International trade

Bibliographic data

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

10 8 INTERNATIONAL TRADE the analysis, and for the present will be ignored. We shall assume that cost of transportation is so small an item that it may be neglected. Each commodity is supposed to exchange for the other on the same terms in both countries; which would not be the case if transportation costs were taken into consideration. Each commodity then will be produced in one of the countries only. Copper will be produced in the United States only, being sent thence to Germany in exchange for linen. Linen will be produced in Germany only, being sent thence to the United States in exchange for copper. No linen will be produced in the United States, no copper in Germany. If now we suppose the two regions are not separate countries whose inhabitants are kept apart by differences of language, custom, race, but are parts of a single homogeneous country — say New York and Pennsylvania, not Germany and the United States — our conclusions become different. They become differ- ent, that is, so far as concerns the possible barter terms of trade. The terms will then be settled at the fixed rate of 15 linen for 15 copper. The inhabitants of both regions will participate equally in the potential gains from the trade. But as regards trade between countries — to return to this case — under a rate more favorable to the United States, say of 15 linen for 8 copper, the total rewards of producers in that country, in quantities of linen and copper together, will be greater than in Germany. On the other hand, under a rate more favorable to Germany, say 15 linen for 29 copper, the total rewards will be greater in that country. If there be free movement of people between the two, such as takes place between different regions within a country, there will ensue equality of reward. That equality is reached under the rate of 15 linen for 15 copper. The circumstance that gives to international trade its out-~ standing characteristics is the lack of free movement between the trading countries, and the consequent possibility of great diver- gencies between the returns to labor in them. The further sig- - nificance of this factor, the causes of divergences between countries, the nature and effects of the divergences which still persist within

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