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

62 INTERNATIONAL TRADE oe “oY Rent, let it be briefly noted, is also to be brushed aside. In accord with the commonly accepted procedure in economics, we shall treat it as merely a differential element. It stands for the differences in the expenses of production under varying natural conditions, and serves to equalize them. Some relations between rent and international trade deserve attention and will receive it in the next chapter. For the present we shall disregard them. We proceed then to consider the influence on international trade of an interest charge as one among the expenses of production. It will be convenient for this phase of the inquiry to revert to the second of the three original cases: that, namely, in which there are equal differences in cost and in which international trade will not arise. It appeared that trade could not be expected to arise, if regard were paid solely to labor and to wages — to quantity of labor and to the wages of labor. How if the additional factor of an interest charge is introduced ? Recall the former figures: In the U. S. 10 days’ labor )) bh UU. S. 10 » » ” Germany 10 ” 2 ” Germany 10 3 WAGES TorAL DowmEesTIC PER Day Wages PropucE SuppLY PRICE $2.00 $20 30 copper ~~ $0.662 $2.00 $20 15 linen $1.33 $1.33 $13.33 20 copper $0.66% $1.33 $13.33 10 linen $1.33 ho hs a 3 There are equal differences in cost; money wages are adjusted to those differences; the price of each article is the same in the two countries; no trade takes place. If now we suppose a flat addition to be made, at the same rate, to the expenses of production all around, the possibilities of trade will be no greater. Add 10 per cent or 50 per cent (according as there is little expense, or much, in addition to the outlay for labor) to the wages bill in each case, to stand for interest. The figures then are all enhanced by the same amount, prices remain the same in the two countries, and no trade will arise. The mere circum- stance that there is a return to capital leads to no modification of the analysis based on labor costs and wages alone. Now change the situation by making the rates of interest not uniform thruout. but higher in one country than in the other.

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