Meditations and Learnings

Meditations and Learnings

The Relationship Between Capital and Labour

The average hammer in a less wealthy country would drive more nails, and the average worker would produce less output. The difference is because an impoverished country has an abundance of labour, while capital is more scarce. The reverse is true of a wealthier country, where resources are plentiful, and each worker would have their own hammer. With abundant capital, the average worker can achieve more in a certain amount of time, increasing their productivity.