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One of capitalisms biggest tragedies
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this post was submitted on 11 Feb 2024
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A Boring Dystopia
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That one is actually weird.
People with more education draw higher salaries. That only works because employers make a higher profit with better educated people. Which means that for profit-maximization, you want to have a pool of potential employees that is maximally well-educated on the expense of someone else. Note the push for more STEM graduates.
You'd think businesses would be all for tax-funded education for everyone.
One can argue that we have two kinds of capitalism. And that would be true for the classic, theoretical capitalism.
However, the modern one favors short term profit and stock prices. Which do not care if economies collapse in 20 years due to global warming, as long as the profit is good now.
Why should they care? In 20 or 30 years most of stockholders would be dead anyways. And not being hypocritical here, I probably do the same in their positions, as most of the people.
Therefore its a systematic failure of modern capitalism. As it is not accounting externalities
The business of student loans is far too profitable and powerful to just quietly go away in favor of your thesis.
I do like your thought process though.
Interesting point. This is consistent with a "Corporate Feudalism" chart I saw recently (and am still digesting/making up my mind on), which puts central bank heads, and then major bank heads at the top two places in the power hierarchy. Corporate CEOs (who might see benefit from a more educated work force) are in 3rd place. World leaders are 4th.
Only to a certain degree. Exxon's been happy to lay off engineers and programmers by the thousands with the downturn in energy markets. However, they've always got a door open for entry level rig workers and cargo ship deck hands, as these jobs are higher risk and lower reward.
Educated professionals have their place, but sometimes you just need someone to turn a wrench. And because these low-skill jobs are more fungible, the businesses have an easier time swapping out younger and less experienced workers for their more expensive veteran peers.
This is what ultimately keeps labor rates in low-skill industries down. As jobs become more formulaic - more assembly-line driven - the wages commanded by the people doing that labor falls, in an unregulated labor market. Education-added-value has far less to do with it than the fungibility of the person doing the job.