You've just descended into an "oh no it isn't" panto show now. Do you think this brings me or anyone around to your POV? I don't see any point continuing.



I asked what makes you feel you are being forced to serve this market rather than it serve you. We're clearly disconnected, because that isn't what you answered at all.

Yep, but there are levels of both service and cheap. There is space and a role for Ryanair and BA first class and other inbetween.

It doesn't mean average across all companies! It's the average cost etc that a company itself incurs over time. It is not a comparison measure that says you can compare companies against each other, just a statistic that tells you if a company is making a super-normal profit or not.

It is a well understood economic statistic and certainly isn't as useless as you want to imply given its used by economists and accountants all over the world. Google super-normal profit and you will see for yourself.

Which companies are making super-normal profits? I have no idea given I don't have access to the data but I am sure we can make an educated guess that companies such as Apple, Google and Amazon fall into this category.

How are they able to do this? Well in Apple's case no doubt it is their marketing nous that gets people buying iPhone's that has a lot to do with it and there is nothing wring with that. What is wrong is when such companies add to their profit by exploitation such as Apple employing sweat shop labour to assemble the things.



That wouldn't even bring a low paid worker on £12K up to the level of the living wage, you know the figure based on the Minimum Income Standard.

A person earning £12K takes home (after tax and Ni) £11,114.72. £213 a week. Add 14% to that and we end up with £13680.

On that salary they would take home a net wage of £12,257.12. £235 a week.

If we assume they earn the minimum wage to get their £12K which is £6.31 an hour then they will have worked a 36.5 hour week to earn it.

The living wage is £7.65 so were they paid that then they would be on £14450.30, take home £12790.82 or £246 a week for the same number of hours.

Given £246 a week is the recognised figure as a living wage you r idea doesn't reach it and at the same time denies the tax man revenue.

Depending on circumstance social security payments will still be required whether you are on £12K, £13680 or £14450.

So no, I would not say your idea is a solution to low pay.

I answered your question and I explained why. I don’t know what else you would want me to do other than point out this is the case.

As I tried to explain, I think we (not necessarily me as an individual, us as a society) allow the market to be our master because the barriers of entry our so high that our choice in some cases are limited, this allows companies within it to offer what is most profitable to them, rather than necessarily what we would want. This is an example of the Market being the master.

I then pointed out a contrast in the BBC acting as a disruptive influence within the market, serving us what we want, with profitability a secondary factor. This then forces the other companies in that market to respond and offer similar wanted, if less profitable things. This is an example of the market being the servant.

The markets that Apple, Google and Amazon are in are quite dynamic in that although there are only a handful of firms doing the same thing as them, they are producing goods that actually compete with a lot of different things outside their markets because they are essentially providing things to do with finding information, reading, watching videos, taking photographs, listening to music, and there are existing products that do all of these things. So they are involved in quite a competitive market structure.

The reason these firms make large supernormal profits is because they are innovative enough to produce products that are differentiated from what is out there and people want them, so this is driving innovation which is how technology improves and living standards rise.

The traditional market power of advertising is starting to ebb away now because of the proliferation of review sites and blogs etc. In the old days you could produce an average product and clever marketing could increase the value of it: the emperors new clothes effect. But now if you produce something thats a bit crap, it will get ripped to pieces on the internet and its easily accessible to people that want to research the product online.

The internet is good for improving capitalism because it makes information accessible, and when there is more information, firms lose market power and consumers become more powerful. I remember reading something recently about how in the cosmetics industry there has been a big market shift because traditionally cosmetics rode off the back of womens magazines and advertising: if you placed your product there it was one of the few products that the consumers got to hear about. However now a prime chunk of their audience (ie females aged 14-30) are now not influenced by direct advertising they get their information on cosmetics from reviews on fashion and beauty blogs most of which have just been started by some random 18 year old girl who then gets loads of followers. Peer influence and peer reviewing is becoming more significant and it is a threat to the advertising industry.

So what you are saying is I can't show you a company that makes super normal profits through exploiting its staff? The firms you quoted especially Apple and Google will be at the top end of pay and conditions as they need to attract the best people.

So if we gave the 14% directly to the low paid that would indeed be a two way win - the employee would get the money directly and it would closer to the living wage and we would cut out needless bureaucracy redistributing the funds

It would be interesting if you, or anyone else could define this.

If you accept the principle of limited accountability, limited or no checks, just trust then "needless bureaucracy" is of course the way to go.

2 observations.

No one, to my knowledge, has defined needless bureaucracy.

When the last great " light touch, don't dig too far system was set free", the entire world economic system nearly went belly up.

rlAmazon and how it treats its employeesrl.

Albeit, in that piece she's not an Amazon employee but engaged by Amazon through an agency, and notably doesn't get the same T&Cs as permanent staff.

This argument can be applied for Unions and workers too. Regulation is necessary for all walks of life but over regulation is as bad as under regulation. The EU is an example where over regulation has restricted its development and led to it being uncompetitive.



The banking crisis was not caused by under regulation. But it was certainly assisted by regulators who were not up to the job. In the UK we contrived to create the climate for disaster when Buster Brown (of no more boom and bust notoriety) moved from one regulator to three regulators. "Oh I thought you at the BofE were checking that"....."And I thought you at the FSA had a handle of that...oops!"

The term "Free Market" is misused. I doubt if anyone would want a totally free market with no rules & regulations whatsoever.

Most businesses would argue for a "Free Trade" market where there were no import/export duties and simple, clear and fair regulations that apply market wide and that could be easily enforced, otherwise there will never be a level playing field. This can be achieved within your own borders but is unlikley to gain agreement on a world wide basis.

However Governments and civil servants do not understand business and therefore they are not the best people to make these regulations on their own.

Capitalism is far from perfect but so far all the alernatives have failed. Profit and the private sector should be encouraged and we need a smaller state to reduce the burdon.

Greed is not a product of capitalism - it is a human condition. There will always be greedy businessmen, greedy shareholders (including the pension funds etc), greedy unions and greedy workers.

That said much could be done to target a fairer society. I would like to see the shareholder rules change for public companies so that the employees own a substantial percent of the shares - say 40%. This would curtail some of the greed of the top executives, reward the employees by incentive and prevent unwanted take overs (if say a 75% shareholder vote was required)

This is the classic phrase of businesses that want to lobby for special protections/subsidies/advantages from government.

Let me guess, government doesn't understand business so they need that business to provide advice on how to do it!

Personally I don't think the RFL understands rugby league and I would much rather they asked Simon Moran from Warrington what the rules should be, as at least he's a rugby man and you could be sure that the correct decisions on administering the game would be made.

Isn't that why Adrian Beecroft paid a few thousand to the Conservative Party to let him make up some bonkers suggestions for how to make more people depend on legalised loan sharks?

Yes, the politicising of policy making is a dangerous route to go down and I'm always suspicious of anyone that throws out the blanket statement "government doesn't understand business". Essentially government is trying to regulate the markets fairly and in an impartial manner and you always find that representatives of a particular sector are particularly keen to get involved in drawing up the regulations to suit them.

I suppose the more apt rugby analogy would be the one of coaches that constantly criticise the referees for not knowing what they are doing, and suggesting that they themselves referee the next match involving their team.

It is amusing to see the type of stuff businesses come out with when they engage with government. I remember once being in a meeting with some representatives of businesses in a sector that was receiving very large government funds and the purpose of the meeting I was in was to establish the right auditing and monitoring information in order to track how these government funds were being used and to be able to measure afterwards the outcomes of the firms that had been helped so that the government could commission an independent report to check whether the investment had been value for money. The whole attitude of the business representatives was aggressive and hostile - continually hectoring the government officials that government "simply didn't get it"....the businesses were "not interested in gathering information for a government box ticking exercise"...this was "about getting the money out of the door to the businesses to stimulate the economy". What this was effectively code for was, they did not want to have to audit and account for the government money they were receiving and they certainly didn't want anybody later evaluating on what it had been used for. Their whole agenda was getting the money signed over from government as soon as possible and then "government getting out of the way so they could get on with it". In the end they didn't get away with it because a fairly senior government official brought up the fact that they were going to be in receipt of a very large sum of funding and if they weren't prepared to properly report and monitor on it to allow value for money to be evaluated on behalf of the taxpayer, then the money wouldn't be forthcoming: at this point they reluctantly came on side.

But I did think it was illustrative of the hectoring attitude some parts of the business community have to government - they are happy to take huge sums of money from the taxpayer but then at the same time lecture government that they don't know what they are doing so the best thing is just hand over the money and leave it to them and it will magically be used best!