Doug, Could not there be an additional explanation in the so-called Leontieff paradox -- that the US exports labour intensive goods because the labour embodies a great deal of 'human capital'. That is, is it not possible that when human capital is added to physical capital, the K/Y ratio would rise both absolutely and relatively. This would also imply that capital is exploiting the workers investment in human capital as well. Paul Paul Phillips, University of Manitoba.
