The following is a guest article by Keith Hamburger. It was originally posted on April 26, 2011 at peacefreedomprosperity.com and is re-posted here with permission from the author.

Who is exploiting whom?

Imagine an artisan widget maker. The widget maker makes one widget per day and sells it for $10.

Now imagine an investor/inventor/developer who creates a machine that makes widgets. He spends his time and money to build this machine and wishes to have an expert run the machine to monitor quality control and ensure the product is adequate to the market.

The investor hires the widget maker to run the machine and, with expert operation, the machine makes four widgets per day of equal quality to the widgets the artisan made on his own. When the widgets are sold, for a sales total of $40 the investor pays the operator $20 and keeps $20 for himself.

In such an instance who is exploiting whom? Who is taking advantage of the other?

Many supporters of various forms of collectivism feel that if the investor doesn’t pay the operator his “full productivity”, the capitalist is taking advantage of the worker. But, what is the “full productivity” of the worker? Why is this “full productivity” any more than what the worker could have done on his own, which is worth $10 per day? Is the worker not exploiting the capitalist to increase his productivity above what it could have been without the equipment and doubling his income?

To focus on what the worker does on a daily basis is to ignore the past effort of the capitalist. To insist that what happened in the past is not relevant to what happens today will discourage investment, invention and progress. No matter what, promotion of collectivism on a large scale is to advocate for, at best, stagnation and, more likely, regression.

As life is dynamic, advocating for collectivism is to advocate for death.