The Human Action Podcast Billionaires, Workers, and the Exploitation Theory
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Jan 18, 2026 Dive into a thought-provoking critique of the exploitation theory, where the age-old battle of billionaires versus workers is examined. The discussion unveils how much value is created by factors beyond just labor, like land and entrepreneurship. Bob Murphy dissects historical theories and highlights how current claims against billionaires echo past arguments. Learn why wages reflect present value rather than future potential, and discover the complexities of profit, regulation, and the myth of labor-only entitlement.
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Returns Don't Track Labor Intensity
- If exploitation as claimed were true, returns would vary systematically with labor intensity across industries.
- Empirically, rates of return are roughly similar across sectors, undermining that exploitation prediction.
Labor Alone Doesn't Determine Value
- Value cannot be traced solely to labor because some goods arise from nature or other nonlabor inputs.
- Böhm-Bawerk rejects pure labor theories of value and includes natural factors in value creation.
The Five-Year Steam Engine Example
- Böhm-Bawerk's steam-engine example shows multi-year production stages where early workers produce future, not present, goods.
- Paying those early workers present money yields less than a share of the final present-engine price due to discounting.
