3 ms·
Productivity can be used to increase future productivity or to increase current consumption. By giving it to capital they use it to build factories or software
by username90 6y ago
Productivity can be used to increase future productivity or to increase current consumption. By giving it to capital they use it to build factories or software to increase future productivity. By giving it to workers we let them consume more and live a better life.
Now, the thing is there is a lot of factories and stuff that needs to be created in order for the entire world to get productive. So until the entire world is productive we need to spend a lot of our current productivity on it.
Btw, the 1% consumes more per capita than the rest but they don't really consume a big fraction of the economy overall, when you give them money they mostly invest it.
So the ultimate result is that in times where there is need to build a lot of factories or equivalent capital will get a bigger share of the pie, and as things stabilize workers will get a bigger share of the pie. Currently thanks to globalism there is need for immense capital investments to increase productivity so of course capital needs to take huge share of our productivity. And personally I'd rather see that another factory gets built in China providing them better productivity and living standard than seeing American workers get another car. This isn't rocket science.