Re: What do workers compete for?

"Matt Timmermans" <mt0000@[EMAIL PROTECTED]
> wrote in message
news:<OYYlc.26361$3Q4.668510@[EMAIL PROTECTED]
>...
> At first glance, the return to labour seems straightforward:  a skilled
> person who wants to work can join himself to the required land and
capital,
> work hard to create value, and demand a significant ****tion of that
value in
> return.  In fact, after deducting reasonable returns to capital and
land, it
> would seem that he can claim the rest.  If that's true, then a worker's
> natural compensation is determined almost completely by his own
> productivity -- it doesn't matter who else is in the workforce and what
> they're willing to work for.
> 
> This notion is, of course, in conflict with the commonly held
(especially
> among the "outsourcing bad!" crowd) belief that wages are held down by
> competition among workers.
> 
> But if wages are held down by competition among workers, then what,
exactly,
> do they compete for?  Capital isn't scarce, and land isn't scarce, so
how
> can jobs be scarce?  Why would a company decline to hire someone who can
> produce in excess of his compensation and the other costs associated
with
> his employment?  It seems self-evident that no company would, so what is
the
> real cause for compensation among workers?
> 
> Perhaps there are subtler factors of production that are actually
scarce,
> like entrepreneur****p and inventiveness, and also required to produce
value
> in Today's complex markets.  Are workers competing, in effect, for
> relation****ps with people who will take the risks, decide what to
produce,
> and tell them what to do?  Someone to give their labour purpose?  I
think it
> might be so.
> 
> These thoughts seem to suggest that those C-level executives are worth
what
> they get paid.  They seem to suggest that what the economy really needs
is
> more inventors, risk takers, and entrepreneurs.  They seem to sup****t
> supply-side objectives, like concentrating wealth in the hands of those
most
> likely to risk it.

Your insight is accurate. I have worked in the VC industry, and I can
tell you that capital, and by capital I mean money, most certainly is
NOT scarce. Billions of dollars are sitting in low-yield bank
accounts, just ITCHING to be more productive. Then why do these
capitalists don't invest the money? Because of risk. They are willing
to take risks, but only at certain levels of reward. And who controls
risk and promises a reward? You got it. The entrepreneur. I personally
have reviewed hundreds of business plans of people looking for VC
money, and written recommendations whether to invest or not. Why did I
throw away 95% of the BPs? Unexperienced management teams.
You can take a mediocre product/service and sell it with a great team,
but you cannot take an excellent product/service and sell it with a
mediocre team.