Re: National Socio-Economic Security Need for Encryption Technology

Sandy Sandfort wrote:

>I've just had an insight with regard to Bart's ongoing capital 
debate.  In response to Perry's "green pylon" post, Bart wrote:

> I am saying that the fact that American workers are better paid
> than workers in Third World countries, can be explained for a
> large part by the fact that there is much more capital invested
> in the US than in Third World countries.

Bart's error lies in his confusion of the terms "captial" and
"capital investment."  While capital may be used to make capital
investments, there are other things it can be spent for as well
(wages, taxes, supplies, etc.).  

If Bart were to use the term "infrastructure" then it would be
clear that the ebb and flow of mere capital would have relatively
little to do with infrastructure influenced wages.<  

What does 'capital' mean? The MacMillan dictionary of modern 
economics (3d edition, p. 51) says:

1) A word used to refer to a factor of production produced by the 
economic system. Capital goods are produced goods which are used as 
factor INPUTS for further PRODUCTION. As such capital can be 
distinguished from LAND and LABOUR which are not conventionally 
thought of as being themselves produced by the economic system. As a 
consequence of its heterogenous nature, the measurement of capital has 
become the source of much controversy

2) The word is also used as a term for financial ASSETS.


So, I fear that it's Sandy who is confused about the meaning of the word 
'capital', not me.

But even if it is me who is confused about the meaning of the word 
'capital' (which isn't the case), this confusion wouldn't affect my argument 
at all. If American capital is invested in foreign countries instead of in the 
US, then the total amount of capital invested in the US will be lower than 
it would have been if the capital had been invested in the US. So the 
wages in the US would be lower than they would have been if the capital 
had been invested in the US. The argument is still the same, and my 
question is still not answered.


Bart Croughs

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                          SANDY SANDFORT
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C'punks,

On Thu, 15 Aug 1996, Bart Croughs wrote:

> 2) The word is also used as a term for financial ASSETS.

Dollar bills are a financial asset, but they are not a capital
asset.  

> So, I fear that it's Sandy who is confused about the meaning of
> the word 'capital', not me.

Bart may fear all he wants, but he is still confusing the two
meanings of the word.

> But even if it is me who is confused about the meaning of the
> word 'capital' (which isn't the case), this confusion wouldn't
> affect my argument at all. If American capital is invested in
> foreign countries instead of in the US, then the total amount
> of capital invested in the US will be lower than it would have
> been if the capital had been invested in the US.

Here is where Bart's confusion lies.  If he is talking about
investment dollars, they none of his Austrian quotes bear any
relationship to his conclusion.  If he is talking about shipping
steel mills overseas, there might be some justification, but I
don't think that's what he is talking about.  

Finally, he as not shown why US investors would move their
capital (of whatever nature) from non-competitive US companies
to foreign ones.  As I said in a previous post, the most likely
to happen is that US investors will move their capital (of
whatever nature) from non-competitive US companies to other US
companies that do enjoy a competitive advantage.

On a personal note:  Bart the people on this list are highly
intelligent.  Many if not most are students of Austrian 
economics.  By the tone of your posts my best guess is that you
are young (20's?) and have little practical experience in "the
real world."  This is not a crime, but it's no great honor 
either.  The people you have been tilting with are not arguing
just to be arguing.  They have a firm grasp of the subject matter
and fine analytical minds.  Your arguments to authority are okay,
but you show a serious intellectual inflexiblity.  I sincerely 
suggest you reconsider your demeanor on this list to date, and 
work to improve it.  Don't waste your reputation capital being a
jerk.


 S a n d y

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