[Cthulhu D]

mike777, on 2013-April-10, 00:12, said:

You want me to take on the risk of your ideas but you get all of the upside.

that's why you have a progressive taxation regime...

[mycroft]

"You want me to take on the risk of your ideas but you get all of the upside"

Well, that's not what he's saying; he's saying that with a ground floor that limits the maximum cost of failure, more people are likely to take the risk that sometimes leads to success; and that taking those risks, and getting the occasional success, is a benefit to society in general which is encouraged by paying for that maximum cost of failure limit. And that ground floor need not be "everybody gets to live comfortable with or without work, with or without taking risks" (in fact, nobody but the "welfare queen boogeymen" are even implying that), but "everybody gets to live".

Having said that, your statement, straight up, seems to be C-class management and Wall Street's effective mantra since at least 2000. In the "golden risk-taker" country.

Also note the anecdote that I am someone who pays a lot back to my country and my society, but would not have been able to do that without the investment in national healthcare that *stopped me from dying*, *solved what was prohibiting me from being an effective worker and taxpayer*, *on society's dime*. Because I'd be dead - and dead men tell no tales pay no taxes.

[kenberg]

Mike,

When I said "I don't understand this discussion about risk taking" I meant it as the words say. I did not say that I don't understand risk taking, or that I don't approve of risk taking, or that I don't think risk taking can lead to some good results. I said that I didn't understand the discussion. And I don't.

I favor people having exciting fulfilling lives filled with opportunity. But so does everyone. Adam does, you do, we all do. Nobody is out to stop the guy who wants to get ahead. Go for it, dude or duchess. Apparently you believe that various programs will have the (unintended?) effect of discouraging such adventure. On a case by case basis, of course it might sometimes be true. But the general picture of people just having their creativity, or their ability to grow, stifled because of the large size of government in general, or because of medicare, or Pell grants, or whatever, just does not match with my experience at all. I went to college and to graduate school. This was an investment of years of my life. That was far more important to me than any investment of money. Did I ever have second thoughts? Yes, from time to time. But not once did I think along the lines of Oh why bother, if I succeed I will just have to pay more taxes. Not only did I not think along those lines, I have never known anyone who thought along those lines.

Maybe I am misunderstanding your views on this. Maybe better to say that I am not understanding, mis or otherwise. Anyway, I think that I understand about risk. When I said I did not understand the discussion of risk, I emphasize that it is the discussion itself that made no sense to me.

[Gerben42]

mike777, on 2013-April-07, 22:04, said:

ok but why? I mean what it your plan? What is your goal and your plan to achieve it?

If people can keep more of what they earn, rather than being rewarded for not doing anything, they will take the risks of starting a business, learning skills, etc. Only with knowledge we can stay ahead of the rest.

Quote

Per the links here....even in Germany and Europe inequality is great.

Yes and no. There is a great inequality when you consider the top 1% or top 0.1%. For the rest, there is relatively small inequality. Everyone who doesn't find a job is well taken care of. I don't know why this isn't experienced as such, I guess it has to do with the feeling of lack of social mobility, i.e. kids growing up to become jobless like their parents.

Quote

btw2 I know this is an old point but does it does it seem major parts of Europe...want to become a Museum a pretty museum where people with lots of education discuss the wonders of the world in a very interesting fashion(and much more interesting than vast most) but take very little risk onto themselves.

What I don't see....I don't see at all in any of the posts in this thread is an attitude of entrepreneurial culture where risk and failure is as natural and necessary for success.

The average German really dislikes risk. This is one point where it's really different from e.g. Britain or the US.
Germany's success is built mostly on solidity, not on risk. Companies like Google or Facebook are rare, instead you find companies like Siemens and VW, built up from the ground slowly rather than explosively.

What's the result? So far Germany's economy is hardly touched by the financial crisis because of it's solid finances. You cannot hurt a dinosaur like Siemens just because there are a couple of slow years. They're paying whatever trouble they are having from their back pocket. The largest German bank didn't twitch when Lehman Brothers toppled.

Generally one can say that the German economy won't grow as fast when there are good times, but in bad times it is more stable. Everyone can pick what he likes best.

[onoway]

kenberg, on 2013-April-10, 17:25, said:

Mike,

When I said "I don't understand this discussion about risk taking" I meant it as the words say. I did not say that I don't understand risk taking, or that I don't approve of risk taking, or that I don't think risk taking can lead to some good results. I said that I didn't understand the discussion. And I don't.

I favor people having exciting fulfilling lives filled with opportunity. But so does everyone. Adam does, you do, we all do. Nobody is out to stop the guy who wants to get ahead. Go for it, dude or duchess. Apparently you believe that various programs will have the (unintended?) effect of discouraging such adventure. On a case by case basis, of course it might sometimes be true. But the general picture of people just having their creativity, or their ability to grow, stifled because of the large size of government in general, or because of medicare, or Pell grants, or whatever, just does not match with my experience at all. I went to college and to graduate school. This was an investment of years of my life. That was far more important to me than any investment of money. Did I ever have second thoughts? Yes, from time to time. But not once did I think along the lines of Oh why bother, if I succeed I will just have to pay more taxes. Not only did I not think along those lines, I have never known anyone who thought along those lines.

Maybe I am misunderstanding your views on this. Maybe better to say that I am not understanding, mis or otherwise. Anyway, I think that I understand about risk. When I said I did not understand the discussion of risk, I emphasize that it is the discussion itself that made no sense to me.

I think that times have changed quite a bit since your youth Ken. At least in Canada, government has consistently punished small businesses in favor of big ones.

A prime example a few years back was that some big meat packing plant had a problem with e-coli. The government's response was to make new regulations that applied to ALL no matter what size, and within 6 months around Edmonton alone at least 5 small butcher outlets, some of them 2nd or 3rd generation had been forced to shut down because the costs of the upgrades just could not be justified. This scenario was repeated all over the country.

Fifteen or so years later, B.C. is just now getting around to thinking about giving the little guys some slack as THEY had done nothing wrong and had had no problems with the previous regulations. I don't know of any other provinces revisiting the issue at all.

The same sort of thing happens in the States. Big packing plants which process thousands of chickens a day need only ONE tracking number for ALL the chickens processed that day. Joel Salatin has a typically small butcher shop where he processes birds he raised and is forced to have a tracking number for EACH bird, in spite of the inspectors themselves admitting that problems are infinitely more likely to occur in the big plants, not in the small butcher shops. So his overhead is higher because of specific government regulations which are more onerous for small operators than huge companies.

Aside from all the relatively new regulations (officially nobody is allowed to take a loaf of homemade bread or a dozen chocolate chip cookies to a farmer's market unless they have made them in an äpproved kitchen - separate from the family kitchen with a designated fridge and a special sink allocated just for washing hands, for instance); there is also a spiderweb of government grants and subsidies which follow the old adage of the only way you get money is if you don't need it, which also didn't exist years ago.

I doubt it is any different in other areas of business.

On top of that, businesses in small towns used to be able to compete because the big box stores pretty much kept to big cities. Walmart changed all that and has been responsible for closing down thousands of small businesses when they started moving into much smaller centres. People who don't have/feel any security about money/work tend to shop on price points and few small outlets can challenge Walmart there.So not only was the small businessman out of business, his employees often went from a decent living wage to minimum wage at Walmart, being the only jobs available.

Big businesses which outsource jobs make things worse..a story this week about one Canadian bank which is aleady making obscene amounts of money had their regular staff train people then they were all laid off and the jobs outsourced to the people they had trained. I don't think this sort of thing happened much if at all years ago but seems fairly common now. How is a businessperson supposed to compete when the others in his business are paying a fraction of his costs for employees, with no perks such as unemployment or health care?

What are those people who just got bounced out of a job they were doing well enough to train others to do it, supposed to do now? They are going to be looking to pinch every penny til it screams for mercy because at least in Canada unemployment benefits are capped at a rate which might have paid the bills years ago but surely won't now, with housing costs alone having risen by something like 400% in the last ten years or so. They are highly unlikely to be able to start a small business even if they were so inclined.

Most small businesses fail for lack of capital they say, and it would appear that it would normally take a whale of a lot more capital now to start a business with any hope of success than it did years ago, unless you happen to be exceptionally lucky or clever or both.

On top of that, a lot of people are now choosing to shop online, which puts even more pressure on small businesses. Competition has gone from relatively regional to world wide.

As far as a university education goes, I bet any of us could point to any number of people with degrees who aren't working in their area and may not be working at all. I knew a guy with a PhD from Yale who was driving cab because he couldn't get any other work. I also know people who have been refused work because they were over qualified. That actually happened to me as well at one point which was bizarre..I was moving from one province to another and Canada manpower refused to give me contact info about a job because I was "overqualified" for it. Apparently it was better for me to be not working than working in a job 'beneath' me, no matter if I wanted to work there. So education is no longer the golden ticket it may once have been.

It seems to me that people might be willing to risk more if they didn't feel as though the government really isn't that happy about people showing a lot of initiative. It's one thing to be taking on a challenge but when you never know if the government will shut you down because of something someone else did it puts a whole new dimension on it.

People who beat the odds deserve kudos esp if they treat their employees with respect.

[mike777]

I understand many of you prefer stability over a risk taking culture.



Again this is not an argument for zero taxes or zero regulations which for some reason people take to the extreme; or an argument to not overprotect the very very weakest among us.

By trying to suppress randomness and volatility in our economy, our health , political life, education, etc you weaken even kill complex systems.


I would argue that such a suppressive system will weaken, die or blow up. Those trying to help are often hurting us the most.

I guess my main point is that yes even in bad times you wont be more stable as you might think.

Siemens and VW are not as stable or as safe as you may believe.

As for Germany it seems that they took on great risk as a society when it came to a nuke first policy to stop Russian tanks that would render large parts of West Germany a wasteland for a thousand years. I mean their policy was to launch nukes on their own country. Germany took giant risks in intregrating East Germany back into one country.
I certainly don't view the Germany of 1946-2000 and perhaps beyond as disliking risk, inflation yes.

---

"Apparently you believe that various programs will have the (unintended?) effect of discouraging such adventure'

Yes Ken I do, discouraging or transferring risk away from those that will benefit.

In any event we seem to agree on the main points. A risk taker, entrepreneur is one who has skin the game. The best way to improve inequality is to encourage risk taking as a noble undertaking, hence the national day of celebration.

---


As far as the whole topic of large businesses vs small ones. I do think size, in this case larger businesses carry much greater risk just based on size alone compared to a s small one. I find it very misguided and funny that so many think a very large business cannot fail or does not have a great risk of failure or simply disappear.
But that may be another thread about size and risk.

[dwar0123]

With respect to large corporations, the thing about risk is that it should actually entail some. Especially for the people who are making the risky decisions. As it is, it seems that even on the occasions the government allows a big business to fail, it is only the low level employees who suffer. The ones who were theoretically not taking any risks and were never going to be richly rewarded upon success. They get laid off while the CEO walks away still a millionaire if not a billionaire.

[mike777]

dwar0123, on 2013-April-11, 17:52, said:

With respect to large corporations, the thing about risk is that it should actually entail some. Especially for the people who are making the risky decisions. As it is, it seems that even on the occasions the government allows a big business to fail, it is only the low level employees who suffer. The ones who were theoretically not taking any risks and were never going to be richly rewarded upon success. They get laid off while the CEO walks away still a millionaire if not a billionaire.

Yes the transfer of risk....is a big problem. Management does not have skin in the game and crony capitalism are problems.

As we see over and over again this leads big companies taking on too much risk or not understanding what risk they are assuming. One important reason why so many big companies fail. It does seem weird so many owners walk away with nothing while they let the ceo walk away with millions per her contract.. as you say.

The gain from size are visible, but the risks are hidden. and some concealed risks seem to make the companies more fragile.

But all of these defects are from a lack of skin in the game.

[dwar0123]

mike777, on 2013-April-11, 18:16, said:

Yes the transfer of risk....is a big problem. Management does not have skin in the game and crony capitalism are problems.

Agreed, I'd argue that this systematic transfer of risk is one of the primary causes of the large income disparity we find ourselves with. When I hear you talk about harming the risk taking culture all I hear is you wanting to remove even more risk from a system that is already playing with loaded dice. The problem isn't with harming the risk taking culture, it is with getting them to actually be taking personal risks rather then just freely taking risks with everyone else's skin, profiting richly when they succeed and getting out with little lost when they don't.

A national holiday for them? I'd sooner support a national holiday for lawyers.

[mike777]

dwar0123, on 2013-April-11, 18:23, said:

Agreed, I'd argue that this systematic transfer of risk is one of the primary causes of the large income disparity we find ourselves with. When I hear you talk about harming the risk taking culture all I hear is you wanting to remove even more risk from a system that is already playing with loaded dice. The problem isn't with harming the risk taking culture, it is with getting them to actually be taking personal risks rather then just freely taking risks with everyone else's skin, profiting richly when they succeed and getting out with little lost when they don't.

If you read my posts I have made this point over and over again.

"By trying to suppress randomness and volatility in our economy, our health , political life, education, etc you weaken even kill complex systems.

I would argue that such a suppressive system will weaken, die or blow up. Those trying to help are often hurting us the most."


I have no idea where you got the idea I want to remove risk....that is the opposite of my posts.

Again the actual number of risk takers is a very tiny number...I just want to focus on the tail rather than the vast middle and increase their number.

I do understand that many posters prefer to place the focus on the middle and that is where we disagree on how to battle inequality. I hope my arguments will have some reconsider.

[mycroft]

mike777, on 2013-April-11, 16:07, said:

I understand many of you prefer stability over a risk taking culture.

I disagree that this is the axis, and so, I believe do others in this thread.

I believe that a certain amount of security increases the risk taking in a culture.

I also believe that the common, US meaning of "risk takers" equate not with risk takers, but with those who need not risk anything except their country's opinions of them. The policies that are pushed by the people who cry "risk takers" do not help the entrepreneurs, the small business people, the whistleblowers or those that otherwise risk their job by not doing the wrong thing - not as much as the owners and investors in big business whose goal it is to impose stability, as long as the stabililty is "us on the top, and protected from failure".

If you truly do believe that encouraging risk taking is beneficial, and you truly believe that making the price of failure ultimate, and you truly believe that the latter does the former, then I don't want to live in your world, but it is at least reasonable. You're a very small minority, however, and swamped by the GOP talking-point parroters who have been trained very well. Unfortunately, usually in duckspeak and doublethink.

Quote

By trying to suppress randomness and volatility in our economy, our health , political life, education, etc you weaken even kill complex systems.

I would argue that such a suppressive system will weaken, die or blow up. Those trying to help are often hurting us the most.

I would agree. However, mood stabilizers for a bipolar health work well, and I beleive that it would work well for our economy as well. I believe that some reasonable minimum standards in education, health, economy are just mood stabilizers, not suppression.

Quote

As far as the whole topic of large businesses vs small ones. I do think size, in this case larger businesses carry much greater risk just based on size alone compared to a s small one. I find it very misguided and funny that so many think a very large business cannot fail or does not have a great risk of failure or simply disappear.

Provided they don't have a golden safety net, you are absolutely right (looking at the last few years, though, it sure looks like that proviso is false). Having said that, even if they don't, it's not the people whose decisions were the ones that failed that lose their house if they don't get a job in a month. So...?

[mike777]

mycroft, on 2013-April-11, 18:49, said:

I disagree that this is the axis, and so, I believe do others in this thread.

I believe that a certain amount of security increases the risk taking in a culture.

I also believe that the common, US meaning of "risk takers" equate not with risk takers, but with those who need not risk anything except their country's opinions of them. The policies that are pushed by the people who cry "risk takers" do not help the entrepreneurs, the small business people, the whistleblowers or those that otherwise risk their job by not doing the wrong thing - not as much as the owners and investors in big business whose goal it is to impose stability, as long as the stabililty is "us on the top, and protected from failure".

If you truly do believe that encouraging risk taking is beneficial, and you truly believe that making the price of failure ultimate, and you truly believe that the latter does the former, then I don't want to live in your world, but it is at least reasonable. You're a very small minority, however, and swamped by the GOP talking-point parroters who have been trained very well. Unfortunately, usually in duckspeak and doublethink.

I would agree. However, mood stabilizers for a bipolar health work well, and I beleive that it would work well for our economy as well. I believe that some reasonable minimum standards in education, health, economy are just mood stabilizers, not suppression.

Provided they don't have a golden safety net, you are absolutely right (looking at the last few years, though, it sure looks like that proviso is false). Having said that, even if they don't, it's not the people whose decisions were the ones that failed that lose their house if they don't get a job in a month. So...?

Thanks for taking the time to post Mycroft. I think your post reflects my main point that risk takers are if not despised they are far from honored guests. Thus the number one problem. btw you misunderstand the price of being wrong need not be total, ultimate failure, there are degrees.(see post #91)

To move the discussion regarding inequality away from risk; perhaps to a discussion that inequality can be reduced by learning how to gain from randomness, uncertainty , disorder, errors, stressors, etc rather than trying to stabilize them.

[mike777]

dup.

[kenberg]

Sometimes I think I am the densest guy on the planet but I am still not getting this. Let me try two scenarios.

A. You have an opportunity to make $50,000 with some work and some risk
B. You have an opportunity to make $50,000 with some work and no risk

We assume that the work in both cases is an equal amount and equally interesting.

I go with option B. Mike, you would choose A?


Risk seems to be being praised as an end in itself. Me, I have never tried skydiving and expect to finish my life without such an experience.

[mike777]

kenberg, on 2013-April-11, 19:53, said:

Sometimes I think I am the densest guy on the planet but I am still not getting this. Let me try two scenarios.

A. You have an opportunity to make $50,000 with some work and some risk
B. You have an opportunity to make $50,000 with some work and no risk

We assume that the work in both cases is an equal amount and equally interesting.

I go with option B. Mike, you would choose A?


Risk seems to be being praised as an end in itself. Me, I have never tried skydiving and expect to finish my life without such an experience.

right!

in your example you are transferring risk....that is the problem.

Ken I have said this over and over again match up risk with benefits. I don't really know how to say it any other way.

If you can make 50K with zero skin in the game and no risk to anyone....you ...the owner, taxpayer...etc.....please email me with details.

[kenberg]

mike777, on 2013-April-11, 20:07, said:

right in your example you are transferring risk....that is the problem.

Ken I have said this over and over again match up risk with benefits. I don't really know how to say it any other way.

If you can make 50K with zero skin in the game and no risk to anyone....you ...the owner, taxpayer...etc.....please email me with details.

Details: Do some productive work.

[mike777]

kenberg, on 2013-April-11, 20:14, said:

Details: Do some productive work.

but who is paying who? or it sounds like you just transferred risk...again...

Ken you can do productive work and not get paid 50K..you can work very very hard and not get paid 50K

again a very tiny % of us are risk takers.....

If you are an artist...then you took some risk.....

[kenberg]

Ok.
Artists are risk takers.
Taxi drivers are risk takers.
Only a small percentage of people are risk takers.
Well, I suppose only a small percentage of people are artists or taxi drivers. But is that the list? How about the guy who cuts my trees? Is he a risk taker?
How about people who repair roofs?
If so, the percentages are going up now.
I am trying to get the idea here of who is a risk taker and what risks s/he is taking to achieve what and how I or the government or someone is interfering with their risk taking or whatever bad thing it is that I am or someone else is doing.

Btw, I used to set pins in a bowling alley. Definitely a risk taker.

[mike777]

In general the vast vast majority are not.


If you lost 10k or 20k If your work was found to be unproductive ...you are...

If you just lost some time playing bbo bridge...then no.....

that is the general idea.

anyway I hope we can move the discussion beyond risk to a more important point which I posted in #112

[kenberg]

I am not sure you would accept this, but in your list I would replace chaos and uncertainty by mobility. I am probably about to sound like a snob, but I don't believe that I am.

When I started high school, age 13, I walked to and from with my good friend Fred, the son of a plumber. By the time I was a senior, all of my friends were from a different, more upscale, school. We got together regularly to discuss scinece, philosophy, religion, what have you. We went to public lectures at the University of Minnesota. On Saturdays Prof. Paul Rosenbloom held free lectures in mathematics for those who were interested. One of us, not me, thought he had a proof of what was then the four color conjecture.and is now the four color theorem. He was of course wrong, but Rosenbloom got a couple of other profs to meet with the kid, hear him out, set him straight, and no doubt encourage him.

My father was a carpenter, I'm fine with plumbers, I hope I am not a snob. But my future lay in mathematics, not plumbing or carpentry, and it was a great asset to be able to easily get around. It started young. In elementary school I went everywhere on my bike, when I was fifteen I bought a car. Mobility was the key. It should be easier in today's world, but somehow we have become more stuck.

Chaos, uncertainty, errors are an inevitable part of life but I do not see them as an end in themselves. But mobility is essential. To aspire to something it helps to see it close up, and I don't mean on the tv. I watched the show Numbers once or twice. It's idiotic.