WAGES NOT UNIFORM — NON-COMPETING GROUPS 51
régime, with no non-competing groups and with prices adjusted
in accord with labor costs in each country, the same result as
obviously would ensue.
Suppose now something like the usual industrial situation: not
merely non-competing groups, but also laborers from different
groups combined in the making of any one article. Suppose that
in the United States there are some groups whose established pay
is $1.50 a day, others whose established pay is $1.00 a day. In
(Germany there are groups whose established pay is $1.00, others
with $0.66%. In each country higher-paid and lower-paid laborers
are joined in the making of linen, and are joined also in the making
of wheat. For simplicity, suppose that in each industry one-half
of the laborers thus combined are from the upper stratum, one-half
are from the lower stratum. Then we have the following:
[n the U. S. 10 days’ labor
[n the U. S. 10 days’ iai
[n Germany 10 days’ la’
[n Germany 10 days’ lab
x
WaGEs
PER Day
~1 50
nn
Bi
3
nN
2.60
Toi propre De
$12.50 20 wheat $0.62%
$12.50 20 linen $0.62%
* 8.33 10 wheat $0.83
. 833 15linen $0.55%
Observe the domestic supply prices of the two articles. Wheat is
cheaper in the United States, linen is cheaper in Germany. Wheat
goes from the United States to Germany, linen from Germany to
the United States. Precisely the same sort of trade takes place
as would be found if there were no non-competing groups.
The general proposition to which this leads is simple enough,
and indeed hardly needs to be brought out by figures. If the
combinations of several sorts of labor, paid at varying rates, are
the same in the two countries (the hierarchy of the groups being
also the same), trade between them takes place exactly as if there
were no internal differentiation at all — as it would if there were
no non-competing groups. It is only a difference in the arrange-
ment of the industrial hierarchy, not the hierarchy itself, that
has effect on international trade. To change the simile, given
