4 ms·
alternatively, labor is the only good, which other abstractions (like money) should subserve. the whole point of an economic system is to distribute the rewards
by clairity 4y ago
alternatively, labor is the only good, which other abstractions (like money) should subserve. the whole point of an economic system is to distribute the rewards of labor across people. most systems (outside idealistic communism) acknowledge that resources will be unevenly distributed, and then focus on the fairness (aka social acceptance) of the chosen distribution, as most people accept that we contribute differing levels of value to the world's production, and so in turn, accept that we get differing levels of benefit from it.
you're getting confused between economies not being zero-sum games in the long term (pie grows/shrinks over time) but do approximate them in the short term (distribution of today's pie). the cost of labor is not going up relative to overall productivity but rather is going down relatively. so where does the surplus end up? concentrated in the hands of people who aren't constrained enough to deploy capital efficiently in an economy.
so in the hotel example, capital is going to owners who are using it to gamble on capital itself rather than going to workers who typically spend the money and help the economy figure out where to invest for long term growth (and health of the economy and society). cost disease is not even applicable here, though rents are. the economy is increasingly seeking economic rents, which are inefficiencies in the economy because rents by definition don't produce anything.