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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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part I. Theory

Collection:: Economics Books

CHAPTER 2 ABSOLUTE DIFFERENCES IN COST WE begin with Case I. Consider first what would be the terms of trade within each country if both of the commodities were produced in each and were exchanged within each. Assume, that is, that the people of the two countries have nothing to do with each other. They go their own ways, quite without contact or trade between them. Assume further that the trade within each — this purely domestic trade — takes place as it would if the labor in each moved with complete freedom from occupation to occupa- tion, from industry to industry. The two commodities then are exchanged, in the United States and also in Germany, in proportion to the amounts of labor needed to produce them. In other words, we proceed, as regards exchanges taking place within a country, on the basis of a labor theory of value. It will appear in due time how important is this assumption, and in what ways it needs to be revised and qualified. For the present, we simplify the case by supposing not only barter between the two countries, but also barter within each on terms settled by equalization of the returns to labor. The figures for Case I, to repeat, are: In the U. S. 10 days’ labor produce 30 lbs. copper pp AS 10:7 » P 15 yds. linen therefore in the United States 30 copper = 15 linen. In Germany 10 days’ labor produce 15 lbs. copper it. Germany 10.7 7 » 30 yds. linen therefore in Germany 15 copper = 30 linen, or 7% copper = 15 linen. 4 There is a wide diversity between the terms of trade that would obtain within the two countries. In the United States 15 of linen would exchange for 30 of copper; in Germany 15 of linen for 73 of copper.

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