[PEN-L:11040] Re: Doug's Paradox for K/Y ratios

[Doug Henwood <dhenwood@xxxxxxxxx>]

Fikret Ceyhun wrote, at the end of an illuminating post:

>4. Comparing the US with other OECD countries.  If the statistics cited are
>true in the long run, that is, K/Y for the US is lower than her
>counterparts in competition, then the explanation lies in the Leontief
>Paradox mentioned earlier by Paul Phillips. That is, according to the
>paradox, the US is not a capital endowed, as commonly believed, but labor
>endowed country.

This is persuasive. What does it mean for the future? Will this reliance on
cheap labor undermine U.S. economic performance over the long term, or can
this economic strategy continue indefinitely without some kind of nasty
reckoning?

Doug