Adam Smith, the famed 18th century economist, articulated the principles and differences between labor and capital. In simpler times, most workers simply sold their labor in exchange for wages. The earning power of a worker was a function of how many hours he or she could work at a given wage. Capital, on the hand, was employed to finance research, purchase equipment and inventory or meet other working capital needs. Capital was instrumental in building value for a business.
Today, many workers, particularly in the executive suite of public companies or financial markets, have been earning far in excess of what (more…)
