Re: Cheap oil forever!

From: Jim Blair (see_at_sig.com)
Date: 07/01/04 

Date: Thu, 1 Jul 2004 17:56:16 +0000 (UTC)

Peter Lawrence <peterl@netlink.com.au> wrote:
>Jim Blair wrote: (on causality: wages or productivity?)

>>
>> But it is clear that productivity gains are a necessary condition for wage
>> gains when the entire economy is considered. Otherwise even the poorest
>> countries would be rich.
>>
>> http://www.geocities.com/capitolhill/4834/egg.txt

Peter Lawrence <peterl@netlink.com.au> wrote:
>
>That reasoning is wrong, and so is the result.
>
>You don't need productivity gains for wage gains - all you need is some sort
>of redistribution (I'm leaving out the ethics and practicality of that for
>the moment). Of course, you can't do that INDEFINITELY - but that wasn't a
>requirement just there.

Hi,

Sure some people can gain wage (or income) increases without being more
productive. As you indicate, by taking theirs from others. But my "when
the entire economy is considered" was intended to mean that for everyone
to gain in real wages (or incomes), there must be gains in productivity.

>
>The poorest countries' predicaments have nothing to tell us on this point -
>other things are going on there as well.

Yes. My reference to poor countries being rich is that IF raising
(nominal) wages were the cause of increased wealth or increased
productivity, then any country could become wealthy by decree. Which I
say is absurd.

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