Thursday, May 17, 2012

Substituting Capital for Labor down on the Farm---The US way and the Afghani way. I don't know what to say when I see the comparison here...

This video (From NPR) shows a farm tractor cultivating/planting a field without a driver. It is pre-programed to ride a grid and do what it does.  The farmer can now do something else with his time or he does not have to hire a worker. 

The farmer, or more likely, a corporate analyst/accountant, has determined that substituting capital for labor will be more profitable for the business.  Technology has become less expensive relative to labor on the farm. 

The photo below shows a farmer in Afghanistan (guessing he is not a corporate account) tilling his field the old fashion way---by old fashioned, I mean pre-1900's on back. 

In Afganistan, labor is cheap and capital is expensive so more labor is used to produce food.  Quite a difference in productivity outcomes, wouldn't you say? Hard to believe these two situations exist at the same time in today's world. 

Source: Here

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