Is there an error in my thinking regarding wage-slavery and wealth inequality?

If there exists 1,000,000 gold coins and a guy earns 10 coins per day by paying 2 coins for labor and spending 3 coins for supplies (food, entertainment, etc), then he saves 5 coins in a pile. How long before he owns all the coins? It seems there is an inherent problem in working for someone else because there is a transfer of value uphill. The guy who earns the 2 coins is transferring 8 coins of value to his employer. The uphill transfer of wealth necessitates that money be constantly printed or else the money would run out. Redistributive tax policies can alleviate the need for printed money to some degree. In the example above, take 2 coins from the guy's pile in taxes means that it takes him longer to own all the coins, but he'll still own them all eventually as long as he continues to make a profit that he saves. In a world where everyone is a fur-trapper, cooper, smith, or someone who works exclusively for themselves, it seems printed money wouldn't be necessary because no one man could own all the money. It's the act of employing others that transfers value that requires money be printed in order to maintain the ever-growing inequality of wealth possession. Can you find an error in this thinking? If not, then that means redistributive tax policies can only slow the need for money printing and consequent inflation. And it means the money supply can never go down. And it means the system will eventually run out of money when inflation is too high, which means it's destined to collapse. It seems there can't exist a system of money where one works to enrich another without inevitable collapse. The tax rates would be so high that employers would refuse to work. If the tax rates are low, then the system runs out of money quicker. This is what we've seen since Reagan. Tax rates are low, so money printing has to increase to maintain the increasing division of wealth. In the 50s and 60s, tax rates were high, so money didn't need to be created as fast. Is my reasoning correct? I don't know who else to ask for a qualified opinion that is not politically biased. I appreciate your time.

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  • published this page in Ask Prof. Wolff 2016-12-22 09:50:44 -0500


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