Erm, Polly?

On Labour\’s watch the top 10% consumed nearly a third of national earnings…

Isn\’t "generated" a better word here than "consumed"?

5 thoughts on “Erm, Polly?”

  1. Let’s just say then that, of those in the top income decile, those in the public sector “consumed” rather than “generated” earnings.

  2. How closely do you think the allocation of income across the economy corresponds to the contribution of individuals towards output generation? (i.e. how much do you believe that wage equals marginal product under perfect competition etc.)

    My guess, which I won’t attempt to substantiate here but which is based upon some scant knowledge of labour economics, is that the gap is sufficiently large of ‘receiving income’ to be a poor substitute for ‘generating output’

  3. I don’t know, Johnnybonk, I don’t know – but having dug a few holes in my time, with a spade and with a digger, I know I’m glad that someone invented the mechanical, hydraulic digger.

  4. Luis:

    Consider, as a gentle suggestion, that there might just be something inherently faulty with the very idea that there exists a separate enclave of “labour economics.”

    In a nutshell, Economics is the study of human action involved in using what is available (the entire complex in existence at this very instant
    of dissatisfactory reality) to bring about, by rearrangement, a more satisfactory reality in the future. In this never-ceasing process, the
    “what is available” comprehends all those entities regarded as “means” (land, labor, and capital in the classic but superfluous separation) and values them for their partial contribution to achievement of the “end” (a less-unsatisfactory futurity envisioned and the proximate impulse to action).

    Men seek to achieve these psychic improvements in a manner to which we apply the term “economic”: in the manner in which each improvement in satisfaction is attained at the least reduction in those means capable of rendering other present/future improvement.

    The entire process is one of constant exchange, to a great extent of buying and selling the specialized goods (both products and services) of others “in the market,” usually through the intermediary of money.

    As with all exchange, the prices at which such exchanges shall occur comes about through the interaction between the competing consumers (their “bidding” for what they wish to acquire).
    The net result is that everyone in the market gets what they want at a price not greater than they are willing to pay, thus achieving the original goal of satisfying the most urgent wants without wasting of the means to satisfy the most urgent of the as-yet unsatisfied ones (both of the present and as much of the future as may be comprehended).

    The important “takeaway” is the realization that it is always the consumer and his action who determines the prices paid. Where there are products whose existence is the combination of many of the means (again, land, labor, capital) and, where labor is concerned, that of many performance types (usually involving employment), again, consumers are the ultimate determiners of each of the prices (including that of various employee types). The business owner is (and this is truer the freer the market)
    virtually an employee of the consumers to whom his products are addressed; his success (and its magnitude) are entirely dependent on the degree to which he discharges his mandate.

    The only situations in which the consumers are not entirely “in charge” of the entrepreneur and his fortunes are 1.) instances of monopoly; and,
    2.) in markets characterized by authoritarian interference with exchange (over and above the
    purely defensive provision of protection of the society and its members from incidents of predation through force or fraud).

    There are no “standards” or considerations of “justice” in the allocations to differing necessary contributions, Luis. Consumers are indifferent, qua consumers, to hardships endured by others; the hardships themselves are the consumers’ “message” to the sufferers that they should be changing something: their occupation, their employment situation, even their region of residence.

    You seem (from your comments today and previously) to have studied something fairly intensively and carefully—just not Economics.

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