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

74 INTERNATIONAL TRADE railways with marked effectiveness of labor; that is, the carrying of many ton miles per unit of labor expended. The great plant was economically laid out and effectively used. The net result was, and probably remains, that in articles which require long inland transportation before they can enter the realm of inter- national trade, the United States had an advantage thruout the period in which the railway has come to be a factor of prime impor- tance; and this notwithstanding the fact that thru much the larger part of the period, 7.c. until the close of the 19th century, a higher interest charge on the heavy capital investment was in the nature of a handicap, serving to lessen in some degree the com- parative advantage. Note oN THE METHOD OF HANDLING CAPITAL AND INTEREST Ricardo and his disciples, indeed any economist following the organon of Ricardo, would have criticized sharply the way in which the figures in the earlier part of this chapter are constructed. The basis of the criticism would be that the calculations imply a rise in the price of all goods in consequence of the introduction of interest (i.e. “profits”’). The proper treatment is to regard the general level of prices as constant, and to analyze on that basis the connec- tion between prices (values) and the return to capital (interest or “‘profits”). Then one would have to say that the rates of money wages which were originally set down under the simplest supposition (no capital involved) must be read- justed when capital enters. They must be readjusted downward ; wages must be assumed to be lower. If, for example, 30 of copper, made by 10 men, sell for $20, the 10 men can not be getting as much as $20 in wages or $2 per man, since that would leave nothing at all for profit. Wages must be less than $2 a day. If profits are 25 per cent of the wages bill, the rate of wages will be $1.60 and profits will be $0.40; the two items making up the full expense (“cost”) of production, equal to the supposed money yield of $20. A mere rise or fall in profits is to be treated as involving a corresponding fall or rise in wages, but not as leading to changes in the prices of goods. It is further to be pointed out, following the same analysis, that so far as profits enter to a different extent in one commodity than in another — so far as more capital is used per unit of current labor, or so far as the use of the same capital is spread over more time, — then a rise or fall in profits would affect the relative prices of goods. A rise or fall thus brought about in any one article would be offset, however, by a cor- responding fall or rise in other directions. Changes in the prices of all goods the same way constitute merely a monetary phenomenon, and one not to be confounded with changes in the relative prices of different goods. The proper

Access restriction

Copyright

fullscreen: International trade

Monograph

Chapter

Table of contents

Download

Monograph

Chapter

This page

Image fragment

Citation links

Citation recommendation