3 ms·
production = rent + wages + interest production - rent = wages + interest when productivity grows but wages do not, that means the marginal contribution of an
by zzzzzzzza 7y ago
production = rent + wages + interest
production - rent = wages + interest
when productivity grows but wages do not, that means the marginal contribution of any new worker is being entirely eaten by various forms of rent within the economy. Those who collect rent have no incentive to do anything but perpetuate their rent collection and most likely if they were to re invest their gains would probably reinvest them in either acquiring more rent or protecting their existing rent... which is why the government should be funded off of monopoly/pigovian taxes like the land value tax, or removing intellectual property deductions from the corp income tax, as opposed to income or consumption taxes - a philosophy known as georgism.