Comment by starspangled
Comment by starspangled 2 days ago
Right, you're replying to my hypothetical which does not describe reality. You contradict the post I first replied to, so it supports my point.
Comment by starspangled 2 days ago
Right, you're replying to my hypothetical which does not describe reality. You contradict the post I first replied to, so it supports my point.
> What
You're replying to basically a strawman I wrote. I didn't say that is what's happening, I said that's what would be happening if investment was all going into capital and not labor intensive industry as OP said.
Good lord you are confused. Nobody anywhere said “all” capital is flowing into capital. You’re trapped in your own straw maze! ;)
Not confused at all, the person with the fallacy that wage intensive activity is insignificant in importance is. Clearly as you say returns are balanced, and the balance that has been arrived at is desperately crying out for more and cheaper labor.
EDIT: Oh, OP is you! No wonder you're getting touchy. Your original comment is wrong.
Can you point me to where I said it’s “insignificant in importance”?
What
Let me echo back what I understand to be your argument: “If there were accelerating returns to capital moving the equilibrium of labor/capital-intensiveness mix, then there would be no demand to further reduce the cost of labor”
My argument is: regardless of where that equilibrium is at any given point in time, it will almost never be 0% labor-intensive, and anyone engaged in labor-intensive production would always have a preference for even lower-cost labor.
So the answer to the question of, “why do businesses want immigration despite a more capital-intensive mix of production” is “because cheaper labor is better regardless of how much labor you need.”