Friday, 18 May 2012

Capitalists will pay you not to leave

It would be easy to think that capitalism is good for the poor because they have a greater incentive to work... because money is worth more to them... the argument would go... they are more inclined to accept work that others would refuse. But this means that the poor will take poorly-paid work. It doesn't mean capitalism is good for the poor. An analogy is with the landlord. The revenue the worker is able to receive is equal to the cost imposed on others if they refuse to work. The landlord can charge a lot for their property because to withdraw it (from the customer) is costly... the customer of the landlord relies on them not withholding their merchandise. To make a high income in a capitalist system one must be able to inflict a cost on others by your withdrawal. If others are dependent on our services there is a high income to be generated but if not it is difficult to make money. The amount you would be paid not to resign (not to leave and to stay) is the value you are able to earn in a capitalist system.

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