire them is not voluntary.
BTW, how the hell do telecommunications companies have the right to "own" radiowave frequencies in the first place?  How are they any more entitled to exclusive access to them than a pirate radio station, or any private citizen?  Oh, right: government enforced ownership.


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If I can command enough value for 1 hour of my labor to support myself for an entire year, is that moral?  If so, what about 10 minutes?  What about 1 second?  If not, how many hours should I work?  Why is that magic number moral but not twice that number?

Should every hour of labor earn the same amount? If not, then some people will inevitably earn more than they need to survive.  If they continue to work, what are they to do with the remaining earnings? 
I don't think there is any minimum, if it is genuinely your own labor that you are being compensated for, and not other peoples.  If you actually had a skill that people felt 1 second of it was worth a year of living expenses, great.
What one could do with the excess is save it up, and then draw down from it in order to fund future living expenses - just like how we can live for 168 hours on just 40 hours of work.  Once one has made enough to last the rest of their life, then stop.  If you enjoy working, then, like MMM, you could devote all the excess to charity.

I find these types of discussions so impractical.   If you want to debate stuff for entertainment that is fine but don't do it under the guise of being a great altruistic sort or wallow in some sort of guilt complex.  If you see a real problem that moves you then do something about it. 

The bottom line is that you are one person and you have a specific sphere of influence.  The question is what you are motivated to do in the world.  If you are motivated to save the dolphins that is fine.  If you are motivated by climate change that is fine.  Find the match for your motives and work it in a positive way.  Ask "what can I do" and not "what should other people be doing".
How do you do something about a problem without narrowing down what the exact problem is, and how it could be addressed?
MMM is one person, and yet he has managed to encourage thousands of people around the world to reduce their consumption, just by telling everyone his opinion about what everyone should do on the internet.

That people shouldn't invest their savings and retire is so far from a priority issue imo that it is laughable.
I think people should save and retire.  I also think that wealthy people collecting unearned income at an exponentially accelerating way is one of the single largest problems humanity faces. 


--

A number of people pointed out this same thing, so instead of quoting anyone in particular, I'll just address the concept all at once;

the argument: the financial transactions which result in being paid interest/dividends/rent are voluntary, therefore they are moral

The transaction between a crack or meth addict and their dealer is also voluntary.   That does not necessarily mean the transaction isn't exploitive.  The transaction between the used car salesman and the 18 year old female immigrant is voluntary, but this doesn't prove it isn't exploitive. 
In some cases, such as paying either rent to a landlord or mortgage interest to a bank, paying a premium for someone else's capital is not voluntary.  In other cases - buying phone service or food or clothes from one of the big corporations instead of a cheaper small independent alternative, or getting a loan via a for-profit bank instead of a non-profit credit union - paying the premium may be technically voluntary, but the majority of the public is unaware of the options that exist, so for all practical purposes, the portion of their payments which ultimately go to dividends are not fully voluntary either.  When the transactions involved are so complex and dilute "voluntary" is no longer so cut and dry.  If the checker at the grocery mart asked you for each purchase "would you like to add 0.0002 cents to this item, in order to pay dividends to investors so that this supermarket can expand into a new state?" do you think most people would say yes?  If not, then I don't see the payments going from the consumer to the stockholder as strictly voluntary.


I'd feel like a horrible person having stock in Exxon... but I'm just fine owning stock in companies that produce solar panels. Make sense?

Do you own or drive a car?

My opinion isn't a challenge.... The fact that I don't want to own part of a hugely immoral company isn't an insult to you. This is rude, off topic, and completely unnecessary.
I think its a pretty reasonable question, so long as it isn't seen as personal.

I have an (anti-capitalist/anarchist) friend I was talking to, and he was saying the fact that Chevron has refineries in our town, even though "the people" (read: people he personally has spoken to) doesn't want them there, is proof that the people have no power.
But I think the real way to see what "the people" really want would be to go to a gas station and count how many cars pull up in a day.  If everyone stopped driving cars, all gas companies would disappear.  If people buy gas, what they really want is "not in my backyard".  They want the refineries to exist, they just want them to be "somewhere else".
Sure an argument can be made that some corporations are more evil than others, but its going to be a challenge to find a pure and holy oil company.


"whenever you invest in a company, you actually help it very very very little compared to purchasing something it makes"

No. Without a system to raise funds, which is dependent on a market for the sale and transfer of stocks, these companies would not have been able to expand and grow.  The liquidity of the stock market is a key factor in this system.
Ahhhhh.......
Now that! that is really something to think about!!!  That certainly brings legitimacy to the claim that participating in the system is helping to support it.  I never thought about it that way.

... But the discussion originally arose when Starstuff suggested that his/her "morals" got in the way of buying stock in particular companies. To that end, buying a particular company's stock (with the notable exception of their IPO, or future offerings) doesn't directly help the company, whereas buying their product does. Or, at least, I am not aware of any benefits for the company. ... I may very well be missing something, but I fail to see the logic in refusing to purchase second-hand stock in a particular company for moral or ethical reasons. If anything, it seems more logical to buy loads of the shares and vote out the shitty directors.
OMG, and again!!!!!!!
so, assuming the conclusion of the last question is that the stock market is not inherently immoral, there is no particular reason to avoid "bad" companies, since it doesn't help them for you to buy their stock.  So, in order to be ethical, depending on the first question, one should avoid all investing all together, or else it doesn't matter what companies you pick.
So when (if) I come to a conclusion about the first question, regardless of the answer, I should change my own investment strategy!  So how's that for tangible effects of online discussions?



Wow, you guys are very lucky the House UnAmerican Activities Committee is no longer active...
HA!
yeah... such irony... that name, for a committee whose sole purpose was violating the first amendment rights of American citizens.
I daresay my posts have been by far the most radical of any here.  And what do I advocate in place of capitalism?  Democracy and a truly free market.  Quite unAmerican, right?  I'm in favor of life, liberty, and the pursuit of happiness.  I believe people should be compensated proportionately to their hard work and ingenuity, and each person should "pull themselves up by their bootstraps" so-to-speak, and earn their own way in life, consuming no more than they personally produce.  I believe in equality of opportunity, a level playing field, and government enforced steps to avoid any form of aristocracy.  I even believe in property rights - just not unlimited ones.  I don't see how any of that could be interpreted as communism, or even disloyalty.


I'm probably the type who is in the crosshairs of the guy who started this thread but I see myself as a net contributor to society and not the other way around.
I can't speak for Zeb, but you aren't in my "crosshairs".
I just think that it would be most ethical if you were to get paid a salary for the work you continue to contribute to the company, and any company profits that weren't reinvested were distributed equally among all employees.

When I hire a subcontractor, I pay them exactly as much as I charge my clients for their labor hours.  (If it were an employee, instead of an "independent contractor", I would add to the charge the amount that covered employer payroll, works comp, etc)
The market would accept it just fine, I just don't see how I can justify me making a profit for the hours someone else works.
« Last Edit: May 20, 2013, 07:37:56 PM by Bakari »

nktokyo

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Re: Living off of other people's work
« Reply #127 on: May 13, 2013, 12:09:31 AM »
Quote
I just think that it would be most ethical if you were to get paid a salary for the work you continue to contribute to the company, and any company profits that weren't reinvested were distributed equally among all employees.

So if we make less money this month I pay them less or in a really bad month we all don't collect a salary and pool our savings to keep the company afloat.

The rewards are divided among those who take the risks and make things happen.
The other way of doing things you've described is more like a commune.

tuyop

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Re: Living off of other people's work
« Reply #128 on: May 13, 2013, 08:11:07 AM »
Yeah, it would be awesome if these boards had a responsive skin for phones.

I think of them as the following:

  • "Work" as exchanging time and energy in return for money and/or some other form of compensation (options, perks, etc).
  • "Save" is money you either keep or invest after living expenses. Hopefully I don't have to define invest
  • "Spend" is money you use to cover living expenses (essential or non)
  • "Retire" is when you stop working - there are varying degrees of retirement from the 4 Hour Workweek sort through to moving to Florida and taking up lawn bowls
  • "Creating value" is producing something that the market puts a value on and exchanging that for money. A business is a system that creates value, a worker is a person that creates value.
  • "Moral" refers to whether this is "right" or "wrong"

I'll use me as an example. I worked hard for 7 years in companies. I saved over half of my salary and invested it. I later started a company that has done well. I'm now "semi-retired" in that I spend maybe half a week on my company. I'm also financially independent because the investments have done OK too and keep growing because 80% of the company profits go directly into investments. My company provides value and between corporate tax, GST and income tax of myself and my employees contributes far more money to the bottom line of the country than I ever did as a worker and I've created 4 jobs in a bad economy.

I'm probably the type who is in the crosshairs of the guy who started this thread but I see myself as a net contributor to society and not the other way around.


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Re: Living off of other people's work
« Reply #129 on: May 13, 2013, 08:24:54 AM »
Quote
I just think that it would be most ethical if you were to get paid a salary for the work you continue to contribute to the company, and any company profits that weren't reinvested were distributed equally among all employees.

So if we make less money this month I pay them less or in a really bad month we all don't collect a salary and pool our savings to keep the company afloat.

The rewards are divided among those who take the risks and make things happen.
The other way of doing things you've described is more like a commune.

When a company (yours, or any other) is losing money, does it not lay off employees, even if those employees were doing their jobs well??  That certainly seems like those employees not collecting a salary to keep the company afloat.
In other cases employees may have mandatory furloughs or pay or benefit cuts.
And surely the owner's job is rarely the first on the chopping block, so they are carrying less risk than the employees.  If the company goes really bad, and the owner decides to sell the assets, they are the ones who keep the proceeds.  Even when a CEO was the one who ran their corporation into the ground, they still get golden parachutes.

And anyway, what I am suggesting is a co-op, not a commune, two totally different things.

nktokyo

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Re: Living off of other people's work
« Reply #130 on: May 13, 2013, 05:57:17 PM »
A co-op is an entity owned collectively by it's members. Again I would be fine running one of those if each of the people I work with were willing to co-fund the business. They're not. They want to exchange their time for dollars and in turn exchange the dollars for new kitchens and holidays.

You seem to be of the opinion that the whole capitalistic economic system is bad. Which takes down investment and therefore banking. What we're left with are centrally controlled groups of workers... a system that has failed every time it's been attempted last time I looked.

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Re: Living off of other people's work
« Reply #131 on: May 13, 2013, 07:17:22 PM »
You're right, co-op was the wrong word, I was more describing profit sharing, or a non-profit.
For example, the bikeshop I used to work at was run by the non-profit bicycle coalition, so, at the end of the year, when there was money left over, we all got a Christmas bonus.  The capital didn't come from the workers, and we didn't all get equal say in how things were run (although, in practice we did...)

What do you mean by "centrally controlled"?  That sounds like communism. 
CHS, Land 'O Lakes, REI, GrowMark, ACE hardware, Ag First bank, Navy Credit Union, TrueValue, Ocean Spray, Central Electric Power, Associated Press, and hundreds of other co-ops exist in the US capitalist system, are doing extremely well, and have been for decades.  No "central control" necessary.

The fact that one specific form of one particular alternative to our system has failed does not automatically prove that everything we do is the optimal ideal.  There are societies in the world with a higher standard of living than the US, which have a less capitalistic system than our own.

brewer12345

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Re: Living off of other people's work
« Reply #132 on: May 13, 2013, 07:59:38 PM »
I've lived and worked in co-ops.  They have their positive attributes, but IME they are not the most efficient forms of organization.  I'd much rather strike out on my own than have anything to do with a co-op (or giant C Corp, or partnership, or gubmint agency, or...) again.

Then again, I have my own capital so I have that option.

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Re: Living off of other people's work
« Reply #133 on: May 13, 2013, 10:51:08 PM »
You're right, co-op was the wrong word, I was more describing profit sharing...

Just a personal opinion, but I've always thought that any business that doesn't have some sort of profit-sharing scheme is missing a chance to improve its bottom line. 

But you'll notice that most unions seem to be dead against any sort of profit sharing, demanding higher wages and benefits even it drives jobs overseas.

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Re: Living off of other people's work
« Reply #134 on: May 22, 2013, 01:14:35 PM »
This reminds me of Jacob's post about Robinson Crusoe at Earlyretirementextreme.com

Would put link here, but the site is down today, hmmm.

The article was called Robinson Crusoe.

Summary, if other's existed on the island, and you invest your time to make inventions/tools to get the basic needs more efficiently, then you'll have all your needs gathered each day, the rest of your freetime becomes invested in making wants that others believe they need when they actually just want it, and they become your financial slaves. Giving their time for their needed "unlimited wants"/spending to borrow from you your tools or wealth of tools, supplies, ideas, etc.

Thus everyone on the island borrows from your made wealth, and you live off of other people's work. (until forever, or rescued, or you and your workers/consumers are killed by some enemy government/kings searching for conquest and power)

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Re: Living off of other people's work
« Reply #135 on: May 22, 2013, 06:45:09 PM »
I remember that post.  Someone here already made an almost identical analogy, even if they didn't go so deep into it, and my response is the same: outside of a government enforced patent, how does Crusoe keep a monopoly on his technology?  The answer is that he can't.  Everyone else sees what a good idea it was, and they make their own version of the miracle tool if he insists on only renting them instead of selling them at a reasonable price.

brewer12345

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Re: Living off of other people's work
« Reply #136 on: May 22, 2013, 07:44:43 PM »
I remember that post.  Someone here already made an almost identical analogy, even if they didn't go so deep into it, and my response is the same: outside of a government enforced patent, how does Crusoe keep a monopoly on his technology?  The answer is that he can't.  Everyone else sees what a good idea it was, and they make their own version of the miracle tool if he insists on only renting them instead of selling them at a reasonable price.

Wrong. There are a number of inventions with lots of value that have never been patented but nobody has managed to replicate.  How?  The methods are kept as trade secrets.  Examples include Zildjian cymbals, the recipe for coke, etc.

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Re: Living off of other people's work
« Reply #137 on: May 22, 2013, 08:10:09 PM »
I remember that post.  Someone here already made an almost identical analogy, even if they didn't go so deep into it, and my response is the same: outside of a government enforced patent, how does Crusoe keep a monopoly on his technology?  The answer is that he can't.  Everyone else sees what a good idea it was, and they make their own version of the miracle tool if he insists on only renting them instead of selling them at a reasonable price.

Wrong. There are a number of inventions with lots of value that have never been patented but nobody has managed to replicate.  How?  The methods are kept as trade secrets.  Examples include Zildjian cymbals, the recipe for coke, etc.

I don't know much about the market for cymbals, but I can buy a can of cola for 35cent at the supermarket across the street.  Also: Pepsi.
And you don't rent Coke, anyway, you buy it.  The manufacture has to continually produce more product in order to stay in business.  In other words, they aren't just making a living off of having come up with the recipe once, they are actively providing value by doing work.  Therefore they are not living off of other people's work, they are living off of their own work.

brewer12345

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Re: Living off of other people's work
« Reply #138 on: May 22, 2013, 08:30:08 PM »
I remember that post.  Someone here already made an almost identical analogy, even if they didn't go so deep into it, and my response is the same: outside of a government enforced patent, how does Crusoe keep a monopoly on his technology?  The answer is that he can't.  Everyone else sees what a good idea it was, and they make their own version of the miracle tool if he insists on only renting them instead of selling them at a reasonable price.

Wrong. There are a number of inventions with lots of value that have never been patented but nobody has managed to replicate.  How?  The methods are kept as trade secrets.  Examples include Zildjian cymbals, the recipe for coke, etc.

I don't know much about the market for cymbals, but I can buy a can of cola for 35cent at the supermarket across the street.  Also: Pepsi.
And you don't rent Coke, anyway, you buy it.  The manufacture has to continually produce more product in order to stay in business.  In other words, they aren't just making a living off of having come up with the recipe once, they are actively providing value by doing work.  Therefore they are not living off of other people's work, they are living off of their own work.

I am pretty sure I am trying to teach a pig to sing, but...

Coke is sugar water.  You can make its equivalent in your kitchen.  The margins on selling coke are obscene.  Oh, and the person who came up with the recipe is long dead.  Sounds like capital accumulation to me, especially since the company is in the hands of third party shareholders.

nktokyo

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Re: Living off of other people's work
« Reply #139 on: May 22, 2013, 09:51:10 PM »
The value of coke is in the brand
« Last Edit: May 22, 2013, 11:03:35 PM by nktokyo »

Bakari

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Re: Living off of other people's work
« Reply #140 on: May 22, 2013, 10:08:05 PM »
the context seems to have been lost.  I was responding to the idea of making an invention, and then renting that invention out to others as a sole means of income.
Whether a corporation has shareholders is irrelevant, how much margin they charge, and whether a consumer could hypothetically make cola at home are all irrelevant.  The equivalent to shareholders would be if you hired someone else to do the actual work of making the invention that you sell, and you kept some of the money and they kept some.  Someone is still doing work.  Coke has employees.
Could I really produce a can of cola in my kitchen in less time than it takes me to do $1 worth of work?  For me, that's about 1.2 minutes.  Given the lack of cola plant and lack of carbonation, I don't think I could.  Somebody, somewhere, is growing cola plants, extracting flavors, growing sugar cane, compressing CO2.  Granted, the margins are ridiculous.  Consumers are stupid, I'll give you that.  But people are paying for more than just the recipe, they are paying for a product.  If Coke stopped producing more cola, they would not continue to get any income.

In contrast, in the example I was responding to, the inventor does NO WORK of any kind, ever again, but they continue to get income forever.  They are no longer producing new copies of the invention.  They are just continually renting out the ones they already made. 
On an island, where there is not enough population for extreme specialization, it is unlikely that everyone else would be content to rent the inventor's tools.  Someone would come up with a Pepsi, and someone else would come up with a Snapple.

Oh, and there is no need for personal insults!

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Re: Living off of other people's work
« Reply #141 on: May 22, 2013, 10:56:18 PM »
I remember that post.  Someone here already made an almost identical analogy, even if they didn't go so deep into it, and my response is the same: outside of a government enforced patent, how does Crusoe keep a monopoly on his technology?  The answer is that he can't.  Everyone else sees what a good idea it was, and they make their own version of the miracle tool if he insists on only renting them instead of selling them at a reasonable price.

Wrong. There are a number of inventions with lots of value that have never been patented but nobody has managed to replicate.  How?  The methods are kept as trade secrets.  Examples include Zildjian cymbals, the recipe for coke, etc.

I don't know much about the market for cymbals, but I can buy a can of cola for 35cent at the supermarket across the street.  Also: Pepsi.
And you don't rent Coke, anyway, you buy it.  The manufacture has to continually produce more product in order to stay in business.  In other words, they aren't just making a living off of having come up with the recipe once, they are actively providing value by doing work.  Therefore they are not living off of other people's work, they are living off of their own work.

I am pretty sure I am trying to teach a pig to sing, but...

Coke is sugar water.  You can make its equivalent in your kitchen.  The margins on selling coke are obscene.  Oh, and the person who came up with the recipe is long dead.  Sounds like capital accumulation to me, especially since the company is in the hands of third party shareholders.

the value of Coke is in the brand not in the "secret" recipe

brewer12345

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Re: Living off of other people's work
« Reply #142 on: May 23, 2013, 08:22:31 AM »
I remember that post.  Someone here already made an almost identical analogy, even if they didn't go so deep into it, and my response is the same: outside of a government enforced patent, how does Crusoe keep a monopoly on his technology?  The answer is that he can't.  Everyone else sees what a good idea it was, and they make their own version of the miracle tool if he insists on only renting them instead of selling them at a reasonable price.

Wrong. There are a number of inventions with lots of value that have never been patented but nobody has managed to replicate.  How?  The methods are kept as trade secrets.  Examples include Zildjian cymbals, the recipe for coke, etc.

I don't know much about the market for cymbals, but I can buy a can of cola for 35cent at the supermarket across the street.  Also: Pepsi.
And you don't rent Coke, anyway, you buy it.  The manufacture has to continually produce more product in order to stay in business.  In other words, they aren't just making a living off of having come up with the recipe once, they are actively providing value by doing work.  Therefore they are not living off of other people's work, they are living off of their own work.

I am pretty sure I am trying to teach a pig to sing, but...

Coke is sugar water.  You can make its equivalent in your kitchen.  The margins on selling coke are obscene.  Oh, and the person who came up with the recipe is long dead.  Sounds like capital accumulation to me, especially since the company is in the hands of third party shareholders.

the value of Coke is in the brand not in the "secret" recipe

Of which the recipe is part.  I would have chosen to talk about the Zildjian company instead, but I was foolishly trying to explain something to a socialist/anarchist that doesn't know anything about cymbals.  I give up.

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Re: Living off of other people's work
« Reply #143 on: May 23, 2013, 08:39:43 AM »
Of which the recipe is part.  I would have chosen to talk about the Zildjian company instead, but I was foolishly trying to explain something to a socialist/anarchist that doesn't know anything about cymbals.  I give up.

Socialism and anarchy are opposites, and I'm not in favor of either.
If you read my long posts in this thread, you see that I am in favor of (limited) private property, an actual free market, and democracy.

Actually, my ideal is the same as yours: independent producers.  Not employers, corporations, government agencies, or even partnerships.  The only difference is, it is not just a personal preference for me (though its that too), I recognize it as the most efficient and fair economic system, and the one Adam Smith advocated. 

brewer12345

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Re: Living off of other people's work
« Reply #144 on: May 23, 2013, 08:47:15 AM »
Of which the recipe is part.  I would have chosen to talk about the Zildjian company instead, but I was foolishly trying to explain something to a socialist/anarchist that doesn't know anything about cymbals.  I give up.

Socialism and anarchy are opposites, and I'm not in favor of either.
If you read my long posts in this thread, you see that I am in favor of (limited) private property, an actual free market, and democracy.

Actually, my ideal is the same as yours: independent producers.  Not employers, corporations, government agencies, or even partnerships.  The only difference is, it is not just a personal preference for me (though its that too), I recognize it as the most efficient and fair economic system, and the one Adam Smith advocated.

And I want to ride a purple unicorn to work every morning while an elf gives me a blowjob.

velocistar237

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Re: Living off of other people's work
« Reply #145 on: May 23, 2013, 09:52:12 AM »
And I want to ride a purple unicorn to work every morning while an elf gives me a blowjob.

Really? As long as we're in fantasy land, you might at least aim a little higher.

brewer12345

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Re: Living off of other people's work
« Reply #146 on: May 23, 2013, 10:36:02 AM »
And I want to ride a purple unicorn to work every morning while an elf gives me a blowjob.

Really? As long as we're in fantasy land, you might at least aim a little higher.

OK, I want to ride a purple unicorn to my hunting grounds while an elf gives me a blowjob.

Jamesqf

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Re: Living off of other people's work
« Reply #147 on: May 23, 2013, 12:51:49 PM »
In contrast, in the example I was responding to, the inventor does NO WORK of any kind, ever again, but they continue to get income forever. 

So how about an author?  Say for a concrete example, Tolkien (since we're into fantasy).  He wrote LotR prior to 1954 (when it was first published), yet it didn't become really popular until the 1960s.  So should he have been able to collect money by "renting out" his past work for people's entertainment?

nktokyo

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Re: Living off of other people's work
« Reply #148 on: May 23, 2013, 07:07:42 PM »
Of which the recipe is part.  I would have chosen to talk about the Zildjian company instead, but I was foolishly trying to explain something to a socialist/anarchist that doesn't know anything about cymbals.  I give up.

Socialism and anarchy are opposites, and I'm not in favor of either.
If you read my long posts in this thread, you see that I am in favor of (limited) private property, an actual free market, and democracy.

Actually, my ideal is the same as yours: independent producers.  Not employers, corporations, government agencies, or even partnerships.  The only difference is, it is not just a personal preference for me (though its that too), I recognize it as the most efficient and fair economic system, and the one Adam Smith advocated.

And I want to ride a purple unicorn to work every morning while an elf gives me a blowjob.

This made me laugh. I'm on a crowded train in central Tokyo. People are staring. Thanks for nothing, internet.

brewer12345

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Re: Living off of other people's work
« Reply #149 on: May 23, 2013, 10:05:28 PM »
Of which the recipe is part.  I would have chosen to talk about the Zildjian company instead, but I was foolishly trying to explain something to a socialist/anarchist that doesn't know anything about cymbals.  I give up.

Socialism and anarchy are opposites, and I'm not in favor of either.
If you read my long posts in this thread, you see that I am in favor of (limited) private property, an actual free market, and democracy.

Actually, my ideal is the same as yours: independent producers.  Not employers, corporations, government agencies, or even partnerships.  The only difference is, it is not just a personal preference for me (though its that too), I recognize it as the most efficient and fair economic system, and the one Adam Smith advocated.

And I want to ride a purple unicorn to work every morning while an elf gives me a blowjob.

This made me laugh. I'm on a crowded train in central Tokyo. People are staring. Thanks for nothing, internet.

Happy to oblige.