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

A8 INTERNATIONAL TRADE NT 3 only so far as the situation thus engendered is peculiar to that country. If the groups are in the same relative positions in the exchanging countries as regards wages — if the hierarchy, so to speak, is arranged on the same plan in each — trade takes place exactly as if it were governed by the strict and simple principle of comparative costs. If the rate of wages in a given occupation is particularly low in one country, this circumstance will affect international trade exactly as would a high effectiveness of labor in that country. But if in other countries also the same occupa- tion has a particularly low rate of wages, international trade will not be affected. The coeflicient to be allowed for will be the same all around, and no special influence on trade between the countries will be felt. Trade will develop as it would if prices within each country were governed by labor costs alone. For further illustration, let us turn to a variant of the previous case. Starting with a situation in which, so far as labor costs go, exchange cannot be expected to arise, introduce the complication of non-competing groups and observe how under the changed conditions exchange becomes possible and advantageous. In the U. S. 10 days’ labor 3 ) U. S. 10 2» » ” Germany 10 7” ie »” Germany 10 ” Wages TorAL PRODUCE DowmesrIC PER Day WAGES SuppLy PRICE $2.00 $20 30 wheat $0.662 $2.00 $20 20 linen $1.00 $1.00 $10 15 wheat $0.662 $1.00 $10 10 linen $1.00 The case, it will be seen, is one of equal differences in cost. The effectiveness of labor in the United States is twice as great thruout as in Germany. Money wages in the United States are adjusted to this relation and are twice as high. Wheat is at the same price in the United States as in Germany ; linen also at the same price in the two countries. Wages in each country are uniform — that is, are the same in wheat-growing as in linen-making. There are no non-competing groups. Prices are in accord with the respective quantities of labor. Germans and Americans go their way regard- less of each others’ doings. Suppose now that German linen wages are not $1.00 but $0.75. The linen workers are in a low-lying non-competing group; their

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