0:09 - Opening Thoughts on Wealth and Poverty
4:12 - Sibling Dynamics and Class Struggles
6:26 - Understanding Scarcity and Competition
8:52 - The Abundance Mindset
10:13 - Guilt and Economic Relationships
12:33 - Projection and Accusation
18:21 - The Nature of Apprenticeships
22:05 - The Realities of Labor and Value
29:16 - Misunderstanding Work and Satisfaction
31:17 - The Visibility of Labor
36:10 - The Value of Intellectual vs. Physical Labor
37:38 - Wage Determination and Market Dynamics
44:25 - Rational Economic Calculations
46:58 - Closing Thoughts on Freedom and Choice
In this episode of Freedomain, we delve into the intricacies of wealth, poverty, and the underlying belief systems that govern perceptions of capitalism and socialism, drawing on the thoughts of Kropotkin. We explore the fundamental question: how do the fortunes of the rich arise from the poverty of the poor? As I dissect the zero-sum game mentality, I illustrate how initial experiences of resource allocation in childhood, such as sharing food or controlling access to the TV, shape our understanding of wealth distribution in adulthood.
The podcast continues with an exploration of psychological tendencies rooted in familial structures, particularly for younger siblings, who often embody the role of the proletariat, while older siblings represent capitalists, and parents act as the state. I contend that the conflicts arising from this dynamic mirror societal class struggles, where blame is directed at those in power rather than at the systemic factors contributing to inequality. This analysis leads us to consider why individuals, especially those from affluent backgrounds, gravitate towards socialist ideologies, often motivated by a desire to provoke guilt in the wealthy—a tactic that ties back to childhood experiences of fairness and resource allocation.
Further dissecting Kropotkin's views, I emphasize the complexities of labor and economic systems. Using the historical context of apprenticeship in trades, I detail how wealth accumulation often stems from the exploitation of labor and the need for skilled workers. This raises the question of whether wage differentials can ever be truly justifiable, especially when viewed through the lens of capitalist structures that capitalize on the labor of others while often denying a fair return to the workers themselves. My reflections here highlight the paradoxes and contradictions present within socialist critiques of capitalism.
I also discuss the distinctive perspectives between those engaged in manual labor versus intellectual professions. Through personal anecdotes from my own experiences in various jobs, I highlight how many laborers find satisfaction and meaning in their work—contradicting the notion that all jobs resembling menial labor are despicable. This leads to a critique of those in the left-leaning intelligentsia who misinterpret these experiences, projecting their own values onto the working class without recognizing the vital contributions these roles make to society.
As I challenge the labor theory of value, I assert that wages are ultimately determined by market demand for labor rather than by the whims of capitalists. This observation reinforces the argument that financial success derives from providing value to consumers—whether in entertainment or services—rather than an inherent inequality imposed by the capitalist system. The discussion culminates in an examination of the irrationalities present in socio-economic critiques, particularly when they dismiss the significance of individual preferences and choices within a marketplace.
By the end of this episode, listeners should have a deeper understanding of how ingrained beliefs about fairness and exploitation shape our perceptions of capitalism and socialism. The conversation invites reflection on the dynamics of wealth and resources, encouraging a nuanced view of the economic structures we inhabit and the personal responsibility we hold toward creating and maintaining equitable systems.
[0:00] All right, this is Seeking to Understand, Kropotkin and the Socialists, part three.
[0:10] Whence come the fortunes of the rich? A little thought would suffice to show that these fortunes have their beginnings in the poverty of the poor. When there are no longer any destitutes, there will no longer be any rich to exploit them. So again, the big question to me is why is this stuff believable. Why is it believable?
[0:34] So, it's really important to remember that our first sense of capital, our first sense of resources, our first sense of the availability of, say, food and shelter tends to be, or generally is, a zero-sum game. Zero-sum game. So, let's take some examples from childhood. So if there is a certain amount of food, let's say it's you and your brother, right? If there's a certain amount of food, a fixed amount of food, right? It's not coming in in a conveyor belt, right? There's a fixed amount of food. Then if your brother grabs more, you get less. If your brother has more food, you get less food. Let's talk about the best place to watch TV. Maybe there's a real comfy couch. If your brother gets the couch or that spot, then you don't. And there's a tussle over it and it's win-lose. Only one person can get.
[1:42] That spot, that space, whatever. If, you know, sort of back in the day, this is when I was We were quite young, of course, there was one TV in the house. There were no tablets or screens in that way. So there was one TV in the house.
[2:02] And if your brother got to watch his show, you didn't get to watch your show. When there was only one computer. If your brother was on the computer, you weren't on the computer. Let's talk about a bed, right? If you've ever had to share a bed, if your brother or your, you know, whoever, if your brother gets more of the bed, you get less of the bed. If your brother takes more of the blankets, you get less of the blankets, right? So this aspect of things is really, really important to understand. I'm sorry to just reiterate this, but why is it that people believe stuff that in the modern world, now, of course, this guy was writing before the true advent of the modern world, but it's a zero-sum, game now if you are in the business world no let's let's let's go i mean if if you're trying to get a job if you get the job another person doesn't get the job if the other person gets the other gets the job you don't get the job uh where the resources are finite in your perception right if you're if you want to date a girl and some other guy gets to date the girl, than, you know, at least back in the day. I don't know what situationships are all about now, but back in the day, if you wanted to date a girl and some other guy got to date the girl, then you didn't get to date the girl, right?
[3:31] So, understanding that for children, it's a zero-sum game. If the person who's bigger and stronger and more powerful gets more, it's because you get less. You know, when I was in the business world, we would occasionally hire talent, lure talented people away from other occupations or other preferences. Maybe they wanted to go back to school. We'd say, no, no, we'll give you a job or whatever it is, right? So if they came to work for us, then they didn't go to school, right? If we got to hire them, they didn't go to work for our competitors. So all kinds of stuff was going on that's zero sum.
[4:12] So, I mean, it would be interesting to do, maybe this would be a little research project somebody wants to take on, but how many socialists are younger siblings?
[4:24] Because if you look at, the mechanics, the psychological mechanics of younger siblings, then it is younger sibling is the proletariat, older sibling is the capitalist, and parents are the state. Younger siblings are the proletariat, psychologically. Younger siblings are the proletariat, older siblings are the capitalists, and parents are the state. Now, sibling conflicts arise from bad parenting. Sibling conflicts arise from bad parenting parents will often enjoy this sort of, infighting that goes on between siblings and if the parents give a scarcity mindset to their children then conflicts over those scarce resources will inevitably occur and there's going to be some conflicts right you kind of a conflict free for life that's uh it's called being dead. So, I guess you're fighting with the worms.
[5:37] So, the younger sibling blames the older sibling because it's safer to blame the older sibling than to confront the deficiencies in the parenting, in the same way that the socialists blame the capitalists rather than the state because younger siblings blame the older siblings rather than the parenting because it's easier and safer, right? And of course, the predations of the older sibling are more.
[6:09] Vivid to the younger sibling and this sort of unfair. It's unfair, right? It's unfair. If the older sibling is getting more, it's because the younger sibling is getting less. And if the capitalist is getting more, it's because the workers are getting less.
[6:26] Now, you understand, this is not a disproof of the socialist argument, but it is an explanation as to why this thing that is patently false, I mean, it's obviously false. And why would people believe in a zero-sum game? Now, of course, younger siblings were evolved to fight like hell and resent the zero-sum game because otherwise they didn't make it, right? Because food was scarce and resources were scarce and it was the case that if you couldn't get a spot close to the fire, you might freeze to death or be picked off by random predators in the.
[7:02] Forest, right? I mean, you absolutely had to fight tooth and nail to get your resources, and you had to understand it was a zero-sum game, which, of course, for most of our evolution, it was, right? There's only a certain amount of food. There's only a certain amount of shelter. There's only a certain amount of blankets. There's only a certain amount of spots close to the fire and so on. So you had to fight like hell.
[7:24] As the younger sibling to get your resources they were zero-sum and those siblings that didn't fight like hell and resent the zero-sum game and and you know i mean i remember my i shouldn't laugh because it's a long time ago now obviously like 50 years ago now but my brother uh my brother is is older and i used to uh he was supposed to stay up five minutes later and i would sit in my bed and i would count to 300 because that was five minutes and I'd say dive a bit you know I didn't want to stay up later and I remember one time I woke up I fell asleep counting to to 300 and I woke up in horror of horrors I came out and my mother and my brother were making cookies in the night oh the horror and uh anyway I just it just bothered me uh it bothered me uh uh my brother got to stay up later, he got more privileges, he got extra pocket money, and it just felt wrong. And I remember, of course, at my aunt's place with a whole mess of cousins at dinner.
[8:35] When I was like, I don't know, four or five saying, well, but it's fine because I get to live, you know, X number of years longer. And people were like, well, you're not guaranteed of that. What are you talking about? You could die tomorrow. Like, oh, this is so unfair. Right? So, and I think this is why I was a socialist when I was younger.
[8:53] Now, once you understand the abundance mindset, and it's not a zero-sum game, which I can understand the dark satanic mills.
[9:04] 18th century agriculture, 19th century industrial labor, I can understand saying there's a couple of rich guys and there's a whole bunch of downtrodden, soot-stained proletariat. I can understand that, but now in the modern world, the idea that there's this scarcity mindset when we're so much, I mean, we're just insanely wealthy relative to the past, and we didn't pillage another dimension or steal from orcs in Lord of the Rings, right? So now it's harder to sustain and maintain, right? And of course, those outside the realms of privilege, like those who want stuff from the rich guys, like the rich kids, right? So the question is, why are there so many champagne socialists? Why do so many rich kids turn to socialism? Well, in part, it's because those who have less have a vested interest in provoking guilt among those who have more, because if they can provoke guilt in those who have more, then those who have more will pay them to alleviate the guilt, right?
[10:10] This is sort of the privilege thing, it's a white privilege or male privilege or whatever.
[10:14] If you can get people who are doing well to feel guilty about doing well, then you inflict a suffering on them called guilt, and then they will pay you to alleviate the suffering. It's similar to voodoo right like there's a witch doctor and if you don't pay him he'll put a curse on you and if you do pay him he'll lift the curse from you this is sort of the original sin argument that if you um since you're born with sin as an ailment and an affliction then you have to pay to have the curse or the sin or the guilt of privilege you have to pay to get this curse Removed.
[10:57] And that is a very difficult thing to overcome. That is a very difficult thing to overcome.
[11:08] And it is the eternal cry of the younger sibling, oh, not fair, not fair, unfair, that's not fair. Why does he get more? You're trying to appeal to, you may have given up on the guilt of an elder sibling, but you're trying to appeal to the sense of unfairness or the guilt the parents might have if the younger sibling is not getting as much and so on, right? Because remember, the parents want the younger sibling to live too because they've invested a lot of time, effort, and calories into having and raising the kids. So the cry of unfair to get resources by provoking guilt that the person will stop calling you unfair if you, like, that's the deal. The deal is, you call me a bad guy, a thief, an exploiter, a capitalist, privileged male, whatever, right? You call me a bad guy, and then I will pay you and you'll stop calling me a bad guy. But of course that's not how economics works at all right if if you pay people to alleviate the bad feelings provoked in you by their shame attack and guilting then they'll just escalate right this is why this stuff doesn't you know the the sort of woke mob can never be appeased and it doesn't matter what you say there'll always be another demand and that's because it's not about a moral judgment.
[12:29] It's about exploitation in return. This is why the word exploitation.
[12:34] So much of what goes on in the world, and I think a little bit more in the left, is this projection, right? They accuse you of what they're doing.
[12:44] So when they scream at the capitalist, you're an exploiter, right? You're an evil capitalist, they're either wanting higher wages if they're semi-socialist, or they want to steal the factory and the capital equipment and the money and the resources from the capitalist. In other words, they're saying, well, you're underpaying us, so we're going to kill you and take your stuff. Well, that's the ultimate exploitation is to kill someone and take their stuff. So when they scream exploitation, they are telling you what they're going to do, what they want to do, what they want to do. It's really important to understand that. Most accusations are confessions of desires for crime. Most accusations are indications of criminal intent, right? You're exploiting me. I'm going to exploit you. I'm going to kill you. So it is just a threat. And people kind of understand this when there are these very large threats, particularly against groups, that it is a, the threat is of criminal, immoral, evil, evil intent.
[13:54] So that's why it is so believable. And if you get into the habit of getting resources by saying, oh, unfair, unfair, it's not fair. If you get into that habit, then you don't become productive yourself and then what you fear and what is actually kind of true as a child then becomes, an inescapable reality as an adult so if you say get resources not from you know hard work and productivity and so on you get resources because you're saying oh unfair it's unfair then, as an adult you just keep yelling and screaming it's unfair at people I'll see you next time.
[14:37] You just keep yelling and screaming about unfairness, and then the world that you fear, that is zero-sum, becomes the actual real world that you inhabit, which is you get resources by.
[14:52] Verbally abusing other people and extracting resources from them through, I mean, it starts with threats of guilt, but the threats of guilt are almost always backed up sooner or later by the threats of violence right right so people call me all kinds of bad names and then if i you know poked my head out in public uh they would attack venues and threaten and bomb and death threats and so on so the it turns from a a oh it's unfair to uh i'll i'll kill you if you don't give me stuff right it's a it's a shakedown right okay so this is really important to understand that And people are not getting out of the, and of course, you know, there's not just two siblings, right? I mean, there's, you know, when there was a bunch of kids, you know, six, eight, ten kids, there's an elder sibling. Then there are different layers of, different layers of sibling, greed, resentment. But the further you go down in the birth order, the more it seems like a zero-sum game and the more you have to fight like hell to, and you have to appeal to the authorities to get what your brothers won't give you. or your sisters won't give you, right? And that's running to the government to get equality. Okay, so let's see here.
[16:18] Assuredly, this is not, sorry, did I get to the wrong here? Yes. If people had the means to support themselves if they were capable of meeting their daily needs without hiring out their labor, no one would consent to work for wages. That must inevitably be if the capitalist is to derive any profit in mere fraction of the value of goods they produce. Even an independent artisan, a labor aristocracy of Kropotkin's day, could not hope to do better than to support his family and put together an almost certainly inadequate pittance for his old age should he rely on his own effort and diligence. And he wrote, Kropotkin wrote, assuredly this is not how great fortunes are made, but suppose our shoemaker takes an apprentice, the child of some poor wretch, who will think himself lucky if in five years his son has learned the trade and is able to earn a living. Meanwhile, a shoemaker does not lose by him. And if trade is brisk, he soon takes a second and a third. If he is keen enough and mean enough, his journeyman and apprentice will bring, him in nearly a pound a day over and above the product of his own toil. He will gradually become rich. That is what people call being economical and having frugal, temperate habits. At bottom, it is nothing more nor less than grinding the face of the poor.
[17:27] Right. So an apprentice. So this is a younger now. The shoemaker takes an apprentice. And I can only assume that Kropotkin was never a manager and never, although, you know, it all claims to be so scientific, right? So the shoemaker takes an apprentice, a child of some poor rich. So what he does is being a shoemaker back in the day of manual tools and no automation, of course. Being a shoemaker was quite a challenge.
[17:59] So you had to figure out the right materials. You had to sometimes customize it for people. You had to be able to produce, if you wanted to be a good shoemaker, high-quality items, medium-quality items, low-quality items, depending on the wealth. If you were just a shoemaker, maybe you had your own store, or maybe you sold it to someone else who would sell the shoes.
[18:21] But all kinds of stuff would be would be quite complicated and you have to be hard working it can also because there's a lot of stitching involved it can fry your eyes after a while so you might not have as long i mean being a farmer is a little bit different right than being doing needlework and you know the sort of famous stories of people who did needlework who kind of fried their eyes over time and i'm sort of aware that it's not like your eyes get fried just from looking at close things but it does seem to have some sort of correlation over time you might lose the ability to focus on distant things. You know, hunters have to look at distance and needleworkers and shoemakers have to stitch very up close and so on, right? And so certainly in the realm, in the era before glasses, you may not have quite as long a go. So if you've never been an employer in a complicated trade.
[19:10] Then you don't understand why the employee is paid less. It just seems kind of incomprehensible to But the reason that you pay your employee less is, like I'm trying to think, when I first hired people, they made a third of my wage, and then they made half of my wage, and then they got up to two-thirds of my wage as they gained in skills. So, I would hire people often out of school because they hadn't developed bad habits. And I would then have to put a lot of time and effort and attention into training them. Into training them. I mean, just looking at a box of scrap leather and figuring out what's needed to put together shoes is a complicated, highly skilled business. Right?
[20:07] So the reason why the child is paid less is the child is paying through lesser pay the child is paying to be trained in being a shoemaker, right? I mean, if you go to a university for an engineering degree, you pay the university to educate you. And so the child is paying the shoemaker to be instructed on the trade and not just to be instructed on the physical aspects of the trade, right? The choosing materials, the choosing of thread, the making sure you're efficient. He also has to know the competition. He has to have some sense of the demand for various levels of quality shoes. And he has to have contacts. He has to have an entire network of people who supply him with materials and to whom he can sell the shoes, whether it's direct to the customer or to other resellers. He has to know how to do the books. He has to know how to pay the taxes, comply with the regulations. And there's a lot of regulations, certainly in the medieval era, for all skilled tradesmen, right? So it's not just the making of the shoes which is complicated enough but the entire.
[21:19] Network and and tricks of the trade and and all this kind of stuff like if you've ever opened a business there's a lot of learning curve you know if i could go back in time to when i first started being a software guy i mean there's things that i would say to do significantly differently there's a lot of complicated stuff that goes on and so in in five years the child can now be a shoemaker, i mean that's pretty good takes seven years to become a doctor four years plus x whatever to become an engineer so in five years this kid has got an entire occupation and he's making this in the shoemaker because the shoemaker is investing hundreds or thousands of hours into the child to make sure the child knows how to be a shoemaker, right?
[22:05] That's the deal. Now, is it too long? Yeah, I'm sure it is too long, but that's because the tradespeople have captured the government and restricted entry to those who don't go through a very long apprentice. You can sort of see this in electrical, in plumbing, in other trades that go on at the moment, that you have to go through a whole bunch of apprentice stuff, you have to pass a whole bunch of tests, and so on. And I mean, I'm sure some of it is useful, but a lot of it is just raising the barrier to entry so you can keep your prices high.
[22:38] Today, to be sure, workers have, after 100 years, succeeded in improving their condition, and the apprentice system, already declining in Kropotkin's time, had all but disappeared. Uh, yeah, I don't think that's true. But saving one's earnings is no more the route to real wealth than it ever was. At best, workers can hope to buy a house, afford some time off from the hated job, and put a little money aside for retirement or hard times. To become wealthy in economic terms requires exploitation, either directly from workers' labor or indirectly by exploiting workers' need for the necessities of life. Okay, so this is another thing that happens, and this is true of a lot of intellectuals. A lot of intellectuals, I mean, with the exception, obviously there's some exceptions. I think, of course, of Down and Out in Paris and London by George Orwell, Eric Blair. But if you've not worked side by side with the, quote, proletariat, it, then you don't understand their attitude to work. You don't understand their attitude to work. So in other words, if you're an intellectual, highly skilled verbally, great analytical abilities and so on, you've got an IQ of, I don't know, 125 plus and so on, then yeah, you would be mindlessly bored by repetitive labor. But that's not really the case.
[24:00] With the majority of people who stay in low intellectual labor for a long time right, that's not really the case i mean if when i was in my early 20s i was a waiter at a variety of places and i had a waitering job at a very high-end restaurant where i made very good tips but had a split shift which kind of blows because you know from two to five you've got nothing to do. You're not getting paid. But at the high-end restaurant, I worked with waiters who were professional waiters. They were in their 30s. They were in their 40s. And that's what they did. They were waiters. And they made pretty good coin. They made pretty good coin. And they were generally not smart. And I don't say this with any negatives. It's the same. Some people are not tall. Right? A basketball player who's six foot eight is going to look at a five foot two guy and say, he's short. This doesn't mean that he's any less. It just means he's probably not going to be very big in the basketball world, right? So, they just weren't smart.
[25:02] And they had got into a job that they enjoyed relative to their abilities. They generally did not have dreams of, I want to become a rocket scientist or a novelist. I mean, occasionally, you'd come across people like that. They discontented people who were operating far below, sort of five easy pieces style. They were operating far below their intellectual abilities and those people tended to have severe abuse and emotional histories or drug addictions or alcoholism or some other significant dysfunction that interfered with their ability to make any kind of real living. But most of the people that I worked with, and I remember when I used to work at Pizza Hut way back in the day in Dom Mills, there were these older women who had been there since, I don't know, prehistoric pizza was invented. And they got all the best sections, right? And I would sort of complain about this. Oh, not fair. Like, why can't I get the best section? And the manager said, look, bro, you're a fine waiter. You're a good waiter. But, you know, come on, you're just passing through. These guys are here for the duration, right? So you're going to come and go, you're going to go to college, you're going to whatever, right? And you're coming and going, but these women are here for the duration. And you can't, right?
[26:19] Because if I quit because I couldn't get a good section, he could just hire someone else. And then they'd have to go through the training and it costs money, right? But if one of these women quit because they couldn't get a good section, then he lost someone who was going to be working for the next 10 or 20 years right at the place or 10 years let's say so so the the cost for him to lose a permanent worker was far greater than the cost for him to lose a temporary worker and also he knew and he says like it's the same everywhere right doesn't matter where you go it's the same everywhere right the guys who the people who stick around get the best you know and i don't want you to stick around go do something else right you're just passing through and so that's you know all all perfectly uh fair and valid right so was it exploitive no i mean he was just making uh so but and the women weren't discontented you know they weren't discontented they didn't hate the jobs now if i was still a waiter in my 40s i'd be pretty depressed i i would be pretty depressed if i was a waiter in my 40s, because it would be a mismatch to my skill set. Right? So, so.
[27:42] There was an old movie, Hollywood Shuffle, and there was a guy who was a really good singer, but he ended up working at the post office because he just couldn't get his dreams of singing going, right? I mean, if, I don't know, if I had some glorious, fantastic singing voice, then, I don't know, maybe being a podcaster wouldn't feel that great. I don't know. It's hard to sort of put these things in alternate dimensions and so on, but I'm certainly infinitely happier using my skills to their maximum potential than I would be carting food around for people for 40 years, right? And again, it's really, really important to understand this is nothing at all negative to the waiters in their 40s, but they don't live to work. They don't have any big dreams about work. They go in, they joke around with people, they do their work they bitch about the bosses a little and they go home and they enjoy their life.
[28:42] They do so what's uh what's wrong by that right what's wrong with that, so it's not a hated job this is projection this is somebody like kropotkin who obviously was a very brilliant but misguided fellow he would be miserable and it would his his job if it was an on an assembly line, or he would be miserable and he would hate it, and that makes sense, right? That makes sense.
[29:16] And so when he says the proletariat hates their job, or the proletariats hate their job, what he's saying is that if I had to do that job, I would hate it. But that is not having empathy for the fact that they don't hate their job and they would actually hate being a manager they would hate because it would be really stressful for them you know the fact that i'm really good at negotiating meant that i was sent out when customers were angry uh upset and and so on right and were making threats of various kinds because something was going wrong with the project. So I would go out and calm the feathers, right? And I remember taking an employee out who wanted to learn how to do this. And, you know, the clients were really angry and upset. And I talked about it. I listened with them. We made our plans. We made our arrangements. They felt hurt. And, you know, I saved like a million dollar project in an afternoon. And I remember the guy saying like, oh man, you couldn't pay me enough to sit across that table. Like you could not pay me enough to deal with these angry customers, right?
[30:27] And he just didn't want to do it. He found it kind of intimidating, he found it kind of negative, and he just didn't want to learn how to do it, and so on, right? And there's no problem. I mean, I looked at the corporate accountant, and I was like, boy, you couldn't pay me enough to be an accountant, right? It's just particular preferences and differences. So just because you would hate the job doesn't mean that everyone who has that job hates it. In fact, I remember, I mean, of course, a lot of times, when people would be leaving the hardware store, and the boss would be up there doing the paperwork and the payroll of the taxes, they'd all say, yeah, you couldn't pay me to do that job, man. You couldn't pay me enough, right? All right. So he says, under capitalism, the harder a man works, the less he is paid. Well, of course, that's the labor theory of value. The harder a man works, the less he is paid. What does that really mean?
[31:18] Well, what it means is that the intellectual labor is not visible and the sweaty labor is more visible.
[31:28] And that is a very sort of concrete way of doing things, and it's this weird thing that says, if somebody's doing intellectual labor, they're spoiling, right? So, I remember, was it Jack Welsh, CEO of, I read his book many years ago, CEO of General Electric. Now, I'm probably going to butcher this story, but the gist of it is important for what I'm saying. So they had their fingers in every pie. And the problem was that when a particular industry or sector was doing badly, then people would lose their bonuses because the managers would lose their bonuses because the section as a whole wasn't making money. And so the managers would then move to the sectors that were doing the best. In other words, they lost the best managerial talent in the areas of the business that most needed it because they were doing badly. And this caused a lot of death spirals in industries, right?
[32:30] So the way that he solved it was to say that we're going to pay bonuses based upon how you're doing relative to the industry that you're in rather than in absolute ways, right? So if you're in some area where the entire industry is losing 15%, but you've only lost 5%, then you'll get the same bonus as somebody else who grew the business 10%. So you're not going to compare it to absolute numbers. you're going to compare how you're doing relative to other people in the same industry, right? So if you're doing better than other people in the same industry, even if you're still losing money, then you're going to get a bonus. And that way, and you could even say or make the argument that we're going to increase the bonuses for people who are doing badly in an industry that's doing even worse in general. And that way you'll attract the best management to the businesses that are in the most trouble rather than, you know, attracting the best management talent to the businesses that are already on an updraft through various economic reasons or factors, right? So, I mean, that's sheer genius. It's absolutely brilliant. And it saved, I assume it saved tens of billions of dollars or more for the company.
[33:36] Well, that's quite interesting, right? What's that worth? Well, it's worth a massive amount of money. And it's just an idea. Now, of course, having the idea, getting people to sign off on it, figuring out how it works, that's a whole different matter. The harder a man works, the less he is paid. And what that means is that the less he does mental labor, the less he is paid. Well, sure, because physical labor is not reproducible.
[34:09] Physical labor is not reproducible. if you're digging a ditch you can't copy paste that right but ideas are reproducible right, i mean jack welch was a great ceo and if he'd gone into these distressed industries and managed like crazy but he couldn't do it for all of them and he couldn't do it for very long because somebody needs to be the ceo but if he designs a structure which changes the incentive so that the best managers stay in the most challenging sectors that's reproducible right, So, another way of saying it is that the less reproducible your labor, the less you're paid because the less profit can be made of it, right? In other words, if you only have active, not passive income, then the less you're going to get paid. So, if you write a song that people want to pay you to cover the song, then you're going to make a lot of money because you don't have to do any additional labor to get paid because you've already written the song whereas if you're just a live band then that labor is not reproducible so you get paid per gig there's no passive income you actually go out and work hourly right so.
[35:23] Uh, but the solution to this manifest injustice could not be found in reversing this equation. In payment according to the service each renders to society, for who is to determine the value of another service? Quote from Kropotkin. We know what reply we should get. The bourgeois economists and Marx too will be quoted to prove that the scale of wages has its reason for being since the labor power of the engineer will have cost society more than the labor power of the laborer. Nope. It's just that the labor power of the engineer is passive. The value of the engineer continues long after he has moved on. So if the engineer designs a bridge, right, and the bridge design is great, then the engineer moves on and the bridge takes a year or two to build, but the engineer is already moving on to other things.
[36:10] In other words, the value of the engineer is not based upon his direct labor he doesn't need to read out the bits of his blueprints to all the workers for a couple of years right so uh the the engineer and the engineer of course you can copy paste designs and you can get designs based upon prayer work work them out and so on right so, the engineer by having intellectual labor intellectual labor can be copy pasted physical labor cannot, right?
[36:42] But the employer who pays the engineer 20 times more than the laborer makes the following simple reckoning. If the engineer can save him 100,000 francs a year on his production cost, he will pay the engineer 20,000. And when he sees a foreman able to drive the co-workers and save 10,000 francs in wages, he loses no time in offering him 2,000 or 3,000. He parts with 1,000 francs when he counts on gaining 10,000, and this is, in essence, is the capitalist system. Well, that's interesting, right? Now, the idea that wages are determined by the capitalist is crazy. It's just, it results from a chilling lack of experience in the economic realm. Wages are not determined by the capitalist. Wages are determined by the customers. Your wages are determined not by the capitalist and his preferences.
[37:38] Your wages are determined by how much the capitalist can sell your labor to the customer for.
[37:53] Now if you are brad pitt you can get paid 15 million dollars to make a movie and you have to do 15 million sit-ups apparently so you have to you get paid a huge amount of money but it's not based on the whim of the producer it's based upon the value that brad pitt provides to the audience brad pitt is a very charming and good-looking guy with a great physique and so on and actually a good actor, like if you've seen him in a variety of roles, he can stretch more than he often does. He's become sort of a meme like Schwarzenegger and Matthew McConaughey. Although Matthew McConaughey, of course, also gave up on doing the rom-coms and wanted to do more challenging work, right? So it is not the whim of the director or the producer that creates the wage of the movie star. It is how much value does the movie star add to the movie in terms of getting the word out, in terms of interviews, in terms of you get free marketing, because whatever they do is going to be covered in the fairly trash rag press. So if you pay Brad Pitt $15 million, it's because the audience wants to pay him $15 million. You're simply borrowing from the audience's ticket sales in the future to give to Brad Pitt in the present.
[39:12] So the idea, and even if we were to say this though, So, if the foreman is able to drive the workers and save 10,000 francs in wages, then the, the capitalist offers him, what is it, 20 or 30% of the savings. But if the foreman is so good at saving money, then the foreman will be able to, he will document this because somebody has to know that he's able to save this amount of money. And he will go to other capitalists and say, look, I'm saving 10,000 francs in wages at this company. Pay me 9,000 or 8,000 and you'll still make money. so he'll just drive his wages up, right?
[39:56] So, let no one come up with this talk, says the article, about production costs of the labor force and tell us that a student who has cheerfully spent his youth at university has a right to a salary 10 times that of a minor son who's been wasting away down a mine from the age of 11. Wage differentials, whether under capitalism or some future socialist society, must be condemned as unjust, nor is it possible to determine a just way based upon an individual's contributions, even if such a system could be tolerated on ethical grounds which it cannot. So, of course, socialism is forced association, which is a violation of freedom of association. Freedom of association means, if I think Brad Pitt is worth going to see a movie because he's in it, and some other unknown guy, I don't want to see the movie. Right? In other words, I'm, you know, Brad Pitt's going to have a certain level of quality in his movies, in his acting, and so on, his last science fiction film, which was total trash, nonwithstanding, but you look at...
[40:57] Brad Pitt, and you say, okay, well, for Brad Pitt to sign off on a movie and for all this money to be spent, there must be a good script, must be a good story. Brad Pitt's a good actor. He's charming. He's funny. He's interesting to watch. So when I go out to watch a movie where I'm going to spend, you know, 20, 30 bucks, and I'm going to drive out and risk getting into a flaming crash and sit in a dark theater for two hours and go through half hour or 20 minutes of ads for a movie that I don't want to see i don't want to like i want some security that i'm not just gonna waste my time and watch a bad movie i mean i remember many years ago a girl i was dating was working at the toronto international film festival and i went to go and see massive amounts of movies she got me free tickets to everything i've got to see sin compassione which was a one of the best adaptations of crime and punishment i've ever seen but unfortunately it's only available i think still in spanish i got to see once were warriors which was a pretty horrifying movie about the indigenous this population of New Zealand and all of the dysfunctions there. It might have actually influenced me on my Australian tour, come to think of it. But anyway, I went to see a whole bunch of movies and most of them were terrible. Most of them were terrible. Like maybe, I don't know, I can't really remember how many movies I saw, but it was a lot. And I only remember two out of the probably 10, 20 movies that I saw at the film festival.
[42:23] So, you know, that's, let's just say 10% right now. Those movies were great, and I wouldn't say Once Were Warriors. It was powerful, but it was not obviously enjoyable. So.
[42:36] Whereas if I look at the Brad Pitt movies that I've seen, I would say probably 90% of them are good and worth watching.
[42:44] Right? So, instead of 10% of the movies being good, which is a bunch of unknowns, 90% of the movies are good. So, that's great, right? So, I saved, I mean, let's imagine I paid for all these other random movies. I saved, you know, hundreds and hundreds of dollars and, you know, I don't know, 20 movies, two hours, 40 hours, like a full work week of time, plus travel there and from 60 hours or whatever, right? So, 60 hours and hundreds of dollars were saved simply by going to a Brad Pitt movie. I mean, minus 10% because a couple of Brad Pitt movies are pretty bad for me anyway, right? So it's just an economic calculation. You're liable to get a better quality movie if there's a movie star in it, which is why the star system exists. It's sort of like, why do people hire celebrities to try to sell new goods and services? Well, because if you hire a celebrity, it means you've invested a lot, which means you want to stick around for the long term. So it's a way of conspicuous consumption display that says you're not just a fly-by-night organization that's going to vanish. So it's determined by the customers, and the customers are making valid choices based upon costs and benefits to go to a movie with a movie star. And of course, if it's some beautiful woman, then even if the movie isn't that great, well, I guess you get to eyeball a beautiful woman for a couple of hours, not the worst thing in the world, right? For women, I'm sure it's the same with Brad Pitt.
[44:12] So, it's not possible to determine a just wage based upon an individual's contribution.
[44:21] So, why not? Why are people not allowed to make rational calculations?
[44:25] And if you look at, say, the movie Industry or whatever it is, right? If you go and see some unknown band, then the odds of them being really great is very low. If you go and see a band you already love and know their music, then the obvious is you having a good time, pretty good, right? Almost certainly good, right? So why are you not allowed to make your rational calculation about where you allocate your funds based upon cost-benefit analysis, which is, you know, instinctual for a lot of people, right?
[44:55] You know, there's a bunch of albums that come out every, used to come out every year, and they still do albums, I guess they do. But, you know, when Queen would put out a new album, I'd buy it. I'd buy it, like 100%. I talked to someone in the music industry who was saying that you know in canada if i remember the numbers rightly there are so many beatles fans that if like ringo star puts out a new album you're going to get 10 000 sales like right off the bat like bang you just know that's the baseline right whereas if some other random drummer puts out an album nobody's going to buy it right, and i sort of say this because in in university i was a dj and i had a radio show, I still got a tape of it somewhere a couple of tapes of me doing a radio show at the age of 19 or 20, and I was in the, radio station and there were thousands of albums on the wall and sometimes I'd just sort of flick through them when I was playing a long song sort of flick through them and.
[46:02] I remember playing the clap by yes and at the end of it screaming that my fingers were bleeding um so, you just see the number of albums out there and you know most of them lost a fortune or lost money or never made money and people come and go whereas you know even a song like free as a bird, resurrected you know not a great song but people will be really interested in it or the Freddie Mercury one or the Queen one that came out recently, people will just listen to it because, and so will I, right? So will I. So what's wrong with people making rational cost-benefit calculations based upon economic preferences? Nothing wrong with that. Now, for someone to armchair quarterback and say, well, this is fair, this is just, this is unjust, I agree with this, I don't agree with that. Who cares? You're just a yapper. You're just yapping.
[46:59] Let people make their choices let people allocate their finances and capital and choices wherever they want it's their right it's their choice you don't have the goddamn right to go in with a gun to people's heads and tell them where to spend their goddamn money you sociopathic a-holes all right freedomain.com slash donate to help out the show massively appreciate it lots of love from up here talk to you soon bye.
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