CHAPTER 6 
Wages Nor UNiForM — NoN-CoMPETING GROUPS 
IN the present chapter, a qualification will be introduced. It 
is not so much a correction as an elaboration ; another of the steps 
which are needed in order to bring the theoretic analysis more 
nearly into accord with the facts of trade. It is one, moreover, 
to which virtually no attention has been given in the literature 
of the subject. 
[n the reasoning of Ricardo and Mill, it was almost always 
assumed that within a country commodities exchanged in pro- 
portion to the quantities of labor necessary to produce them. 
Goods exchanged par for par in terms of labor. In our own very 
first suppositions — those of trade conducted under barter — 
it was assumed that if in the United States 10 days’ labor pro- 
duced 20 of wheat and 20 of linen, wheat and linen would of course 
exchange within the United States at the rate of 1 wheat for 1 
linen. And in Germany, if 10 days produced 10 of wheat and 
15 of linen, 1 of wheat would exchange for 1} of linen. It was 
the very fact that within each country the relative values of goods 
depended on labor expended which led to the possibility of trade 
between the countries, and to the special problem of the terms on 
which they might barter their products. Similarly, when exchange 
thru the medium of money came to be taken up, the prices of 
goods within each country were supposed to depend on the labor 
given to making them — on their cost of production in the sense 
of labor applied. If 10 days’ labor produced in the United States 
20 wheat and 20 linen, wheat and linen would sell for the same 
price; with American wages at $1.50, each would sell for $0.75. 
If 10 days produced in Germany 10 wheat and 15 linen, wheat and 
linen would not sell for the same price; with German wages at 
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