Company wages and what it means

[Castanza]

The thing I find most offensive about socialism is the term "workers" as if a human being with unique skills, thoughts, abilities, creativity and potential is just some kind of widget that can be grouped together and referred to en masse, because one is just as good as any other.

 

I agree, life is not a SIMS game and everything doesn’t boil down to efficiency. Life is inefficient and humans are particularly inefficient. There is no magic input/output control mechanism that will magically create a utopia where everyone has their needs met and is happy. Why? Because we are human. Socialism reduces individuals to numbers (drones basically) and ignores everything that makes people human. Yes, the end goal of socialism tries to address “humanity” but you can’t have humanity without the good and bad aspects of being human.

 

https://www.tsowell.com/spquestc.html

 

 

[RichardGibbons]

Socialism reduces individuals to numbers (drones basically) and ignores everything that makes people human. Yes, the end goal of socialism tries to address “humanity” but you can’t have humanity without the good and bad aspects of being human.

 

Socialism doesn't reduce individuals to numbers unless taken to an extreme like communism. And generally I agree that reducing individuals to numbers is a very bad thing.

 

The appropriateness of socialism depends on the problem you're trying to solve. For justice and national defence, it seems clear that socialism is the way to go. Socialism--or socialism + capitalism--clearly works better for things like healthcare and basic research.  And capitalism--or capitalism with only a touch of socialism--clearly works better for things like food and widget production and distribution.

 

Also, capitalism breaks when one can make money by killing other people. That's why there's value in actually looking at the problem and different solutions rather than assuming that because your hammer is great at pounding in a nail, it will be equally good at cutting a board into two equal-sized pieces.

[Castanza]

Socialism reduces individuals to numbers (drones basically) and ignores everything that makes people human. Yes, the end goal of socialism tries to address “humanity” but you can’t have humanity without the good and bad aspects of being human.

 

Socialism doesn't reduce individuals to numbers unless taken to an extreme like communism. And generally I agree that reducing individuals to numbers is a very bad thing.

 

The appropriateness of socialism depends on the problem you're trying to solve. For justice and national defence, it seems clear that socialism is the way to go. Socialism--or socialism + capitalism--clearly works better for things like healthcare and basic research.  And capitalism--or capitalism with only a touch of socialism--clearly works better for things like food and widget production and distribution.

 

Also, capitalism breaks when one can make money by killing other people. That's why there's value in actually looking at the problem and different solutions rather than assuming that because your hammer is great at pounding in a nail, it will be equally good at cutting a board into two equal-sized pieces.

 

I think that if you are going to say things “work” then you also need to define them in terms of time. Socialized medicine may work in the short term, but it isn’t guaranteed to work in the long term. I’m not saying I’m for or against it, just as an example. Hell even Hayek was in favor of a universal healthcare plan (if it could be afforded without burden). Entitlements tends to not go away. Hence my apprehension to them.

 

Modern politics is defined by “catching falling knives” and “doubling down”. It’s not often that societies take a step back and move against the grain or natural tendencies.

[scorpioncapital]

"socialism + capitalism--clearly works better for things like healthcare" - disagree 100%.

In the end, the issue is that there are lots of people with money. Not necessarily alot of money, like the billionaires using offshore trusts or protected by countries that don't tax them much, but just average run of the mill people middle class. That segment has enough money to want to pay for more than 'basic service'. Sure have the basic service. But I know socialist -capitalist countries that ideologically do not want any providers that offer service+. That would be 'unfair' to waiting in line and one year wait times. In these countries you often have to go to the USA or Europe that have an actual hybrid private -public system and don't take ideological stance about it. Large private hospitals and they even treat in public hospitals private customers.

[Cigarbutt]

"socialism + capitalism--clearly works better for things like healthcare" - disagree 100%.

In the end, the issue is that there are lots of people with money. Not necessarily alot of money, like the billionaires using offshore trusts or protected by countries that don't tax them much, but just average run of the mill people middle class. That segment has enough money to want to pay for more than 'basic service'. Sure have the basic service. But I know socialist -capitalist countries that ideologically do not want any providers that offer service+. That would be 'unfair' to waiting in line and one year wait times. In these countries you often have to go to the USA or Europe that have an actual hybrid private -public system and don't take ideological stance about it. Large private hospitals and they even treat in public hospitals private customers.

This is, by definition, work in progress and blanket 'solutions' cannot be applied across the board but i've come to believe that hybrid public-private healthcare solutions are the way to go. There are significant disadvantages related to public coverage but the coverage at least provides some kind of mitigating effect against the somewhat clear association that exists between low incomes and poor health outcomes. i've often wondered about the outcome related to the "more than 'basic service' option" available, to different degrees, in various areas. Overall, at the individual level, the more-than-basic option can, at times, offer positive value but IMO, from both an individual and population perspective, the more-than-basic option's expected net value is negative (even considering the cash cost as a sunk cost). This should be an input when thinking about the tapeworm cost argument and the growing size of health expenditures versus GDP.

We are presently watching a TV series and there's a gentleman in New Mexico who needs rehab services. The family is outraged by the basic formula that the insurance carrier is providing and are going all-in with their savings and more for the Cadillac option. i thought this was very puzzling. The problem can sometimes be reduced to the tension that exists between individualism and social capital. More of one invariably means less for the other. In Putnam's Bowling Alone which was edited during another bubble, the author was wrong about the endurance of bowling but he had a point about the importance of moral and intellectual associations and the risk of growing technology-related mass media.

[SharperDingaan]

Healthcare is insurable, and covers everything from dental, vision, and a basic level of service - we pay a small amount every year (premium, tax, etc,) so that we never have to pay a catastrophic amount. Loved ones never have to choose between OUR life, and a future life of extreme hardship. To some this is socialism (if the state does it), to others it is just common sense - so much so, that almost all companies offer some version of healthcare as one of the company benefits.

 

Level of service is the key.

There are those who argue that if you smoke, or are a drug-addict (drugs, opioides, etc.), alcoholic, diabetic, or obese - it's 3 strikes and you're out. Whatever put you there, after 3 strikes you wear it - thereafter healthcare is limited to making your exit, as painless and humane as possible. Others argue that you have the right to die on your own terms, and healthcare is to assist you - quality of life, versus longevity of life. Level of service evolves over time.

 

Sure, if you have the money, you can buy a higher level of service - wealth gives you that privilege.

But recognize that while in a different swim lane, it still leads to the grim reaper.

 

SD

 

 

 

[Castanza]

How do you couple tax payer funded health insurance with vast freedom of consumerism in the US? Why should we subsidize the masses when people stuff their face with hamburgers, chain smoke, and binge drink?

 

I think some form of assistance for those in need or low income bracket is absolutely fine. Although I do think there could be better alternatives (ex prior HMB 1973). But that question (above) would absolutely come up at some point in the US if healthcare is afforded to all. And I have little faith that it would not lead to a restriction on diet, lifestyle, and health related choices by the government. To me, it opens the door for more legislative abuse and the chipping away of freedoms.

 

Why is political progress always viewed in a one directional linear path towards social policies?

[SharperDingaan]

We all remain perfectly free to consume as we wish - we just wear the consequence of our actions.

When the same person is on the floor for the 4th time, and is both severely obese and drug addicted, he/she is just not resuscitated.

He/she simply chose to die by gluttony, and was successful.

 

Ultimately, it's the right to die - on your own terms.

No interference in personal freedoms whatsoever.

 

SD

 

 

 

[Cigarbutt]

How do you couple tax payer funded health insurance with vast freedom of consumerism in the US? Why should we subsidize the masses when people stuff their face with hamburgers, chain smoke, and binge drink?

I think some form of assistance for those in need or low income bracket is absolutely fine. Although I do think there could be better alternatives (ex prior HMB 1973). But that question (above) would absolutely come up at some point in the US if healthcare is afforded to all. And I have little faith that it would not lead to a restriction on diet, lifestyle, and health related choices by the government. To me, it opens the door for more legislative abuse and the chipping away of freedoms.

Why is political progress always viewed in a one directional linear path towards social policies?

When, as a 'group', it is decided that life insurance will be issued to 'members', the risks are pooled and the premiums (possibly adjusted for age for obvious reasons) are essentially uniform across the board. Sometimes, it is decided to account for some specific risk factors (ie smoking status, because it is so significant and 'easy' to document) but, otherwise, the risks are pooled and you end up with a premium (adjusting for administrative costs and maybe a profit margin but let's forget about this profit part for now or consider profit as the business definition or the potential social capital gain) that reflects the pooled risks. You end up with individuals that will exhibit various levels of risk behaviors, some of which may be very far from your 'values' but you may adhere to the group life insurance program because of the net benefit it provides. What is a 'group'? Can it be a nation?

By definition, pooling risks and other collective behaviors will have a tendency to impact personal preferences and 'rights'. What is it that prevents to aim for the best NPV, taking all relevant inputs (private or public)? Benjamin Franklin was not exactly a leftist but, when seeing the impact of fires in Philadelphia, decided to put in place several community features for the 'common good': community-sponsored fire brigade, an insurance company, prevention measures (the Franklin stove etc). These features had a 'government' component but included good governance aspects which apply to any endeavors, public or private, in order to maximize outcome and minimize consequences.

When referring to the "directional linear path", instead of a war-type mentality, i wonder if all specific questions (healthcare, student aid etc) should not be seen from the perspective of a spectrum whereby, for some questions, one needs to pull and, for others, one needs to push. It may help to get bipartisan 'deals' without individuals having a sense that they are losing their sense of identity.

i think you like quotes and i wonder what Benjamin Franklin would say and do in today's environment but when he said: "whereby every man might help another, without any disservice to him", i think he was referring to the net positive NPV concept described above.

[Castanza]

How do you couple tax payer funded health insurance with vast freedom of consumerism in the US? Why should we subsidize the masses when people stuff their face with hamburgers, chain smoke, and binge drink?

I think some form of assistance for those in need or low income bracket is absolutely fine. Although I do think there could be better alternatives (ex prior HMB 1973). But that question (above) would absolutely come up at some point in the US if healthcare is afforded to all. And I have little faith that it would not lead to a restriction on diet, lifestyle, and health related choices by the government. To me, it opens the door for more legislative abuse and the chipping away of freedoms.

Why is political progress always viewed in a one directional linear path towards social policies?

When, as a 'group', it is decided that life insurance will be issued to 'members', the risks are pooled and the premiums (possibly adjusted for age for obvious reasons) are essentially uniform across the board. Sometimes, it is decided to account for some specific risk factors (ie smoking status, because it is so significant and 'easy' to document) but, otherwise, the risks are pooled and you end up with a premium (adjusting for administrative costs and maybe a profit margin but let's forget about this profit part for now or consider profit as the business definition or the potential social capital gain) that reflects the pooled risks. You end up with individuals that will exhibit various levels of risk behaviors, some of which may be very far from your 'values' but you may adhere to the group life insurance program because of the net benefit it provides. What is a 'group'? Can it be a nation?

By definition, pooling risks and other collective behaviors will have a tendency to impact personal preferences and 'rights'. What is it that prevents to aim for the best NPV, taking all relevant inputs (private or public)? Benjamin Franklin was not exactly a leftist but, when seeing the impact of fires in Philadelphia, decided to put in place several community features for the 'common good': community-sponsored fire brigade, an insurance company, prevention measures (the Franklin stove etc). These features had a 'government' component but included good governance aspects which apply to any endeavors, public or private, in order to maximize outcome and minimize consequences.

When referring to the "directional linear path", instead of a war-type mentality, i wonder if all specific questions (healthcare, student aid etc) should not be seen from the perspective of a spectrum whereby, for some questions, one needs to pull and, for others, one needs to push. It may help to get bipartisan 'deals' without individuals having a sense that they are losing their sense of identity.

i think you like quotes and i wonder what Benjamin Franklin would say and do in today's environment but when he said: "whereby every man might help another, without any disservice to him", i think he was referring to the net positive NPV concept described above.

 

Undoubtedly there are social programs which are beneficial. But I stand by my point that they are not always the best way to do things. Many of these institutions (fire departments, police departments) which provide net positive services for community’s also present real drag in certain manners. Pensions in the public sector are a good example. Many of these institutions start out great, but quickly mutate into leeches and inefficient monstrosities. I have a friend from high school who’s dad was the fire chief. He is a great guy and will do anything to help. He had a good reputation in the community etc. he retorted last year, and the newspaper published an article. “Fire Chief Retires with Highest Pension”. He was going to be pulling a 70k a year pension in a city where the average income is low-mid 30s. It absolutely wrecked his reputation. He played by the rules, and that’s how the system worked. But even an upstanding guy can be greedy and stack their cards to get as much as they can. It’s human nature.

 

On this flip side of this it’s easy for government to utilize these institutions created to provide a base benefit to society, and stretch them beyond their means. A good example of this is the essay . “Not Yours to Give.” Which highlights Davy Crocketts time in government.

 

https://fee.org/resources/not-your-to-give/

 

I appreciate your thoughts though, and I can understand your perspective. If I had to pick a direction for healthcare in the US, I would say let’s start by uncoupling it from employers and allow it to be bought and sold in the open market much like car insurance etc.

 

I guess this went a bit off the original topic, so any further discussion in it I’ll move to politics (probably already a thread).

 

Thanks

[Cigarbutt]

How do you couple tax payer funded health insurance with vast freedom of consumerism in the US? Why should we subsidize the masses when people stuff their face with hamburgers, chain smoke, and binge drink?

I think some form of assistance for those in need or low income bracket is absolutely fine. Although I do think there could be better alternatives (ex prior HMB 1973). But that question (above) would absolutely come up at some point in the US if healthcare is afforded to all. And I have little faith that it would not lead to a restriction on diet, lifestyle, and health related choices by the government. To me, it opens the door for more legislative abuse and the chipping away of freedoms.

Why is political progress always viewed in a one directional linear path towards social policies?

...

When referring to the "directional linear path", instead of a war-type mentality, i wonder if all specific questions (healthcare, student aid etc) should not be seen from the perspective of a spectrum whereby, for some questions, one needs to pull and, for others, one needs to push. It may help to get bipartisan 'deals' without individuals having a sense that they are losing their sense of identity.

...

Undoubtedly there are social programs which are beneficial...It’s human nature (humans have a tendency to stretch and incentives matter).

On this flip side of this it’s easy for government to utilize these institutions created to provide a base benefit to society, and stretch them beyond their means. A good example of this is the essay . “Not Yours to Give.” Which highlights Davy Crocketts time in government.

...

For healthcare, the patchwork will make it a challenge to reform. Change will eventually come, maybe out of eventual necessity.

To link back to the company wages topic, perhaps a similar push-pull principle applies. Unless you can show me how top executives' talent has been multiplied since the 70s for instance, it's hard to explain the rising 'gap' between top execs in many companies, large and small, and the typical 'worker' in these companies. This gap is good and is a major contributor to the overall pie growth but it seems to me the share of the few has become too large in comparison to the share of many and this may have a detrimental effect on the growth of the pie. If i'd be a CEO right now, my aim would be to maximize my compensation but it would be appropriate to have safeguards to make sure that the Board knows what's not theirs to give. IMO, the present rules of the game (Boards and "say-on-pay" policies) are not 'working' giving rise to consideration for outside policies. If you like to learn from elsewhere, i like what the Germans have been trying to do in order to maximize the NPV at the group level:

https://www.gibsondunn.com/stricter-rules-for-remuneration-of-management-board-members-in-german-stock-corporations-extended-liability-for-members-of-the-supervisory-board/

But like for many topics, before discussing solutions, 'we' first have to agree that there is a problem.

[SharperDingaan]

Sadly, a CEO's ability to implement CSR is very limited - essentially set the tone from the top, and walk the talk.

Obviously, it is a lot easier to do it in a small company, a private company, and a family owned one. If you are unsure, walk into any family owned business - it will be immediately obvious.   

 

CSR caps the Maslow Hierarchy, owners are already rich, and dynamics are very different.

To an owner - the value of that extra dollar earned, after tax, is minimal. Were that dollar spent on additional staff costs - it's value would be 2-3x higher. So you pay your junior staff more, match retirement savings, cover health care benefits, etc. - and watch it come back to you in spades. Smart business.

 

For some folks - this is just plain wrong. Not a problem, it's just not for them - they can vote with their feet.

Just keep in mind that people are the limitation, not money - and that the new technologies are removing cost as a barrier to entry. The world is rapidly changing, and Big Inc. is not the glamour show that it once was.

 

Interesting times.

 

SD

 

 

 

 

[RichardGibbons]

"socialism + capitalism--clearly works better for things like healthcare" - disagree 100%.

In the end, the issue is that there are lots of people with money. Not necessarily alot of money, like the billionaires using offshore trusts or protected by countries that don't tax them much, but just average run of the mill people middle class. That segment has enough money to want to pay for more than 'basic service'. Sure have the basic service. But I know socialist -capitalist countries that ideologically do not want any providers that offer service+. That would be 'unfair' to waiting in line and one year wait times. In these countries you often have to go to the USA or Europe that have an actual hybrid private -public system and don't take ideological stance about it. Large private hospitals and they even treat in public hospitals private customers.

 

I'm not quite sure what you're disagreeing with 100%, since my view of "socialism + capitalism" is basically "basic medical + rich people can get extra/expedited service by paying". The key point is that 100% capitalism just doesn't work in healthcare, and that's pretty clear because the USA has way higher costs, the same or worse outcomes, large numbers of people having awful financial outcomes from as a result of bad luck, and perverse, grossly-suboptimal economic outcomes where people have to hold on to a particular job to maintain health insurance. It's basically indefensible.

 

It's worth noting that I'm in Canada (a public system), and this year people in my family have had two surgeries, both done privately, one in a public hospital and one in a private clinic. I'm open to the idea of a hybrid system, and it seems plausible to me that that a hybrid system might be optimal.

[Castanza]

"socialism + capitalism--clearly works better for things like healthcare" - disagree 100%.

In the end, the issue is that there are lots of people with money. Not necessarily alot of money, like the billionaires using offshore trusts or protected by countries that don't tax them much, but just average run of the mill people middle class. That segment has enough money to want to pay for more than 'basic service'. Sure have the basic service. But I know socialist -capitalist countries that ideologically do not want any providers that offer service+. That would be 'unfair' to waiting in line and one year wait times. In these countries you often have to go to the USA or Europe that have an actual hybrid private -public system and don't take ideological stance about it. Large private hospitals and they even treat in public hospitals private customers.

 

I'm not quite sure what you're disagreeing with 100%, since my view of "socialism + capitalism" is basically "basic medical + rich people can get extra/expedited service by paying". The key point is that 100% capitalism just doesn't work in healthcare, and that's pretty clear because the USA has way higher costs, the same or worse outcomes, large numbers of people having awful financial outcomes from as a result of bad luck, and perverse, grossly-suboptimal economic outcomes where people have to hold on to a particular job to maintain health insurance. It's basically indefensible.

 

It's worth noting that I'm in Canada (a public system), and this year people in my family have had two surgeries, both done privately, one in a public hospital and one in a private clinic. I'm open to the idea of a hybrid system, and it seems plausible to me that that a hybrid system might be optimal.

 

The US healthcare has been messed with so many times by government. Every attempt to “control cost” has lead to greater cost. How can you argue that capitalism style healthcare systems don’t work when it really hasn’t even been allowed to be tried. As I’ve pointed out before the US healthcare system was great before big government coupled it to employers.

 

Before HMO1973 many people didn’t have insurance simply because general visits were cheap enough to pay out of pocket. Healthcare costs were generally low because it was competitive. And catastrophic insurance was generally affordable. Also there was a plethora of pro bono medical fair for those in need. Poor individuals were also not stuck without insurance because they didn’t have a job. Likewise individuals weren’t tied to a job they hate simply because they liked the insurance.

 

I pay $120 a month for my wife and myself. This is including dental, vision, medical. My deductible is max 6800 out of pocket. Most of these socialist type healthcare systems require me to pay roughly my full deductible every year even if I never have anything done. Instead I get to keep that “theoretical 6.8k” and max out my HSA every year.

 

Some people might not have it like me, but America is the land of choice (for almost everything in life). Why would we not move in that direction? I would guess that over 50 years many of these governments are going to struggle with the costs of such plans. Won’t be any different than medicare, public pensions, and social security in the US. The things almost always balloon way out of their intended scope.