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Message: <blockquote data-quote="Celebrim" data-source="post: 6495703" data-attributes="member: 4937">That's a poor analogy.  Just because you can live for $5 a day in a developing region, doesn't imply that $5 has the same purchasing power in say Cuba, Nigeria, Ecuador, Sioux Falls and Boston.  A person can't really live on $5 per day in Boston, regardless of how meager I live, even as a homeless beggar.  The cost of living is too high, because everyone else around you has high priced labor and so its not possible to buy the goods and services they offer for $5.  By contrast, $5 in an impoverished region were labor prices are low buys a large amount of goods and services which they have to offer at low prices for lack of any wealthy buyer or way to capitalize on their own labor.  The same Venezuelan meal of beans, rice, and fried plantain that costs me $12.95 for lunch here in the USA, would cost me perhaps $3 in Venezuela and perhaps $1.50 in rural Ghana.  A person with a daily income of $60 a day in Ghana would be able to live relatively comfortably, able to support many children, and perhaps even having house servants.  A person with a daily income of $60 a day in the United States depending on where in the United States that they live, how old they are, and whether they must support children may well require subsidization to afford basic necessities.  So to speak of prices and incomes in different parts of the world provides us little additional clarity.  We aren't even able to say what '$5' means in Egypt, Belgium or San Francisco without dividing it by the price of something and coming up with it's value in that other thing.  I would be willing to bet that for the sort of handmade goods available in our hypothetical world, regardless of the money something is priced in, pricing in 'daily wages' or 'simple meals' remains fairly constant.</blockquote>

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