(A sequel to the original.)
The anticapitalist ignorance/fallacies involved are well represented by Bernie Sanders' statement to Bloomberg at the Feb. 19 debate: "You know what Mr. Bloomberg? It wasn’t you who made all that money. Maybe your workers played some role in that as well. And it is important that those workers are able to share the benefits also." No one said that Bloomberg created the entire value of his company; what economics experts would say, however, is that the people involved in the running of his business were each paid roughly proportional to their marginal value-added contribution. Bernie's language would indicate that he thinks there's some kind of (exploitative) zero-sum rather than win-win thing going on here; this kind of language/tendency is pretty widespread among socialists, notwithstanding the dramatic rise in both population and living standards in the era of modern capitalism.
(Sanders followed the above statement with the following, also a familiar one from enemies of capitalism; we'll call it the "alienation argument": "When we have so many people go to work every day and they feel not good about their jobs, they feel like cogs in a machine. I want workers to be able to sit on corporate boards as well, so they can have some say of what happens to their lives." The arguments involved here can't be covered in a brief paragraph of post. But the gist of this problem, as best as I understand it, is that Bernie and socialists are talking here about a human problem, not a capitalism one, and it's not a problem I see being solved by the traditional socialist solutions about "seizing the means of production (sic)" or other forcible measures of putting "the workers" more in charge of decisions about the running of firms. That being said, I'm all for voluntary 'worker'-empowerment arrangements that even a Randian 'left-libertarian' like Roderick Long gets behind. And in any event, how do the rare, entrepreneurial skills of a Bezos get put to their optimal use under socialistic proposals?)
Sanders' statement about the "workers" creating much of the money is standard for socialist-talk and an ingrained tendency toward thinking in terms of a labor theory of value (LTV) under some guise or other. The most (in)famous proponent of LTV, Karl Marx, had to qualify the LTV in such ways as to make it a truism. To make a long story short, a CEO of a company qua such (i.e., not qua shareholder in the firm, which I address in a moment) is in the category of highly skilled labor, which represents a multiple of simple or unskilled labor. And CEOs are known to often make many multiples of the lesser-skilled laborers under his or her command. But the real villain in the Marxian/socialist framework, the source of alienation and exploitation, is the category of capital (in its privately-owned version, that is). It's not the CEO that exploits, it's the shareholders (the capitalists) who are in the position to exploit the labor of the CEO and everyone else working in the firm.
Now, Bezos' salary as CEO is a mere $81K. The vast bulk of his compensation comes from the value of the shares in the company he founded and runs. IOW, in the Marxist/socialist "understanding," the shareholder-value part of the equation represents exploitation. And Bezos is only a roughly 1/6 shareholder in Amazon, meaning to the tune of 5/6 of the company's value, Bezos the skilled-laborer-CEO is beholden to shareholder-capitalists. It's so unfair and alienating. (Ludwig von Mises among others went through considerable pains to make the point that entrepreneurs and capitalists are beholden to customers. Is that what's unfair and alienating, in the final analysis? Is the Marxist/socialist objection really about the inequalities in wealth and income arising from differences in ability to satisfy market demand?)
But the whole Marxian/socialist analysis runs into a problem that Rand solves, when we think through how Bezos qua capitalist/shareholder supposedly exploits the workers (including Bezos qua CEO)? The question that Marx/socialists fail to answer but Rand does answer, is whether and how Bezos' shareholder-based net worth is a more or less accurate reflection of the value-added he generated as prime mover behind Amazon's success. Never mind whether or how the net worth of other shareholders in Amazon and other companies reflect how they generated value-added through their skills, savings-and-investing, and savings-and-investing skills or vision. (Warren Buffett - net worth of roughly $90B or 5th largest in the world - made his fortune through pure investing/finance skills an vision. What role for a Buffett's finance skills in a socialist-style economy? And if a highly-and rarely-skilled person holds out not merely for the minimal level of compensation that would bring forth performance, but rather holds out for what the market will bear, is that especially objectionable?)
Anyway, in 2019, Jeff Bezos divorced from his wife, Mackenzie, and as a consequence of the divorce settlement she became currently the 23rd wealthiest person in the world, with a net worth of roughly $44B. She's not the CEO; she's not usually credited with being the prime mover behind Amazon's success. From 2019 onward, she draws returns from Amazon's productive capacity qua pure capitalist.
So, using Marx/Sanders/socialist logic, does Mackenzie exploit Jeff?
