Comparison based on the Labor Theory of Value

If the employer is really not providing value, why does John Smith not work for himself and get the $10,000? If he can’t, then maybe the employer is providing something, such as raw materials, intellectual property, capital, or trust (customers, suppliers, and investors trusting the employer more than John Smith, and therefore being more willing to do business).

The analogy to government is there, somewhat. If you don’t like the government taking some of your stuff and providing services you don’t want, why don’t you go and start your own country? Usually, the problem is that you need some government services, such as armed forces, that are very expensive to provide on your own. You can buy a ship, you can build an artificial island, but can you defend them from a truly hostile takeover?


The place where it all breaks down is that in most advanced countries opening a business is relatively easy, so if one stays an employee there are probably valid reasons. Startup countries, OTOH, are extremely difficult.

h/t @David Burkhead

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