The economy
Sir.—There appears to be a great deal of interest in inflation with respect to wages and costs of materials. There appears to be an assumption that the price of wages has dropped with respect to the price of materials. Everything on this earth is provided free — costs are labour only. Some economists state that price equals labour, plus profits. However, profits ultimately end up back as labour. In the most simpli-' fied sample, a company’s profit deposited in a bank is lent out for a construction project, hence the profit itself is immediately turned back into labour. All costs are labour, so to reduce prices, all labour prices must be reduced. Where New Zealand loses, is that overseas countries have a higher labour content, which we must pay for by working harder to make our exportable goods more competitive. The efficient nations such as Japan and. Taiwan become wealthy at the expense of less efficient nations. Need more be said. — Yours, etc., CHRIS CHASTQN June 18, 1981.
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Press, 22 June 1981, Page 18
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169The economy Press, 22 June 1981, Page 18
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