Re: Poverty in the USA, Welfare in Denmark

Michael Price wrote:

Now if a worker created $100,000/yr of goods then
I'm betting he did it by using shareholder capital,
so he did not create it alone.

Correct.

The shareholders are therefore one of the creators of the goods as their
contribution was neccesary to it's production.

Not quite, it is a forcefully co-creator.

If their contribution was not neccesary why would the worker work
for them?

Because he was never paid enough to enable him to accumulate his own
capital. That happen because of old rules (the capitalism inherited it from
the feudalism) where the capital(land owner) have the decision power on how
the created wealth is distributed, while the labor have no such of power.

Due to the original condition (scarcity of capital, few owners) the capital
is overprices (due to his scarcity) then the generated wealth accumulate
into the hands of the original owners maintaining the original condition.

Now, just imagine a society where the newly created wealth belong to labor
and the capital owners compete on the free market instead of belonging to
the capital owners and have the labor compete on the free market for access
to capital. Into such a society the capital would be properly distributed
based on the amount/quality of the work one put to create new wealth.
In short time, the old capital owners who just lend the capital but don't do
any usefull work will dissapear being required to actually contribute to
the society by their own work.

Why we have the current situation and not the one I just described?
Well, because the rules and regulations are specially made to perpetuate the
existing state. That is. The legislation we have encourage capital
accumulation and is against a distribution of capital based on the newly
created wealth.

From pure historical reasons we have what we have, nothing else.
Keep in mind however, that what I described it is still free market based on
capital investment, private property etc, all the definition of capitalism
just a single reform: the original condition differ.

So as one of the creators the value is not being
redistributed to them but distributed.

Not quite. The single reason he participate into the creation of wealth is
the fact that he prevent the creator to do it by itself.

It is the lack of distributed capital what make the creator to have to
associate with the owner to create new wealth. And it is this association
responsible to perpetuate the lack of distributed capital.

Chicken egg problem.


.

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