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From: eder@ssc-vax.UUCP (Dani Eder)
Newsgroups: net.politics.theory
Subject: Re: Widgets Redux
Message-ID: <540@ssc-vax.UUCP>
Date: Wed, 20-Mar-85 17:44:16 EST
Article-I.D.: ssc-vax.540
Posted: Wed Mar 20 17:44:16 1985
Date-Received: Fri, 22-Mar-85 03:14:43 EST
References: <377@enmasse.UUCP>
Distribution: net
Organization: Boeing Aerospace Co., Seattle, WA
Lines: 133

> [widgets again]
> 
> 	The free community of Libertaria was well known for its fine
> 	hand crafted widgets. The citizens of Libertaria lived a 
> 	comfortable and industrious existence from the production
> 	and trade of widgets. A good living for a family could be
> 	earned by setting aside 3 days of the week to widget crafting.

Let us assume that the hand-craft rate is 1/day, or 3/week
> 
> 	And so j-S worked 6 days a week making widgets. He saved lots of
> 	credits from his widget production, and after several years of
> 	labor, he started to implement his plan.
> 
Let us say it took three years to save up, or the price of 468 widgets.

> 	He travelled throughout the land, until he found a machine that
> 	could be adapted to manufacture average widgets at an alarming rate.

Assume the machine can produce 10 widgets/day, and takes one person to
operate.
> 
> 	At first the citizens of Libertaria were amused. These were just
> 	average widgets, not the superior hand crafted widget that
> 	Libertaria was famous for. But j-S was able to sell his widgets
> 	for half the price that hand crafted widgets had been sold for.

Then sales from his machines output is the price of 5 handcrafted
widgets (hcw) per day, less .15 hcw to allow for replacement of the
machine after 10 years of 6 day weeks (machines don't last forever).

> 	And j-S was able to supply as many widgets as people wanted to
> 	buy.
> 
Now, unless j-S operated the machine full time himself, he would need
to hire two local artisans to work three day shifts each.  He would
have to offer at least as much as they would get from hand-making
widgets, otherwise who would switch to working for him?  In fact,
he would probably have to offer more.  Presumably widget makers could
make their own hours (choose which days to take off).  If they were
working for him, they would have to work specific days.  Let us
say he pays a wage rate of 1.2 hcw/day.

> 	Slowly, except for the few widget craftspeople who made a truly
> 	remarkable widget, every widget artisan was forced out of
> 	business. A few citizens pooled their resources and bought
> 	a second widget machine, but most citizens did not have the
> 	resources to acquire widget machines. Besides, there was an
> 	abundance of widgets anyway.

The implicit assumption is that the demand for widgets is inelastic 
versus price.
> 
> 	Soon the widget artisans were widget laborers, toiling six
> 	days a week at the widget factory, and living not nearly as
> 	well as they had before j-S. There really wasn't a need for

Those laborers are making 2.4 times as much as the artisan.

> 	quite as many widget laborers as there had been for widget
> 	artisans, so many of the citizens were out of work.
> 
90% of former widget makers are unemployed. (temporarily, see below)

> 	j-S meanwhile, had retired from Libertaria, leaving a group of
> 	professional managers to run things in his place.
> 
Some of the former widget makers become foremen, and one becomes
plant manager.  You will probably need a maintenance guy to keep
the machines running, a truck driver to deliver raw materials
and finished widgets, a clerk to keep track of money and paperwork,
a boss for everybody, and a secretary for the boss.  If the widget
factory is typical, there will be .5 overhead people for each
shop floor person, and they will average the same wage rate as the
guy on the shop floor (2.4 x artisan).  So instead of 100% of the
widget workforce making 1.0 x artisan, we have 15% making 2.4 x artisan,
or 36% as much overall earnings.
> 	Now, you might wonder why the citizens of Libertaria put up with
> 	this nonsense. Why were they working six days a week for
> 	miserabble wages so that j-S could fornicate and indulge in
> 	exotic drugs on a tropical island? 
I have previously shown that, under reasonable assumptions, the
employees of United Widgets have a higher standard of living than
the artisans.  That is reason enough for them.  The widget consumers
of the world get to buy widgets for half as much as before.  They
are satisfied.  The few that demand high-quality hand crafted
widgets can still get them, so they are also satisfied.  Perhaps
10% of the original widget makers are still handcrafting at their
original rate. (Total widget output is 110% of pre-industrial output).
The 40% less money spent on widgets and the 21% excess wages
the workers gained over being artisans (measured in units of the
money previously spent on widgets) is available to employ the
remaining 75% of the population (at 81% of their artisan-era wages).> 
> 	j-S was no fool. Some of his loot was spent to buy the only t.v.
> 	station in town, and some went to support widget artists, and
> 	some went to make some improvements in the life of the
> 	community, for j-S was a benign despot. 
> 
> 	His t.v. station always pointed out that everything good that
> 	happened in Libertaria was a result of the introduction of the
> 	widget machine, and that therefore the citizens of Libertaria
> 	should be greatful for the wisdom and foresight of j-S.
> 
> 	And there was truth in j-S's propoganda, for widgets were much
> 	cheaper than they were before, and in fact lots of other
> 	communities had their j-S's, and so dodads, gizmos and
> 	thingamajigs also were cheap and plentiful. And the people
> 	of Libertaria forgot about how they had to work all the
> 	time, and forgot about how there was this awful smelling
> 	smoke that came out of the widget factory, and forgot
> 	about how their children never used to get so many cancers
> 	at so young an age. And they consoled themselves with
> 	lots of dodads and gizmos and widgets and thingamajigs.
> 
> 	And it is true the j-S really did nothing wrong, after all
> 	the people of Libertaria were free to choose some other craft
> 	to take up, they didn't have to make widgets. And if it
> 	wasn't for j-S risking all of his hard earned credits on the
> 	widget machine, there wouldn't be a widget factory and then
> 	nobody would have a job. So it was only fair that j-S should
> 	lay perpetual claim to all the profits from the widget factory.
> 
> 	And j-S lay back in the sand, exhausted from a long day of
> 	fornication and drug abuse, and smiled at how good life was.
> 	And in Libertaria, life just went on.
> -- 
> 						Mark Roddy
> 						Net working,
> 						Just reading the news.
> 
> 					(harvard!talcott!panda!enmasse!mroddy)

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