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

12 INTERNATIONAL TRADE reasoning that they do rise when money becomes more plentiful, do fall when money becomes less plentiful. An inflow of gold from one country to another causes prices to fall in the first, to rise in the second. I would not be supposed to imply that so bare and simple a statement as this tells the whole story of the working of the monetary mechanism. As will appear later, some of the most troublesome complications of the subject arise precisely in connection with the working of that mechanism. The reader’s patience is asked once more. Let the simpler aspects of the problem be first cleared up. Suppose now money wages to be $1.50 a day in the United States and $1.00 a day in Germany. And suppose too that this is the sole expense involved in producing the commodities in the two coun- tries. Ignore any return to capital; to that complication, as to others, attention will be given in due course. With regard to the supposed figures on wages, consider them for the present merely as a status quo. Accept them as existent. It will appear presently how they came to exist, and in what way such money rates of wages are related, in the last analysis, to the prices of the goods. Then, still assuming that within each country there is free movement of labor and that goods sell on the basis of the labor involved in producing them, we have the following results : In the U. S. 10 days’ labor bh 2» U. S. 10 J) » ” Germany 10 ” » ” (Germany 10 ” 2 WAGES PER DAY £1.50 £1.50 $1.00 £1.00 Wont Propuce PE 15 30 copper $0.50 £15 15 linen $1.00 $10 15 copper $0.662 $10 30 linen $0.33% al Observe the term “domestic supply price.” By this is meant the price at which, under the given conditions of expenses of pro- duction, each article could be steadily brought to market and sold. It is the (simplified) money cost of production; the kind of “cost” which figures in most economic discussion and in all business discussion. Since we are here (and in almost all parts of this book) using “cost” in the other sense — that of labor cost — it will obviate misunderstanding and will conduce to clarity if

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