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Value, worth and poverty: 3 points to ponder
Posted by: McQ on Sunday, December 31, 2006

Three excellent points to ponder all from Thomas Sowell:
One of the hardest things for anyone to be informed about is the value of someone else's productivity. Yet there are cries from all directions that some people are being paid "too much" and others "too little."

Who can possibly be better informed about the value of what someone else produces than those who use the goods or services that the person provides and pay for it with their own money?

Things are worth it or not worth it to particular individuals. What these things might be worth to somebody else is irrelevant.
And that applies from CEO pay to minimum wage.

More on value and worth:
One of the questions often asked by those obsessed with income "gaps" and "disparities" is: "Is anyone really worth the millions of dollars a year that some people receive as personal income?"

Such a question presupposes that there is such a thing as "real" worth. That assumption goes back to the Middle Ages, when people thought that there was a "fair and just price" for things.

But if there were an objective value — whether of goods or of labor — then economic transactions would make no sense.

[...]

It is the same story when Derek Jeter gets paid millions of dollars to play shortstop for the Yankees. He gains by exchanging his time and skills for the money that George Steinbrenner pays him. But Steinbrenner also gains by paying Jeter to play shortstop — which helps bring in more money in gate receipts, the sale of television rights, and other sources of revenue.

As for the rest of us, it is none of our business what Steinbrenner pays Jeter. It's their deal. If we don't understand it, there is no reason why our ignorance should influence what happens.
Tell that to those who would dictate what each person’s labor is worth. As I’ve always said, when asked my opinion about the salaries of some sports figures, “if someone is willing to pay that price, then he’s worth it ... and more power to him.”

And finally, poverty:
Even such historically poverty-stricken countries as India and China, repeatedly struck by massive famines, have within the past two decades adopted changed economic policies that have raised vast numbers of people out of desperate poverty.

An estimated 20 million people in India rose out of destitution in just one decade and more than a million Chinese per month have risen out of poverty. But have you heard any progressive intellectuals explaining how such a dramatic change for the better came about?
I haven’t heard any progressive intellectuals note those facts, much less try to explain them, have you? As I noted below, the way out of poverty is through a growing economy and India and recently China have proven that very point in spades (just as Taiwan, South Korea and Japan proved in a few decades ago). Rest assured that in neither case have such massive changes in individual economic status been the result of government “poverty programs”.
 
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Who can possibly be better informed about the value of what someone else produces than those who use the goods or services that the person provides and pay for it with their own money?
This is a point I was making in the minimum wage thread: it’s easy to say the minimum wage should be raised if the money isn’t coming out of your pocket. But if you actually ran a company, you would see what these jobs add to your bottom line, and what they really are worth to you. Once you start paying staff out of your own pocket, it becomes a very different matter.
 
Written By: steverino
URL: http://steverino.journalspace.com/
"An estimated 20 million people in India rose out of destitution in just one decade and more than a million Chinese per month have risen out of poverty. But have you heard any progressive intellectuals explaining how such a dramatic change for the better came about?"

Perhaps if the Chinese government called it "The Great Leap Forward" there would be more enthusiasm in progressive circles, at least those nostalgic for the good old days.

 
Written By: timactual
URL: http://
I keep wishing that the philosophy of the Golden Mean could be reintroduced in discussions. You know’ for every yin there is a yang, etc.

Re China: It is admirable that so many people were lifted out of poverty, but some paid a heavy personal price for the achievement. There were designated losers. Many farmers were forcibly evacuated from their lands, to make room for develpment, and relocated in warren-like city buildings, with no means of self-support. The stripping of liberty from these people, as well as the high number of incidents of civil unrest, do not figure in the glowing reports of China’s rising.


I’m sure China’s reforms are paying off, in the large picture. But I think it is a bad, bad mistake not to also address the costs of draconian changes, in China or anywhere.

We never talk of the principles of a balanced approach and harmony any more. We are the losers in this phenomenon, because it dooms us to swing from one extreme to the other.
 
Written By: Laime
URL: http://
We never talk of the principles of a balanced approach and harmony any more. We are the losers in this phenomenon, because it dooms us to swing from one extreme to the other.

Written By: Laime
URL: http://
Well I think China remains a socialist state, and our own country has plenty of social welfare programs, so we ARE taking a balanced approach. My guess is that you will remain unhappy if you believe that someone, somewhere in the world is making a profit.
 
Written By: kyle N
URL: http://impudent.blognation.us/blog
I completely agree. I was at a dinner where someone remarked on how horrible it was that the editor of the Yale Review made less than a garbageperson. Everyone but me agreed. I simply pointed out that I would rather be the editor for less and obviously the editor felt the same way or he would be out hauling garbage. Fortunately, college professors (the made up the bulk of the dinner) do not determine world salaries.
 
Written By: China Law Blog
URL: http://www.chinalawblog.com
" garbageperson."

Is that some kind of racial or ethnic slur? Joe? Where are you?
 
Written By: timactual
URL: http://
Laime, Have you been to China recently?

Living standards are shooting up across the boards, ESPECIALLY in the ares with the most capitalism.

Rural folk had the EARLIEST opportunity under the Deng reforms, so let’s not cry too much for them.
 
Written By: Harun
URL: http://
Many farmers were forcibly evacuated from their lands, to make room for develpment, and relocated in warren-like city buildings, with no means of self-support.
Paraphrase to capitalism - Many buggy whip manufacturers were run out of business by the automobile and relocated to warren-like tenaments with no means of self-support (until they let go of whip making and got jobs in the automobile plant).

It sucks if you’re on the losing end, yes, but it’s called progress.

You can be nostaligic about your way of life, or job, and go on with no means of self-support, or you can move on with the changing world. One way or another it’s not going to stop moving forward.

What you’re complaining about Laime is progress, all through history.
People who made good, and people who lost out, because change happened.
 
Written By: looker
URL: http://
I haven’t heard any progressive intellectuals note those facts

If you only watch Fox and listen to Rush, you wouldn’t.
 
Written By: Boleslaw
URL: http://
"Many farmers were forcibly evacuated from their lands, to make room for develpment, and relocated in warren-like city buildings, with no means of self-support."

Eminent domain and urban renewal. Hey, if it’s good enough for our proles, it’s good enough for theirs.
 
Written By: timactual
URL: http://

 
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