A major problem with Capitalism, that no one wants to talk about - Page 3 - Politics Forum.org | PoFo

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#14898028
Drlee wrote:No. That may contribute to why the owners have a lot of money but professional sports players are paid a great deal because skills at their level of play are excruciatingly scarce. There are a lot of good players. The colleges are full of them. There are not that many great ones. It is truly supply and demand.


Professional sport is essentially a zero sum game. Sure, talented players might make the sport as a whole more attractive, but in general they just take home more of the cake because they're slightly better than the competition. They don't grow the cake. In contrast, a highly-paid entrepreneur or CEO might actually earn what he gets. That's not to say they generally do, some might just be faster to establish a dominant market position.
#14898032
Professional sports is as straight forward in the way of supply and demand as it gets.

The supply is basically fixed, because there are only so many warm bodies that it takes to wear the jerseys on all of the teams.

The demand depends on large-scale television viewership (and secondarily, stadium attendance), which generates immense profits (principally by way of advertising sales--and secondarily by way of ticket sales. Conversely, for some sports like boxing, television subscriptions and PPV purchases are the principle driver).
#14898046
Professional sport is essentially a zero sum game. Sure, talented players might make the sport as a whole more attractive, but in general they just take home more of the cake because they're slightly better than the competition.


What is your point? The winner of a golf tournament may be one stroke better. One at-bat can win a ball game. One basket a basketball game. Don't even get me started on soccer. Slightly better in most sports is not a small thing. It is a HUGE thing. Being a few hundredths of a second faster wins best in the world at the Olympics.
They don't grow the cake.


Of course they do. Watching the best compete is the whole point and it is the whole cake. Are you aware of the amount of money that a player like Tiger Woods brings to the sponsors of a golf tournament? Care to guess how much soccer team makes off of the fame of a particular player? Are you actually unaware of how much time every day the masses of fans spend discussing individual players? You have it completely wrong.
#14898049
Rugoz wrote:Professional sport is essentially a zero sum game. Sure, talented players might make the sport as a whole more attractive, but in general they just take home more of the cake because they're slightly better than the competition. They don't grow the cake. In contrast, a highly-paid entrepreneur or CEO might actually earn what he gets. That's not to say they generally do, some might just be faster to establish a dominant market position.

'

Interesting. You do know that the CEOs set their rates of pay and benefits. I know of situations where the industry has been in the tank, eg banking where the annual losses should have seen the CEO in line ups at the unemployment insurance office, not getting pay rises and benefits, saved by spin and the support of their colleagues. The athletes' performances are measured.
#14898052
CEOs are also to a significant degree paid in stock options, and their pay is thus linked to their overseeing the movement of share prices, i.e. through stock buybacks. This is a strategic arrangement whereby the interests of management have been made to align with those of 'shareholders' (that special euphemism for 'financial oligarchs').
#14898056
Crantag wrote:CEOs are also to a significant degree paid in stock options,
benefits
and their pay is thus linked to their overseeing the movement of share prices, i.e. through stock buybacks. This is a strategic arrangement whereby the interests of management have been made to align with those of 'shareholders' (that special euphemism for 'financial oligarchs').
yes. My point was even when they make an utter crock up in a tin hat of things, they can be highly rewarded instead of fired, compared to the athlete.
#14898061
Crantag wrote:Professional sports is as straight forward in the way of supply and demand as it gets.

The supply is basically fixed, because there are only so many warm bodies that it takes to wear the jerseys on all of the teams.

The demand depends on large-scale television viewership (and secondarily, stadium attendance), which generates immense profits (principally by way of advertising sales--and secondarily by way of ticket sales. Conversely, for some sports like boxing, television subscriptions and PPV purchases are the principle driver).


This is absolutely correct. Make sure you read this TtP. The vast supply of viewership is the demand. As Drlee points out, only a small percentage of top athletes are great. So their labour is in short demand. And because of this, the athlete has the upperhand when negotiating his salary. In contrast to this, a low skilled ticket office job in the same stadium has plenty of competition for its labour so the employer has the upperhand in determining the salary. At no point is privilege or land rents a factor here. And also, it is important to point out that the fact the ticket office job is still required due to the same viewership demand that requires the top athletes job means that supply and demand of labour is the ultimate factor in salary, not whatever nonsense TtP thinks.

As for TtPs comment about skilled people on YouTube, again this is supply and demand issue. If there is a high demand for that talent and a low turnover of that skill, they could earn a high wage. The problem is, there isn't much demand for singing, juggling, farting out the alphabet, or whatever else is usually posted on there.
Last edited by B0ycey on 20 Mar 2018 06:34, edited 1 time in total.
#14898062
Stormsmith wrote:benefits
yes. My point was even when they make an utter crock up in a tin hat of things, they can be highly rewarded instead of fired, compared to the athlete.

Compensation in the form of stock options is not a fringe benefit, it is a form of remuneration.

And I wasn't seeking to correct or contradict you, I was just trying to make a tangential point on the topic of CEO pay (and the relationship of 'performance' and 'compensation').
#14898127
What the OP is talking about and what we are all talking about is not "capitalism" but the pareto distribution.

The universe itself just seems to like inequality. Look at commies, if ever there were a bunch of frothy mouthed ideologists who are so against inequality that they would finally defeat the universe's tendency to strenghten the strong and crush the weak it would be them. In USSR nobody had any money or food so there was equality there but in the USSR that wasn't wealth, wealth was having a 100 ft statue or enormous portraits made in your image. And was that equally distributed? No 80% were of Stalin, Lenin and Marx while the remaining 99.9999999% of people had to make do with indeterminate everyman portraits and statues. The Pareto Distribution rules even there.

How many species of life are there on this planet and how many have the privilege of making scientific discoveries? 1 out of trillion makes all the scientific discoveries.

#14898134
The video has a false title. Marxism is not ignorant about Pareto.

Pareto did personally put out a famous phony and superficial critique of Marxism (which Ernest Mandel easily shot down in his introduction to Capital--I could quote or summarize it but that would take time and would fall on def ears, so look it up yourself if you are genuinely interested, which I'm sure you are not.)

I listened to the video, and the guy almost seemed to have something interesting to say for a moment, before he started fumbling over his own words, unable to present his own arguments; while at the same time betraying his own gross ignorance of Marxist economic theory and his personal adherence to the same old tired simplistic misnomers, which have nothing to do with anything Marx actually wrote.

His argument boiled down to "some economists who use difficult math concepts have hypothesized about some distributional tendencies which might have something to do with this thing I can't explain because I am intellectually unable to understand what I am purporting to talk about."

However, I am interested in the underlying theory the guy is so unable to represent, no less.

One of the quintessential aspects of Marxist analysis--which is one of the things that makes Marx's own work what it is--is the eclecticism of it. That means taking handy information from anywhere and everywhere, with no lies of omission, and guided by a pure adherence to the truth. Marx was intolerant of nothing more than the willful perpetuating of ignorance.

That was a useless video, but I don't mind that I took the time. There was nothing of value in it, one way or another. If he would have name dropped one of these 'econophysicists' which the guy evidently so admires, while being utterly incapable of understanding their work, that would have at least been something, but he couldn't even do that.
#14898138
SolarCross wrote:What about the central (observable) point that the pareto distribution isn't just a consequence of "capitalism" but plays out for just about everything, including species capable of building rocket ships and who gets a statue under communism? You seem to have ignored that.

That was the one interesting observation--the notion of the permeability of distribution patterns across different venues of mathematical analysis--but this area of computational economics/advanced applied mathematical modeling of economic phenomena--is notoriously controversial as it were, and is not settled territory at all. The techniques are seen often to drive the analysis, and people seemingly like to compare who has the biggest and most impressive computer program. What can happen is that the data which make the cut are merely those which are particularly amendable for the purpose of the computer model--and this involves excessive selectivity of such data, due to the limits of what can be readily calculated.

I will freely admit that I am not skilled enough in this area of mathematical economics to be able to fully give an accounting of either its benefits or its shortfalls, but I will say that in my experience it is not settled science, and does suffer from technical shortcomings. But I am also interested in mathematics, and am even working on my third bachelor's degree presently--in mathematics--as it were. And mathematics does have a lot of usefulness in economic analysis.

Without studying the underlying analyses it is hard to come down strongly on the topic in any which way, but I wasn't too impressed by the guy's presentation there.
#14898144
Sivad wrote:Also it's just an appeal to nature. For that line of argument to be valid he'd have to first explain why we should accept the natural order.

I don't think it is, because the point wasn't that we should just accept it, the point was that the Marxist's diagnosis and prescription is false. They say pareto distribution is a flaw in capitalism when it isn't it's a flaw, if it is a flaw at all, with the very nature of the universe. They say the cure for pareto distribution is to take everyone's private property and make it the property of the government and make everyone into tenants and employees (if not even just slaves) of the government and that will magically fix it. Show me the equality between a gulag victim and comrade Stalin. That solution doesn't work, pareto distribution rules even there.

Understanding that pareto distribution is far more pernicious than just the existence of normal trade and property conventions, far more rooted into the very fabric of the universe, is the first step to being able to do something about it, if indeed that is even possible.
#14898224
Drlee wrote:What is your point? The winner of a golf tournament may be one stroke better. One at-bat can win a ball game. One basket a basketball game. Don't even get me started on soccer. Slightly better in most sports is not a small thing. It is a HUGE thing. Being a few hundredths of a second faster wins best in the world at the Olympics.


Exactly, but do you derive a higher utility from seeing someone run 100m in 9.58 seconds instead of 9.69 seconds. Not really, your utility derives from seeing the winner, the fastest man in the world. But winning in sports is a purely positional good. Somebody will win no matter what. If Bolt wouldn't be around you would celebrate another guy. Bolt simply takes the cake from the other sprinters.

Drlee wrote:Of course they do. Watching the best compete is the whole point and it is the whole cake. Are you aware of the amount of money that a player like Tiger Woods brings to the sponsors of a golf tournament? Care to guess how much soccer team makes off of the fame of a particular player? Are you actually unaware of how much time every day the masses of fans spend discussing individual players? You have it completely wrong.


To my knowledge Tiger Woods made golfing a lot more popular in general, it's not only his relative superiority to the other golfers that makes him valuable.
#14898226
On the topic of CEO pay earlier in the thread, I think there is also a social prestige and networking issues. Companies want to be seen as offering the best pay and the pool of people seen to have the experience required to be CEO is small and they are thus connected to lots of people on the boards of directors that decide their pay when they are hired.

That being said it's all well and good to be annoyed that CEO's at failing companies get lots of money for the trouble of destroying a company but it's also a way that Companies that are less careful about their CEO hires are punished in the economy. Lot's of Companies make better decisions about hiring executives, those just aren't highlighted in the same way.

All in all it's a controversial topic but I don't think it's so black and white as high profile CEO failures make it seem.
#14898229
Rugoz wrote:Exactly, but do you derive a higher utility from seeing someone run 100m in 9.58 seconds instead of 9.69 seconds. Not really, your utility derives from seeing the winner, the fastest man in the world. But winning in sports is a purely positional good. Somebody will win no matter what. If Bolt wouldn't be around you would celebrate another guy. Bolt simply takes the cake from the other sprinters.



To my knowledge Tiger Woods made golfing a lot more popular in general, it's not only his relative superiority to the other golfers that makes him valuable.

Runners are measured against all-time records. That's why Hussein Bolt was so popular--somewhat like a Tiger Woods of his particular sport (on a lesser scale, but that probably has more to do with the lower relative audience of track events, outside of the Olympics, than the professional golf circuit). I think your arguments don't stand up here.
#14898240
Crantag wrote:Runners are measured against all-time records. That's why Hussein Bolt was so popular--somewhat like a Tiger Woods of his particular sport (on a lesser scale, but that probably has more to do with the lower relative audience of track events, outside of the Olympics, than the professional golf circuit). I think your arguments don't stand up here.


Others would have beaten the world record if it weren't for Bolt.

My argument holds to the extent an athlete's paycheck is determined by his relative superiority over competitors. I understand that some athletes might be particularly charismatic or have a particularly attractive way to play.
#14898248
Rugoz wrote:Others would have beaten the world record if it weren't for Bolt.

My argument holds to the extent an athlete's paycheck is determined by his relative superiority over competitors. I understand that some athletes might be particularly charismatic or have a particularly attractive way to play.

Athletes which help their teams win make a huge difference in terms of the team's revenue, both in terms of regular season viewership, and also--in playoff sports--from playoff games, which are huge revenue makers. Superstar players bring huge value to their sports teams, as well as to their leagues. They are so highly paid because of the bidding process which goes on.

Individual sports are a little different. However, Floyd Mayweather Jr. was the highest paid athlete in sports during his peak earning years. Other boxers like Manny Pacquiao, Mike Tyson, Evander Holyfield, and others essentially built entire brands, and capitalized immensely (and were capitalized on). Currently Anthony Joshua is selling out football stadiums in the UK for each one of his fights, and could be on pace to become the highest paid athlete in history if he continues to win. This has to do with the amount of people that are interested in seeing him fight in the broad sense, coupled with the ability of his management company and affiliated promotional company (Eddie Hearn's Matchroom Sports) to sell the fights and monetize the viewership. It is the viewers which are the lifeblood of the profitmaking, and this forms the basis of the remuneration.
#14898252
Crantag wrote:Athletes which help their teams win make a huge difference in terms of the team's revenue, both in terms of regular season viewership, and also--in playoff sports--from playoff games, which are huge revenue makers. Superstar players bring huge value to their sports teams, as well as to their leagues. They are so highly paid because of the bidding process which goes on.

Individual sports are a little different. However, Floyd Mayweather Jr. was the highest paid athlete in sports during his peak earning years. Other boxers like Manny Pacquiao, Mike Tyson, Evander Holyfield, and others essentially built entire brands, and capitalized immensely (and were capitalized on). Currently Anthony Joshua is selling out football stadiums in the UK for each one of his fights, and could be on pace to become the highest paid athlete in history if he continues to win. This has to do with the amount of people that are interested in seeing him fight in the broad sense, coupled with the ability of his management company and affiliated promotional company (Eddie Hearn's Matchroom Sports) to sell the fights and monetize the viewership. It is the viewers which are the lifeblood of the profitmaking, and this forms the basis of the remuneration.


That's nice, but doesn't contradict anything I said. They surely wouldn't have the same audience if they weren't winning over competitors.
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