I try to avoid getting drug into philosophical discussion on Facebook anymore. Political arguments don’t typically go very far and people’s minds are hard to change. However I’d like to share this with you before I but my nose back into the copious quantity of reading I need to do by tomorrow. The topic wound up some how on profits/businesses/laborers etc. Here’s a question proposed by a man whom I do not know, I’ve paraphrased some of his comments as they’re quite long and somewhat redundant. Here is his first allegation:

I can see what you are saying, but I don’t understand why when employees for a company work hard to help that company create record profits they can not reap the rewards for that work. Heck the wages of the average worker have barely covered the increase in the cost of living, let alone profited by the growth in the economy.

It’s not like that middle manager didn’t have anything to do with those profits, he was a key ingredient in making those profits, so why can’t he even get a percentage of the company growth?

And my response, in pieces:

To answer your first question, companies have no obligation to share the profits of the company with it’s workers. That is a decision left up to the managers at the approval of the Chief Operator/Owner. Businesses primarily have an obligation to their owners and or shareholders. The lowest wages possible to keep those positions filled is what is optimal for business and society as a whole.

The root of the point I’m trying to make lies on whether coercion is something that is a tool to be used by (whom?) to share those profits. Where is the underlying need for profits to be shared to employees? And if the sharing of profits is not happening, how do you enforce it? Is there some preconceived moral code that businesses aren’t following? What are morals? Contrary to popular opinion,  morals are subjective.  Society establishes morals whether it be religious, normative, or otherwise. And should morals be enforced? We make laws enforcing morality all the time. Is profit immoral? There are a lot of fundamental questions that must be answered long before we criticize people who make profits. We all go to work to make money. We all work hard to provide for ourselves and our families. We don’t force anyone to pay us a paycheck, we don’t force anyone to provide for us. Generally speaking most people work for what they’re worth in our semi-free-market mercantile economy. Just the same as corporations don’t force anyone to invest in them or buy their goods. If society really didn’t believe in profits then we wouldn’t have an exchange system based on economic value.

The Gentlemen rebutted with a general economic fallacy, implying that increasing laborers wages helps the company:

Adam, while I agree that they don’t have to help their workers by increasing their pay, it still is the right thing to do. It’s not like they created the profits in a vacuum where they did it by force of will, no the Shareholders bring the capital and the workers bring the Labor and everybody creates the profit. I’m not saying that the Labor should get a huge share of the profit but how can we justify paying out less than 4% in wage increases to employees (which barely covers inflation) while the company sees record profits for the year. It’s like saying “You had nothing to do with this, only the people with the money matter”.

Increasing the wages for the middle class is a win win for everyone because it give them more disposable income which creates a higher demand for products which leads to more jobs and increased profits. Right now we have companies making record profits by laying waste to their customer base and that is just not sustainable.

My response:

Andy, anyone who has taken an economics course would tell you you’re building an ineffecient economy. You’re alleging hyperbole on a free market system that is a product of self-interest. If a “free-market” produces such atrocities which you describe, then is that a bad thing? Clearly people wanted it as they paid for the goods, invested in the company, and chose to work for those wretched profit motivated industries.

You’re making business awfully simple, as if corporations owe their employees anything at all. Remember, if investors and entrepreneurs had not taken risks there would be no jobs at all. Why should reward go to employees who risked none of their personal well-being in the development of the company.

By the way, who decides what is right? Why is paying employees more, moral? Who makes these morals? Where do morals come from? Who establishes this proposed “social contract?”

If employees are paid more than they are worth it harms enterprise. Period. How can you expect to earn $12/hour if your production is only marketable at $8/hour?

If higher wages were so necessary, why shouldn’t we just set the minimum wage at $50/hour? Wouldn’t the world be a lot better place if everyone made $50/hour? We can coerce businesses to go from $5.25/hour to $8.25/hour, why not just make everyone rich and make it $100/hour? While it may seem far-fetched, the extremes of the argument paint the picture of the margins.

The world revolves around self-interest. It revolves around money and every person being committed to their own well-being first and foremost. When someone asked you in high school what you wanted to be, did you pick your top tier jobs in life based on the socioeconomic benefit provided by those jobs? Or by what you thought you wanted to do?

None of us think of society first. Altruism is in itself a product of self-interest. Altruism would not exist without a self-motivated desire to do good by self-sacrifice. To sacrifice you must have something with which to give, and where does one obtain the sacrificial material good? By product of their own labor and mode of work. Self-interest, labor, work, product, are all parts of individual rights to property and your own human capital and ability to produce. It is a natural concept ingrained in mankind that is unwavering. The idea of work and mutual agreement for payment for a good or service. An exchange of capital whether it be intellectual, monetary, physical, etc.

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