Re: National Socio-Economic Security Need for Encryption Technology

[Bart Croughs <bart.croughs@tip.nl>]

Sandy Sandfort wrote:

>I've just had an insight with regard to Bart's ongoing capital 
debate.  In response to Perry's "green pylon" post, Bart wrote:

> I am saying that the fact that American workers are better paid
> than workers in Third World countries, can be explained for a
> large part by the fact that there is much more capital invested
> in the US than in Third World countries.

Bart's error lies in his confusion of the terms "captial" and
"capital investment."  While capital may be used to make capital
investments, there are other things it can be spent for as well
(wages, taxes, supplies, etc.).  

If Bart were to use the term "infrastructure" then it would be
clear that the ebb and flow of mere capital would have relatively
little to do with infrastructure influenced wages.<  

What does 'capital' mean? The MacMillan dictionary of modern 
economics (3d edition, p. 51) says:

1) A word used to refer to a factor of production produced by the 
economic system. Capital goods are produced goods which are used as 
factor INPUTS for further PRODUCTION. As such capital can be 
distinguished from LAND and LABOUR which are not conventionally 
thought of as being themselves produced by the economic system. As a 
consequence of its heterogenous nature, the measurement of capital has 
become the source of much controversy

2) The word is also used as a term for financial ASSETS.


So, I fear that it's Sandy who is confused about the meaning of the word 
'capital', not me.

But even if it is me who is confused about the meaning of the word 
'capital' (which isn't the case), this confusion wouldn't affect my argument 
at all. If American capital is invested in foreign countries instead of in the 
US, then the total amount of capital invested in the US will be lower than 
it would have been if the capital had been invested in the US. So the 
wages in the US would be lower than they would have been if the capital 
had been invested in the US. The argument is still the same, and my 
question is still not answered.


Bart Croughs