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money. Now, not only workers have more capital to work with, they need to share less to capital owners.
Before the capital owners get 30% but now they get only say 4%.
The one benefiting from better rules in Indonesia will be workers.
Ups… Correction. Before capital owners do not really get 30%.
Remember that before, those capital owners need to share with corrupt officials, and take huge risk. Moreover, the capital owners used to face café burning, pig farm burning, all those are money that just, well, burn.
So, before, the capital owners get 30% return but with all those risk and extortion. Most capital owners are indifferent between getting 30% with all those negative consequences and clean 4% money.
In workers perspective, there is no such different. Interest rate does drop.
Then what? We have more capital in our country. We need only to share less money to the capital owners. Where did the rest of the money will go?
You guess it. Workers. The inflexible workers that cannot just get a job somewhere else take the brunt of all government’s regulation, good or bad.
Government’s regulations that maximize productivity as a whole, such as less intervention, will increase workers income.