By Gunnar Myrdal
Asian Drama, An Inquiry Into The Poverty of countries Volumes I, II and III (Volumes I, II and III)
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Extra info for Asian Drama: An Inquiry into the Poverty of Nations
The wages he receives for the week are merely certificates to show the world that he has done these things. The money he receives in return for his labor is only the first in a long series of exchanges. These transmute his labor into those particular things for which he has really been laboring. All this is clear when we look at it this way. But the fallacy remains firmly entrenched in many hiding places. To reveal it, we must now change our investigation from the deductive to the inductive. Our conclusions have been obvious when we began with general principles and deduced specific examples.
The wages of hunters are the game they kill; the wages of fishermen, the fish they catch. Farmers get wages from their crops. In addition, if they use their own capital and their own land, part of the crop will be considered interest, part rent. Gold panned by self-employed prospectors is as much their wages as money paid to hired miners. Defining Terms 19 And, as Adam Smith noted, the high profits of retail storekeepers are in large part wages—that is, compensation for their labor, not just for their capital.
Clearly, the smith adds picks to the employer’s capital before taking money from that capital in wages. But what about a boilermaker working on a great ship? One may be completed in a few minutes, the other not for years. Yet both are items of wealth, articles of production. Each day’s work produces wealth and adds capital. In the steamship as in the pick, it is not the last blow (any more than the first) that creates the value of the finished product. Value is created continuously—it is the immediate result of the Wages Not Drawn from Capital 37 exertion of labor.
Asian Drama: An Inquiry into the Poverty of Nations by Gunnar Myrdal