This is the heart of capitalism right, you bought the capital, the post hole digging machine, and so you get to (this next word is being used with its technical definition, make full use of and derive benefit from (a resource), not the emotionally charged one) exploit the value generated by labor using the capital.

In your scenario you didn't say how much you charge the customer, but I'll assume that it's more than you pay the laborer so that you can turn a profit. You are paying the laborer $5 per post hole. Let's say you have a healthy profit margin so you charge the customer $10 per post hole. The laborer makes you $200 each day of which you pay the laborer $100 and pocket the other $100 as profit.

Now you have a post hole digging machine, they guy can dig 200 post holes and that generates $2000 dollars in value for you of which you pay out $100 to the laborer and pocket the other $1900. Now you used to make $100 profits, so let's subtract that out and say you make an additional $1800 per day from that laborer. If the capital costs $20,000 you will pay for the capital in $20,000 / $1800 = 11.11 days, we can round up and say 2 weeks.

So in 2 weeks you will have paid for the capital expenditure with the increase in productivity, and then there will be upkeep and maintenance on the post hole machine, but every day after the first 12 days you go from labor making 50% of the value they generated digging holes to labor making 5% of the value they generate digging holes.

Now we tell ourselves, this is the system working, you took the risk in buying the post hole digging machine. The laborer could save up his earnings for 200 days (assuming he had no other expenses, which is not realistic) and also have $20k to buy a post hole digging machine and then could just go capture the full value of his labor himself, or could pay someone $100 to operate it and make $1900 a day.

If you are the guy digging the holes though, 6 months after the machine is paid off you are still only capturing 5% of the value you generate, does that seem like a good deal anymore. At what point does your taking 95% of the value someone else generate become predatory. We make ourselves feel better by saying, it's a free market, if he doesn't like it he can go get a different job. But at the end of the day, someone making $1900 has a lot more economic power and the options that come with it than someone making $100. After a year of hard work that laborer has $36,500 and the capitalist has $693,500.

It's not surprising that as the economy has done this day after day, year after year, we are faced with massive income inequality, and it was really only a matter of time before the guy actually digging all the post holes your selling might ask how this arrangement is fair.