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

WAGES NOT UNIFORM — NON-COMPETING GROUPS 47 of labor, Germany has a comparative disadvantage in producing wheat. But this is offset, so far as the supply price of wheat is concerned, by the specially lower wages. In the market it is all one whether there be higher effectiveness of labor or lower rate of wages. Wheat would sell at a lower price ($0.663) if the labor were as effective as German labor is in linen; it sells at that same lower price if the labor is obtainable at the lower rate of pay. International trade, to repeat, is governed proximately by prices; and the ruling prices, under this supposition of a non-competing group, are such that wheat is not sent from the United States to Germany even tho the United States has unmistakably a com- parative advantage for producing it. Now make a further supposition. Suppose that not only in Germany, but in the United States as well, the wheat laborers are in a low-lying group; that these Americans, like their German fellows, receive lower wages than obtain in other occupations, and therefore lower wages than the linen workers. Suppose that while wages In the United States are in general $1.50 a day, the wheat workers get no more than $1.00 a day. The German wheat workers, in their turn, receive only $0.66% a day, as against a ruling German rate of $1.00 a day. Then our figures must be modified as follows: In the U. S. 10 days’ labor » ” TU, S. 10 » » ” Germany 10 ” P ” Germany 10 ” 1H WAGES PER DAY NY 1.50) 20.66% 21.00 ToraL WAGES 10) 6.¢ Domestic PRODUCE QuppLy Price 20 wheat 20 linen 10 wheat 15 linen $0.50 $0.75 $0.663 30.66% Prices are now such that commodities move both ways. The American supply price of wheat ($0.50) is now lower than the German supply price (30.662). Similarly German linen at $0.662 is lower in supply price than American linen (80.75). Trade between the two countries takes place as it would if the differences in wages within each of them did not exist — as if there were uniformity of wages in each and no non-competing groups at all. The general conclusion thus indicated is that the existence of non-competing groups within a country affects international trade

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