Kilkis wrote:That change represents a transfer of wealth from the providers of labour to the owners of original capital not just a proportionate increase in the wealth of both.
No. It is wrong to call this a transfer - it implies a movement of something owned by one person, to another person.
So, to provide a contrast, printing money *is* a transfer. The value of each unit of currency is reduced, and this transfers wealth from those who have saved to those who have borrowed - and there is no consent to this transfer from either party; it is conducted by the State, who keeps to itself the value of the newly printed money. Not very nice.
When people work, there are people with capital who offer work to people who wish to work. (Of course, none or almost none of us -wish- to work, but we must, body and soul etc).
The terms of the contract define who gets paid what for what. The work done produces wealth, which is typically (minus salary costs, taxes, etc) retained by the person who made the investment.
There's no *transfer* here. The person offering work, offered, the person accepting, accepted.
It may be that over time that of the amount of wealth created, less has ended up (in the form of salary) in the hands of the employed person. The extent to which the wealth created ends up as salary is influenced by a large range of factors, but primarily I think by whether or the economy of growing or shrinking. A growing economy encourages wages rises, a shrinking economy encourages wage reductions. Technology has a major role to play here, and I suspect also people are basically a lot more efficient, over the whole of the economy, over a reasonable period of time : it genuinely costs less to do work. We can also look to China and India for an influx of low cost (and low living cost) workers in the global market.
None of this changes anything much, because all the capital that's around just gets invested, and creates more work. If it costs less to do work, or costs less for people to live (and so wages are lower - remember this is all relative; if inflation doubles wages, but living costs are lower so they only increase by 80%, then it's cheaper to live than before), then there's more work available.
People can feel this radical change in their everyday life but they don't know what has caused it so they are very susceptible to being convinced that one group or another is to blame.
I here say nothing about radical change, but I would say a lack of generalized "bullshit detector" makes a person vulnerable in all sorts of ways, and this would be one of them. Providing people with that detector is, in my view, one of the two sole goals of education. The educational systems in existence in the world have no concept of this as a goal, and that leads to events like Trump and the mis-use of fractional reserve banking to continually print money.