Why do some people believe the poor are poor because the rich are rich?

Consider the creation of a toy, the Jack in the Box (JIB).

To get a JIB we need the tools and materials to build one.

We also need someone to assemble the JIB.

A few companies make JIBs.

If someone works 40 hours per week at a JIB factory they have little time to pursue other efforts if their lives are to be balanced with family. Time is not infinite. It is a limited resource.

Those who makes JIBs are paid wages. Consumers will only pay so much for a JIB. If one company makes JIBs that cost $10 and another sells JIBs that cost $25 and they are of the same quality the more expensive JIB seller is going to go out of business. Sellers will try to reduce prices to increase sales as mu

So the market and time are not infinite. Nor is the amount of money paid for JIBs.

If the makers of JIBs are very rich then it is likely you will find the workers are paid a low amount. Sometimes the factories are moved overseas and sweatshops are created. Lower labor costs leads to more profits, because only so much cash is coming in from consumers.

The rich being rich doesn’t cause poverty. But profits are often created by squeezing the workers by expropriating the maximum amount of unpaid value of labor. The rise of sweatshops since 1980 thanks to “free trade” and logistics technologies has caused even more inequality than before. As unions are destroyed by offshoring the Middle Class falls apart, heightening the inequality we see in modern America.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.