Productivity

Emigrating to another country widens your horizons in so many ways, also in a way that allowed me tomrealise that differences in standards of living, at least those measured by purchasing power of an average wage, don’t come from the fact that some areas have been and are poorer, neither from some vicious policies of central banks setting currency exchange rates on one level or another. These days capital and labour are freely mobile and can be allocated just as easily in smarter as well as in poorer areas. Equally most of European central banks have long freed their national exchange rates for almost all currencies in the world. So where does the inequality in living standards across different parts of the continent come from? Having worked in many companies in East and West for many years now, taking it all into consideration it turns out to me that it’s all down to simple facotrs of collective productivity. Some economies, some comapnies and indeed some individuals are just more productive than others. Not all of them are entrepreneurial enough to develop working habits and build patterns of capital that support high productivity and efficiet use of resources. That’s precisely why so-called Eastern European counties are lagging behind their Western counterparts.