Fake News Exposed: Inflation, Iran, College, America First, and Poland

by | Nov 18, 2022

What Makes Wages Rise

The buyers do not pay for the toil and trouble the worker took nor for the length of time he spent in working. They pay for the products. The better the tools are which the worker uses in his job, the more he can perform in an hour, the higher is, consequently, his remuneration.

What makes wages rise and renders the material conditions of the wage earners more satisfactory is improvement in the technological equipment.

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 domestic 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 manhour and can only afford to pay wage rates which, compared with American wage rates, appear as shockingly low.

There is only one way that leads to an improvement of the standard of living for the wage-earning masses, viz., the increase in the amount of capital invested. All other methods, however popular they may be, are not only futile, but are actually detrimental to the well-being of those they allegedly want to benefit.

– Ludwig von Mises, Ph.D., “Wages, Unemployment, and Inflation,” Christian Economics, March 1958.

  • Facebook
  • Twitter
  • Pinterest
  • reddit
  • LinkedIn
  • Buffer

Our Books

9 libooksjuly2023sm

Related Articles

Related

TGIF: Hurrah for Real Globalization!

TGIF: Hurrah for Real Globalization!

Globalization, like the free market and classical liberalism generally, isn't wildly popular these days, is it? People blame globalization for all sorts of bad things, and the raps are usually bum. In truth, to the extent that governments keep out so-called foreign...

read more
Yeah, It Was (Mostly) the Fed’s Fault

Yeah, It Was (Mostly) the Fed’s Fault

A not uncommon reaction from central bank defenders in response to criticism is some form of an apology, arguing a lesser of two evils choice. Posing a counterfactual, they present a scenario, say the East Asian Crisis or subsequent Subprime Crisis, which it is then...

read more

Pin It on Pinterest

Share This