There seems to be a lot of oppositional thinking about labor and capital. I’m not sure that this is conducive to clear thinking and wonder if putting them on a continuum would lead to more productive solutions to everybody’s problem, how to make money.
In the cycle of producing stuff and serving customers, the later you get paid, the more the risk you won’t get paid at all. To take hindmost position, the capitalist takes the greatest risk and consequently reaps the greatest reward. Flipping over the coin, the sooner you get paid, the less you get paid because your payment is a surer thing and thus you don’t get as much in risk compensation. So the common stockholder gets the biggest rewards and is paid last, preferred stockholders get paid earlier, but their payments tend to be less, ditto bondholders.
Labor is, by definition, made up of people who are paid in advance of sales and regardless of whether there is a profit made of the fruits of their labor. The laborer gets paid first, even more so than the bondholder or the preferred stockholder. But just like the bondholder and the preferred stockholder, getting to the head of the payment line has a price.
Now if you’ve got no reserves, I can see the need to be paid right away. But after age 30 when you’ve got some money put away and could afford to not be paid immediately, would deferring compensation either in part or in whole make sense? In terms of the enterprise you would be reducing the capital requirements to produce and reducing the risk that the capitalist has to take. Payroll would drastically shrink and payout would be in shares as sales came in. Capitalists would have a shrunken role in the enterprise because they would only have to fund the land and the tools. In terms of worker attitude, you would be strongly aligning worker interests with increasing sales in order for their back end compensation to come through. To some extent, these workers would cease to be labor.
Labor would become a phase you went through as a kid, if your family couldn’t stake you to a more normal working arrangement, or right after a bankruptcy, because you’d exhausted your reserves and couldn’t afford to wait for your pay anymore. It might also be something you would do if you lost faith in your company’s future but hadn’t found another position at a different company yet. It could also be used as a weapon, punishing management by demanding to be paid on the front end or the back end and driving up costs by shifting quickly from one to the other.
Would firms accept a lower capital cost and a better incentivized work force in exchange for the risks? I suspect that some would be amenable to it but we’ve gotten so stuck in the rut that labor is paid first and hit with the penalty of not taking part in the risks of the firms that it just hasn’t been considered an option.