21.
What is the Source of Wages?
Anyone truly concerned with the welfare of workers should first analyze
the source of wages. Wages are determined by worker productivity. Worker
productivity is determined by the availability of capital goods (tools
& equipment, buildings & fixtures) to the worker to help him in
his production. The availability of capital goods is determined by the
prospect of profiting from such an investment. And the appropriate mix
of investment in capital goods results from freedom in the marketplace.
Thus anyone concerned with the welfare of workers should be the greatest
advocate of free markets.
If this sounds too theoretical, consider the action of real world
workers concerned with their personal welfare without regard to theory
or ideology. The experience the world over is one of workers constantly
seeking out freer economies: escaping from East Berlin to West Berlin,
from China to Hong Kong, from Havana to Miami. The world has yet to
see any such mass migration of workers from the freer to the less free
economies.
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