: What matter most to a firm, is staying *ahead* of the competition. To fall behind may mean death. Finding a safe niche away from competition is good in teh short-term, but when demand disappears from under you, then you need to try and grow to survive, diversify and expand, etc.
The people who benefit from all this is the consumers, getting better and better utility giving items for less and less of their net salary. Flights, electronics, communications etc are all better and cheaper (as % of household spending) than they ever were. This means that the rest of the inome is beng spent elsewhere which supplies for workers salaries elsewhere. Siemens people lose their jobs that month, 1000s are soaked up quietly all over the country in other jobs. People see siemens and say "ooh thats terrible" they dont see the other jobs and say "ooh thats groovy" because it isnt so focussed at one point. We had a discussion about Rover once, yes its terrible for the specific people and the Longbridge community, no it isnt a net loss.
Current unemployment rates in the UK are holding at 4.5%, lowest for many years, it been hanging between 4 and 4.5% in the USA and hourly earning rates are increasing by an average of arounf 0.2, 0.3% a month. I am sure that there are towns where unemployment is at 25%.
: Size of returns does, and ever greater returns are needed to stay ahead of the rivals, and keep paying the shareholders lots.
Greater returns relative to competitors is an advantage, doesnt mean you have to grow. Dividing up the profist among shareholders is a function of profit over the number of shares, doesnt have to be big.
: when it happens in a free market, the firm contracts, jobs are lost, and chaos temporarilly ensues, overproduction does not last long. It can't, its desperately unprofitable.
Good job it *never* happens to all firms at once, and good job of the hundreds of sectors in industry only a few are suffering at any one time, and more a growing - hence the consistency of global growth in economically exchanged value.
Also look at the manufacturing cycle, its self steadying; http://www.dismal.com/thoughts/new_econ.stm
: But their 'niche' depends very much on kleeping their price competetive. A small hike in prices can see people shifting to anotehr brand because it likes their pocket more.
They do have to keep competitive but what it allows is not small slices of a cake, but the growth of the whole, say, perfume cake by growing slices in and of themselves (ie not by beating others to the static demand, but by stimulating it)
: Yes, the usual trick is to lay off, and increase the work load of the remainder, without increasing wages.
The workload being increased with tools rather than whips, although I am sure some stupid companies try the latter and are repaid with very high staff turnover and lower profits. the laid off workers becoming part of that 4.5% consistent rate?
: However the interpretation that this is a crisis and that production is too high is looking it the wrong way round, instead of supressing successful production its better to match it with exchangable value.
: But thats pricely our point, that eventually production exceeds the capacity to conume (because private Capitalists cream off much of the income from production). It is Capital that stops production, in order to re-assert scarcity, our aim is not to do that, but to free that potential for abundance creation.
that capital 'creamed off' doesnt sit in the corner, its invested again in new production which supplies the exchange value required for the relative equilibrium. If a super capitalist liquidised his $40billion and burned it all or whatever then I am sure the world would temporarily have to downsize to adjust, if he just bunged it into a great big PEP then all that happens is it goes toward new production for more exchanging. Only while the capitalist is 'sitting' on his liquified money is it 'creamed off' from the rest of the market.
: We don't want to stop it, we think that it is capitalism itself that provides an artifical limit, that means that we can't supply everyone's needs, remove this limit, and we can. the limit being teh private gain of a few.
Ive described above the only way a capitalist can stop the engine (by destroying capital, or the next worst thing, making lousy investments). If your truck is with a small group of individuals being able to foul up and destroy capital then Im listening, if its with the existence of capital then it doesnt make sense.
: It should be that workers instead of impoverishing themselves by working hard, can actually have time off, luxury, relaxation as a reward for hard work. By handing control of production voer to teh consumers, it means that the inherent crisis and artifical scarcity would end.
A modern worker in the west has about 4 weeks hols a year of which, say, two can be spent sunning in Italy. It may not seem great but taken against the context of human life in the past it seems positively decadent compared to a fellow of the 18th century, and even more of the 13th century ete etc. You do keep saying these things are relative. The only thing consumers dont control is whats on the menu, that has be 'guessed' at by producers, and they guess quite well.
: But the Pie then has more room for expansion. We feel teh same way about war. Waste of resources. Desctruction of wealth and slaughter of humans.
The pie only expands over what was previously in existance, without war (Im glad we feel the same way) the expansion could have continued, as explained above, in excess of previous ceilings. War is indeed the enemy of free trade.
: I can, because 20 million people in Europe (2 million in britain) are permenantly unemployed, sometimes up to three generations in a familly without a Job. Its soul destroying.
I make it around 1.5 million (quick calc on UK work age population and 4.5% rate) but the point is the same, its a helluva lot of people and its soul destroying. Are there any really good (ie unbiased) studies of who is unemployed and why (including analysis of the voluntary unemployment of supported spouses etc) ? Perhaps I shall go on a net hunt.
: How is more value added, machines just transfer value already stored in them into the product, and less value is added by labour- hence why mechanisation lowers the cost of products.
More value in exchange, more utility in use. Not all prods, not 'none' either, ie there is no universal rule here.
: Yes, good for consumers, but unfortunately consumers don't matter in this model, its bad for producers, who go out of business and lay off workers. Thats the big problem.
Except that the same consumer spends his other 3 weeks on otehr goodies, more demand elsewhere.
: And that 'scrap heap' is used to force wages down overall.
It has to be job specific, a large amount of ex-mechanics dont directly reduce wages for PC programmers (they do indirectly by having less demand and creating less exchangebale value whilst unemployed - which most dont remain for long but some, as you say, do)
: And now, there are many who are utterly beyond employement. Instead of reaping the rewards of our industry, we are being made to suffer it, tech is *perceived* as a threat (Marx covers this in Capital).
For those people now unable to trade their now obsolete labor skill it was a threat, for those who adapt (I like personal life change stories), which is most, it was a factor in change. I have never suggested that those people who are left behind dont exist or that their suffering is invalid.
: Unfortunately in the past, that has included employers paying racial minorities, and women much less, because they were more desperate, and willing to work for less. A union would turn round a say 'you may not need a familly wage, don't you want higher wages?'. Wages have fallen through the floor...
Wages are for labor, they are not for your family and other responsibility, that leaves such at a disadvantage comapred to the one who works for less - but that is no reason to exclude that one. They havent (avg), even in real terms, even net of deductions (at least not in US), see the hourly rate increases. Moreover flling prices allow them to get more for each $.
: And themself, by solidarity we all gain, scabs hurt everyone.
There is no gain for the unemployed fellow who wont work through a strikers picket, there is no gain during the strike or afterwords when the strikers go back to work having thorouhly excluded him, and now costing more th the company than before, exclude him in the future too. Many hard working people suffer when made to sacrifice themselves on the altar of solidarity with people whose interest does not include him.
: But where there are desperate people who will work for peanuts, we cannot organise such a strike.
Refer to the first message of strikes.
: I didn't say they did, i offered escape routes- all of which you recounted in one form or another, and all of which pass the harm onto the working class.
I am showing that it does not, that the only ones to suffer are the minority who get isolated from the labor market by being unable to adapt to change, the solution to this is stasis, arrested development.
: You didn't proove the latter,
Scientifically we might find the limit somewhere related to the sum of e=mc2 in the universe.
: and its quite clear that machines *have* destroyed jobs,
Some jobs, not all jobs - not even a net loss as proportion.
: responses show is the actual tactics that firms use to avoid death by overproduction,
And develop new wealth for increased exchanges, globally.
: I don't feel that anywhere you have demonstrably shown my model to be flawed (you have to reember, it must always be looked at from the producers perspective, you shift perspective to different groups, etc.).
I believe that I have, in showing that the expected outcomes of ever increasing unemployed and industrial collapse, wasted inactive capital are not occuring, the opposite is.