Well here we have it, the Industrialist starts up a new business. His first order of business is to find the investors. Here he convinces them that for every dollar invested, the return on their investment will be higher than anything the banks can offer. Lets say for the argument that the Industrialist promises a return of 5 cents per dollar on the first year of operation and will be able to increase the return by an extra 5 cents each year. Charts and statistics and market studies and consumer models all show how the product or service or "doodad" will be very popular and will make all the investors rich if they invest right now.
What this means is that the investor invests $100 and his investment will be worth $105 after a year, aproximately $115 on the 2nd year (remember he has already accumulated $5 and he has accumulated an extra $10).... the calculations are much more complex but I am using an extremely simplistic model to show the basic function. The 3rd year the investment of $100 would now be worth $130. Investments are always better than the banks but unlike the banks they are more like gambling. The investment could end up = $0 because the Industrialist miscalculated the future and lost out on whatever opportunity. The Investor has to be shrewd and take a risk and judge the Industrialist's capabilities to deliver. The Industrialist must have a great track record and show past successes for really big investment requests.
Now with the money received, the next task for the Industrialist is to acquire customers as he builds the factories. The Industrialist promises to the potential customer that he can provide X amount of product at Y cost. The Industrialist wants to undercut the competition and have the contract signed. If more customers are found than can be initially handled, the Industrialist can get more investors to invest because there is a guaranteed customer base.
The investments are in, the customer is ready to exchange his cash for product X upon delivery. The next step is to find employees. Now the Industrialist has already made promises to the Investor and more promises to the Customer, he must now convince the Employee to provide the work so that the Industrialist's promise are kept. If the promises are kept, the employee keeps his job, its as simple as that. So, if the promise was 100 units for $1000 each for the Customer and the Investor is awaiting his 5% return with an increase of 5% per year.... well the Industrialist must juggle and convince the workers that they must work harder, longer to keep up. So the salary and benefits for the Employee will be as low as possible to satisfy the Investor first and Customer second. Quality of the product will be sacrificed to keep the Investor happy, costs will be cut down to guarantee that the Investment returns are guaranteed. Eventually, the Customer will be frustrated by the product and look elsewhere to another company that does the exact same thing.
If the situation becomes untenable, well the Industrialist just takes his corporation to bankruptcy and the investors still get some kind of return, customers find a new company to provide the product and the employees end up screwed. The Industrialist then proceeds on a new project with a track record showing that he succeeded wonderfully in his endeavour.
We allow them to get away with this because we are all told that we must work hard and that the Industrialist is the hero that provides us with work. We must respect our hero and consider ourselves lucky if we work for this hero. If we criticize the hero, we are accused of being lazy or some stigma gets attached to us. Meanwhile, the hero manipulates us for his own personal ends which makes us poorer in the end and the hero richer.... and we reward him whenever he finds new ways to impoverish us.
Of course in this metaphor, the customer is not treated with much respect either, as they are the next ones to suffer with low quality junk, worsening customer service and rising prices for the junk.
Lets pretend I am an Industrialist. I convinced someone to pass me enough money to buy a $2 bucket. I convinced a mother that I can get her some water for $1 per trip and she needs 5 trips a day. Then I get you to go fetch me the water for a nickel a trip. If you are hard working enough, I may give you a bonus of a dime after a day's work if you can do the trips in 4 hours. If you can do that, I will get an extra customer and have you work the entire day and I won't need to get a new bucket. Would you accept my deal? Then why do you work as an employee in any company? Look into it. Yes my examples are very simplistic and the economy is much more complex than that.... but you'll see that my examples are not as far fetched as that.
Would you agree that perhaps the Industrialist is stealing from you and taking advantage of your ignorance? Consider Steinbeck's novel "The Pearl", the pearl farmer finds a huge pearl that is probably worth a million dollars. The farmer used to get $10 dollars per pearl and imagines that he can get $1000 for this huge pearl, the buyer offers $500 and they negotiate.... (it has been a while since I read the story so the details are probably wrong.... but you get the general idea of the premise of the story). The buyer thrives upon the ignorance of the farmer, just like the Industrialist thrives on the ignorance of the Employee.
Investigate for yourself, you will see.
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