Does Capitalism Kill People, Or Just Underpay Them?

Eric Boromisa
Feb 19
7 min read

Over the last century, two curves went almost straight up:

The number of humans on the planet
The total value of global financial markets

Those were the stars of the first version of this article. More people, more wealth, longer lives on average. On the surface, that is not the chart of a system that simply kills people.

Once you add two more curves, the story changes:

Worker value added per hour, often called labor productivity
Worker pay, plus what flows to investors through capital gains and profits

Now the question becomes sharper.

For every unit of value a worker creates, who captures it over time: the person doing the work, or the person who owns the assets?

That is where capitalism does not look like a neutral life extension machine. It looks more like a sorting mechanism that decides who gets the survival upgrades.

Curve 1: Population and Life Expectancy Still Go Up

Quick recap.

Very rough global population numbers:

about 2 billion people in the mid 1920s
2.5 billion around 1950
more than 6 billion by 2000
more than 8 billion by the mid 2020s

Average global life expectancy more than doubled over the 20th century, from something like the mid 30s to the low 70s.

That happened because we got much better at:

growing and moving food
clean water and sanitation
vaccines, antibiotics, and medical care
global trade in all of the above

Capitalist markets are not the only driver there, but they played a big role in scaling and distributing those systems.

So on the most basic measure, people alive times years lived, capitalism is not showing up as net population loss. It is showing up as more humans, living longer.

Curve 2: Global Market Wealth Goes Up Much Faster

Now look at global stock market capitalization as a proxy for the financial layer of capitalism.

From mid 1970s to mid 2020s, decent data says:

world population roughly doubled
global equity market capitalization in nominal dollars increased by something like two orders of magnitude

If you divide total listed equity value by the number of people alive, you get:

only a few hundred dollars of market value per person in the 1970s
tens of thousands of dollars per person today

Again, that does not mean every person has that portfolio. It shows that the paper claim on future profits has grown far faster than the headcount of human beings.

So the first two curves say:

Curve 1: more people, more years
Curve 2: far more asset value per person

This is the classic story: capitalism generates growth and wealth.

To understand who actually benefits, you need the next two curves.

Curve 3: Worker Value Added Per Hour

Worker value added is a simple idea. Take what a firm earns from an hour of your work, subtract the non labor costs, and you get the value added by your time and skill in that hour.

Economists measure it as labor productivity, often output per hour worked.

In many advanced economies, that value per hour has risen steadily for decades:

In the United States, net productivity grew about 1.3 percent per year between 1973 and 2014
That compounds to roughly a 75 percent gain in how much value the average hour of work generates

Internationally, the pattern is similar. The OECD and others have documented big gains in labor productivity across high income countries over the last several decades.

In plain language:

For a typical worker in a rich economy, each hour of work now creates far more value than it did in the 1970s.

So far, so good.

Now the uncomfortable part.

Curve 4: What Workers Actually Get Paid

If productivity and pay moved together, then each step up in worker value added would show up as higher real wages and better living standards.

That used to be roughly true in the mid 20th century. Since around 1980, it is much less true in many countries.

Some examples:

In the United States, median hourly compensation grew only about 0.2 percent per year from 1973 to 2014, while productivity grew about 1.3 percent per year. Only around 15 percent of productivity growth showed up in pay for the typical worker.
An OECD analysis finds that in most member countries over the past two decades, productivity growth has decoupled from real median wage growth. In other words, raising productivity is no longer enough to guarantee real wage growth for a typical worker.

Globally, you see the same pattern in a different way. The labor share of income, which is the slice of total income going to workers as wages and benefits, has trended down in many countries since the 1980s.

Recent numbers from the International Labour Organization are a useful snapshot:

workers currently receive about 52.3 percent of global income
capital income, from owning assets like land, machines, buildings, and patents, takes the rest

That is the fourth curve. Worker value added per hour goes up. The share of total income going to workers does not keep pace, and often shrinks.

The gap between those two curves is where capital gains live.

Where Capital Gains Come In

Capital gains are the increase in the value of assets you own, such as stocks, real estate, or a privately held business. If a company you own shares in becomes more profitable without proportionally raising wages, that extra retained profit and future profit expectation shows up as:

higher dividends
higher stock prices
buybacks that raise your claim on earnings

At the global level, we know a few things:

Capital income as a share of total income has risen relative to labor income in many economies over the last 40 years.
The share of people who receive some capital income has grown. One recent study finds that the share of individuals worldwide with positive capital income rose from 20 percent to 32 percent between 2000 and 2016, with much of that change driven by China and a growing global middle class.

So more people own some slice of the asset pie, but the largest gains are still heavily concentrated at the top.

Put differently:

workers create more value per hour
a smaller fraction of that value flows into wages than in the past
a larger fraction flows to the owners of capital as profits and capital gains

If you are mainly a worker who depends on wages, your personal living standards rise more slowly than your own productivity.

If you are mainly an asset owner, your wealth can accelerate much faster than your own labor input.

Revisiting the Original Question

With all four curves in view, we can restate the question.

Instead of just asking:

Does capitalism kill people?

A more precise version is:

For each extra unit of value that workers create, who gets the survival benefit and who absorbs the risk?

The population and life expectancy curves say that capitalism, in aggregate and paired with public health and state capacity, has lengthened lives and lifted billions out of extreme poverty.

The productivity and pay curves say that capitalism, as currently configured, systematically underpays a large share of workers relative to the value they add, and directs a growing share of that surplus to capital owners through profits and capital gains.

That does not always kill people outright, but it shows up as:

Chronic financial stress
Weaker social safety nets
Delayed or skipped healthcare
More fragile lives that are one illness, one eviction, or one crisis away from collapse

In global terms, that is a quieter kind of violence. Not a single event, but a pattern of shortened options and thinner margins for billions of people.

Why This Matters For Executives And Investors

If you are running a company or a fund, you already live inside these curves.

Your workers have a certain value added per hour.
Their wages and conditions capture some fraction of that value.
Your shareholders capture the rest through profits and capital gains.

The practical questions are:

What is the current split between labor and capital in your own model?
Not the accounting version, but the lived version. How much of the value that workers generate turns into stable, predictable income and security for them?
How much of your growth thesis relies on keeping that split skewed?
Are you promising margin expansion primarily through automation and wage suppression, or primarily through real innovation and new markets?
What happens to your customers and your workforce if you keep pushing that wedge?
At some point, your own workers and customers are the same people. Underpaying them is not just morally fraught. It is eventually bad for demand and for political stability.
Where will generative AI push your own four curves?
The ILO has already warned that, if historical patterns continue, new AI tools could push the labor income share down further unless guardrails are put in place.

The point is not that you need to erase the return on capital. The point is that you are always making design choices about who captures value created by human time and attention.

Designing A Less Extractive Version Of Capitalism, Locally

You cannot rewrite the global system on your own. You can redesign your subsystem.

Some practical levers:

Align pay with productivity inside your firm.
Track value added per worker or per hour, and ensure that real compensation grows meaningfully when productivity does. If the gap grows, be honest about where the surplus is going and why.
Share upside through ownership.
Broader stock ownership, profit sharing, or cooperatively owned structures can convert some capital gains into labor income.
Stabilize the floor for your lowest paid workers.
Predictable schedules, living wages for core staff, and access to basic benefits cost money in the short term. They also reduce turnover, error rates, and reputational risk.
Stop pretending externalized costs are free.
If your margin depends on pollution, burnout, or precarious gig work, treat that as a risk on the same level as cybersecurity or supply chain fragility.

None of these fixes change the global ratio of labor income to capital income on their own. Together, across thousands of firms, they shift the shape of the fourth curve.

Operationalizing your values gap

If you want to move beyond the "infinite squeeze" and build a system that actually scales, we need to talk about the mechanics of your operation. At Numbers & Letters, we help founders and operators navigate the messy middle where growth meets governance.

We take these high-level macro shifts and translate them into a concrete GTM strategy or a Product Development roadmap that doesn't rely on burning out your human capital.

If this resonates, get in touch and we can map it out together.

Resources:

Disclaimer/Full Disclosure (You made it!): This blog post was generated with the assistance of AI, with N&L human oversight ensuring accuracy and insight. The thoughts and opinions expressed are our own.