Quote from: dinofelis on April 13, 2015, 02:22:09 PM

Quote from: twiifm on April 13, 2015, 05:18:31 AM

If you want break it down to economics. If you exploit labor like this where will you get consumers? When people have decent wages they can become consumers so in the long run the producers will enjoy more wealth.

This is also such a crazy statement that comes back very often: one should pay its employees a lot of money, so that they can pay a lot of money for your products

The secret is that you don't want MONEY from your consumers, you want to get *goods and services* from others. Money is just an intermediate thing. You produce, because you want to get production from others, not money. If you can get the production from your labourers for less, then by all means, that's what you should do.

Imagine: I have material costs of 100.-, I pay 100.- wages, and I have then produced 100 products which I sell for 3.- each, so I make 100.- benefit.

What advantage would I have, by paying 160.- wages, and sell now 20 products more (namely, the 20 products that my employees can buy with their extra salary) ? Because now, in fact, I have a cost also of 120.

In the end, I will now sell 120 products at 3 each, have a material cost of 120, and pay 160 wages. My benefit is now 360 - 160 - 120 = 80.

I LOWERED my profit from 100 earlier on to only 80, by paying my workers more so that they come and consume my products and by selling more.

There is nothing to be won by increasing wages for people to consume more. Because you have to pay the other production factors too (in our case, the "material costs")

Thats' what the empirics show. Just look at the postwar times nothing unusual about this idea