Matt — this is a great point. FWIW, this was Thomas Paine’s argument in his 1795 essay Agrarian Justice. He called it “the citizen’s dividend,” arguing that the bounty of the new land should be shared fairly among all. The same point could be made for the fruits of productivity brought to us by the machine age. It seems to me that it isn’t “either-or.” There are good reasons for there to be incentives for capital as well as labor. They’ve just gotten out of balance. Capital already has many advantages, yet we compound them by giving it a lower tax rate, encouraging public company management to serve shareholders only while treating workers as a cost to be eliminated or passed on to the public — which must fund them by taxing labor at an an even higher rate.

In terms of how to change the balance, we could adjust the tax rates, taxing capital at a higher rate and labor at a lower rate. But we could also change the fundamental orientation of business towards stock price maximization, and instead into the virtuous cycle of investing in the people who are also ultimately their customers. Shorter work weeks and higher wages are reasonable policy approaches once you take away all the incentives that drive businesses towards stock price maximization.

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