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Am I right in thinking that if those employees save any of the money, then they accumulate wealth, but if they don't (because they don't receive enough compared
by lambertsimnel 2y ago
Am I right in thinking that if those employees save any of the money, then they accumulate wealth, but if they don't (because they don't receive enough compared to their fixed costs, or for any other reason) wealth accumulates elsewhere, probably in the hands of plutocrats?
- nickff 2y agoJust because one person wastes money, it doesn't mean that someone else gets rich. If the employees spend their income on low-margin goods or services (food and clothing are quite competitive low-margin sectors with high labor costs), the money has flowed from investors mostly to laborers.
- lambertsimnel 2y agoMy thinking is that spending gets split between richer and poorer people. The former buy assets with it, but the latter spend it on living costs. Each time it circulates, typically some goes to richer people and stops circulating. Various things could disrupt the resulting increase in inequality. The Black Death and World War 2 are both supposed to have done so.
- nickff 2y agoMoney doesn’t really get “split”, it flows, and the where it goes each time it is spent is what determines who makes how much. You’re right that some people are able to accumulate, but that’s not a default, and the money usually doesn’t stay put for long.