Tuesday, June 16, 2009

Quote - Ludwig von Mises on Wages

"American wages are higher than wages in other countries because the capital invested per head of the worker is greater and the plants are thereby in the position to use the most efficient tools and machines. What is called the American way of life is the result of the fact that the United States has put fewer obstacles in the way of saving and capital accumulation than other nations. The economic backwardness of such countries as India consists precisely in the fact that their policies hinder both the accumulation of capital and the investment of foreign capital. As the capital required is lacking, the Indian enterprises are prevented from employing sufficient quantities of modern equipment, are therefore producing much less per man hour and can only afford to pay wage rates which, compared with American wage rates, appear as shockingly low."
Ludwig von Mises, Planning For Freedom, 1962.

6 comments:

Christopher said...

I guess that is why American corporations operating in China pay slave wages, eh?

Josh said...

Its certainly why as capital has flowed into China the purchasing power of the average chinese has steadily increased. Though, let's not forget, China is still far from a free market.

Christopher said...

And let's not forget that the PPP in China is incredibly low.

Christopher said...

And let's not forget that the PPP in China is incredibly low.

Christopher said...

7000 PPP is what corporations want to pay. And that is why they have moved.

Josh said...

Why wouldn't corporations pay less? Why would they want to pay more today than they did 5 years ago? If I was a greedy sniveling corporation out to make as much money as possible at the expense of everyone else, I'd want to pay my workers less than 7000 per year. Thats far too much.