Cheap not so Cheap

5 Oct 2013: Capital (Ch. 22, “National Differences in Wages,” 1867, Karl Marx)

Highlights the difference between nominal costs and relative ones, debunking the idea (seen in Adam Smith and elsewhere) that a higher wage means a greater burden for the employer. Highly industrialized countries, where products are created much more quickly, require less money to buy subsistence necessaries; however, pay still rises because more is generally incorporated into “necessaries” within a highly industrialized society (one with free healthcare, maybe, or one where everyone needs to pay the monthly cable, Netflix, and iPhone bills). This results in a situation in which nominal wages become greater than those in poorer, less advanced nations, making it seem as though the way toward greater profits is increased labor in the latter environments. Though many workplaces were established in these poorer places (India, Russia, etc.) according to English methods and even under English supervision, the relative surplus value generated still falls well short of that produced in England itself – industrialized countries by virtue of technologies and other systematic (say, infrastructural and societal) enhancements generally enable more intensive and relatively profitable production.

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