tag:blogger.com,1999:blog-4058766287077382431.post9141389978197270114..comments2024-03-23T04:01:39.348-04:00Comments on Understanding Society: Prosperity based on commoditiesDan Littlehttp://www.blogger.com/profile/15953897221283103880noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-4058766287077382431.post-46426851820723456512010-06-03T22:07:46.322-04:002010-06-03T22:07:46.322-04:00A reduction in population (rather than an increase...A reduction in population (rather than an increase in productivity) would could to an increase in living standards. Particularly if the society was at a population level were diminishing marginal returns to labor had set in some time ago.<br /><br />The English at the time of the industrial revolution already had high wages, and that lead to their developing steam pumps and then steam engines:<br /><br />Or at least that seems to be what <br />Robert C. Allen "The British Industrial Revolution in Global Perspective" is saying. [I saw him give a talk, but I have not read the book yet].<br /><br />What I don't know is why they had high wages. The time period of the industrial revolution, I believe was a time period of expanding populations. But it is possible that just enough of the skilled labor went off to the new worlds, or possibly there was competition for skilled labor from world trade.<br /><br />Of course in your closed economy, there is no trade. But someone could open a pool hall if you had adequate surplus resources. At which point the price for your basic commodities would drop as people choose to play pool rather than over indulge in commodities. And of course gambling (as pointed out by Aaron Brown in "The Poker Face of Wall Street") is one of the few methods for normal people to accumulate capital in pre-modern finance days.<br /><br />Somewhere within this muddled mess of a comment, I guess I am trying to get at/ and or figure out why, there seems to be at least a correlation between the wages of the common worker, and advances in labor productivity on one hand; but that the high wages do not appear to be driven (at least initially) by the higher productivity.russell1200https://www.blogger.com/profile/16258915475311426433noreply@blogger.com