Bart Croughs writes:
Nowhere in the writings of any Austrian economist will you find anything claiming that the wages for a given job are linked to capital investment by the employer.
I already gave some quotes of Austrian economists in another post, but = maybe you didn't read it, so here I go again:
Henry Hazlitt in 'economics in one lesson' (p. 139): "The best way to = raise wages, therefore, is to raise marginal labor productivity. This = can be done by many methods: by an increase in capital accumulation - =
^^^^^^^^^^^^
i.e. by an increase in the machines with which the workers are aided..."
You should read your own quotes. No one claimed that you can't increase productivity and income on average under some circumstances by increased capital investment. What was being made fun of was the simplistic misunderstanding of what the underlying mechanisms are. Prices, including the price of labor, are set purely by the marketplace. Under some circumstances, incomes will be determined by investment levels made by employers. Under others, they will not. The important feature is the market principle, not the capital investment. The point of my "green pylons" posting was to note that it is the market direction of the investment and not the investment that is important. Impediments to trade create wastes of capital just as surely as burning cash in the marketplace does. If you were really an Austrian, and not a confused person, you would know that all the Austrians and Chicago School people are for completely free trade, something you don't seem to get in your expositions on capital flows. Perry