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INTERNATIONAL TRADE

— virtually never — that a given commodity is produced solely by
laborers of one group only. The usual situation, when once
the division of labor has been considerably developed, is that a
commodity is made by a combination of laborers belonging to
different groups. The several laborers whose work serves to turn
out linen, for example, will probably not be all in the same stratum
 ; some will be well-paid, such as the mechanics who make and
repair the machinery, others will be unskilled operatives who tend
and operate it. The combinations are various in the different
industries, various in different stages of industrial development,
various in different countries. They are likely to be less heterogeneous
 (to refer again to the example of linen) where there is a
household handicraft industry, such as long persisted in Germany,
than where there is a highly developed factory system, such as
alone is to be found in the American textile industries. The
combinations are likely to be more heterogeneous and elaborate
in manufactures than in agriculture; more so in countries industrially
 advanced like England or Switzerland than in those
industrially backward like Spain or Portugal. But in every case,
if account is taken of all the labor involved in producing a given
article — of the labor given to the raw material, of that fashioning
it, of that transporting and marketing it — some combination of
different grades of labor will be found. The theory of international
 trade must be adjusted to this all-pervading heterogeneity.
For illustration of the working of this factor, return to a case of
comparative costs such as was considered in the initial stages of
our analysis.

Wada

2

In the U. S. 10 days’ labor produce 10 wheat
or 2 Sy 2 ae 90 linen
” Germany 10 ” 2 10 wheat
»” Germany 10 7 2 i 15 linen

EH
hed

The case is one in which the United States has a comparative
advantage in wheat — a superior advantage. Germany has a
comparative advantage in linen — an inferior disadvantage.
Under barter, the two would obviously find it advantageous to
exchange American wheat for German linen. Under a money