Half a croissant, on a plate, with a sign in front of it saying '50c'
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Head Pay

Pay employees based on how much you need them
  (+1, -4)
(+1, -4)
  [vote for,
against]

1) There are no degrees of absolute necessity.

2) Labor is almost any firm's highest cost.

3) You will not hire unless by absolutely necessity.

Consequences:

1) No one is working in your firm who is "more necessary" or "less necessary" than anyone else. If it seems that way, it just means you made a bad or unnecessary hire, which hurts the company, the employee and/or resource allocation in the larger economy.

2) Want to know what to pay your new hire? If you did your hiring right, you don't have to decide what to pay. Since you need him/her just as much as anyone else in the company, you pay accordingly.

3) When you start a firm, and decide how much to pay the founders based on their necessity (which like all hires, is absolute), you pay what all other firms pay. Thus, everyone in every firm is paid the same.

Problems and solutions: Information asymmetry is remedied by the fact that these hires are really not doing anything since all jobs have been replaced by automation, and firms are simply notional workplaces. Thus, the type of worker the person is does not matter. In fact, this firm is nothing more than an organization with a completely automated productive capacity. The new hire is nothing more than a member of your little club. The only reason you hire is to make sure no one in the firm sees their pay go up because even if you split it equally among everyone in the firm, you are still subject to the third consequence.

fishboner, May 31 2013

Intrinsic and Extrinsic Motivation http://restud.oxfor...t/70/3/489.abstract
A central tenet of economics is that individuals respond to incentives. For psychologists and sociologists, in contrast, rewards and punishments are often counterproductive, because they undermine “intrinsic motivation”. We reconcile these two views, showing how performance incentives offered by an informed principal (manager, teacher, parent) can adversely impact an agent's (worker, child) perception of the task, or of his own abilities. Incentives are then only weak reinforcers in the short run, and negative reinforcers in the long run. We also study the effects of empowerment, help and excuses on motivation, as well as situations of ego bashing reflecting a battle for dominance within a relationship. [fishboner, May 31 2013]

LSE: Why Does Performance Pay De-motivate http://cep.lse.ac.u...download/dp0476.pdf
The sheer scale and speed of the shift of payment system from time-based salaries to performance-related pay, PRP, in the British public services provides a unique opportunity to test the effects of incentive pay schemes. This study is based on the first large scale survey designed to measure the effects of performance related pay on employee motivation and work behaviour across the British public services. While there is evidence of a clear incentive effect for those gaining above average PRP, it is likely that it is offset by a more widespread demotivating effect arising from difficulties of measuring performance fairly. Organisational commitment appears to offset some of the negative effects of PRP. [fishboner, May 31 2013]

After your job is gone http://techcrunch.c...r-your-job-is-gone/
Pretty good Techcrunch article, with links to other relevant analysis [theircompetitor, Jun 01 2013]

[link]






       What is the sound of one hand clapping? Economic decisions cannot be made based on demand alone, or supply alone. It is not possible to properly value work without regard to supply. Supply, definitionally, breaks up the labor force by skills.   

       The corporation already pays people according to how much it needs them, and certainly already divides the pie (though unevenly). This idea cannot be implemented if for no other reason that your proposed company is not the only job providing entity in the universe. So the second a more profitable corporation (which according to this scheme, maybe paying more to each employee) has a "need", it will hire away workers from you by paying more than you can pay, and you won't be able to compete.   

       Fixed pay scales already exist in various union jobs, of course, and they do in fact skew the hiring process, generally in a way that is harmful to the corporation.   

       Finally, an entity such as you propose can and does exist in partnerships. From law firms, to multi-owner restaurants, lots and lots of businesses are owned by more than one person with an even revenue distribution scheme, and many of those, when they bring in an additional partner, divide the equity equally. Of course in any such situation people tend to think long and hard before adding such a partner.
theircompetitor, May 31 2013
  

       // already pays people according to how much it needs them, and certainly already divides the pie (though unevenly).//   

       I think you missed the part where I proved this is impossible.
fishboner, May 31 2013
  

       I think you missed that part :)
theircompetitor, May 31 2013
  

       //No one is working in your firm who is "more necessary" or "less necessary" than anyone else.//   

       That's a silly statement, because the "necessity" of a job isn't the same as the "necessity" of a particular employee.   

       A cleaner and a CSO, for example, are both necessary. But, with no disrespect to the cleaner, his or her role can be filled equally well by many other people. But if I'm a biotech company, the CSO is one of a handful of people who make and shape the company - the CSO is not readily interchangeable.   

       Thus, the cleaner is necessary but that particular cleaner is not. The CSO is necessary and that particular CSO is.   

       If I have a biotech company that depends on a particular cleaner, but where the CSO can be swapped out easily, I'm probably doing something wrong.   

       [-]
MaxwellBuchanan, May 31 2013
  

       Pay is already generally ordered this way creating incentive for those to aspire to certain jobs, and also to be repulsed from doing certain jobs that receive less pay. That's why MB is offended because he sides with the system of inducements for people to act rationally pursuant of rewards, and avoidant of menial lowly paid servitudes, choosing this draconianism over the actual ideaology of the market that would indeed cause the too many who have aspired to wallow in their deflated value. The draconianism of inducements, of course, is set up against the too many who have not aspired, either disaffected or unaffected by the institutions of behaviourism that denominate into functional roles.
rcarty, May 31 2013
  

       Is the cso the Chief Science Officer or the Chief Scientist Office?
calum, May 31 2013
  

       Chief Sewer Operator. It's the cleaner going for a raise with an important sounding acronym.
lurch, May 31 2013
  

       //his or her role can be filled equally well by many other people//   

       [Max] In other words, you need a janitor just as much as a CSO, but you will pay the janitor less because you can.   

       Meanwhile, your CSO has his performance potentially damaged by an unnecessary and wasteful extrinsic motivator enhancement[link].   

       Essentially, you are looting your company to get slightly worse performance out of everyone in it.
fishboner, May 31 2013
  

       yes, if Roomba won't cut it. To be sure, when algorithms can run your corporation, you need less people too. Which is happening.
theircompetitor, May 31 2013
  

       //In other words, you need a janitor just as much as a CSO, but you will pay the janitor less because you can.//   

       Yeah, that's pretty much how supply and demand works.   

       [marked-for-deletion] This idea is advocating either for or against a free labor market (I'm not quite sure which); either way it's still advocacy. Besides, every concept described here has been expounded upon in great detail as part of the existing body of economic theory, so there is nothing here that's not WKTE.
ytk, May 31 2013
  

       I'm with ytk [hmm, I think that works as a rap song title, too]
theircompetitor, May 31 2013
  

       // [Max] In other words, you need a janitor just as much as a CSO, but you will pay the janitor less because you can.   

       Meanwhile, your CSO has his performance potentially damaged by an unnecessary and wasteful extrinsic motivator enhancement[link].   

       Essentially, you are looting your company to get slightly worse performance out of everyone in it.//   

       No. I pay my CSO more than the cleaner because (a) I do not want my CSO to laugh at me and walk out the door and (b) I believe in paying people in proportion to their abilities - his are rarer than the cleaner's, therefore more valuable.   

       To look at it from the other side, if I am CSO of a company that offers to pay me what they pay the cleaner, I will laugh and walk out the door, and they can replace me with the cleaner. I will go to a different company that will pay me more, and that different company will ultimately employ the cleaner when the company he's CSO of goes under.   

       Can I ask, [fishboner], whether you earn above the minimum wage (either actual or de facto, depending on where you live)? If "yes", would you be happy to be cut back to minimum wage? If "no", and you could do the same job elsewhere for better than minimum wage, would you switch?   

       I realize the idea was intended as humour, but it seems somewhat mirthless.   

       [And I never arm the cleaners; unless you are referring to my 'cleaners', that is.]
MaxwellBuchanan, May 31 2013
  

       //Your anno comes across as a lame defence of the badly managed status quo//   

       Thanks! I was worried I was being too subtle.   

       //You have won second prize in a communist beauty contest, please report to the gulag for 10 years//   

       Reminds me… They had a contest in the Soviet Union for the best political joke. Do you know what first prize was?   

       Ten years.
ytk, May 31 2013
  

       [ytk] the logic of necessity as it pertains to pay rationale as applied here is completely original, afaik. I don't see anything normative in my post.   

       Labor is expensive. Trust is hard to come by. You only hire if you absolutely need to, and you pay accordingly. If you have seen this idea posted elsewhere, kindly link us to it.   

       Is the janitor more replaceable? Sure. So replace him if it doesn't work out, but if you pay him less just because you can, that is really a case of you letting the janitor set his own wage. More specifically, a janitor who is desperate for a job will offer to do it for less. if that undercutter were not there, you would be paying the higher wage. thus, the undercutting janitor is setting the wage. This is an abdication of your role as a manager.   

       People are having a hard time letting go of dead ideas about how markets function. What's more, they do this under the flag of an unyielding market rationality. Well here we have my proposal and mounting evidence from the field of economics[link] about how performance, motivation and pay really function, and we are deciding to cling to the old, failed model just because it seems more cut-throat, and thus more valid.
fishboner, May 31 2013
  

       I don't “need” a janitor to run my company. I need my floors cleaned and my trash taken out. If someone is willing to do that job to my satisfaction for $8/hour, I would be an irresponsible manager if I paid more than that.   

       I also don't “need” the CSO. I need a smart person with an appropriate degree in a relevant field to direct my research department. If I'm only willing to pay the same $8/hour for such a person, there will be nobody qualified who is willing to do that job, because it is a much more difficult job than cleaning floors and taking out trash, and any reasonable person would do the easier job for the same amount of money. Further, no person would bother seeking the advanced qualifications, because there is no financial incentive to do so.   

       Your response to this is, undoubtedly, “No, people will do the more complicated job for the love of doing so (or other reasons not related to compensation), so you can simply fix the pay for all jobs at the same rate and still find qualified people.” And you'll probably think that's a highly original notion. Funny how I've heard it before, though.   

       Your whole premise seems to be based on getting all companies to agree to pay the exact same rate for every employee. That's not a new idea—it's called a planned economy when it's government enforced, and collusion when it's not. Do you really need me to handhold you with some links to Wikipedia where you can read all about this?
ytk, Jun 01 2013
  

       // [CSO] is a much more difficult job than cleaning floors and taking out trash// and Chief of Sites' Maintenance is a much more difficult job than titrating a sample and running a spectrometer.   

       Anyways, the idea is "communism" (the theory, not the practice): baked.
FlyingToaster, Jun 01 2013
  

       Why are you even talking about paying anyone $8.00 per hour?
fishboner, Jun 01 2013
  

       [flyingtoaster]   

       Communism did not operationalize need to this end in the same way. You might as well say pianos and radios are the same invention since they both create sound.
fishboner, Jun 01 2013
  

       The only way you'll get people to take positions, without their own personal graduated recompense, is for them to own the company in some manner, which definition can be easily stretched to include things like sense of duty (armed forces' pay is never high) or "love of the work" (likewise forest rangers and artists rarely make top ten wage lists).   

       By definition, a person who has to be "on top of things" needs support.
FlyingToaster, Jun 01 2013
  

       //Chief of Sites' Maintenance is a much more difficult job than titrating a sample and running a spectrometer.//   

       Uh, no, it's not. Practically any able-bodied person can perform janitorial duties with little or no training. Like the vast majority of people, I'm not even sure what it /means/ to “titrate a sample” and I have no idea what to do with a spectrometer, or how to interpret the output of such an instrument.   

       //Why are you even talking about paying anyone $8.00 per hour?//   

       Because if I pay much more than that, I don't have to worry about /having/ floors to clean or trash to take out for very long.   

       Where do you propose getting the money to pay everyone at above market rates? And if everyone is paid the same rate, why does it even matter what that rate is? This idea is just utter silliness with a side of magical thinking.
ytk, Jun 01 2013
  

       //[spectrometer] or how to interpret the output// as an entry-level lab tech you generally don't have to worry about that unless it's outside of a certain range... likewise as a junior janitor you don't have to worry about deciding what chemicals to use to clean the 50 different kinds of surface in the building: the boss tells you.   

       Done both: I don't recall either as being easier or more difficult. Move a couple rungs up the ladder and there's Stationary Engineer on one side, a 3 year apprenticeship + courses to semi-proactively keep a building in working condition, and "Lab Supervisor" on the other: a 3 year community college or university program + time in, to semi-proactively decide the best way of achieving <x> statistics for a given problem. Pay's about the same too. After that I'm not sure where the janitorial hierarchy leads... wait, actually I am: ever had to decide how to dispose of kilotons of hazardous materials ?   

       Of course there's still cultures which look down on environmental maintenance and worship the shiny magic of technology.
FlyingToaster, Jun 01 2013
  

       [fishboner] as it's pertinent to the argument, may I ask what you do for a living?
MaxwellBuchanan, Jun 01 2013
  

       //dead ideas about how markets function//   

       Just to state a fact rather than economic theory, Communism (in any actual implementation I'm familiar with) distributes pay based on level, similar to how it would occur in a contract enforced union job. There are no Communist countries, past or present, where a janitor makes as much as the plant manager, though the gap maybe narrower, and all janitors with the same seniority may get the same pay, but not all janitors.   

       Economic studies, however thorough, cannot possibly compare with the ultimate statistically significant experiment, and that is history. In said history, the one giant population subjected to anything resembling these kinds of rules -- the Eastern block -- saw a dramatic collapse in any kind of productivity and eventually collapsed, and the other giant population subjected to same -- the Chinese -- saw a dramatic positive change only when they changed their mind and subscribed to dead economic theories. We've also seen the collapse or near collapse of numerous structures, private and government, where expense structures are governed by equal pay.   

       Ultimately, this "idea" is doomed thus: If ever there is something that is completely obvious to you, that if only you could make everyone else understand things would be so much better, it's fairly obviously a WIBNI. Wouldn't it be nice if everyone was paid the same. To the extent there's ANY economic sense in it, it has already emerged through market forces (i.e. labor unionization), and quite arguably, is on the wane because it produces inferior results. As I pointed out earlier, some partnerships are run like this, but these cannot, by definition, scale. The best analogy, a large law firm, or a large consulting firm, both partnerships, quickly deviate the partnerships into paying people based on business they bring in, because to do otherwise would encourage free loaders.   

       So it has both been tried and [marked-for- deletion] WIBNI.
theircompetitor, Jun 01 2013
  

       I would actually go further and disagree with //a WIBNI. Wouldn't it be nice if everyone was paid the same.//   

       If you rephrase this, you're saying "wouldn't it be nice if extra skills, extra effort, or extra time spent studying were not rewarded", and I don't think that would be nice.
MaxwellBuchanan, Jun 01 2013
  

       I think fishie's looking for a universe where everybody lives, eats, breathes their chosen vocation 24/7, which is the only realistic way, in a free society, that you might get people to work for peanuts.   

       Unfortunately such a society would tend to be rather short-lived: what if during a generation almost nobody wanted to be a farmer... or a teacher ?
FlyingToaster, Jun 01 2013
  

       Skynet will provide
theircompetitor, Jun 01 2013
  

       But if there is a glut in the market of skilled labour such as executives with MBAs then they should depreciate in value, instead of enjoying permanent affluency because of a nonmarket but an institutional pay scale that attempts to induce a certain type of ascendency to entrenched positions of power. Given the right circumstances where too many people aspire to achieve in institutions, then cleaners should receive enhanced pay. However, this is not what will be observed because market capitalism has given way to a draconianism, and a behavioristic institutionality, that seeks to maintain the social order of class, not capitalism, that the mass market may not necessarily maintain, because doing so would require a level of direct economic planning that would still fail and uncover managerial incompetency, so keeping certain jobs in certain economic classes maintains institutional discipliinarianism as an implicit threat of failure or reward for success.
rcarty, Jun 01 2013
  

       Ask any newly graduated lawyer who is looking for a job this year, rcarty. Starting salaries crashed, completely. It is exactly market forces at work.
theircompetitor, Jun 01 2013
  

       That's all very well and good but the entrenchment has already taken place, those newly graduated lawyers are now directly experiencing the draconianism, having been disciplined, hardworking and aligned with societal values, only to endure even more hardwork for reduced pay, whereas during their education they were little more than slaves labouring hypnotized by dreams formed by popular television lawyer progammes, fuelled by the false promises of freedom, and the detterence of becoming minimum wage toilet cleaners in the washrooms of an undomesticated public of feral disaffecteds who have resisted even their toilet training in such a disciplinary overall context.
rcarty, Jun 01 2013
  

       You're just out of a scrabble tournament?
theircompetitor, Jun 01 2013
  

       Not likely, because winning such a trivial accolade would only be an absurd event in an already meaningless life, however I might be in attendance at such a tournament if only for the economy of mildly attractive and socially awkward but bookish homebodies that would also be in attendance at such an event.
rcarty, Jun 01 2013
  

       [theircompetitor] Whereas Marx claims eventually, resources will be allocated according to need of the people, my idea allocates resources based on the need of managers. So it's WIBNI for the managing elite, so I guess you got me there since the rest of us are superfluous.   

       You need look no further than Cato, Heritage and other conservative think tanks to find out even more thought-to- be market-biased resource allocation structures in the classical tradition are ar least as historically mythical as the "communist" ones (as we'll see, both are just examples of elite cronyism, or Draconianism in [rcarty] parlance.)   

       Take say the Fortune 500 list of top multinationals. Last I checked, all the top 100 of that list had benefitted from state interventionist policies, and of that 100, twenty were spared outright disaster by timely nanny state intervention. And while the food subsidy is a favorite issue of Heritage Foundation writers, a lesser- examined issue is the tremendous amount of public sector technological research which is just handed over to the private sector. And the government is the main buyer for a few decades, until the private sector can figure out a way to profit off the technology. At that point, they pull an Apple, and all that public money completes its journey right into the pockets of overseen holding companies with no domestic tax burden. This was the story of aerospace, computers, the Internet, genetics and it will be the case with the next phase of AI and robotics.   

       Taken together with the rest of a supposed market economy, (what with the huge military and police apparatus and all that entails) are we not looking at something like a centrally planned, albeit dysfunctionally, socialist system? Could we say with certainty that the ratio of public to private wealth transfer, for example, is higher in a self- described market economy?   

       Whatever the case may be, at least the misnomer communist economies had the decency to collapse when the desires of the people became misaligned with what it could promise. The US' one lasts in part because it hands the dough to a very effective, self-preserving class of global management elites with a very large private security force, a burocracy, and a custom policy fabrication facility we all happen to pay for.   

       Meanwhile, as the links indicate, the behavioral theories underpinning mythical market rationality are the exact opposite of the data. I mean, if the kinds of qualities expected of managers, engineers and creatives are not enhanced by pay past a surprisingly low threshold, it may be that only employees who's jobs require none of these qualities are the only ones who's performance is not harmed by higher pay. And infact, a cursory view of some of the foudational research in this field (much of it funded by banks) reveals this to be the case.   

       In other words, we need to be open to the possibility that janitors need to be paid more than the CEOs.   

       One more thing; who said a partnership has to be scaled up?   

       [maxwellbuchanan] I have a future-proof job as a trust fund kid or retiree who spends his spare time implementing workplace automations so that no one has to work in the future. Isn't that nice of me?
fishboner, Jun 03 2013
  

       [fishboner] the point of the partnership comment was that this model exists to a limited extent in small horizontal organizations, but cannot be scaled.   

       The fact that managers do not make optimal hiring or salary decisions and instead protect their own, or that the market is distorted by governments does not change this idea from a WIBNI. Nor does the distortion in any way disprove markets, the opposite -- the government is simply like a black hole distorting time and space, inflating it by blowing money into the system -- where it appears, gravity operates abnormally -- but it does not disprove other physics, quite the opposite -- it's a great illustration of physics. Market forces operate in every single Communist system -- they are the reason for the emergence of black markets, for instance. And the military industrial complex, or the banks, or any other easily aggregated amorphous squid is simply an illustration that if there's sufficient money in something, people will try really hard to get it.   

       Ultimately, decisions in any entity add up, and produce Darwinian results. Some fish evolve to take advantage of the Gulf Stream in their migrations, others evolve to swim upstream to spawn. The water, though, continues to flow downhill.
theircompetitor, Jun 03 2013
  

       I'm not saying markets are mythical forces. Of course market rationality is a force of nature on par with gravity and evolution. What I'm doubting (and the data bear this out) are markets as an efficient means of resource allocation consistent with continuity of technologically advanced civilization.   

       As a novel mechanism facilitating a partnership mode of firm structure, my model has merit, and if you cannot demonstrate otherwise, you are obliged to bun it.
fishboner, Jun 03 2013
  

       In other words everyone acts individually stupid and then pray to the aggregate result of their collective stupidity.
rcarty, Jun 03 2013
  

       //and if you cannot demonstrate otherwise, you are obliged to bun it//   

       No, we're really not. I could go through and Bun/Bone things at random if I felt like it. And even if your statement were true, the fact that you've gone from this entire company being make work to discussing market forces means that the lack of a single point invalidates your claim.   

       And no, market forces are not a perfect method for allocating wealth, but, under the appropriate contraints, they're better than most of the alternatives.   

       Jobs pay more for one of three reasons: Higher skill requirements, higher responsibility, or higher unpleasantness.   

       If the job requires a higher skill level, the higher pay is an incentive to acquire those skills. If it has higher responsibility, the higher pay is compensation for the additional stress (and, if done properly, which too many companies don't, a reward for successfully managing the responsibility). The higher unpleasantness pays more in order to provide incentive to do those jobs instead of the lower paying ones.   

       If everyone in a company was paid the same, in the absence of outside jobs, you might still get people to fill some of the positions in the highly skilled category, because a lot of us tend to be nerds and enjoy the work. The high responsibility/stress jobs, and the unpleasant jobs would be extremely difficult to fill.   

       In the presence of outside jobs, you would not be able to fill any position that normally paid higher than your set rate.
MechE, Jun 03 2013
  

       The data does not bear it out, [fishboner], not outside an academic's fevre dream, anyway. Sorry, no bun for you.
theircompetitor, Jun 03 2013
  

       Far be it for me to say this is a very dumb idea, but I think it's a very dumb idea.
MaxwellBuchanan, Jun 03 2013
  

       //In other words everyone acts individually stupid and then pray to the aggregate result of their collective stupidity.//   

       //Gamble possibly.//   

       I would say it's both. And of course it's not just prayer, but tribute and ritual sacrifice are offered. Take say the passage below:   

       //I could go through and Bun/Bone things at random if I felt like it.//   

       Momentarily finding self in the role of the deity, the devotee is obliged to be capricious, thus proving the need for the deity. The rest of the tract reveals that the the acts of the actual deity posess a benevolent wisdom:   

       //If the job requires a higher skill level, the higher pay is an incentive to acquire those skills. If it has higher responsibility, the higher pay is compensation for the additional stress//   

       In other words, the deities are not merely shaping the aspirations of man, but they are rewarding ritual suffering, tribute and sacrifice with rewards of good fortune.   

       And we find numerous useful statements of faith throughout the rest of the seven passages of the text.   

       The next text we will examine you will recognize as a defense of the faith.   

       //The data does not bear it out, not outside an academic's fevre dream, anyway//   

       Note the tell-tale "academic" label. This is a codeword to the rest of the congregation that it is from "those people". To see the truth, they need look no further than the reality of how the congregation functions around them, for there is no order except that which God has established.   

       The opening statement is equally interesting. It is a simple, ex cathedra statement. Note the economy of words undoubtedly meant to convey to the faithful that "yes, the academics talk and talk, but it is all noise." This devotee can blow away all unpleasant secular thoughts by simply inverting a fact.   

       [MB] takes the same approach, only slightly more deftly.
fishboner, Jun 04 2013
  

       //the academics talk and talk...//   

       You don't say? Look -- at some point -- you may want to consider the "it's not you, it's me" argument. The other one -- that we all just don't get what you're saying -- is likely a bit less likely. Or by all means carry on.
theircompetitor, Jun 04 2013
  

       Add into this hash the concept of the individuals' complete sanity, which is presumed in many theories yet rare in real markets, and it all starts to make sense, therefore proving I am insane.
AwarmRay, Jun 04 2013
  

       [theircompetitor] but there isn't much to get...
fishboner, Jun 05 2013
  

       Author, Artist, Artisan, Butler, Personal Assistant.   

       And yes, we may be able to automate all of the above, but that doesn't mean we will. Otherwise there would be no market for live theatre in the face of movies.   

       Employment only disappears if we manage to stumble our way into a post scarcity society, not a rationed one, and even then work doesn't, it just gets a lot more optional.
MechE, Jun 05 2013
  

       //Otherwise there would be no market for live theatre in the face of movies. //   

       I have given this issue much thought, and have come to this very example before. Of course, there are infinitely more employees and work hours in movie and television production than in theater. We might even consider live theater to me close enough to zero to just call it zero in terms of its relevance to the economy.   

       Love it or hate it, market rationality simply has no way to reconcile emerging ends of automation with a predominantly market approach to efficient resource allocation. We are reduced to faith that it will all just work out, because the idea that we could engineer resource allocation produces such a feeling of sudden defeatism in our usually gung-ho, result oriented, can-do scientific and academic sectors. Could it be that the information age changes the game of resource allocation engineering?
fishboner, Jun 05 2013
  

       Actually automation does work with market forces quite well, since at the same time it reduces available wages, it reduces the cost of goods. These two aren't perfectly in balance, but they are generally applicable. To own more than two sets of clothes prior to the industrial revolution, you had to be at least moderately well off, and most likely wealthy. Now, you can pick up a complete outfit for a day's wages (depending on where you shop).   

       As goods cost less and less, more and more people can make enough to buy them in what otherwise would have been marginal jobs.   

       What's really limits employment as a result of automation is not the cost of labor, but the cost of materials, and beyond that the cost of energy. Those are the factors that define the minimum possible cost of an item. If we reach a true post scarcity society (someone comes up with a truly cheap, resource free source of energy) then truly trivial amounts of labor would be required to earn enough to live.   

       If not, then all those out of work people will be able to get employment as guards/soldiers for the people who actually have resources.   

       Of course neither is going to happen in the short term. Yes, there is some significant disruption in the work force, and increasingly the jobs are going to go to the creative or innovative. Learn how to program a CNC mill rather than run a manual one. Learn how to diagnose plumbing problems rather than putting the plumbing into a standardized ship.   

       Your main problem appears to be that market forces don't actually care if a given individual starves.
MechE, Jun 05 2013
  

       //We might even consider live theater to me close enough to zero to just call it zero in terms of its relevance to the economy.//   

       I would also debate this argument. SAG has a total membership on the order of 180,000, Actor's Equity has a membership of about 50,000. I don't have the time or the detailed knowledge to go through all the relevant unions, and I don't argue that Movies and Television employ more people than live theatre, but not so many more that you can afford to ignore live theatre all together.
MechE, Jun 05 2013
  

       There are some ideas which are so wrong that the interesting game is not to prove them wrong, but rather to enjoy the meta-argument about the neatest way in which to encapsulate their wrongness.   

       St Anselm's Ontological Argument is one and Head Pay is another.   

       To this point, most of the observations have been about how this idea won't work at the level of practical economics - which, of course, it won't. However, the idea could also be attacked much earlier, in its premises - the first is a vacuous tautology and the third is untrue.   

       Should we, then, focus on the wrongness of the premises, or on the wrongness of the idea derived from them?   

       Alternatively, we could treat the whole thing as an interesting counter-factual; in an alternative universe, where the premises were true, could the idea be derived from them, or is the derivation process itself as broken as its start and end points?
pertinax, Jun 06 2013
  

       //To this point, most of the observations have been about how this idea won't work at the level of practical economics//   

       Of course, we could say this about any idea, and many do. What I am wondering is why we choose one dumb idea over another.   

       Head Pay may be no less a counterfactual than the proposition of our current mode of resource allocation would have been in the tenth century.   

       I will say that resource allocation is an effective metric for the normative assessment of an economic model or set of policies. If the proponents of one or another model aren't even concerned with resource allocation outcomes associated with their model in practice, that tells you something.   

       Again, all i have done is proposed a particular mechanism providing rationale for a partnership model. It really is not controversial. I see managers struggle with this all the time. They have no idea what to pay people, so they pay as little as they can get away with; essentially, letting the mass of desperate workers set the pay. This leads to a general inefficiency of resource allocation across the economy that ends up hurting even the managers themselves, as their rationale is replicated across the entire economy eventually dragging down aggregate consumption.   

       Keep in mind, the decision to pay as little as possible is merely one of several rationalities available to us, each with its own set of advantages, drawbacks, stupidity, magical thinking, etc. I have merely proposed one such rationality, and I believe it is novel but bun-worthy.
fishboner, Jun 06 2013
  
      
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