Quote:Then you would be wrong. Productivity is the sole consistent driver of wages growth. If wages are halved it doesn't matter a fuuk if productivity is also half. You've missed the point by long shot.
So I am wrong because I 'missed your point', not because I am actually wrong?
You are wrong on both counts. The point being that paying someone half the rate has the same cost if their productivity is half also.
Quote:If you don't know the difference I suggest you purchase a decent textbook. Opportunity cost is generally covered in the first chapter due to it's high importance.
Most economic textbooks don't feel the need to mention it. As far as I can tell it is just a slightly different way of thinking about the same concepts. Though the people using the term like to turn it into something reovlutionary.
On the contrary, just about all decent textbooks will have it addressed in the very first chapter. I don't know where you formulate the idea that it may be revolutionary. Ibn Khaldun described the concept way back in the 14th century and David Ricardo wrote extensively on the topic two centuries ago.
Quote:Untrue, and grossly untrue. Your suggestion relies on an unlimited supply of capital.
Not it doesn't.
So capital is unlimited is it.
Quote:It's a bit like Freediver if he had $10 million of spare capital. He may have a choice of making ball stroking machines or making blow updolls. The opportunity cost of choosing blowup dolls is the forgone profit from making ball strokers. The opportunity cost of making ball strokers is the forgone profit from making blowup dolls. The end solution will gravitate to which one presents the lowest opportunity cost.
You are considering opportunity cost in the absence of an understanding of economics - ie assuming everything else is fixed. If both were profitable, both will be done.
If we do not have enough capital or labour to do both, then the value of labour or capital will increase until one ceases to be profitable.Not quite. One will cease because the opportunity cost is too high and the capital will be redeployed at a lower opportunity cost.