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

70 oN kg INTERNATIONAL TRADE Fale yo unit of output. It means also that the effectiveness of the labor per unit is increased. The use of good tools and machines enables the same product to be got with much less of current labor. The illustrative figures just given would imply on their face that with the use of capital the total expense (the supply price) per unit becomes higher. For closer verisimilitude, they should look some- thing like this: ! INTEREST Do- CHARGE ToTAL MESTIC WAGES ToTAL AS BE- Ex- SuppPLY PER DAY WAGES FORE PENSES PRODUCE PRricE 31 days’ current labor = $7 U.S. $2 : | $17 $10 $27 30 copper $0.90 $ 5 davs’ past labor = $10 $ pper $ But further — and here we reach at last the point which is of importance for the theory of international trade — this reduction in the total labor applied, the increase in the effectiveness of labor, the lowering of cost in terms of labor and in terms of money, the whole train of modifications — is likely to take different shape in different countries. And different not only between countries, but between commodities. Some countries use tools and machines more readily and more effectively than others; some commodities are more amenable to the machine processes than others. Comparative advantages and disadvantages emerge. These are advantages and disadvantages, be it remembered, arising from the relative effectiveness of the totals of the labor applied. They arise, not because the matter of return on capital is involved, but because a more complicated reckoning must be made of the effectiveness of labor. This fundamental fact is dis- ouised by the business man’s and the accountant’s ways of reckon- 1 Observe that the figures indicate a diminution in the amount of current labor as a consequence of the use of past labor (capital) ; and therefore a diminution in the total labor for the same output, in the total money expenses of production, in the supply price per unit. The amount of current labor, 10 days before, now is but 31 days; the total wages bill is $17, not $30; the total expenses of production are $27, not $40; the supply price per unit is lowered from $1.33 to $0.90. No doubt, for still closer verisimilitude, it would be desirable to make the pro- portion of past labor to current labor smaller. As there is greater use of plant, the element of past labor (represented in accounting by the depreciation charge) tends to figure less and less per unit of product in comparison with current labor (the “labor cost’”’ of accounting). The reader who is interested can easily work out further numerical illustrations.

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