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But should you? Your employer will not reward you for it with anything that could be considered reasonable when compared to the value you are creating for them.

What people can do, and what employers are willing to pay for, are two very different things. Employers, by and large, have adopted a strategy of paying employees as little as possible, divorcing their compensation from the value of their work. Capitalism says that employers should receive as little work of as little value as possible in return.




I'm not sure where your definition of Capitalism is coming from, but nothing about capitalism or free markets requires (or even predicts) that workers will be paid commensurate to the value they create.

Workers are paid based on supply and demand. If moving a pile of manure from one side of a parking lot to the other will net me $100,000,000, that doesn't mean the laborer I hire to move the manure will share in the value created by moving the manure. This is because the pool of laborers willing and able to do the job is roughly 4 billion people (or more accurately, tens of thousands of people in the immediate vicinity). Competition ensures that a laborer will be willing to move the manure for (roughly $15/hour here in Southern California), regardless of the ultimate value the work produces for me.

On the other hand, if a Steve Jobsian/Jony Ive figure creates a series of industry dominating products from whole cloth, he may get to share in a huge percentage of the value created by those products, simply because there are only a handful of people on the planet capable of creating those products, and thus the employer is willing to pay his $100,000,000 salary.


I think both of your examples highlight exactly what the OP was talking about, that employees are not paid based on the value they produce. In both examples, some employer stands to make much more value off of someone's labor than what they will pay that employee. Businesses and capitalists are looking to gain more profit and value than what is reflected in someone's salary -- this is the way they accumulate more resources than those workers. This accumulation of wealth is typically backed by hierarchy and authority structures that maintain that the employer continues to get more value out of someone's work than the employee(s) participating in that work.

Like you said, there's nothing about capitalism that says it should do otherwise, but I think for me that shows how unethical capitalism is in how it treats the output of others.


Ah. Perhaps my point was too subtle then. More bluntly, I was trying to say that there is no ethical duty to pay employees solely based on the value they produce. If there were, markets could not function. There is no conspiracy to "divorce employee's compensation from the value they create" as otakucode states.

By definition, free trade happens because each side believes they are receiving more value than they are paying. In my example, the manure owner who pays his laborer $15 an hour and the board of directors who pays the Steve Jobsian figure $500,000 an hour both believe that what they get in return is worth more than the money they pay. This is why they enter into the transaction.

>This accumulation of wealth is typically backed by hierarchy and authority structures that maintain that the employer continues to get more value out of someone's work than the employee(s) participating in that work.<

And from the other side, the laborer who exchanges his time for $15 per hour and the Steve Jobsian figure who exchanges his time for $500,000 an hour both "continue to get more value out of" the money the employer is paying them than they would otherwise get out of their other options. Again, this is why they agree to exchange their time for money.

Again, this all boils down to supply and demand (plus value). If there are millions of laborers that can perform any task, the price to perform that task will always be low, no matter how much value the task ultimately generates. (I say plus value because, even if you're the only person in the world that can do something, if nobody wants that thing done (i.e. no value is created) then no one will agree to transact.)


smh... that doesn't jibe with reality. Reality is that there are different people, with varied skills, and the economy demands different people and skills at different times, in different places. There are barriers of culture, race, language, gender, national border, laws, family, and so forth.


In a sufficiently supply-constrained field, assuming performance can be measured, your reward can be fairly closely correlated with the value you contribute.

The lack of correlation is primarily due to inability to measure contributions vs. an effort by employers to selectively screw high achieving employees. If you had perfect visibility into the current and future contributions of employees, it actually would make sense to pay the 10x employee 10x more than the 1x employee (and arguably being able to make a team of 5 x 10x employees would be worth way more than the equivalent salaries of 50 regular employees, since a 50 person team would be so large as to have 2-3 layers of management, much higher support costs, etc., so just paying the smaller team 10x as much would be a bargain.)

For a variety of reasons this isn't really done directly with cash compensation (taxes, measurement, supply shortage, envy of other employees, politics with managers, etc.), but rather by the 10x teams being startups which may get purchased.


If everyone had your attitude, then employers would be justified in paying as little as possible. Thankfully my experience has been that most co-workers don't try to provide as little value as possible, and most employers actively try to reward value (with varying success at evaluating it).




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