Marco Rubio’s speech about our economic system. Interesting and encouraging.

https://www.washingtonpost.com/opinions/marco-rubio-may-be-on-to-something–if-he-gives-up-the-straw-men-arguments/2019/11/07/315a472c-0196-11ea-8501-2a7123a38c58_story.html

In case some can’t access WAPO, here is the gist as written in the opinion:

“The Florida Republican spoke about how American capitalism had run aground and how a different understanding of the role of business and markets could save us from drowning. He argued that business had forgotten its obligation to society, describing in detail the disintegration of families and hollowing of communities. Noting the right of workers to share in the benefits they create for their employers, he proposed taxes on stock buybacks, an expanded federal child tax credit, paid parental leave and even a national cooperative bank for domestic investment. And he posed what might be the key question of our time:

“Does our country exist to serve the interest of the market, or does the market exist to serve the interest of our nation, and of our people?”

There were a couple of links to other sourceS not paywalled that gave a background to his speech.

https://business.catholic.edu/news/2019/10/human-dignity-and-the-purpose-of-capitalism.html

https://www.rubio.senate.gov/public/_cache/files/6d09ae19-8df3-4755-b301-795154a68c59/C58480B07D02452574C5DB8D603803EF.final—cua-speech-11.5.19.pdf

I think that the CEO meeting a few months ago that outlined the concept of corporations focusing on the community and workers and not just a quarterly return comes to mind.

Keeping in mind that Rubio and those CEO’s are not bleeding heart liberals, I think that there is a rising awareness that free market capitalism has responsibilities in return for that freedom.

21 thoughts on “Marco Rubio’s speech about our economic system. Interesting and encouraging.

    1. I don’t think that will happen. Rubio and those CEO’s are outliers for the time being.

      Forward thinking is not a conservative strong point. At least not beyond the next quarter.

      In some ways, a good political system would have Progressives that push for “out of the box” thinking and ideas, while tempered by Conservatives.

      Sort of like an entrepreneur who is restrained a bit by his accountants and/or his underwriters.

      The idea of labor with rights has moved forward very little since the tumultuous beginnings of the industrial era.
      The union battles, bloody and costly, were a watershed for at least recognizing that there was a fine line between slavery and the working conditions in the late 19th and early 20th century.

      We are still in an adversarial system which pits labor and management, just not necessarily with guns and goons. The idea is still that labor is but another commodity like raw materials that is a necessary “evil” in the pursuit of profits and must be bought for the least amount of expense. That makes sense in a way, but overlooks the obvious. That is that the entire reason for an economic system at all is to quantify a system of the exchange of goods and services among people.

      Also, the expenses of labor for one company is the profit for another. That is, the paychecks from Ford pay for airline tickets on Delta.

      Iron ore doesn’t do that.

      Liked by 2 people

      1. RE: “The idea of labor with rights has moved forward very little since the tumultuous beginnings of the industrial era.”

        There’s good reason for that: Labor’s only rights are those mutually agreed upon with an employer at the commencement of an employment agreement. No other arrangement is either practical or enforceable.

        Most people can see this intuitively. If you agree to work one hour for $10.00, you’re not entitled to receive $11.00. You’re also not required to accept only $9.00 as payment in full.

        Similarly, most people can see that if labor has a “right” to share in business profits then businesses have has a corresponding “right” to share their losses and liabilities with its workers. Few workers, however, would consent to such an arrangement. Imagine, for example, being a former Johns Mansville employee and having a lifetime lien against all your earnings as a result of asbestos claims.

        Like

        1. “… lifetime lien against all your earnings as a result of asbestos claims.”

          Why? The owners and management who do share in the profits are shielded to limit losses to income and stock value. Why should workers be different?

          Other capitalist countries, like Germany, have very strong unions but the cooperation with management is quite good. And they have union members on the boards. There are ways to make this work other than adversarial methods.

          But the bottom line is that human labor is different from materials and buildings. The economy is all about the exchange of goods and service by people. People who need to eat, have families, get sick, own homes, volunteer, create communities, buy goods and services and add to the national tapestry of what it means to be a nation. And Rubio and some very powerful CEO’s et.al. are acknowledging that.

          This is not a communist or socialist thing. It is a fact of life.

          Like

          1. RE: “This is not a communist or socialist thing. It is a fact of life.”

            I think it is a communist/socialist thing, because the idea that workers are exploited by business owners (capitalists) traces back to Karl Marx, the originator of communist/socialist economics. Marx’s concept of labor exploitation never became mainstream thinking among economists, however, for two main reasons:

            a) it is logically fallacious

            b) no actual economy based on Marxist economic principles has ever been successful

            The difficulty is this: If one doesn’t know and appreciate the fallacies of Marxian economics, one is prone to repeat those very fallacies, perhaps without recognizing that one’s own thinking is Marxian.

            The notion that labor has natural rights which transcend the basic employment contract is an example of this. Marx tried to establish a natural right of labor to participate in profit, but utterly failed. And no other economist has ever succeeded where Marx failed.

            Like

          2. RE: “Why? The owners and management who do share in the profits are shielded to limit losses to income and stock value. Why should workers be different?”

            Workers are not parties to the articles of incorporation. Your idea that workers should share in the profits would change that. But if workers have a right to a share of profits, why shouldn’t they have exposure to losses and liabilities?

            That’s the question you need to answer.

            Like

        2. “why shouldn’t they have exposure to losses and liabilities?”

          I did answer that. They would have the same exposure as management and shareholders, period.

          That means loss of stock value and perhaps jobs.

          No one is liable beyond that in a corporation.

          Like

  1. RE: “Noting the right of workers to share in the benefits they create for their employers…”

    What right is he talking about; where does it come from?

    Labor is one of several inputs to production. Others are materials and facilities. Let’s assume that a particular business spends 30% of its operating expenses on each. Would that mean that the materials supplier has a right to receive 30% of the benefits the business creates? How about the landlord providing the facilities? Does he deserve 30% of the benefits?

    If not, what “right” does the worker have to 30% of the benefits?

    RE: “Does our country exist to serve the interest of the market, or does the market exist to serve the interest of our nation, and of our people?”

    This is one of those rhetorical manipulations that sounds reasonable, but isn’t. Markets don’t exist to “serve” or “be served” by anyone. They just exist.

    Laws, regulations and customs may serve or be served by people, but not markets.

    RE: “there is a rising awareness that free market capitalism has responsibilities in return for that freedom.”

    Do you mean capitalism, or government? Capitalism is a thing without a brain; it isn’t capable of exhibiting “responsibilities.”

    Government, in contrast, is capable of both responsible and irresponsible behavior. Our government was conceived on the idea that human rights are unalienable in the sense that they come from Nature (or God), not from government. For our government to behave responsibly, it must preserve and protect freedom as a natural right, but this objective has nothing to do specifically or necessarily with capitalism.

    Rubio is either a dolt, or he is trying to capitalize on the popularity of ignorant socialism.

    Like

    1. What are some differences between ‘ignorant socialism’ and capitalism . . . ‘a thing without a brain?'”

      Ignorant socialism means “an ignorant belief in or ignorant support for socialism.” This is made clear by the full phrase, “popularity of ignorant socilism.” Capitalism is a thing without a brain in the same way that dirt, or socialism itself, is.

      Like

  2. “Capitalism is a thing without a brain”

    And that is the problem.

    It leads to such ridiculous ideas as that there is no difference worth considering between a human being and the machine that they work with.

    Liked by 2 people

    1. RE: “It leads to such ridiculous ideas as that there is no difference worth considering between a human being and the machine that they work with.”

      Where do you get that idea? And what does it have to do with anything?

      Like

    2. Why is that a problem?

      A free market is much like natural selection, survival of the most efficient. It doesn’t have a goal beyond that, but that is fine.

      Greater efficiency means less labor is required to purchase what we need and an abundance of those things to choose from. Government intervention into the market always means less efficiency and thus greater costs.

      Natural selection gave us cheetahs, intervention into natural selection gave us poodles.

      Like

      1. A free market is not a problem. So long as it follows certain rules.

        You can’t sabotage your competitors with violence. You can’t dump effluent in the rivers and streams. You can’t ignore the Tragedy of the Commons. And of course a litany of other do’s and don’t as products, lives and trade became infinitely more complex both domestically and internationally.

        Then there is the matter of labor, which has a unique quality that other business expenses don’t have.

        Labor is both a producer and a consumer. It is also the raison d’être of all business, commerce and markets. Because labor is composed of people.

        Without labor and its paycheck, there is no business. There is no market. And there is no economy in our current version of that.

        Keeping labor costs down is an important goal of most businesses. And a business has to make a profit in order to stay alive. And in Third World economies, we see the results. They have the cheapest labor and the largest gap in wealth. Essentially, many workers cannot buy what they are producing since most of it is for export and their pay is too low.

        Yet, we have to ask ourselves, is that the best for the health of a nation’s citizens. Is there not a way for businesses to profit less to pay labor more and raise the standards of living? We already to that with the constraints on environmental impacts such as effluent dumping. The greater health of the environment and the people who live in is more important than profit, so the companies make less than they would have otherwise. Still profitable, but just a bit less so. In the First World, it is established that we have a right not to have our environments destroyed for profit.

        And this costs us a competitive advantage in the global scale, but we live better.

        Now apply such thinking to labor.

        Here is the catch, however. As robotics and AI start taking over millions of jobs, it will get problematic.
        But once the AI starts eliminating top and professional jobs, which it will, then some kind of creative thinking will take place. The key is to make sure that creativity works its way through the entire populace.

        IMHO

        Liked by 1 person

        1. “ So long as it follows certain rules. “

          That’s the sticking point, big money uses big money (they ARE people of course) to make the “rules” vague enough to wiggle around. Even then they get greedy(er) and abuse the “rules” and subsequently the pions that struggle to live under their overbearing hands.

          Liked by 1 person

        2. RE: “Is there not a way for businesses to profit less to pay labor more and raise the standards of living?”

          No, there isn’t. Think it through: When earnings rise, so does spending. When spending rises, so do prices. Until an equilibrium occurs. At that point, earnings must rise again to enable more spending, which leads to higher prices, which establishes a new equilibrium, which starts the process all over again.

          But notice that the process is self-limiting. You can’t keep cutting profits forever because at some point profits hit zero.

          The process is also unnecessary, because profits pay for process improvement (doing more with less), and process improvement also improves the standard of living.

          Like

      2. RE: “Greater efficiency means less labor is required to purchase what we need and an abundance of those things to choose from.”

        Exactly. Put another way, market forces alone tend to improve the standard of living such that artificial profit cutting to increase wages is unnecessary.

        Like

  3. “Where do you get that idea?”

    Well, lots of “conservatives” deny that there is any more responsibility to an economically obsolete employee than there is to an obsolete machine so just get rid of it or them. Like you are arguing in your post above.

    “And what does it have to do with anything?”

    The subject is Senator Rubio’s speech in which he opines that the kind of capitalism you seem to like -“a thing without a brain” – needs to change its ways.

    Liked by 2 people

    1. RE: ” Like you are arguing in your post above.”

      I mak no such argument. Go back and read: The three providers of inputs to production I name are workers, the materials supplier and the facilities landlord. All human beings, none of whom have any right to a share in the benefits the business creates.

      Like

      1. As usual, you do not understand the import of the statements you make.

        But of these three groups you mention, only the workers invest their lives into the success of the business. THAT is why your “analysis” is way off the mark.

        Like

      2. RE: “But of these three groups you mention, only the workers invest their lives into the success of the business.”

        What does that even mean? If a particular worker represents 30% of the cost of production does that mean the “investment of his life” is worth 30% of the profit? If two workers represent 30% of the cost of production does that mean the “investment of each of their lives” is worth 15% of the profit? What if one of the two workers is an accountant and the other is a janitor?

        How do you explain the concept that only direct employees, and not others who provide inputs to production, “invest their lives into the success of the business”?

        Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s