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Because in that industry, you need a lot of capital, which usually means you need to convince people to lend you theirs. If you’re in an industry that doesn’t,
by ericd 4y ago
Because in that industry, you need a lot of capital, which usually means you need to convince people to lend you theirs. If you’re in an industry that doesn’t, and labor is the limiting factor (tech is more in this vein), then labor tends to get its way. This has been a bit mixed up by super loose monetary policy, but that’s not historically the norm.
- sangnoir 4y agoI get your point: I was just making it clear that the opposite isn't true for labor-intensive industries where one has to gain the labor from a lot of people and still get to dictate how the labor is used. The obvious conclusion is that it's not about the quantity of capital/labor, but the current economic system where capital is king.
- andsoitis 4y agoI wonder whether it isn’t more fundamental. I think the underlying principle is “leverage” and “scarcity”. The more leverage an input has and or the more scarce it is, the more it is prized, everything else being equal. That’s why some labor is more highly paid or has more power than other kinds of labor. Capital, likewise has inherent leverage and scarcity power.
- ericd 4y agoYep, this. Most labor has much less leverage now that it’s more easily replaceable by equally talented people half a world away. It’s just in areas with shortages where it has strong negotiating leverage.