Imagine that Alice can create 100 utilons if she works alone. Bob can also create 100 utilons if he works alone. (They are doing different things.) But if Alice and Bob cooperate, they can create 500 utilons together. How will those 500 utilons be divided between them?
The answer depends on how easy it is for Alice to replace Bob in their partnership, and how easy it is for Bob to replace Alice. If there is only one Alice, but thousands of Bobs, we can expect that Alice will keep 399 utilons, and Bob will get 101 utilons. Because if he doesn’t take the deal, some other Bob will.
Now imagine that Alice + Bob + Machine can make 1000 utilons if they all work together. What happens now?
Well, if there is still only one Alice and thousand Bobs, and if Alice owns the Machine… again, we can expect Bob to get the same 101 utilons, or get replaced by another Bob.
(Of course in real life there is usually more than literally one Alice, but the point is about how relatively easy it is for each side to replace the other side.)
Here is my simplistic understanding of economy:
Imagine that Alice can create 100 utilons if she works alone. Bob can also create 100 utilons if he works alone. (They are doing different things.) But if Alice and Bob cooperate, they can create 500 utilons together. How will those 500 utilons be divided between them?
The answer depends on how easy it is for Alice to replace Bob in their partnership, and how easy it is for Bob to replace Alice. If there is only one Alice, but thousands of Bobs, we can expect that Alice will keep 399 utilons, and Bob will get 101 utilons. Because if he doesn’t take the deal, some other Bob will.
Now imagine that Alice + Bob + Machine can make 1000 utilons if they all work together. What happens now?
Well, if there is still only one Alice and thousand Bobs, and if Alice owns the Machine… again, we can expect Bob to get the same 101 utilons, or get replaced by another Bob.
(Of course in real life there is usually more than literally one Alice, but the point is about how relatively easy it is for each side to replace the other side.)