Your semi-daily reminder that claims on the future earnings of capital are not somehow magically more stable than claims on the future earnings of labor.
Will a declining labor force drive the marginal return to capital up or down?
When you consider attempts by business administrators to capture the capital stock and burn the corporate commons, I would be concerned.
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Monday ~ August 29th, 2011 at 6:06 pm
todd
Is that really what’s being argued? I was under the impression that the forms of the claims were what affected their stability. In other words, which is more likely to be honored and promote wealth creation: private contracts or “social” contracts?
Monday ~ August 29th, 2011 at 8:20 pm
Roland
Inevitable final crisis of capitalism? Will each individual finally own their own means of production, and, no longer alienated, live a full life enjoying the full value of their labor?
Monday ~ August 29th, 2011 at 9:40 pm
lfvoss
Is the labor force decreasing? Perhaps, but only if you are investing solely in Europe/Japan/US.
Monday ~ August 29th, 2011 at 10:22 pm
Rick
But defined contribution is more stable than defined benefits. Isn’t that the axis along which we should be aligning, not public vs. private or labor vs capital?
Friday ~ September 2nd, 2011 at 4:51 pm
engineer27
Defined contribution relies on the stability of the (personal) earnings stream, which is essentially the same problem as Karl is pointing out (” claims on the future earnings of labor”).
Tuesday ~ August 30th, 2011 at 10:29 am
Th
The 75 year projections from Social Security administrators is that SS payroll taxes will stay virtually constant at around 5% of GDP. What can be more stable than that?
What if another Bernie Madoff is running Vanguard or Fidelity? Don’t kid yourselves, private contracts are about as solid as toilet paper. Single ply.