Labour and capital mobility: Highbrow theory and lowbrow illustrations

Abstract Complete mobility of labour in the long run equalises the ‘rate of return’ to employment, independently of any particular price structure. Then, given some level of net output, aggregate net value added is proportional to aggregate labour effort, a macroeconomic equal exchange. Complete mobility of capital in the long run equalises the rate of profit, a process that creates prices that are different from the prices that directly reflect labour effort in production. Hence, microeconomic unequal exchange is the norm. Then monetised effort appears in locations different from where that effort was performed. Hence, the profit of any and every firm depends upon the exploitation of the world’s working class, and not upon the exploitation of its own workforce. Some empirical consequences of this approach are explored for the world’s largest 500 firms.