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

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part I. Theory

Collection:: Economics Books

36 IN TERNATIONAL TRADE (wheat) ; as regards both wheat and bricks the same labor produces twice as much in the United States as in Germany. The 10 days’ labor produce 2000 bricks in the United States and but 1000 in Germany. Then, altho wages are higher in the United States, bricks are actually lower in price. If now we change our supposition by assuming that the effective- ness of labor in the United States is not double that in Germany, but only one and one-half times as great, —if the 10 days’ American labor produce 1500, — the American price of brick will be $1.00 per 100, identically the same as the German price. And if we change still further by assuming that the effectiveness of labor is the same in the two countries, —if in the United States as well as in Germany the 10 days produce 1000 bricks — the price will be higher in the United States; the American price will be $1.50 and the German $1.00. In other words, the prices of domestic goods are not necessarily higher in a country of higher money wages. They will be higher only if the effectiveness of labor is not higher in the purely domestic field. If the effectiveness of labor is positively higher than it is for the same articles in foreign countries, domestic prices may be as low in those countries or may be lower. High wages and high prices do not go together, either as regards international com- modities or domestic commodities. We may proceed now to indicate summarily what determines the range of money wages in a given country and what determines that of commodity wages. Money wages, it is seen, are high in a country which has advan- tageous terms of international trade, which carries on trade with other countries in such way as to secure large gains from the trade, — favorable barter terms of trade. The main factors on which these gains depend have been sufficiently indicated : an outstanding comparative advantage, and the play of demand in the terms of trade. High money wages and incomes are the indication of favorable terms of trade, and constitute the mechanism by which the gains are secured. The countries having these favorable conditions realize them concretely by buying with their larger

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