International trade

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Monograph

Identifikator:: 1758394757

URN:: urn:nbn:de:zbw-retromon-136209

Document type:: Monograph

Author:: Taussig, Frank William http://d-nb.info/gnd/120199459

Title:: International trade

Place of publication:: New York, NY

Publisher:: Macmillan

Year of publication:: 1927

Scope:: XXI, 425 Seiten; graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Part II. Problems of verification

Collection:: Economics Books

CHAPTER 15 DirrereNCcES IN LaBor Costs! TuE principle of comparative advantage or comparative costs has bulked large in our theoretical analysis. What confirmation or verification of its significance is supplied by the facts? In one respect we are much hampered in the search for pertinent facts. The data on costs which are most abundant are quite inapplicable. They are accountant’s figures; that is, figures on money costs, on expenses of production, supply prices. The principle of comparative advantage or comparative costs, however, has regard to the quantities of labor needed for a given physical output. Labor cost in this sense is a matter of no concern at all to the accountant, and ordinarily of equally small concern in the business man’s reckoning of profit and loss. It is “labor cost” in quite a different sense from that which is sought in business figuring. What the business man and his accountants mean by labor cost would be better described for our purposes by such a term as “wages expense’’ — the amount of money paid out in wages for a given unit of product. The labor costs of the accountant and business man (wages expenses), it is true, might conceivably be converted into labor costs of the kind significant for the present inquiries. They could be so converted by reckoning also the money rates of wages per hour or per day. If these money rates of wages are known, the conversion would seem to be no troublesome matter. Yet in fact it is troublesome. The instances are rare in which the two sets of figures needed — wages expenses per unit of product on the one hand, wages paid per unit of labor (hour or day) on the other 1 The substance of this chapter appeared as an article in the Quarterly Journal of Economics for November, 1924 (Vol. 39). 161

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