Quote Originally Posted by rong View Post
Somewhat going off on a tangent here, and not really sure where I'm headed.

But it's odd that owners of capital and land use labour.

Owners of labour do not use capital or land.

I'm not sure why this is the case.

To produce something you need all 3 and there is an abundance of all 3. Further, the one thing nobody can own originally is land, at least not in the sense that you own your own labour. Yet somehow the one thing you truly own is the thing that other people use.

So say I have land, you have capital and some other guy is not busy so can provide labour, surely the fruits of our joint efforts should be equally owned and distributed. But instead the land owner gains from the growth in value of the land and the rent received. The capital owner gets the profits. Where as the labour provider just gets a wage.

Anyway, like I said, not sure where I'm headed here. Nowhere probably.
In your hypothetical, each party likely would split it three ways. But it's not wholly analogous to the real economy. Land and capital almost always have more built up value in them than labor. But not always. Sometimes in your hypothetical, labor gets the majority of equity.

Let's say you're a fantastic software programmer. Your labor value is very high, but you don't have any capital or land. There are many places you can go to develop software where you control majority equity. But if you want to take your labor to more effective capital or land developments, the relative value of your labor reduces to where you won't get majority equity anymore. Many (possibly most) successful companies arise from origins where the laborer had more equity than the land and capital.

The laborer still gets the better of it when he's the opposite, unable to speak the language, whose only skill is basic physical labor. Put him in a situation where the land owner is incapable of work and the investor is small-time. The laborer then has a ton of equity.

We could go more into this if you want.


Here's the broken record version: The protection for the parties with the least leverage is the freedom to choose. Imagine if Ong was uninhibited by the government and free to choose. He tells us he would grow pot and be quite productive. But he's not allowed to choose this and the economy is worse because of it. Additionally, the "inherent" value of each person's attributes is determined by supply and demand. Government intervention attempts to discard supply and demand and micromanage the negotiation, but all this has done is anything from making societies poorer to mass starvation.