Raise the Hammer

LL, I totally agree that business owner's get more from their employees than they give back. However, this is not unique in nature. Parents give more to their children then they get back and yet if this wasn't the case, none of us would be around. Furthermore, there is nothing stopping a group of individuals from forming a co-op, where the workers share in 100% of all surplus. Over time, if this arrangement creates the happiest, most productive employees, then they should take most of the market share from companies that "exploit' their workers. Therefore, over time, the market rewards those companies that strike the right balance between rewarding employees, and rewarding those who supply capital.

Moreover, how do you explain the fact that many companies go out of business. The reason why this happens, is because workers get paid too much. In this scenario, the goods offered to the public only bring in a percentage of what it costs to pay employees to make them. Therefore, in these cases, the worker is exploiting the business owner.

Then there is the relationship between customer and business owner. Since in aggregate, customers never pay more for a product than it is worth to them in utility, it is the business owner that gets screwed over by the consumer. However, since most consumers are also employees, any exploitation that took place in the first relationship, is likely counteracted to an even greater extent by this relationship.

Then there is the question of what is exploitation. Is it simply the fact that employees don't retain 100% of all of their efforts, or is it something else? For example, is it preferable to work for a company that earns 5% more every year, but pays its employees 99.9% of all income. Or is it better to work for a business that pays its employees only 80% of their labour, but that grows at 10% per year. Over time, the numbers indicate that the employee willing to allow the owner to keep more in profits will do better.

Lastly, in a free society, where individuals are allowed to enter into contracts voluntarily, we should expect people to enter into all sorts of agreements that others may deem as being exploitative. However, by outlawing what appears to be exploitative to politicians, we lose focus on what really matters and that is freedom. If government bans people from entering into contracts that both sides deem is fair, they have reduced the overall satisfaction in society, which contradicts the goals that they are trying to promote.