Capital and unskilled labor are substitutes Essay

Capital and unskilled labor are substitutes - Essay Example These are the factors that facilitate the growth development and expansion of a business. One would therefore have to understand the importance of labor in maintaining the production of more capital for a business. There is an immense similarity between the capital invested in a project and the type of labor it can afford to hire. This is also determined by the materials used by the business as it grows and ensuring that it rises. Production takes place when all the integral parts of an organization or business work together to attain a goal that will contribute to the whole company as well. It is particularly through these social relations to each other that that each part influences the other (Krusell 2000). These interactions between the manufacturers and the atmosphere within which they trade tasks and contribute to the complete construction usually differ depending on the nature of the method of production. Capital also involves the exchange values. It is hence a computation of property, trade ethics and social extent. It maintains its value regardless of the form in which it is invested in. Basically; capital always has a constant value of exchange. For instance, if the capital is in the form of land the exchange value will still remain the same. The commodity may appreciate or depreciate in value but during transformation its exchange value will not be altered. This shows that all factors are interrelated in one way or another so as to produce an end result that favors each integral part of the system (Johnson 1997). A laborer will receive a mode of survival in return for his services. Substitution of capital with unskilled labor would depend on how much initial capital was invested. Low capital investment would not enable employment of skilled labor as this would reflect unrealistic allocation of finances. Therefore, low capital investments will lead to employment of unskilled labor. A workforce that does not have adequate skills would