{"id":21,"date":"2004-04-28T00:17:45","date_gmt":"2004-04-28T05:17:45","guid":{"rendered":"http:\/\/server97.snhdns.com\/~ravik\/wp\/?p=21"},"modified":"2004-04-28T00:17:45","modified_gmt":"2004-04-28T05:17:45","slug":"ylasi-series-first-blood","status":"publish","type":"post","link":"https:\/\/www.ravikiran.com\/blog\/classic\/200404\/ylasi-series-first-blood\/","title":{"rendered":"YLASI series: First Blood"},"content":{"rendered":"

My first attack in the You Libertarians are so Impractical! <\/a> series is on Sathish VM. Last heard, he was arguing with me that one cannot decide whether killing a lot of people is wrong or not unless we know whether the decision to kill the people was democratically taken or not<\/a>. Now in his blog, he seems to be tired of seeing that though more and more rules are being made, companies are finding ways to wriggle out of them. So he has proposed a Pareto test <\/i> rule. In his words<\/a><\/p>\n

We can use the pareto test here? Only those corporate activities that bring the maximum wellbeing to all stakeholders, without making even any one of them worse off – is legal. Anything else is unlawful, not just immoral! Will this work?\n<\/p><\/blockquote>\n


\nHm… let’s see. Taking a decision to revise salaries is a “corporate activity”. Is a decision to increase salaries pareto optimal? Of course not. Increasing salaries would make the shareholders worse off while making employees better off. So increasing salaries is out. <\/p>\n

But wait. Increasing salaries is Pareto optimal in one case. If the employee is on the verge of quitting, and if it can be proved that the resignation would cause a significant loss in profits <\/i> then the decision to increase salaries would be pareto optimal. ( I am ignoring the other stakeholders. Including them will only make the calculus more complicated and will probably mean that no<\/i> decision can be taken at all)<\/p>\n

But in which case can you prove<\/i> that an employee is so valuable that his quitting will lead to a loss of revenue? A worker low-down in the scale can easily be replaced. But a manager higher up is valuable. So Sathish VM’s rule essentially ends up screwing the happiness of the ordinary worker at the expense of the shareholders and managers. <\/p>\n

Sathish’s proposal is in fact so impractical that he must be a libertarian and an evil capitalist at heart.<\/p>\n","protected":false},"excerpt":{"rendered":"

My first attack in the You Libertarians are so Impractical! series is on Sathish VM. Last heard, he was arguing with me that one cannot decide whether killing a lot of people is wrong or not unless we know whether the decision to kill the people was democratically taken or not. Now in his blog, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[],"_links":{"self":[{"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/posts\/21"}],"collection":[{"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/comments?post=21"}],"version-history":[{"count":0,"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/posts\/21\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/media?parent=21"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/categories?post=21"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/tags?post=21"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}