Luxembourg, the United States, Norway, and Bermuda have the highest levels of GDP per capita of all other countries in the world. Although Luxembourg is a small country and the United States is a large country, there routes to success are very similar. Counties with large GDP’s per capita have quality education, access to resources, and higher education. Countries with large GDP’s take advantage of these three factors.
Capital does not move well in poor/ developing nations, however capital moves well among rich nations. The marginal product of capital between India and the United States differs by a factor of 5. Human capital in the labor force feeds off of education, the idea is that workers skills’ and education rub off on each other. In an educated country like the United States, the workforce will be much more educated than a workforce in India. The increase in education as a result increases human capital by 200
…show more content…
Location is the key to success, if a nation does not have an abundance of natural resources then the nation must seek resources. Rich countries extract resources and raw materials from poor/developing nations and reap the benefits. When foreign nations exploit a country’s natural resources, the poorer country gets the short end of the stick. Corporations tend to seek corrupt countries with relaxed laws and regulations that allow them to exploit the labor and resources. This was evident with the United Fruit Company and their harvesting of bananas in Central and South America. The UFCO paid their workers well and created jobs but almost all the money generated from the extraction of bananas went to the UFCO not the workers. Nike also outsources their labor to Indonesia and Folgers coffee in Brazil. It would be difficult for Folgers to grow coffee beans in the U.S, but it would be easy and cheap in Brazil. Folgers saves money and generates more