Nah
read you and understood you perfectly well. Only thing is although I agree with
many of your concerns, I don't agree with your proposed remedies.
First
thing is, I view equal opportunity and income parity as two different things.
Interconnected yes but not one and the same. So, I prefer to talk about them
separately.
When
you were talking about disparity in income, I think you were talking more about
wage slavery. I agree that wage slavery exists in many parts of the world.
Apart from the underdeveloped and developing countries it might even exist in
some jobs of a developed country. I also agree that wage slavery is wrong and
such practices should be eliminated. What I am not agreeing with is your
solution or the method by which you want to eradicate such malpractices.
If
what you're saying is correct and the rich are getting richer by robbing the
poor, then what you're suggesting is rob the rich to pay the poor. But my
concern is that there will be people who are earning comparatively higher than
the others but actually achieved it through their own merit and ability. In
fact most are doing it on their own merit and ability. Why should we penalise
them?
The
path that you're suggesting, with government control in everything and equal pay
for everyone, is communism. We have already tried that and it has failed. As
Gauri had pointed out earlier, it robs people of the desire to excel because
they know that they won't be rewarded for their extra effort. It's the general
law of nature that someone will emerge as the leader, some as followers and
some will simply remain where they were. If in capitalism we end up with rich,
middle class and poor; in socialism/ communism we will end up with the
powerful, followers of powerful and the powerless. It's bound to happen. We
can't force that to change, neither will it be right to force everyone to be
even. Only thing we can control is how one acquires their wealth or power, i.e.
we can see to it that they go only by fair means.
Talking
about communism and how it can be discouraging for some people – if someone
comes up with a brilliant idea and because of that we are able to create
considerable wealth, he'll expect to be rewarded for that. If we say 'Thanks to
your idea, our state coffers are now richer by a billion but hey we will reward
each worker including you with hundred bucks', I don't think he will feel very
happy about it. And next time he has a good idea he won't even bother to come
forward to share it. What we're effectively doing is asking the intelligent to
dumb down or atleast not expect any rewards for their intelligence, while we're
assuring the dumb that they'll be rewarded for the efforts of the intelligent.
The mediocre will remain where they are. However, the nation as a whole when
compared to other nations will slowly decline as personal initiatives and idea
generation dry up due to lack of personal motivation. You might say that it is
selfish to seek personal rewards but that's how people work and we simply can't
ignore reality.
According
to me communism, socialism, capitalism none of them work when implemented as a
standalone economic policy. These economic models are for the ideal scenarios.
But in real life, the market is far from perfect. There'll be businessmen
who'll try to take undue advantage of others. There'll be workers who will
demand more than they deserve. There'll be overachievers but there'll be a lot
of underachievers as well. Free trade is necessary but so are controls to
ensure free trade remains fair as well. So, I will agree with RTH on this one.
In reality it's better to have a mix of both capitalism and socialism (maybe
communism also but I don't favour that) and as RTH had said, most countries
currently follow a mix of both.
Capitalism
alone can give rise to powerful syndicate and politician nexus who'll try to
control the entire market and eventually the country. On the other hand
socialism alone will give rise to complacency. A country can't run on welfare
programs and will eventually go bankrupt. In complete capitalism, an individual
might end up with disproportionately large amount of wealth, much of which may
not enter the economic cycle and thus will never benefit others. In complete
socialism, surplus ends up with the state and thus will not completely benefit
those who actually worked for it.
To
keep people motivated and to encourage trade we need capitalism but to ensure
fairness and to see that a section of the population doesn't get deprived
altogether we need government intervention as well in the form of socialism.
Next,
if we talk about profit sharing. The objection I had with your suggestion of
profit sharing is, if a company is supposed to give away it's profits to it's
employees then in that case employees should also be asked to shoulder the
burden of losses. It's only fair, but you never mentioned it. So I asked you,
shouldn't we ask the employees whether they are ready to accept that
responsibility or not? If I say to a simple assembly line worker that he will
get paid only if we are able to sell the goods that he is helping us in
manufacturing, will he accept? For him he has already put in his effort.
Selling the goods is someone else's responsibility and if the salesman fails I
don't see any reason why the assembly line worker should take blame, unless the
salesman failed to sell because of some negative quality of the product that
was due to the assembly line worker's fault during production. Point is, if
he's not ready to be penalised for other's failure, then he shouldn't expect to
be rewarded for other's success either.
Moreover,
there can be another possible scenario. Employee A might work hard in a company
during a period when it was going through financial hardship and so will not
get much money during that period because of less or no profit. Employee A
helps the company to recover but then moves to another company. Employee B
comes in A's place. Now, B will enjoy the benefit of a profitable company that
actually is A's credit. Employee A never got the reward for his own efforts.
Anyways,
I'll say that you lost sight of the primary aim when you were talking about
profit sharing. The aim is not to share profits; it's only a means that you
were suggesting. Aim is to pay everyone their fair share of wages. Instead of
vehemently defending profit sharing, we can also look at other alternatives.
For example, we place a check where we say that the labour and human resource
cost (you can even break it up by levels to ensure that whole of it is not
given to the top level) should make up atleast a certain percentage of the
final selling price of the product or service. We can ensure healthy wages for
everyone in this manner and we will also be able to reward those who will put
in more effort as this structure will give us more flexibility. Additionally
the profit of the owner will be under control but at the same time he won't
feel deprived if he does do a good job of managing the company and thus
generate high revenue.
It's
just another suggestion though and there can be other ways which might be even
better.
Once
again, coming back to Nike example and sweatshops. Any business will try to put
in place policies that will make it harder for it's competitor's to survive.
There is nothing wrong with it either as long as they adhere to certain ethics
and fair play. But there will always be people who'll try to break those ethics
and fair play rules and it should be upto us that they're not able to do so.
Maybe
you're thinking that I don't give a damn about those people. In a way you are
correct. I will never accurately know and I can never fully appreciate their
situation. But I do know this, that a nation which wants to move ahead should
take care of it's people; and a nation which truly cares for it's people will
do everything to ensure that they don't have to work in sweatshops.
Again
it's not your concern for such people that I was against, it was your remedy
that I am opposed to. You think closing Nike sweatshops will solve the problem.
I think it won't. If not Nike, then Reebok. If not Reebok, then someone else.
As long as the condition persists there'll be someone or the other to take
advantage of that situation. And the present condition in third world countries
is such that, even if you prohibit all companies from availing the services of
sweatshops, the workers will themselves plead to the companies to employ them
even if it's for $2 per day. Instead of asking industries to go away, if the govt.
does opposite, i.e. encourage more industries, especially local industries, to
come in; then the companies will by default have to raise their wages to
attract workers. But if 20% or 30% of your population is unemployed, then the
rest will simply feel grateful to have a steady source of income.
This
is the reason I was saying that it's ultimately the people, who want the
change, who also have to become more responsible. We vote to power incompetent
politicians, we go with the flow when it comes to over hyped celebrities, we
are the one who willingly pay more money just to flaunt a brand. Then if an
incompetent politician fails to create employments for the masses, if the
celebrity becomes millionaire and if the brand starts fleecing us, can we
really blame them alone. Ain't we equally responsible? No one will say that a
thief is a good person, but if we leave our house open and vulnerable we are
equally at fault.
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