[ithkuil]

And cost of living is also driven by how much local industries can pump up the salaries.

In a way it's a system designed to extract the most of the value generated by a local industry, "taxing" it at every layer, first you give some money to a engineer that then has to part a good chunk of it for rent and then even plumbers get their cut (who in turn spend it elsewhere), etc.

The key insight here is the word "local" in "local industry".

As the industry itself starts to be less local, this mechanism breaks down.