<story><title>Global capital is the tail that wags the U.S. economic dog</title><url>https://carnegieendowment.org/publications/82847</url></story><parent_chain><item><author>ballenf</author><text>Sincere question: why is purchasing power not the defining characteristic of wage growth at least post-gold standard? If I can buy more stuff with the same salary, hasn&amp;#x27;t my salary effectively gone up?&lt;p&gt;Or is your point that only &lt;i&gt;some&lt;/i&gt; stuff is cheaper, but the total standard of living supportable by average wages has nevertheless dropped?</text></item><item><author>PaulDavisThe1st</author><text>&amp;gt; money can move much faster and more freely than labor.&lt;p&gt;That&amp;#x27;s a result of political choices made in many jurisdictions, it&amp;#x27;s not a law of nature. The EU made a very conscious decision to tie free movement of labor to free movement of capital within its operating zone (probably the only such economic agreement of its kind).&lt;p&gt;The choices that the US has made are entirely favorable to capital, and entirely disfavorable to all non-professional labor. The only upside I can see (and I&amp;#x27;m not alone in this) is cheap consumer goods that have obscured the true cost and depth of wage stagnation over 35 years.</text></item><item><author>snake_plissken</author><text>Along the lines of this article, there&amp;#x27;s the dilemma&amp;#x2F;contradiction faced by modern globalisation in that money can move much faster and more freely than labor.  In previous iterations (late 1700s, 1800s and the first few decades of the 1900s) labor and money moved at basically the same speed: as an investor, your capital (gold&amp;#x2F;silver, then whatever money instrument replaced it) took the same boat&amp;#x2F;train&amp;#x2F;carriage as labor.  This had a moderating effect, and the system was able to almost always equalize itself in terms of trade and investments flows.</text></item></parent_chain><comment><author>dtech</author><text>Because purchasing power is quite hard to quantify. It requires you to define a set of goods the &amp;quot;average&amp;quot; consumer uses. This leaves much more wiggle room for manipulation and politicization. [1]&lt;p&gt;Wage in currency is a lot simpler. The only real manipulation possibility is currency value and some minor tinkering in the definitions.&lt;p&gt;[1] For example a major criticisms of the euro-zone inflation index is that it excludes housing cost: &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;en.wikipedia.org&amp;#x2F;wiki&amp;#x2F;Harmonised_Index_of_Consumer_Prices#Controversy_on_housing_prices&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;en.wikipedia.org&amp;#x2F;wiki&amp;#x2F;Harmonised_Index_of_Consumer_P...&lt;/a&gt;</text></comment>
<story><title>Global capital is the tail that wags the U.S. economic dog</title><url>https://carnegieendowment.org/publications/82847</url></story><parent_chain><item><author>ballenf</author><text>Sincere question: why is purchasing power not the defining characteristic of wage growth at least post-gold standard? If I can buy more stuff with the same salary, hasn&amp;#x27;t my salary effectively gone up?&lt;p&gt;Or is your point that only &lt;i&gt;some&lt;/i&gt; stuff is cheaper, but the total standard of living supportable by average wages has nevertheless dropped?</text></item><item><author>PaulDavisThe1st</author><text>&amp;gt; money can move much faster and more freely than labor.&lt;p&gt;That&amp;#x27;s a result of political choices made in many jurisdictions, it&amp;#x27;s not a law of nature. The EU made a very conscious decision to tie free movement of labor to free movement of capital within its operating zone (probably the only such economic agreement of its kind).&lt;p&gt;The choices that the US has made are entirely favorable to capital, and entirely disfavorable to all non-professional labor. The only upside I can see (and I&amp;#x27;m not alone in this) is cheap consumer goods that have obscured the true cost and depth of wage stagnation over 35 years.</text></item><item><author>snake_plissken</author><text>Along the lines of this article, there&amp;#x27;s the dilemma&amp;#x2F;contradiction faced by modern globalisation in that money can move much faster and more freely than labor.  In previous iterations (late 1700s, 1800s and the first few decades of the 1900s) labor and money moved at basically the same speed: as an investor, your capital (gold&amp;#x2F;silver, then whatever money instrument replaced it) took the same boat&amp;#x2F;train&amp;#x2F;carriage as labor.  This had a moderating effect, and the system was able to almost always equalize itself in terms of trade and investments flows.</text></item></parent_chain><comment><author>chickenmonkey</author><text>It makes sense if their point is that only some stuff is cheaper. It&amp;#x27;s cheap in the US to buy processed food and appliances but college and healthcare costs are pretty high, and it&amp;#x27;s hard for young people to find good housing.</text></comment>