BTW I forgot to address this comment of your's:
fwiw, modicum doesn't mean "amount"; it means, like, a small amount. or, as dictionary.com puts it: "A small, moderate, or token amount" ... granted, "small, moderate, or token" is a pretty apt description of Chinese wages compared to the US, but i'm not sher that's yer point.
"Wherewithal" means the modicum of income, i.e. the amount of income
denoted in the local currency you get from your labor or skill in an Asian
country. He'd find that it costs the same in wherewithal.
"modicum" means nominal or marginal in economics. It doesn't mean small in
the sense of diminutive. The term has a specific nuance in economics. One
would know that if one was conversant with economists.
I use it here to signify marginal degree. Modicum of income means the
change of spending relative to a change in income, dC/dI. So in the case
"i.e." case above, what is known as an instantiation from the general to a
specific example, marginal increases in income are met with marginally
proportional increases in spending. Thus, dC/dI =k, a constant. Solving
this elementary differential equation by integrating, C2 - C1 = k*(I2 -
I1). Generally k = 1, so if you get an increase in income, which is
determined by subtracting what you now get, I2, from what you had, I1, you
can be expected to spend it, and this is determined by subtracting what you
now spend, C2, from what you did spend, C1. What modicum of income means or
what the terminology implies, is that k<>1. In fact, k = f(I). This means
that as income rises one has a tendency to spend disproportionately. The
money goes to one's head and one borrows to spend. So now the modicum
equation looks like: dC/dI =k*I, C2 - C1 = k*(I2 - I1)^2. So the little,
"modicum", increase of income, I2 - I1, leads to exponentially increasing
spending! Since output rises only linearly with spending, prices must rise.
In the US k has had this kind of power law for some time, but so far, at
least in the non-urban parts of say, China, k has been pretty much constant.
The result is that labor cost and prices remain relatively stable in
non-urban parts of China even when 11% growth nationwide causes inflation
to rise to 4% in the urban areas. Not so in the US. This is why one can't
compare costs directly between nations. Indeed, currency fluctuations don't
adjudicate between these relatives, but are motivated by other factors only
tangentially related to them. You can see this when you compare equivalent
product labor costs trends. They often don't correlate with corresponding
currency trends. Long ago this was a mystery to me because I confused labor
costs with labor value. Total labor value, an indeterminate quantity, is
what actually determines currency conversion rate over the long run.
In order to convey the above more rigorously defined notions I used
"wherewithal", the ease or ability to get income and afford some arbitrary
lifestyle which may or may not have an equivalent in a foreign country. The
absolute law of economics says "can't get something for nothing", so
intuitively, the wherewithal of some somewhat comparable state of
microeconomics like going out to dinner, is equal to the wherewithal of
doing so in some other country. |
