Wealth is made by labor, yes. But it is not accumulated by it. It's accumulated by being in a position of power whereby you can extract rents from the laborers who make it. In older times, this was done by threat of physical force. These days, it's more often done by exploiting some economic advantage - for example, if you own any valuable resource, such as land or means of production, you can extract rent from people who use it.
Whenever you see concentrated wealth with such extreme disparity that you have one person owning more than a million others, there are only two possible conclusions: either they really are a million times more productive, or it was actually produced by that million, and extracted from them via rents.
You could argue that those rents are fair, since they stem from legitimate ownership. But what makes it legitimate? Most land was originally taken by force, for example, and the result enshrined in law (that was written by the people who did this) post factum. If that doesn't make economic advantages that stem from such ownership unfair, then surely the same standard holds today, and those people have no right to complain if society decides to take it away from them by force, and enshrine it into law, just because it can.
Exactly, and there’s in particular the very special kind of rent extracted by the hiring of people to work for you without profit-sharing, and using your negotiation power as a capital owner to get people to agree to the terms of your employment contract stipulating your appropriation of the whole work product.
I’ve found the writings of David Ellerman to be very elucidating on this topic, and admirable for giving a deep critique of capitalism without any reliance on Marxism. He relies on a labor theory of property rather than a labor theory of value, and a Lockean liberal notion of inalienable rights. Two short texts that make a good introduction:
Land is finite natural resource and its ownership is a zero sum situation. Company ownership, however, is not. It is entirely possible to own your sweat and labor, which is demonstrated by millions of small business owners.
The sentiment we hear often, however, is yearning for benefits of co-owning a (ideally mature and profitable) business while retaining the hired hands' rights. Not many are keen to give up their 8 hour workday, benefits, social welfare net for the upside of owning their share of corporate profits.
Exactly, people are making choices, and then complaining about it, which make sense as a coping strategy, but not if you really want to own your own labor.
There's hardly a place in the world (yes, even in Scandinavia) where starting a business entitles you for welfare or the usual labour rights. A typical small entrepreneur has to live with that for years, until the cashflow becomes viable enough to support them employing themselves.
I realize that's not what most people have in mind when they ask for profit sharing. They want to be a part of an already successful operation, and take no risks. And that's precisely what I've been talking about. The process of building a successful business is given little thought, as if they grow on the trees or are being brought to Earth by meteors.
Then there's that thing with businesses statistically being just slightly more often in black than in red. Would your profit sharing scheme involve absorbing the losses as well? How many takers you think it will have? If not them, who will get to absorb the losses, potentially reinvest to weather through rough times etc? The expense would be not negligible, on the order with the profits.
Scandinavian entrepreneurs and coop workers can certainly participate in the social security. Probably some reforms could make the situation better, especially if cooperative business becomes more of a norm.
When the firm spends more than it produces, it needs access to capital. This can be in the form of savings, credit, or new investment. Small new businesses are routinely launched through loans. Credit institutions are quite used to absorbing losses.
A worker-owned coop can also take investment from external capitalists. It would just be in the form of a profit-sharing contract rather than equity with voting rights.
We are in Norway and my wife ran her own small construction engineering business for a few years. You get no welfare, as it is funded from your previous payroll contributions, and only for up to 2 years. If you business is too small for you to have yourself on payroll, tough luck. Getting there takes a while, as tax burden on a business here is quite significant.
> Credit institutions are quite used to absorbing losses.
They are also quite good at taking the profits on their investments. If a bank bails you out, it wants to take its pound of flesh. You essentially arrived at status quo.
Whenever you see concentrated wealth with such extreme disparity that you have one person owning more than a million others, there are only two possible conclusions: either they really are a million times more productive, or it was actually produced by that million, and extracted from them via rents.
You could argue that those rents are fair, since they stem from legitimate ownership. But what makes it legitimate? Most land was originally taken by force, for example, and the result enshrined in law (that was written by the people who did this) post factum. If that doesn't make economic advantages that stem from such ownership unfair, then surely the same standard holds today, and those people have no right to complain if society decides to take it away from them by force, and enshrine it into law, just because it can.