Wealth Creation & Distribution

1. Wealth is created when planning, raw materials and labor come together.  All three elements are essential to create salable goods and services.

2. In an unregulated economy, the profits from the sale of goods and services can be divided virtually any way the owners of the enterprise choose.  They can pay workers less or more, not according to how essential labor’s contributions are but by how little they need to pay out to keep labor on the job.

3. There are four ways for labor to increase their share of the profits: First, they must be paid enough to sustain their usefulness.  This is the case with slavery. A slave owner can trim back the expenses of labor but he cannot get his labor free. He has to feed, clothe and house his slaves or else they will sicken and die and he will be left without the necessary labor to sustain his enterprise.  Second, if the labor pool is small and its members hotly competed for because of their skills and education, company owners will be forced to raise wages and benefits as long as the shortage exists. Third, laborers can consolidate their power by creating unions that are strong enough to withhold labor and thus shut down the company unless their wage demands are met.  Fourth, the government can set minimum wages, dictate minimum working conditions and set up a judicial system that can hear and rule on workers’ complaints.