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> you have to be able to capture the difference between the value of someone else’s work and what you pay them to do it This is the textbook definition for how

> you have to be able to capture the difference between the value of someone else’s work and what you pay them to do it This is the textbook definition for how wealth is created, and it's exactly what's supposed to happen in every transaction in the marketplace. You buy an apple for $1 and it brings you $1.10 in value. You have captured the difference between its value to you and its value to the seller, and the ten cents is wealth that didn't exist before. This also works for the seller, who sold her apple for $1 even though it only cost her $0.95. She captures five cents of the wealth created by the transaction. Wealth is created because things have contextual value. It's the same when we exchange our labor for money. They wanted our labor more than the money. We wanted the money more than the time. Win/win for both of us.

mactrey 6y ago
This ignores any effects of market power. Amazon is not bargaining with its workers in the way that you are bargaining with Alice for her apple - a lot of these workers have very few other options to sell their labor. And sitting at home and not working is a false choice in today's America. That inequality in pricing power helps maintain the gap between wages and marginal revenue production of labor - and as OP says, that gap at scale is what makes a billionaire.
- winston_smith 6y ago
  OP's argument was that capturing value itself is bad. But I suspect you don't check to see if your apple sellers have plenty of other potential buyers before buying apples. If nobody else is buying, then the seller lowers the price until the market clears, and you get a bargain. Lucky you.
  - mactrey 6y ago
    That's true, I generally don't care about the welfare of apple sellers, and I'll take a deal when I see one. But, and I hate to stretch this analogy to its breaking point, it's more like the overwhelming majority of Americans are apple sellers (read: wage laborers) and they have no way to achieve basic human rights like food, shelter, and baseline medical care without selling their apples. And they can only sell to one buyer at a time as part of an apple contract (employment contract) and if that buyer decides to stop buying from them ("restructuring"), which the buyer may do at any time (right-to-work laws), our apple seller has to go looking for another buyer (job search) which can take months all while their savings dwindle... So you can see why some people might think this is not the optimal way to structure a society. Or to just put the analogy in its coffin, they might see this situation as more complicated than just a few apple-buyers getting a bargain.
    - winston_smith 6y ago
      We are indeed far from the original argument that billionaires and creating value are bad. But I respect your right to petition the government to bring back housing projects and welfare cheese.
- kortilla 6y ago
  > and as OP says, that gap at scale is what makes a billionaire. But that’s a dumb generalization. Microsoft wasn’t paying low wages and software people easily found jobs elsewhere but it still made Gates a billionaire. Warren Buffet gave cash to companies he thought were undervalued and on hard times in exchange for ownership stakes. This worked out more frequently than not and made him wealthy without exploiting any labor (many of these companies paid/pay solid middle class wages). The Google founders are billionaires and their company has nothing to do with paying for cheap labor and up selling it. Exploiting labor prices isn’t a business model that pays well enough by itself. In other words, companies that produce billionaires have to be providing more than just labor at a higher price than they paid for it.
  - webmaven 6y ago
    > The Google founders are billionaires and their company has nothing to do with paying for cheap labor and up selling it. Google executives (possibly not the founders personally) colluded with management at competing employers to reduce employee mobility and negotiating power. The cost of getting caught wasn't much compared to the salary increases they saved. So, yes, the labor wasn't 'cheap' but it also wasn't the fair market value.

mactrey 6y ago

This ignores any effects of market power. Amazon is not bargaining with its workers in the way that you are bargaining with Alice for her apple - a lot of these workers have very few other options to sell their labor. And sitting at home and not working is a false choice in today's America. That inequality in pricing power helps maintain the gap between wages and marginal revenue production of labor - and as OP says, that gap at scale is what makes a billionaire.

winston_smith 6y ago
OP's argument was that capturing value itself is bad. But I suspect you don't check to see if your apple sellers have plenty of other potential buyers before buying apples. If nobody else is buying, then the seller lowers the price until the market clears, and you get a bargain. Lucky you.
- mactrey 6y ago
  That's true, I generally don't care about the welfare of apple sellers, and I'll take a deal when I see one. But, and I hate to stretch this analogy to its breaking point, it's more like the overwhelming majority of Americans are apple sellers (read: wage laborers) and they have no way to achieve basic human rights like food, shelter, and baseline medical care without selling their apples. And they can only sell to one buyer at a time as part of an apple contract (employment contract) and if that buyer decides to stop buying from them ("restructuring"), which the buyer may do at any time (right-to-work laws), our apple seller has to go looking for another buyer (job search) which can take months all while their savings dwindle... So you can see why some people might think this is not the optimal way to structure a society. Or to just put the analogy in its coffin, they might see this situation as more complicated than just a few apple-buyers getting a bargain.
  - winston_smith 6y ago
    We are indeed far from the original argument that billionaires and creating value are bad. But I respect your right to petition the government to bring back housing projects and welfare cheese.
kortilla 6y ago
> and as OP says, that gap at scale is what makes a billionaire. But that’s a dumb generalization. Microsoft wasn’t paying low wages and software people easily found jobs elsewhere but it still made Gates a billionaire. Warren Buffet gave cash to companies he thought were undervalued and on hard times in exchange for ownership stakes. This worked out more frequently than not and made him wealthy without exploiting any labor (many of these companies paid/pay solid middle class wages). The Google founders are billionaires and their company has nothing to do with paying for cheap labor and up selling it. Exploiting labor prices isn’t a business model that pays well enough by itself. In other words, companies that produce billionaires have to be providing more than just labor at a higher price than they paid for it.
- webmaven 6y ago
  > The Google founders are billionaires and their company has nothing to do with paying for cheap labor and up selling it. Google executives (possibly not the founders personally) colluded with management at competing employers to reduce employee mobility and negotiating power. The cost of getting caught wasn't much compared to the salary increases they saved. So, yes, the labor wasn't 'cheap' but it also wasn't the fair market value.