to not understand capitalism

[IceBeing]

Some people work hard (say 60 hours a week all year) and get paid about £20000 a year...and some people work hard and get paid 10 or even 100 times as much a year.

How can 60 hours a week of work from 1 person be worth 100 times as much as 60 hours a week of work from another person?

[NeoFaust]

The theory is 'value added' - that somehow the labour of highly trained individuals is key to making a product created for £1 sell for £100.

This could be advertising, choosing intelligent markets, shrewd investments or identifying areas of efficiency.

In practice it means lying, manipulation and corruption.

[EverythingsDozy]

The same way one carrot would not be equal to one cow, if we traded in food rather than money.

[WhereDoAllTheCalculatorsGo]

Personally I'd rather a brain surgeon operated on my brain than a bin man. Would be cheaper though, I suppose.

[IceBeing]

hmmm so I get the premise that scarcity of skill implies some premium...but 100 times as much?

comparing a whole cow to a carrot is fallacious though...you get more nutrition from one than the other. Comparing a cow of breed A to a rarer cow of breed B and saying that even though you get the same value from both one is going to cost 100 times as much as the other would be fairer.

[IceBeing]

I rather pay a bin man than a footballer.....

[Pootles2010]

Supply and demand surely? My 3 bed in Yorkshire is worth less than 1 bed flat in London, because less people want it.

A person capable of running multi-national company, or a highly qualified surgeon, lawyer etc is going to be harder to find than a shop-floor worker.

[IceBeing]

and no offence kim but if I could only afford one or the other I would rather pay the bin man than a tutor....

[IceBeing]

The housing one is interesting because the differential isn't as great really...

I mean it is rare to be able to find a house that would go for 100 times as much if you moved it to London.

So even though people think house prices in London are bonkers, wages in London are actually MORE bonkers.

[Pootles2010]

Why though Ice? I could take my bins to the tip myself, its a job anyone could do. But teach my child to get to a higher grade in maths? I can't do that, I must pay someone who can. Therefore, tutor gets more than bin man.

[IceBeing]

Yes but should we actually leave the market to its own devices given it apparently throws up huge pay for people who trash the economy and almost no pay for people who make the whole shebang actually work?

[qwertyqwerty]

It's really not hard.

If you work for a company/football team etc and generate say 100m for them in a year...you would want a cut of that.

Let's say they agree to pay you 1m a year, well then company b comes along and says oh well we'll pay you 10m a year.

Sorry but it's really not hard to understand.

[IceBeing]

Well I could indeed take rubbish to the tip...and I could clean my place of work, and cook all my own food, and produce all my own food and....

Oh wait...actually I can't do all that and my job as well....

[Pootles2010]

That's an entirely different argument Ice, and tbh, I have no idea.

I guess it boils down to capatalism being a bit shit for some, but better than alternatives.

[IceBeing]

Kim yes but now find an equivalent for 6 million....

[tabulahrasa]

I can buy a Dexter cow for about £300...they weigh about 350kg, 350kg of carrots from Asda costs £311.50.

So cows and carrots are about the same tbh...

But the price of cows and carrots isn't really the point.

Some jobs pay more per hour because not just anyone can do them, they need years of training or experience, so if you want to find somebody to stack a shelf, most people are capable of that and you don't need to pay as much as you would if you wanted someone to do something complicated.

Some just pay more because society puts weird values on stuff, like football.

[merrymouse]

Market forces.

It's all very well working hard, but not much good if nobody wants what you create.

Of course there are some things we need, but may not want to pay for as the benefits are less tangible e.g. a well educated society, healthcare even when we are healthy. That is where government steps in and forces us to pay for things that the market wouldn't value. Different governments do good and bad jobs investing in these things.

Also, it depends how many other people can do the job. It's not difficult to find somebody to stack shelves. It's quite difficult to find somebody who can perform brain surgery or score the goal that wins the World Cup.

Then there is a whole other category of people who earn relatively large amounts of money because they work close to loads of money. E.g. if you are a corporate lawyer organising multi-billion pound deals, there is more money floating around to pay you a high salary than if you work in criminal law. The same is true of banking.

Fundamentally though, it's all about one person making more of something than they need to support themselves, finding somebody else who is prepared to buy it, and then finding a third party who has the resources to invest in that business and take a cut of the profits.