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?

It's about deferred gratification. To get to be a surgeon involves years and years of hard work and great intelligence and application. There has to be some kind of reward for those years.

You get paid for what you know, not what you do.

Also, you get paid more for 'consequence of error'.

Obviously supply and demand, too.

I think it's also (footballers aside) about the amount of responsibility which goes along with a job. If captains of industry don't to their job well, thousands of people could end up without a job, lose money, etc.

If a brain surgeon doesn't do his job well, someone could die, or be badly affected for the rest of their life.

But if a bin man doen't collect the bins - we can do that ourselves.

Its simple...

Take a supermarket chain.

They need one CEO

They need thousands of checkout operators.

Of course they cannot afford to pay them the same. Not to mention many people can work on a till...very few have the abilities to be a CEO.

hmm but does anybody really think that banks need to pay in the millions per year to get a decent job done?

For that matter does anybody think a decent job is actually being done?

Or to put it another way I wouldn't pay my cleaner ANYTHING if they did the kind of job the bank bosses have been doing recently....let alone millions.

As somebody with 4 degrees I might think my skill set is more unique than a cleaners....but I don't think my work is worth 100 times as much...maybe 1.5?

I don't think society would notice in the slightest if I stopped working (in fact I have and they didn't).

I could just about fit in my head that the best of the best is worth 10 times the rate of the average....

monica you get paid more for the potential consequences....except in what way did the consequences of recent high paid utter failures in the news fall on the failures themselves?

I could understand big risk, big reward...but not if the risks are not borne by you but by everyone else....

Now firefighter is a big risk job....not so much big reward though...

kim but that is only globally true not locally...I would do my job for far less than I am paid...

and someone in a very generic low paid role gets no say in working for a certain price either. We have a system in which people are taking full time jobs that don't provide a living wage and getting topped up by the government....is this a success for capitalism?

Yes, I think there is a level at which banker's salaries start to take the piss and I don't think all people are naturally inclined to pay the people who work for them a fair wage.

In any system those with the most power have the ability to exploit those with the least power.

There were thousands of bankers earning more than 2.5 million last year.

but just think how our society would be different if the maximum wage was capped at 10 * the national average....

wouldn't that be better?

Supply and demand.
If I advertise a job which requires people to put paper in a box and pays £20 an hour, I will probably get hundreds of applicants who are all capable of doing it. If I advertise the same job at £8 an hour, I will probably also get hundreds of applicants who can do the job. Where is my incentive to pay an extra £12 an hour when I can get the right person for the lower wage?

If I advertise a job for £20k a year for someone who has a phD in quantam physics and will work on a trading floor being shouted at, while knowing that one false calculation will lose the bank a billion pounds, but they are expected to make a profit on 10s of millions, I probably won't get a single applicant who can do the job.

If I advertise the same job for £200k, I might get a few
If I advertise it for £200k, plus 1% of whatever profit they make, I'll almost certainly get someone

So basically, if you do a job that pretty much anyone could do, you won't get paid more than the minimum they can get away with paying.

If you do a job that no one else can do, and makes someone higher up the chain better off, you can name your price.

Everything in the middle is a variation on that

As someone above mentioned, it's about what you contribute.. You're paid based on the value that those paying your wages think that you have. My cleaner has 2 masters degrees and is fluent in 5 languages, and she earns £11/hour, because she's chosen to work in an industry where the qualifications she has are not relevant.

If you're good at talking rich people into putting their money somewhere, you get a cut of that.

I make a very good base salary, but I also have a very good bonus if I bring an additional value to the company above and beyond what my normal duties call for. What's wrong with that?

If I advertise a job for £20k a year for someone who has a phD in quantam physics and will work on a trading floor being shouted at, while knowing that one false calculation will lose the bank a billion pounds, but they are expected to make a profit on 10s of millions, I probably won't get a single applicant who can do the job.

Yes it would be terrible if no one took that job...oh wait! Maybe if noone was doing that job then we wouldn't be in the mess we are currently in!

If no one took on cleaning jobs then we actually genuinely would be in a mess.

Or farming...or anything else that actually produces something...

I don't get the supply and demand thing....

I mean I have an actual genuine demand for cleaning and food etc. I have no demand whatsoever for stock brokering bullshit.

So how did capitalism throw up this 'solution'? It seems to be screwed up to me...

Are bankers like a virus? Are they some sort of unavoidable glitch in the system?

Why doesn't capitalism value the things we actually need?

Humans are competitive and capitalism exploits that. There is absolutely no need for anyone to work 80+ hours a week and earn hundreds of thousands of pounds but people will do that so they can outperform other people.

Capitalism is a very effective system but, just like communism and socialism, it needs to be reined in to be truly effective. The problem is that at the moment it isn't being reined in.

Just because you don't have a demand for "stock brokering bullshit" it doesn't mean that no one else does either.

What I'm getting from your posts is that you're not against capitalism, you're against bankers. Is this about the Barclay bonuses by any chance?!

OP, how would that cap work though?

In a typical sales company, you have the cleaner earning minimum wage, and you have the salespeople earning a % of whatever they make for the company. If you take away their ability to earn that commission, and put them all on 10x the cleaner's pay, that is an awful lot more money not being paid out in salaries. Does it go to the owner of the company? Or are they on the 10x cap as well? Does it just sit in the bank?

Or would people work out the salary they want, divide it by 10 and pay their cleaners that? And if they do that, how do you stop the pay divide between those who work in 'entry level' jobs and those on benefits?
Also, where is the tax income coming from if you take away all the high earners who pay half of their income to the government?

OP, do you have a pension? Or a mortgage? Or do you work for a company that has a small business loan?
You may not directly engage the services of 'stock brokering bullshit', but I would bet my (mortgaged) house that you indirectly use an awful lot of the services these people supply.

And don't forget that while some banks got into an awful lot of trouble, others didn't. More, in fact, than did get in trouble.

So I don't really understand why we have to reinvent an entire global system to punish the relatively small number of people who cocked up.

In pure capitalism, value is entirely relative.

Take the royal family for example. They are just a bunch of people. But historically their family was more powerful than everyone else and they used that to claim they were somehow special. The only value they have now is purely historical and monetary, and yet that still affords them respect and notoriety. They have absolutely no intrinsic value - they are flesh and blood, they shit and they die. But they have outdone everyone else to such an extent that their "value" endures.

I don't get socialism. I moved to the oil and gas industry for several reasons, mainly a tax free salary and decent healthcare