There is a deep flaw in this logic. Person A and Person B are both investing the same amount, just in different forms.
Person A converted their 100k into 1 year of time.
Person B converted their 1 year of time into 100k of money.
They both put in 100k of something, B put in 100k worth of time, A put in 100k worth of money. If we assume a fair market rate for the conversion, then essentially this is a perfect exchange, and they both traded their different investments for exactly what they were worth. That is, the money invested, got back EXACTLY the amount of time it purchased, and the time invested got back EXACTLY the amount of money it purchased.
Person A and B are trading things of equal value. This means they invested equally, and hence should split the reward equally.
My guess it's you'll claim A got $100k of your time so A is at 0 as well but if we follow that logic in other places we can see how it doesn't work.
A pays $10 for B to make a pie
B pays $10 of time to make a pie
A now resells pie for $20. A does not own B any percentage of profit. That's the business success case just replace "pie" with "business". Similarly A drops pie. B does not owe A a new pie. That's the business fail case. $B got their $10 money for their $10 of time. B's risk has now been paid for. A still has a risk, that they can sell the pie. Replace "drops pie" with "business fails".
Person A has not the time to invest into building the product, so they invest money, 100k's worth of dollars.
Person B has not the money to invest into building the product, so they invest time, 100k's worth of time.
So if we compare dollars in the event of company failure, we have:
Person A is now at -100k
Person B is now at 100k
Person A is now at +1 years
Person B is now at -1 years
Again, this means they both invested equally. What is usually harder to see is the time investment. But Person A gains one year of work they did not have to do on the product (via their investment). Person B loses the year they invest/spend on the product.
Purchasing a product does not imply joint ownership. Consumers do not partly own the profit of the Producer. However, if A and B decided to build a pie product together then yeah, they'd split the profits. Which is what is at stake here in this overall discussion: how should profits fairly get split when two or more parties contribute the resources to build it.
This literally makes no sense, and it wrong even by your own math.
Person A is now at -100k: Agreed
Person B is now at 100k: Agreed
Person A is now at +1 years: If you are valuing 1 year at 100k, then no - they are at zero years. They put in $100K over 1 year, so the two cancel each other out.
Person B is now at -1 years: Again, they have been paid at the rate of $100K for 1 year, so they are at zero years.
Again - I reject this "losing a year" thing. The investor hasn't gained a year at all - you can't lose or gain time. But if you value 1 year at 100K then they have paid for 1 year, but that means they have by-passed other opportunities.
If they invest $100K in 2019 and the company goes bust in 2020 how have they gained a year?
But even ignoring that (!!) your math doesn't work.
Let's say you have 1 year left to live. You have two things you want to do, X and Y, but X and Y take 1 year each to complete. It is the end result you want, but each result takes 1 year achieve, and you only have 1 year left to live. What can you do?
Well, if you have enough money, you can pay for someone else to work on X while you work on Y. In this way, you have been able to get 2 years worth of work done, in only 1 year. In effect, you doubled the number of years you had to spend on getting things done.
Spending money in exchange for someone else's work is a time multiplier on the one who spends the dollars. They get more done in less calendar time, i.e., because they effectively have more effort-time by converting their money to someone else's calendar time.
The entirety of my reasoning in predicated on one simple thing: an investor trades in their money for something of equal value, and the worker trades in their time for something of equal value.
This means, by definition, they are equal partners in the exchange, and hence must split the profits equally. It also means they each gained and lost equally, because they traded evenly.
If you do not agree with the foundational assumption I am making, point out the error in that, as all else necessarily follows.
Also, if the company failed because they failed to deliver that thing you wanted to build does the investor get the time back? No.
But the employee keeps the money.
The entirety of my reasoning in predicated on one simple thing: an investor trades in their money for something of equal value, and the worker trades in their time for something of equal value.
Indeed. The investor buys part of the company, and the worker gets paid for their time.
If you buy shares in Microsoft you get a proportion of the company, not some weird "time" thing.
Are you saying that when a company fails, all employees should return their past salaries paid by that company? Because that’s what splitting the (negative here) reward equally with investors would mean.
No, that doesn't mean that at all. If a company fails, investors don't have to return the time they've invested by putting in extra years of work, so it follows that those who invested time wouldn't return the money they received.
Investor A puts in 100k of dollars, the company fails they've lost 100k worth of dollars.
Worker B puts in 100k of time, the company fails, they've lost 100k worth of years.
The point is, they are both risking equally, when compared in the same units, time or dollars, but not both. The investor is investing 100k worth of time, and the worker is also investing 100k worth of time. If the company fails, they have both lost that invested time.
Investor A puts in 100k of dollars, the company fails they've lost 100k worth of dollars. Worker B puts in 100k of time, the company fails, they've lost 100k worth of years.
This is complete nonsense.
The worker has received $100k for their time and keeps that money. The investor has nothing.
If you try to argue that the workers wage doesn't count for some reason, then you also should argue that the investor's time counts the same as the workers did. Either way the investors is worse off.
The investor is not the least bit worse off. He gains what the worker loses, and the worker gains what the investor loses. The worker gains the 100k, but the investor gains the extra year of work.
That is, the investor, effectively, gets 2x the time they otherwise would have, because they traded some of their money for someone else's time.
Whereas the worker has now lost 1 year, though they did gain 100k for the time they spent.
If you do not believe that the investor is trading their 100k for something of equal value, then please demonstrate this. For it is this equality that underpins my argument.
Saying the investor "has nothing" is naive, since, as with others, you are ignoring what they traded their dollars for.
Person A converted their 100k into 1 year of time. Person B converted their 1 year of time into 100k of money.
They both put in 100k of something, B put in 100k worth of time, A put in 100k worth of money. If we assume a fair market rate for the conversion, then essentially this is a perfect exchange, and they both traded their different investments for exactly what they were worth. That is, the money invested, got back EXACTLY the amount of time it purchased, and the time invested got back EXACTLY the amount of money it purchased.
Person A and B are trading things of equal value. This means they invested equally, and hence should split the reward equally.