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 Originally Posted by rong
But when deciding what to invest in they look for the optimal return on their capital. If higher wages was assumed then all returns woujd be smaller, so it wouldn't make a difference. Also there's the effect of higher disposable incomes for the population and therefore greater demand accross the board.
You're trying to create something from nothing. If investors have to factor in a lower amount of profits into their investment strategy, they will pass on marginal investments that they otherwise wouldn't. It's like how a poker player is reluctant to play small pocket pairs or suited connectors for a raise when the stacks are too shallow. When you are making a bet (read: investment) that's meant to pay 4:1 in order to show a profit, and you have 20% of the profit shaved off the top, many bets become ill-advised. Fewer people will be employed, and fewer businesses will exist. The only businesses that exist with tough wage laws are ones that still make huge amounts of profit in accordance with the increased risk imposed by the system. It's the same thing only worse.
I'm failing to convince you here so I'll go back to the basics. The tone of your argument and the words you choose ("accept a smaller rate of return" comes to mind) indicates that you believe that all of this is a zero sum game where the many are exploited by the few. As if value is not created when two people agree to a transaction. As if things haven't been getting continually better and better for the poor and middle class over the last century because of this. Nobody except governments exploits anybody.
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