This is quite a claim. I can’t imagine an economic system in which investors captured 100% of value. The savings are definitely passed onto the consumers, otherwise the consumers wouldn’t have an incentive to choose this company over their competition. Economies of scale are probably the principal reason quality of life improved so dramatically across the board following the industrial revolution. This seems to prove that economies of scale benefit consumers and employees.
I'm not exactly claiming 100%, but it's close. Until the industrial revolution GDP was very close to flat. It has to be this way to explain why most people lived on subsistence farming for thousands of years: if GDP growth was even 1% we'd have space colonies.
The industrial revolution brought GDP growth, but to a very small number of people. The rest (practically everybody) were plunged into abject misery. This is where anarchism, marxism, communism, socialism, fascism, and so on came from. I mean, one of Henry Ford's famous innovations was paying his workers enough to afford the things they were building. It was a capitalist nightmare.
WWI and the Great Depression unbelievably made things worse, and they led to serious political upheaval throughout the western world. It was only when WWII wiped out the holdings of many of the wealthy that quality of life started to improve at all, and in fact that lead to one of the longest periods of growth and equality in human history. But it really had nothing to do with economies of scale. It had to do with the fact that incomes finally rivaled capital gains from wealth.
The essential difference between that period of expansion and the initial industrial revolution weren't economies of scale. It was that we had political systems that distributed the profits to more than just the business owners. If you don't have those kinds of systems (free markets, progressive taxation, financial regulation, open credit), then it doesn't really matter how efficient your production is, because the benefits are only going to .001% of people. If those people aren't sharing (not exactly something rich people are known for), then quality of life for everyone else won't go up at all. And hey look, that's what happened during the industrial revolution.
