Using g-side to balance i-side

The thing that Kessler's article on i-Side vs. g-side ecomomics ("... the term i-side economics—for investment and innovation and individual incentive—rather than g-side economics, as in "what has the government given me lately?"") seemed to miss is that there is also a division within the i-Side, and that division is not healthy without the government's intervention.

The key is what I call the labor vs. investment capital balance rule. The more fairly that a person's "deliverable" capital (labor) is balanced against an investors capital, the freer a person is, and IMO, the better a capital-based system is likely to run. The more that a person's deliverable capital is not tied up (in garbage debt like credit cards, for example) and can be invested is one example. Another is their ability to move their deliverable capital to the venture that pays the best. This free movement of labor forces enterprises to not only be competitive with product, but also labor.

Why is it important for economies that enterprises also be competitive with labor? Without this balance, there is no "natural" way for markets to find a way to give individuals enough spending money to drive the consumer economy. If Joe Public's purse is empty, the rest of the economy will eventually flounder.

This two-way competitiveness (product and labor) can only be achieved if labor can move. One way this is enabled is if the safety net offered by each enterprise is seen as equal by the labor pool. If, for example, an individual contributor must stay with his current company because he would lose his level of medical insurance when moving, he becomes "stuck" with that company and the laws that allow an insurance company to do that distort the labor market in its client company's favor and so distort the free-market.

So the government needs to protect the deliverable capital of the individual to the extent that it balances with investment capital to prevent distortions (such as labor migration limits and debt that limits spending) on free markets. This is where the "g-side" needs to regulate the "i-side".

In Kessler's article, how well would Ford's automobile market have developed in the long run if the labor had only ever been able to work for Ford at a rate that Ford determined? Would they have been able to buy those cars and help to drive the market? It's the eventual balance between compensation and product that built the economy, not the product only.