Profit simply means that income is greater than outgo in the books. It has nothing to do with Political Economy.
I agree with Harry on this one. REH From: [email protected] [mailto:[email protected]] On Behalf Of Harry Pollard Sent: Friday, October 08, 2010 11:58 PM To: 'Keith Hudson'; 'RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION' Subject: Re: [Futurework] Not a very positive picture Keith, Profit simply means that income is greater than outgo in the books. It has nothing to do with Political Economy. The boss might just add the "profit" to his wages whereupon the firm will be profitless but the boss will do all right. Or, he might put into contingency until January 1st because income taxes are being reduced next year, or . . . . ? It's accountancy, not economics. Modern economics hasn't a clue about how to deal with poverty, or unemployment, or Great Recessions, but it can come up with several "profits". They hardly advance the discipline, but do help to fill the semester. Your extra Factors of Production are unnecessary. Innovation is part of Labor - what else? Why not add invention, skills, knowledge, to the bundle. Will innovation happen without Labor? As I said, if you start entering the psyche of Labor, it will become a different science. What is the return to innovation? I suppose it is increased production. What is that increased production - wages? But, wages are the return for the exertion of Labor. As innovation is carried out by Labor, that's all right. However, if you separate innovation, you had better have another return for it. By all means complicate things. "Energy" is produced by and is part of capital. How else? What is the return to energy? Further, you have thrown out Labor. The man who produces the car, the aircraft, the kitchen table, the toilet roll, is left out of your foursome. That's a shame. An enormous amount of good thinking has gone into the 7 basic terms of Classical Political Economy. The basic four - Land, Labor, Capital, and Wealth, cover everything in the universe - even God! In other words the complexity has been reduced to bite-sized chunks that enable analysis to begin. The seven terms (including Rent, Wages, and Interest) are the bedrock on which the entire science is based. A major reason why modern economics is such a mess, even though some of our brightest people are involved in it, is that the basic terms were corrupted by politicians and ideologues. Their bedrock turns out to be sand and as they can't go back to change their beginnings they become ineffectual. Harry ******************************** Henry George School of Los Angeles Box 655 Tujunga CA 9104 818 352-4141 ******************************** From: [email protected] [mailto:[email protected]] On Behalf Of Keith Hudson Sent: Wednesday, October 06, 2010 10:39 PM To: RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION Cc: Harry Pollard Subject: Re: [Futurework] Not a very positive picture At 13:24 06/10/2010 -0700, Harry wrote: Ray, While it may be Rent or Interest, a profit is usually Wages. Management does a good job and is rewarded. They don't and they get nothing. Of course the situation is complicated by modern accounting which pays more attention to tax finagles than reality (or maybe it is reality), and by neo-Classical economics which has come up with several kinds of profit. There are only two sources of profit and these lie on the production side of economics. You either make an existing thing more efficiently than previously (that is, using land, energy or capital more efficiently by innovation), or you invent a new product for which a demand appears.This is why your troika (Land, Labour, Capital) is inadequate, but the four-factor one (Land, Energy, Capital, Innovation) isn't. Labour lies on the consumption side of economics. This is where Marx went completely wrong in seeing profits as being squeezed from the wages of workers on the production side of things. Unless you have feudal-labour, or slave-labour, or conscripted-labour or child-labour (all perversions of our previous 150,000 year-old human tradition of hunter-gathering), then services involve the voluntary exchange of things between one person and another (or the community or the state), or the use of things by one (expert) person for the well-being of another. They all balance up sooner or later -- person-to-person directly, or person-to-person via another agency. Money is involved in the consumption side of things to keep individual tabs within the total complexity of exchanges going on. (To advert to another comment of yours [below] it is the printing of excess money by one government after another [24 devaluations last week] which causes economies to go haywire -- at the present time pretty well the whole world economy.) Keith Communism does poorly. There may not be profits, but I am reminded of when the Ukraine became independent, they were left with a dacha that had belonged to a high party official. The Ukraine wanted to get rid of it because the maintenance cost was $800,000 a year. The Fat Cats are rewarded in any system. Haven't a clue what you mean by the need for regulations to keep the flow if information. One notes that is the controlled economies that restrict information. Maybe oursystem doesn't work, but neither do other systems including whatever system you advocate. One problem with comparisons is that often the ideal is compared with reality. Thus, the ideal First Nation is compared with the reality of the present. Ideals should be compared with ideals. Reality with reality. Harry From: [email protected] [mailto:[email protected]] On Behalf Of Ray Harrell Sent: Thursday, September 30, 2010 12:18 PM To: 'RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION' Subject: Re: [Futurework] Not a very positive picture The problem is a system that must generate progress through surplus (profit). That redefines sustainability and stability into stagnation and creates a situation that is at best chaotic with lots of Private Enterprise viruses eating at the root of the tree of prosperity. Their only comparison is to the failure of communismwhich was really a Kingsystem with an elite advisory legislature. Their inadequate version of our counsel system. Either way they are both western products in a culture that admires aristocracy more than anything. Its your system Ed. Thats what those first Nations folks have had to deal with all of their lives. But it doesnt really work without the church beating them over the head for being evil. Untrammeled they are just dog eat dog and inefficient. Take for example, two things on the web. Dictionary. Com and Babelfish. They used to be open use and had great reference. Good etymological sources and reasonable translations for some languages. But there was no profit in that and everyone jumped on the copyright wagon and now we have an inferior free product and if you buy Babylon or any of the other for profit products they gum up your system because they operate like an invading army. They are also inferior translations. I put a German or Italian art song text in and they cant translate it. Im still driven back to my library and the hard copy. For a brief moment there was a promise by capitalism has closed the door and information, just like what happened with the telephone system, is fragmented and disconnected. The rule for you white folks is the opposed of We are all connected. Its we are all disconnected in order to make a profit. Because there are no regulations to keep the flow of information open, the creative small sector slowly succumbs to the big for profit sector and what we get are private governments of wealthy stockholders unchecked by anyone. Even the Supreme Court has sold out. So its the system Ed. Your system doesnt work Ed, Arthur, Chris, Harry, Spencer, Tom, etc., etc, etc. Your system doesnt work. You need to think harder and write. Or is the fact that Futurework has been quiet on my computer mean Ive been banned or removed from the list? REH From: [email protected] [mailto:[email protected]] On Behalf Of Ed Weick Sent: Thursday, September 30, 2010 2:57 PM To: RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION Subject: Re: [Futurework] Not a very positive picture Partly because some recent US Presidents had a strange faith in supply side and trickle down economics, very rich Americans have become much richer and poor Americans have become much poorer, while the middle class has declined. Presidents Reagan and G.W. Bush believed that giving large tax cuts to the very rich and to business would "trickle down" into investment that would boost the economy and employment. It simply didn't happen that way. The rich liked the extra money that the tax cuts gave them and hung onto it. It's difficult to assess where Obama is with regard to all of this. I believe he intends to put an end to Bush's tax cuts for the rich before long and make other adjustments to taxes and tax credits, but he's not in a very strong position to do anything right now. Ed ----- Original Message ----- From: Ray Harrell <mailto:[email protected]> To: 'RE-DESIGNING <mailto:[email protected]> WORK, INCOME DISTRIBUTION,EDUCATION' Sent: Thursday, September 30, 2010 12:25 PM Subject: Re: [Futurework] Not a very positive picture Of more interest to me is the frozen capital at the top and we refuse to tax them to free some of it for work in the economy. REH From: [email protected] [mailto:[email protected]] On Behalf Of Ed Weick Sent: Thursday, September 30, 2010 10:07 AM To: [email protected] Cc: [email protected] Subject: [Futurework] Not a very positive picture >From yesterday's Washington Post. Ed _____ As 44 million Americans live in poverty, a crisis grows By Katrina <http://projects.washingtonpost.com/staff/articles/katrina+vanden+heuvel/> vanden Heuvel Tuesday, September 28, 2010 It's clear that the Great Recession battered those on the bottom most heavily, adding 6 million people to the ranks of the officially poor, defined as just $22,000 in annual income for a family of four. Forty-four million Americans -- one in seven citizens -- are now living <http://www.washingtonpost.com/wp-dyn/content/article/2010/09/16/AR201009160 2698.html> below the poverty line, more than at any time since the Census Bureau began tracking poverty 51 years ago. Shamefully, that figure includes one in five children, more <http://www.huffingtonpost.com/angela-glover-blackwell/poverty-in-black-whit e-an_b_721124.html> than one in four African Americans or Latinos, and over 51 percent of female-headed families with children under 6. These numbers are bad enough. But dig deeper -- as Georgetown University law professor Peter Edelman has been doing for nearly 50 years in his battle against poverty -- and the story told by these figures is even more staggering. Edelman points out that 19 million people are now living in "extreme poverty," which is under 50 percent of the poverty line, or $11,000 for a family of four. "That means over 43 percent of the poor are extremely poor," said Edelman, who served as an aide to Sen. Robert Kennedy (D-N.Y.) and in the Clinton administration before resigning in protest over welfare reform that shredded the safety net. "That's over 6 percent of the population, and that figure has just been climbing up and up." Edelman says that the number of people living at less than two times the poverty line ($44,000 for a family of four) is equally significant. "Data shows that's really the line between whether or not you can pay your bills," said Edelman. "That has reached 100,411,000 people. That's 33 percent of the country. That's the totality of the problem -- whether you call it poverty or not." For too long we have accepted the narrative -- promoted by well-funded conservative think tanks -- that claims people who are struggling are to blame for their troubles, and at the same time we don't have effective anti-poverty policies. So tackling the problem is seen as wasteful. "So many people think it's their own fault," said Edelman. "They don't see the structural problem in our economy." But with so many in poverty, that narrative has become harder to sustain during the Great Recession, and so renewed work is being done to take on poverty and its structural underpinnings. [If you want to read more, go to: http://www.washingtonpost.com/wp-dyn/content/article/2010/09/28/AR2010092802 356.html?wpisrc=nl_opinions _____ _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework Keith Hudson, Saltford, England
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