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All of that capital was produced by labor, except what fraction of the value derives from raw natural resources pre-extraction. So it is absolutely a fair fram

All of that capital was produced by labor, except what fraction of the value derives from raw natural resources pre-extraction. So it is absolutely a fair framing to state "why shouldn't workers seek to capture as much of their labor as possible?". If their labor produces capital which produces profits, why are those profits not fair game to bargain over? In your example, it wouldn't make sense to pay the one remaining employee all of the profits, but it would have made perfect sense for all the employees who produced the perfectly automated factory to negotiate for a share of the profits.

chii 6y ago
> all the employees who produced the perfectly automated factory to negotiate for a share of the profits. if they were employees, they would've been paid compensation for making such automation. Unless they are a shareholder (either by investing initial capital, or by negotiated compensation in the form of equity), they are absolutely not entitled to any profit from their output.
- GavinMcG 6y ago
  That's the water we swim in, but can you actually make an argument for why things should be that way? We allow infinite returns to "shareholders" long after their risk has been reasonably rewarded. Why should we?
  - _-o-_ 6y ago
    That was the deal made when those shares were created and sold. Compared to all other parties they seem to be more deserving - at some point shareholders took a financial risk.
  - chii 6y ago
    > can you actually make an argument for why things should be that way? yes - because it didn't work any other way. Look at how communism fared? Tell me a way to incentivize people to invest their capital any other way?
    - GavinMcG 6y ago
      You're saying the possibility of unlimited returns from others' labor is the only incentive people have to invest capital?
ChrisLomont 6y ago
>All of that capital was produced by labor Not all capital is the result of labor. Economists put around a third of modern capital to be the result of labor, around a third from leveraging capital, and around a third created by technology. Labor, investment, and technology all drive new capital creation.
- adamsea 6y ago
  Where does technology come from? Labor. The labor of knowledge workers, which is what software engineers are called by economists ...
  - ChrisLomont 6y ago
    Yes, labor is a component. So is capital. And, recursively, so is technology. That is why economists don't claim all value is created solely by labor, and why econometrics measures the contribution of various components. Where does Labor come from? From being taught skills - and that took capital to train someone before their labor could add value. All pieces are interrelated, and modern economies cannot work by ignoring that all pieces are needed. >The labor of knowledge workers, which is what software engineers are called by economists And those knowledge workers did their labor with zero capital investment before by an employer (or themselves)? Computers, tools, infrastructure all were provided so the knowledge worker could work, and those pieces required capital before the knowledge worker could produce labor. I have hard time understanding why so many people cannot accept that capital is a valid and necessary input to creating things, including creating more capital, which can then be invested in yet further productive pursuits.
    - sudosysgen 6y ago
      Technology can be reduced to labour, capital, and previous technology. Capital can be reduced to labour, capital, and land. The first unit of technology was the product of labour and capital. The first unit of capital was the product of land and labour. If you operate recursively until the first unit of capital and the first unit of technology you end up finding that all value is the product of land and labour. There are certainly a great many economists that agree with this definition. Actually, a famous economist gave a talk at Google that made this exact point!

chii 6y ago

> all the employees who produced the perfectly automated factory to negotiate for a share of the profits. if they were employees, they would've been paid compensation for making such automation. Unless they are a shareholder (either by investing initial capital, or by negotiated compensation in the form of equity), they are absolutely not entitled to any profit from their output.

GavinMcG 6y ago
That's the water we swim in, but can you actually make an argument for why things should be that way? We allow infinite returns to "shareholders" long after their risk has been reasonably rewarded. Why should we?
- _-o-_ 6y ago
  That was the deal made when those shares were created and sold. Compared to all other parties they seem to be more deserving - at some point shareholders took a financial risk.
- chii 6y ago
  > can you actually make an argument for why things should be that way? yes - because it didn't work any other way. Look at how communism fared? Tell me a way to incentivize people to invest their capital any other way?
  - GavinMcG 6y ago
    You're saying the possibility of unlimited returns from others' labor is the only incentive people have to invest capital?

ChrisLomont 6y ago

>All of that capital was produced by labor Not all capital is the result of labor. Economists put around a third of modern capital to be the result of labor, around a third from leveraging capital, and around a third created by technology. Labor, investment, and technology all drive new capital creation.

adamsea 6y ago
Where does technology come from? Labor. The labor of knowledge workers, which is what software engineers are called by economists ...
- ChrisLomont 6y ago
  Yes, labor is a component. So is capital. And, recursively, so is technology. That is why economists don't claim all value is created solely by labor, and why econometrics measures the contribution of various components. Where does Labor come from? From being taught skills - and that took capital to train someone before their labor could add value. All pieces are interrelated, and modern economies cannot work by ignoring that all pieces are needed. >The labor of knowledge workers, which is what software engineers are called by economists And those knowledge workers did their labor with zero capital investment before by an employer (or themselves)? Computers, tools, infrastructure all were provided so the knowledge worker could work, and those pieces required capital before the knowledge worker could produce labor. I have hard time understanding why so many people cannot accept that capital is a valid and necessary input to creating things, including creating more capital, which can then be invested in yet further productive pursuits.
  - sudosysgen 6y ago
    Technology can be reduced to labour, capital, and previous technology. Capital can be reduced to labour, capital, and land. The first unit of technology was the product of labour and capital. The first unit of capital was the product of land and labour. If you operate recursively until the first unit of capital and the first unit of technology you end up finding that all value is the product of land and labour. There are certainly a great many economists that agree with this definition. Actually, a famous economist gave a talk at Google that made this exact point!