Wage regulation destroyed the cheap-labor advantage of developing countries

Evidence

The impact of wage regulation, Bauer said, had destroyed the major competitive advantage of developing countries: abundance of cheap labor. Bauer contrasted the rapidly growing East Asian economies and India to argue that “contrived scarcity” injured “prospects for economic growth” (Bauer 1958b, 4). — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1324

Categorization

• XREF: Bauer’s ‘contrived scarcity’ thesis and the cheap-labor argument foreshadow later critiques of Indian planning and align with the growing East Asian vs India comparison that would become a staple of development economics. — connects to: Global wage suppression was engineered to boost dollar profit rates — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 199; Standardizing wages removes the third party’s exploitative advantage

Broader Connections

• Standardizing wages removes the third party’s exploitative advantage #corroborates (0.85)