Quote:
Originally Posted by Wowbagger
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1) Worker improves the value of their labor - through experience (free) or education (cheap). Worker negotiates higher wages - possibly from a competing employer. Maybe even eventually collecting enough capital to take the risk of becoming an owner... possibly even offering a fair wage!
2) A competing capitalist offers a fair wage for the same job.
Fixt.
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Those don't address the problem. The problem isn't that people who rely on the value of their labor aren't getting enough value. The problem is with the people who don't rely on selling labor. No matter how highly compensated a worker is, his creation of personal wealth scales linearly with the sale of his labor in a manner that does not create a positive feedback loop.
A union plumber who makes $90,000 a year for his labor will make $90,000 the next year with the same labor and the same market, and maybe $100,000 a year after that if he gets a higher wage or successfully invests.
If Paris Hilton has $100 million being managed by investment bankers, in a few years it will grow to $120 million. In the next few years with a higher principle it will grow even more. Paris Hilton's wealth creation is only dependent on aggregate wealth because the wealth itself is the vehicle for income. As her wealth increases, her capacity to generate even more wealth also increases. There is no natural force in the free market that counteracts the tendency of the Paris Hiltons of the worlds' investment accounts to grow over time at a rate totally unparalleled by those who sell their labor.
Even something like an economic crash, bubble burst, poor management, fraud, etc, doesn't keep pace with the diversification of investments.
Basically, without things like progressive taxation, capitalists come to be 'owners' of ever-larger segments of society.