A Possibly Interesting Debate On Economics and Morals

[Axm]

I found a very fascinating clip here from a late-70's show that covered Milton Friedman lectures and the debates with the audience after, and rather than post it in Random Thoughts, I think it deserves its own thread.

[youtube]http://www.youtube.com/watch?v=cD0dmRJ0oWg[/youtube]

Whose side are you on after watching?

[Sonikku]

The winner of argument is apparently decided by whoever can speak the longest and whoever can speak last.

[Bluecast]

Donna is hot so is Jackie. They are all high. Red calls everyone a "Dumbass"

[mue 26]

It is an interesting debate actually. I don't think I can agree with Friedman, yet I can't really process a good enough counter argument to present. He's a slippery one he is. We need to get Naomi Klein up in this thread.

[Sonikku]

I tend to agree with Moore with most of his criticisms of the auto industry. His depiction of how his home of Flint Michigan was devastated by GM's decision to close the plant and lay off thousands of Americans to move labor to cheapo Mexico despite record profits tells the perfect analogy of the dismantling of the American dream we find ourselves with today. Looking at Flint and Hiroshima today compared to 1946 is a very chilling reversal indeed. But while Flint was not destroyed by any bomb or war machine it was devastated just the same by corporate greed and economics.

[Axm]

Friedman missed the point. It wasn't "how much money is a life worth", it's whether or not morality should be factored into the equation at all. The fella asking the question seemed to be implying that the decision was purely financial.

[KiBa]

^ But Friedman did answer whether morality should be factored into such decisions. Morality is enforced by means of courts provided by the government, since Ford was guilty of fraud. There's other moral decisions to consider too, like Ford's duty to maximize profits for its employees.

I tend to agree with Moore with most of his criticisms of the auto industry. His depiction of how his home of Flint Michigan was devastated by GM's decision to close the plant and lay off thousands of Americans to move labor to cheapo Mexico despite record profits tells the perfect analogy of the dismantling of the American dream we find ourselves with today. Looking at Flint and Hiroshima today compared to 1946 is a very chilling reversal indeed. But while Flint was not destroyed by any bomb or war machine it was devastated just the same by corporate greed and economics.

But was it corporate greed and economics that devastated Flint, Michigan? Or was it oppressive Federal tariffs that make the U.S. non-competitive? Or a lack of tariffs that embolden foreign slavers to undercut American standards? What is the government going to do, force GM and every other company to produce the same for more? Enslave the board? Some other company will produce in Mexico and undercut GM, and then Flint, Michigan is still destroyed.

Moreover, as Friedman said, it is only because the government taxes "corporations" (i.e. workers) that they feel they need not tax the actual holders of concentrated capital as much. That is the real issue: a corrupt tax code that encourages monopoly and unjust wealth concentration. Freedom is always better than planning.

It is an interesting debate actually. I don't think I can agree with Friedman, yet I can't really process a good enough counter argument to present. He's a slippery one he is. We need to get Naomi Klein up in this thread.

She's invited.

[beedle]

^ But Friedman did answer whether morality should be factored into such decisions. Morality is enforced by means of courts provided by the government, since Ford was guilty of fraud. There's other moral decisions to consider too, like Ford's duty to maximize profits for its employees.

the idea that institutions should simply be split into two completely distinct categories as financial and moral is kinda unrealistic and ridiculous.

Also, Ford's duty to maximise profits for its employees? Hahahahahaha. That is hilarious. Since when do businesses ever maximise profits for that purpose? Employees (GENERALLY) are paid as little as they can get away with. I'm no Marxist or anything, that's just the way it is.

[Sonikku]

I never said government was going to fix things for Flint, Kiba. Fact is, no law can make people stop being greedy job off shoring assholes. But that does not mean we can't condemn them for being greedy, job off shoring assholes. Nor does it mean we cannot condemn the kind of insanity that goes on in moving American jobs and by extension wealth into other countries, thus depriving said companies trying to save a buck of having customers fiscally secure enough to buy their products.

When you lay off people to set up shop in a country with no standards you are destroying that individuals disposable income and all the money they were putting back into the local economy. Maybe the people laid off weren't all buying your businesses product in particular (though it would seem strange if GM employees only bought non-GM cars) But when it is a mentality adopted by all the corporations of the country, sooner or later your customers will be poorer for it and your own income will be demolished in turn in one of the sickest domino effects ever seen. It's the mentality I condemn. Not a lack of government strong arming regulation.

[KiBa]

^ But Friedman did answer whether morality should be factored into such decisions. Morality is enforced by means of courts provided by the government, since Ford was guilty of fraud. There's other moral decisions to consider too, like Ford's duty to maximize profits for its employees.

the idea that institutions should simply be split into two completely distinct categories as financial and moral is kinda unrealistic and ridiculous.

Also, Ford's duty to maximise profits for its employees? Hahahahahaha. That is hilarious. Since when do businesses ever maximise profits for that purpose? Employees (GENERALLY) are paid as little as they can get away with. I'm no Marxist or anything, that's just the way it is.

But Friedman's position is not to split the financial and the moral. Friedman's point is that the financial and the moral are not necessarily opposed, and in the case of workers, they won't be working at all unless their companies maximize profit. Had Ford not committed fraud, the vehicle would have been a financial loss, and making the car safer would have maximized profits. Hence, financial interest and morality converge.

Also, the key phrase is "employees are paid as little as they can get away with." Maximized profits determine that minimum. So, it stands to reason that the more profit retained, the minimum pay they can get away with must increase, or they will lose employees to competitors.

I never said government was going to fix things for Flint, Kiba. Fact is, no law can make people stop being greedy job off shoring assholes. But that does not mean we can't condemn them for being greedy, job off shoring assholes. Nor does it mean we cannot condemn the kind of insanity that goes on in moving American jobs and by extension wealth into other countries, thus depriving said companies trying to save a buck of having customers fiscally secure enough to buy their products.

When you lay off people to set up shop in a country with no standards you are destroying that individuals disposable income and all the money they were putting back into the local economy. Maybe the people laid off weren't all buying your businesses product in particular (though it would seem strange if GM employees only bought non-GM cars) But when it is a mentality adopted by all the corporations of the country, sooner or later your customers will be poorer for it and your own income will be demolished in turn in one of the sickest domino effects ever seen. It's the mentality I condemn. Not a lack of government strong arming regulation.

I agree. In fact, everyone agrees with what you've written here.

Still, here's another talk to consider to understand Friedman's thought:

[youtube]http://www.youtube.com/watch?v=JSumJxQ5oy4[/youtube]

[beedle]

But Friedman's position is not to split the financial and the moral. Friedman's point is that the financial and the moral are not necessarily opposed, and in the case of workers, they won't be working at all unless their companies maximize profit. Had Ford not committed fraud, the vehicle would have been a financial loss, and making the car safer would have maximized profits. Hence, financial interest and morality converge.

Also, the key phrase is "employees are paid as little as they can get away with." Maximized profits determine that minimum. So, it stands to reason that the more profit retained, the minimum pay they can get away with must increase, or they will lose employees to competitors.

In all honesty I just find this entire argument bizarre.

[KiBa]

I do too, beedle, insofar as money, as a system, is indeed arbitrary. But the only alternative seems to be slavery as a productive economic system.

[Yokosuka Martian]

If corporations were people, they'd be psychopaths.

[Sonikku]

I'll believe corporations are people when Texas executes one.

[St. Elmo's Fire]

If corporations were people, they'd be psychopaths who also happen to be some of the biggest cunts you've ever met.

EFA. And I agreed with your less-rude version anyway.

It IS bizarre, and I'm not sure what to think TBH. The bit that got me was where he posed the "What value do you put on a human life? If it actually cost $200m, would you think the same?" question. To me, who knows "how the world just is" and capitalism etc., and accepts it and gets on with things, a situation where someone dies because of trying to save money fixing a serious design fault is unacceptable. Or so I thought, until you added so much other stuff on (about other employees, the needs of the many vs the few who will die in a fireball, etc.). Interesting one.

For this specific case though, $13 isn't that much, how much was a Ford Pinto in 1977 (when this design flaw was present)? About $2k? They shoulda either added the cost on to the purchase price if they wanted to keep their margin, or taken the hit, since they were making a lot more profit than $13 when the car was sold anyway. It wouldn't hurt the workers' pockets much either. And let's not forget what a greedy bunch of preening cunts the UAW union has become (though it was General Motors who suffered most for that in the current times). In an ideal world, if the design fault was gonna cost thousands to fix, they'd be better off scrapping the whole design and starting again, which would then run into millions, and probably cause job losses, but to me, letting people die to save a few $$ is not on.

I think we basically ALL agree with that, but some corps obviously don't and live and die by "the numbers"...

I have absolutely no idea how one would go about determining the value of a human life either.