Perry Metzger wrote:
Bart Croughs writes:
But there is another axiom of economics which the nationalist/socialist can use for his case against the free movement of capital. This axiom states that the wages of workers depend on the amount of capital invested. The more capital invested, the higher the wages are.
I failed to note obvious counterexamples. Well known authors get giant advances for books written with manual typewriters. Minimum wage workers routinely operate expensive equipment. Workers doing the same job in different places using identical equipment that cost identical sums earn different salaries.
Clearly, wages are defined by supply and demand -- not by "capital investment".
When economists say that wages are determined by the amount of capital invested, they mean on a regional/national level, not on the level of individuals. Bart Croughs