Capitalism with a heart.

[NALs]

I want the egg and the chicken, but I don't want the chicken to put the egg!!!

If people want to see wages in the DR rise rapidly, stop supporting illegal immigration, make having a baby at a young age something to be ashamed of, and encourage massive emigration of the unskilled labor segment all at once.

Watch the wages rise and technology replace human labor from the sugarcane fields of La Romana all the way to the factories of Santiago.

Anything that doesn't includes increasing productivity on a per worker basis (ie. either decrease the labor pool while keeping productivity at current levels or keep the labor pool stable while increasing the productivity) is just a short term pipe dream.

It's like Socialism, it works well until countries grow out of it, then its either back to Capitalism or face a total collapse.

There's no way around this.

The only issue I have with people that often support high wages without taking into account the economic reality of a place, is that these are the same people that support actions and conditions that are counterproductive to achieving high wages. For example, they will come out in support of what this firm is doing "out of the blue", but also oppose deportation of illegal immigrants, oppose the use of technology, oppose pretty much anything that would ensure wages to rise.

It's as if they want to have the cake and eat it, without having someone baking it first. It simply doesn't make sense and these folks confuse the living daylights out of me. But, whatever.

BTW, I'm not against high wages, I'm just realistic of what needs to be done to have high wages become a reality in the DR, hence I will not support something that I know is a problem to achieving high wages.

The title of this post I think explains the dilemma quite clearly!

 

[Mariot]

If you're willing to pay more for a generic product, be my guest.

Problem is that's not how world economics works.

isn't that what brands and marketing have been invented for, so that people are willing to pay more for generic products?
besides, in first world countries people who can afford to have become more socially conscious, and a market for 'green' and 'fair' products has developed. so if these guys can manage to sell their story, they can sell their shirts.

 

[Daniel10]

I agree with Cobraboy and others that this should not work in the current economy.
But I do hope Knights will succeed.
First of all, there is a grassroot movement that doesn't want to walk around in top-brands just for the sake of being top-brands.
The economic crisis, that I believe is far from over, does lay barren the greed and especially the pleasing of stockholders. Just look at Google's latest figures. They made more profit, but stockholders where not pleased because expectations where not met.
The normal man on the street goes: What the f*ck?
I sincerely hope that greed gets less and people get more compassionate about each other.
Now there is a little point in this article that most overlook.
The CEO had a bad struck in live: Getting blind, son sick, brother died, friend died.
This guy was down and out in a life where everything changed around him. Not his fault and he started looking at life differently. Came up with more humanity and regained his eye-sight. Some may call it a miracle. But deep down in our hearts we all know that doing something good will alter your life's expectancy and could heal your body.
Call me a dreamer, I don't care. But I've seen people around me getting old and sick very fast because they couldn't cope with life's challenges. This Joseph Bozich realised that.

Back to the solid market mechanisms of playacaribe2. Do not forget that Knights is privately owned. If factory B&C are not, they cannot follow. If factory A doesn't need more workers, the workers of factory B&C could go on strike, demand all they want but in the end there is one thing they do not want: Loose their income. They could be jealous of the workers of factory A, but they surely do not want to loose their income. So factory B&C will continue to exist. Unless there is a strong union that keeps insisting on higher wages against better judgement.

 

[pedrochemical]

It is a poor excuse for poverty and exploitation that 'economics' somehow dictates that the only sustainable market is the most efficient market and in turn this most efficient market is the one that takes the most and gives the least to workers.

It is simply not true to say that of the profits made there is only one possible distribution that satisfies 'economic laws'.

There is always room to maneuver in a dynamical system such as this.

And more importantly - there are no such things as 'the laws of economics' - this is a pseudoscience - like astrology, psychoanalysis and long range local weather forecasting.

If these people want to pay over the odds to their workers then let them try.
I have done it in two scenarios and both times found that it worked well.
The financial benefits were massive for me and for the employees.

 

[Daniel10]

There is a lot of room to improve wages. It's just that the people at the top got a bit too greedy:

source: CEO-Minimum Wage Ratio Soars

This CEO just happens to see it differently.

 

[playacaribe2]

I did not see that anyone in the thread...

It is a poor excuse for poverty and exploitation that 'economics' somehow dictates that the only sustainable market is the most efficient market and in turn this most efficient market is the one that takes the most and gives the least to workers.

It is simply not true to say that of the profits made there is only one possible distribution that satisfies 'economic laws'.

There is always room to maneuver in a dynamical system such as this.

And more importantly - there are no such things as 'the laws of economics' - this is a pseudoscience - like astrology, psychoanalysis and long range local weather forecasting.

If these people want to pay over the odds to their workers then let them try.
I have done it in two scenarios and both times found that it worked well.
The financial benefits were massive for me and for the employees.

stated that regarding profits...."there is only one possible distribution that satisfies 'economic laws.' Certainly the company is free to pay its workers as it sees fit over and above the minimum. The point was that those payments may have unintended adverse economic consequences.

As to there being no such things as the laws of economics, I will respectfully disagree. Call it pseudoscience or whatever you prefer, but as I see it, the laws of economics encompassing supply/demand and efficient markets have been around as long as there have been people bartering/trading/selling.


Respectfully,
Playacaribe2

 

[cobraboy]

As to there being no such things as the laws of economics, I will respectfully disagree. Call it pseudoscience or whatever you prefer, but as I see it, the laws of economics encompassing supply/demand and efficient markets have been around as long as there have been people bartering/trading/selling.


Respectfully,
Playacaribe2

It may not be an emperical science, but as a behavorial science accurate predictions can be made.

 

[pedrochemical]

stated that regarding profits...."there is only one possible distribution that satisfies 'economic laws.' Certainly the company is free to pay its workers as it sees fit over and above the minimum. The point was that those payments may have unintended adverse economic consequences.

As to there being no such things as the laws of economics, I will respectfully disagree. Call it pseudoscience or whatever you prefer, but as I see it, the laws of economics encompassing supply/demand and efficient markets have been around as long as there have been people bartering/trading/selling.


Respectfully,
Playacaribe2

Economists have been around for a long time - agreed.
So have astrologers, snake oil salesman and carnival charlatans.

The mistake is extrapolating immutable laws from theory.
Other sciences at least try do this with repeatable, verifiable experimentation and peer review.
Economics, by its very nature cannot do this.
The very 'things' of economics are people - who would claim to know the laws of 'people' - nobody.
Yet economists claim by inference and innuendo that what they glean in one particular and necessarily unique scenario must apply to other scenarios.

Why else would Nobel prizes in economics have been awarded to diametrically opposed and contradictory theories in successive decades?

Did this happen in other scientific disciplines?

Economics can give us broad and naive platitudes about supply and demand through modeling. But with all modeling, and especially where the degrees of freedom of the system modeled are virtually infinite (weather systems and people for example) too many assumptions must be made for the model to provide realistic solutions to hugely complex systems of what economists try to describe with partial differential equations.

Sure, if the supply of diesel is low the price goes up.
But beyond that axiom - 'there be dragons'.

A little off topic, maybe, but when people frame their opinions - or even worse, derive fiscal policy - with the so-called laws of economics then we generate dangerously speculative notions erroneously supported by this logically circular non-science.

If you see what I mean....:bunny:

 

[pedrochemical]

It may not be an emperical science, but as a behavorial science accurate predictions can be made.

I would say that by definition "accurate" predictions cannot be made using the tools of economics.
Rough predictions can be made.
But the reality and the consequences of these predictions lie in the cracks.

Mind you, it is all we have got so perhaps it is a moot point.

All I am saying is that we should take with a pinch of salt everything that is proclaimed as a "fundamental truth" by an economist.

After all, one of the greatest minds of the 20th century, Jon Von Neumann, used his superior logic and "indisputable" mathematics of economics to show that the correct course of action was to launch a nuclear attack immediately on the Soviet Union.

Thankfully some lateral thinkers intervened and we are all still alive.


Once economists stumbled across Rationality Theory, things improved. Not by much, but at least it has become more properly regarded as an art and not a science.

 

[cobraboy]

I would say that by definition "accurate" predictions cannot be made using the tools of economics.
Rough predictions can be made.
But the reality and the consequences of these predictions lie in the cracks.

Mind you, it is all we have got so perhaps it is a moot point.

All I am saying is that we should take with a pinch of salt everything that is proclaimed as a "fundamental truth" by an economist.

After all, one of the greatest minds of the 20th century, Jon Von Neumann, used his superior logic and "indisputable" mathematics of economics to show that the correct course of action was to launch a nuclear attack immediately on the Soviet Union.

Thankfully some lateral thinkers intervened and we are all still alive.


Once economists stumbled across Rationality Theory, things improved. Not by much, but at least it has become more properly regarded as an art and not a science.

Economics is as much of a behaviorial science as psychology is.

It's OK to not trust it. Hell, there are economic theories I don't trust either, and I done got skooled in economonics...

 

[pedrochemical]

Economics is as much of a behaviorial science as psychology is.

It's OK to not trust it. Hell, there are economic theories I don't trust either, and I done got skooled in economonics...

In my opinion, that is a very healthy attitude for someone who actually knows about these things.

And with this in mind, could you stop riding cool motorbikes around tropical islands and go explain it to the IMF, World bank, UN and various governments. :bunny::bunny::bunny:

 

[pedrochemical]

In my opinion, that is a very healthy attitude for someone who actually knows about these things.

And with this in mind, could you stop riding cool motorbikes around tropical islands and go explain it to the IMF, World bank, UN and various governments. :bunny::bunny::bunny:

Actually I realise that no you cannot - because that would be to violate a "law" of economics that is real.
The law of "Doing Fun Things in Cool Places" as I have christened it.

 

[NALs]

I always say that people go down the discrediting route whenever they feel threatened and have no real argument to calm their nerves.

The question now is, what exactly is so threatening about anything that has been said in this thread?

aranoid:







DR1 and its quirks.

 

[pedrochemical]

Discrediting what?
Economics?
Or Knights for having a go?

 

[pelaut]

Those that won't read Hayek, von Mises, Friedman, Sowell, etc., try a novel. Atlas Shrugged.
I haven't read it since Rand wrote it in 1957 (?), but I'm just positive the Knight story was there.

 

[Tarheel]

Economics

Economics is just as much a science as medical science. There's an old saying in economic circles which is "assuming all other factors remain equal". The problem is all other factors do not remain equal which causes people to dispute economic theory.

My thing is macro economics which to the average person is beyond common sense. Thus the tea baggers claiming that the US stimulus was ill conceived and unnecessary. Even an anti-government person such as Cobraboy knows that government spending during a deep recession is necessary to keep the whole economy from collapsing.

But back to the Knight Enterprises experiment. I would like to see it succeed as well but there's a reason why apparel manufacturers shop the world for the cheapest labor: The profit motive which is what business is all about. Providing a living wage is a great thing but it just doesn't fit into proven business models. Good luck Knight Enterprises but you are swimming upstream.

 

[mountainannie]

But back to the Knight Enterprises experiment. I would like to see it succeed as well but there's a reason why apparel manufacturers shop the world for the cheapest labor: The profit motive which is what business is all about. Providing a living wage is a great thing but it just doesn't fit into proven business models. Good luck Knight Enterprises but you are swimming upstream.

The bulk of the market is always to the cheapest but there is always a market for higher end products. Just look at all the "whole food" markets that are prospering in the USA.

But the apparel industry has long been a target for eliminating sweat shops (Apparel Industry Partnership's Agreement)

It has been the students (bless them) who have spearheaded this movement . and are KEEPING AT IT Nike | No Sweat

There is a HUGE market here for corporate responsablity - think Benneton and Banana Republic and all the other "brands" that can benefit from this sort of production.

And the really good news about this sort of operation is that it will not leave the DR to follow the race to the bottom.....

 

[cobraboy]

Even an anti-government person such as Cobraboy knows that government spending during a deep recession is necessary to keep the whole economy from collapsing.

Certainly. We can argue ~how~ the money is spent, however, and ancillary gubmint policies that may have an influence on the effect of the Keynsian model.

Re: Knight. I wish them well. But I, for one, do not discount the brutal tactics Dominican unions can play. I hope Knight can deal with them.

 

[Acira]

If you're willing to pay more for a generic product, be my guest.

Problem is that's not how world economics works.

A very success full story is that one of the Max Havelaar coffee.

And yes, consumers are willing to pay that extra more for those kind of products.

 

[pedrochemical]

I read Ayn Rand's book years ago - and I read "The world is flat" and books like "No Logo" there are many of these books around - each of their time and age and each reflecting the contemporary zeitgeist.
They all observe some interesting points - but not one of them gives and algorithm for manipulating the economy effectively or convincing reasons why the economy should not be manipulated.

The scary thing is that when a market finds its so-called most efficient solution, that this is somehow taken as the morally correct solution.
I would propose that is not the case in the same way that I would not propose that a "survival of the fittest" attitude is the morally correct way to run a civilised society.

Good luck to these people with their venture - however naive they may regarded as being.