We could, but then we would need accept that Union power was hat kept the greed and avarice of big business in check. Right now, with the rules restricting union action, a removal of the working tax subsidies would simply leave people without enough to live, a race to the bottom as it were.

I am paying for the cheapest deal I can get. It is too expensive.

Its not news, simply an explanation of why it isn’t, imo, acceptable that a private enterprise can rely on government infrastructure and subsidy, have high charges and high profits. That is not a ‘free market’ in any way, shape or form. What is, is a cartel where the public share the risk of investment, and but the profits go to private enterprise. It is a transference from the public purse to the fat cats pockets. It is a clear example of a market which isn’t working.

Im not being too absolute. Free market economic theory only holds any kind of water in an entirely free market. Otherwise it isn’t a free market economy, it is a managed economy using free market theory to justify avarice, exploitation and excess. I don’t believe you are arguing for a free market without any rules and regulations, I think you are justifying excess, avarice, greed and exploitation by saying that is a how a free market economy works. It is how a free market economy works, but none of us want one. What we want is a regulated economy. So why not stop excess, avarice, greed and exploitation? Why not have government which manipulates markets to work in the ways we want them? And if a market proves not to work. Why not have a nationalised industry?

It was just that though if you are asking for honesty. There was also a good deal of poor, traditional lending without fancy products being involved. As to sub-prime, the US and later Blair's government encouraged it - as ever when politicians meddle in the economy it ended it tears.

Plenty of big businesses don't have unions and have (mainly) happy employees. Can unions themselves count as "big business" ? Can't see why not, so what you're wanting to say is that business keep business in check, but sometimes business keeps itself in check anyway.
Another argument about the removal of subsidies is that employers would increase pay to compensate. Which is what you seemed to suggest on your earlier post.



Too expensive for what? It's clearly not too expensive for you to pay, or seek alternatives.


Firstly all private enterprise relies to some extent on gov infrastucture. How would we drive or even walk around for one thing, otherwise.
On subsidies.....I kind of shrug my shoulders here. Where subsidies are given, perhaps we should take them away. In most cases where they are in place they are in such scenarios that no service would be provided otherwise, and if the state tried to do it they perhaps would cost even more.
"Fat cats" is emotive and we should stay away from such terminology if we are to have a sensible discussion.



You are being absolute. Please find me any suggestion that is what we should have. Your alternative isn't going so well in North Korea.

And plenty of those big businesses are those with many employees being subsidised by in work tax credits.

Too expensive for the level at which I value it. I am forced to pay that amount because there is no realistic alternative.

You are doing nothing here but espousing the free market economic theory that the free market will drive costs down yet where it doesn’t saying the only alternative is for the government to subsidise it or lose that service. If the a company cannot provide a service without government subsidy, it shouldn’t provide that service that is the free market. What certainly cannot be acceptable is that a private company receives government subsidy and makes a profit. That is simply giving money collected by tax to rich individuals.
There is no way that government subsidy can be compatible with a free market. Any market which operates with a government subsidy, cannot even begin to argue that it is in anyway, shape, or form a free one

And if all private enterprise relies on government infrastructure, which belongs to all of us, it should remember that it exists to serve all of us, not to exploit so that a few can live in luxury.

Now who is being too absolute? My alternative isnt North Korea, my alternative is do what we do now, but with the over-riding thought that our markets exist to serve us. Not the other way around. the markets are our servants, not our master. They should do what we want, not us what they want. If you think that is how north korea is run then you need to read a book.

It's a defined term in economics. Normal profit is when enough profit is made to pay the workers and managers a reasonable wage and for the company to remain in the market. Average Revenue = Average Total Cost.

super-normal profit is when Average Revenue > Average Total Cost and economic theory says this should only ever occur temporarily as it means there will be incentive for others to enter this market as it is clearly very profitable.

It is therefore very easy to tell which and how many businesses are making super-normal profits.

The interesting question is how they are doing this.

That is because Economic theory also assumes the super-normal profit is being made [iwhile still paying the workers and managers a reasonable wage[/i.

So if we end up with firms making super-normal profits while [inot[/i paying the workers and managers a reasonable wage i.e. ending up with Average Revenue > Average Total Cost by exploiting the workforce or relying on in work benefits as a subsidy, then any such firm is making super-normal profits is not doing so because they have cornered the market but are doing so at their workers and the taxpayers expense.



The fact John Lewis and Richer Sounds are more successful than many of of their competitors gives lie to what you say above. They value their staff and for example John Lewis are for more successful than M&S who under successive chairmen have abandoned treating their staff as they once did (in a similar way to John Lewis).



I have no idea what the implications of that would be and neither I suspect do you. Nor do I understand why you mentioned it.

I agree in the USA especially in the Clinton era there was government support for extending the American dream downwards to those on lower incomes by making them have access to credit.

But in the UK the problem was the politicians didn't meddle with it. There was no policy of encouraging subprime lending from the Blair government and if you think there was how about find some policy measures and/or government statements in favour of extending credit to those on the lowest incomes....?

So?


Clearly not, because you are paying it. You are even using more power to argue with me here.


You're effectively arguing against private hire taxi drivers here. They rely on state infrastructure. Do you propose taxis should be provided by the state?


Not happy with hard working taxi drivers then?



You're arguing against a lawless and unregulated free market. Thing is, nobody is arguing for that.
Which particular market do you think you serve?
Which book should I read about North Korea? Was it written by a private enterprise, or a state?

If you value it as too expensive for you then that only applies to you, not anybody else. What alternative do you want?

They may well value their staff, but saying they're more successful because Mr Richer lets them have a go in his Rolls Royce every now and then is fanciful.

So, just what the staff at these 2 companies get? Salary? Pension? Bonuses? Private Medical Care? Shares? Holidays etc etc

For comparison, The M&S company pension scheme has 3% employee 6% Employer Contributions for new starters, after 2 years this goes up to 6% and 12%. Which isn't bad.

The point being that John Lewis and Richer Sounds are highly successful businesses, which is a very nice illustration of how you do not have to shaft your workforce to be successful and highly profitable.

I'm not personally familiar with Richer Sounds, but I am with John Lewis, and a key reason I go there when I need, say, anything for the flat is because the standard of service is so much better than most other places. And that also means a standard of service that includes honesty and not just an intention of flogging you something come what may. Thus they get my return custom – and my recommendation to other people.

In other words, treat people well and value them and give them a stake in the success of the business and you improve the business because you improve the standard of work.

The fortunes of M&S, on the other hand, are declining.

That is the same for anything though isn’t it?

Either a market that actually works, which in this instance likely to be impossible, so failing that a nationalised industry able to supply a necessary utility at an affordable price.

I;ve already explained that to you.

Under free market economic theory that would be the case. But those companies aren’t operating in a free market. They are operating in a highly regulated, massively subsidised one using what was nationalised infrastructure where there isn’t a realistic alternative. Your premise here is wrong.

In what way are taxi drivers subsidised by the state? They do use state infrastructure, they do pay towards that infrastructure, they are also highly regulated and often their prices are set at a reasonable level by the local council. I am perfectly comfortable with that.

To borrow a tactic from yourself? Why differentiate? Why only hard working ones? Why not lazy ones? Whats the difference?

Nobody is arguing for that, I accept that. You are however justifying excess using that economic theory. You are using the free market theory, where the capital will find the best product, where people will pay a products worth and that is how it finds its value, and that risk takers and wealth creators should be rewarded for the risk they take and the wealth they create and applying to markets which aren’t free markets, where the wealth created is subsidised by the state and the risks taken are mitigated by the state. You cannot apply free market theory and justifications to a managed and subsidised market
myself? Media.
Any. In fact all. dont limit yourself to one.

No you haven't


Why is it wrong?


Is our road network, traffic police, not provided by the state then? I guess we should shift food distribution from the likes of Asda and Tesco to the state too.


Just take out the "hard working" then




Why not? Remember, it's freer market, not free market in your measurements.


Interesting.....so how do you think the media market exists to make you serve it, and how should it change to serve you instead?


I should read all the books about North Korea? BRB in a mo then.

The likes of JLP certainly have their place. Whilst they might be the preferred retailer for the likes of you (and we got most of our furniture there) there is also a place in the world for "no-frills low cost" retailer who doesn't give good service but is cheap. Some of those will be succesful, and some won't, just like those at the premium end of the market.

Oh I think you will like Julian Richer....

"It was no surprise to hear Richer, 54, who still holds 100 per cent of the company he started 35 years ago, explain this week how he has formed a trust for when he dies so that the business becomes a mutual, similar to John Lewis, under which every staff member receives an equal share, with the IT director, Julie Abraham, stepping up to managing director."

[url=http://www.independent.co.uk/news/business/analysis-and-features/high-fidelity-julian-richer-rewards-staff-loyalty-with-holiday-homes-and-trips-on-the-company-jet-next-hes-planning-their-inheritance-8952760.htmlFrom here.[/url



Quite and they treat their staff pretty poorly these days. I have a relative and a neighbour who work for them who can vouch for how things have declined over the years. Do they go the extra mile for their employer these days where they once would? Nope. They do their hours and that is it.

I myself have often put in stupid hours and worked weekends when on-site to get IT systems installed but I didn't do it because I was compelled to or out of fear for my job. It was done because I knew my services were valued and not just monetarily e.g. allowing flexibility to deal with child care issues.

Why some people and business leaders can't grasp if you treat people right they will be loyal to your company and work hard so your company benefits is beyond me.

:25gbar3rYes i have.

:25gbar3ri explained that to you in the paragraph that said the premise was wrong.

:25gbar3rThat doesn’t have anything to do with what I said.

:25gbar3rYeah, because it is irrelevant that they are hard working, just like it was irrelevant that small businesses also exist when we were talking about big business.

:25gbar3rBecause it doesnt work.

i think the barriers to entry need to be looked at in the media market. I also think that the state interference in terms of our regulation in some ways makes it work better, and I certainly think the BBC (who are a competing comany of ours) makes it work better precisely because its over-riding aim isnt to make profits. I am confident without the BBC's disruptive position within the market we would be far worse served in this country. (i appreciate 'media' is a lot wider than this but i am only commentating on what I am involved in)

Now I may be misreading this and, if so, I apologise in advance ... but you're suggesting (given the context of the discussion) that there "is a place" for staff to be treated as poorly as possible?

How do you determine what is average - it is impossible each companies sales/cost circumstances are different how do you compare Lloyds to HSBC? So give us an example of firm you believe are making super normal profits and explain how you think they are doing it.

The point about the 14% is simple - you want lower paid workers to have increased incomes. I am merely pointing out that companies do pay well above the minimum wage unfortunately the employee loses out to the tune of 14% which goes directly to the government. Perhaps diverting the monies from the government to worker would be a solution to the issue of low pay. It would also removed the need for the inefficient administration of redistributing the funds via income support.

You can still give good service and be cheap.

I am not aware of any business that treats it's staff "as poorly as possible"
Some businesses treat their staff well, and some not so well. Some invest in training and expertese, some don't want that cost. None that I'm aware of treat their staff as poorly as possible.

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.