Have you ever wondered why you get paid what you get paid?

We’re taught that the market is a rational, magical force. It calculates your "value," determines your "worth," and spits out a salary. It’s called the Theory of Marginal Productivity.

It sounds scientific, doesn’t it? It suggests that if you’re a developer, a designer, or a founder, you are paid exactly what you produce—no more, no less. It implies the system is fair.

But what if I told you that this "theory" wasn't discovered in nature—it was invented to keep the peace?

The "Peace" Theory In the late 19th and early 20th centuries, as labor movements were gaining power and threatening the status quo, economic theorists needed a way to prove that workers were being paid "fairly." The goal? To convince the working class that no matter how much (or how little) they made, it was the "market" that decided, not the power dynamics between the boss and the worker.

It’s an attractive idea for the people at the top: If the market decides your wage, then I’m not the one suppressing it. Don't blame me; blame the math.

The Myth of Efficiency The theory relies on a fantasy: that markets are perfectly efficient and that every worker has infinite "optionality." But as any founder or employee knows, the real world doesn't work that way.

In reality, your ability to earn isn't decided by a magical productivity number. It’s decided by:

• Negotiation Power: How much leverage do you actually have?
• Institutional Constraints: Laws, unions, and social norms.
• The "Power" Gap: The reality that capital owners hold more cards than labor owners.

The Founder’s Takeaway Why does this matter if you’re building a company? Because if you fall for the myth that "market rate" is a law of nature, you’ll never build a truly equitable culture.

1. Stop Hiding Behind "Market Rates": As a founder, don’t use "market data" as an excuse to underpay your team. If you’re the one setting the culture, you are the one deciding if you value human labor or just "marginal output."
2. Negotiation is the Real Market: Recognize that every salary conversation is a power dynamic. Being transparent, fair, and human is a choice, not an economic impossibility.
3. Optimize for Humans, Not Just Math: The most successful companies I see aren't the ones that squeeze the most "marginal productivity" out of every dollar—they’re the ones that treat their team as partners in the upside.

The Bottom Line The "market" isn't a god. It’s a series of decisions made by people in power. If you’re a builder, don't let the "math" of the status quo dictate how you treat the people who help you build your dream.

What’s your take? Do you think the salary you earn (or pay) is a true reflection of value, or is it just a reflection of leverage?

Keep journeying,