CAPITAL FORMATION, WAGE BATES AND ECONOMIC DEVELOPMENT IN UNDERDEVELOPED COUNTRIES

The analysis of the level and changes oveu time of wages in underdeveloped countries should refer to a precisely defined economic struc¬ture that characterizes the stage of underdevelopment. Unless we have a clear definition of underdevelopment, it is impossible to inquire into the level and behavior over time oi the remuneration ®f dependent labor i.e., wages, in these economies. In terms of definition, the concept of underdevelopment is by no means "underdeveloped". To begin with the layman's understanding, the underdeveloped are the poor countries. For* anyone who is interested in the degree of poverty of these countries, th© statistical answer is the low level of their per capita income. If the question is raised, e.g., "what makes them so poor?" the answer is no longer so concise. A more or less general answer is that these countries are poor because of insufficient natural resources, low capital endowment and formation, lack of skilled manpower, and entrepreneurship, bad health conditions, poor government, ete.; all these poor indexes, exeepi natural resources, being, in their turn, due to the low level of per capita income. Thus the vicious circle is closed : poverty generates poverty.