WAGES NOT UNIFORM — NON-COMPETING GROUPS 49
wages are less than prevail in other German industries. Our
figures then are modified thus:
In the U. S. 10 days’ labor
» » 1. S. 10 »
” Germany 1. ” ”
" Germany 10 ” >
WaGEs
PER DAY
$2.00
£2.00
$1.00
20.75
TorAL
WAGES
$20
$20
310
® 7.50
Propuce
30 wheat
20 linen
15 wheat
10 linen
DomesTic
SurpLy Price
$0.662
$1.00
$0.662
$0.75
Wheat is still at the same price in both countries. But linen
is now cheaper in Germany, and moves from Germany to the
United States. At first specie alone moves from the United
States to Germany. As prices fall in the United States and rise in
Germany, wheat becomes cheaper in the former and dearer in the
latter. Wages fall in the United States, rise in Germany. Equi-
librium will be reached under conditions somewhat like these :
[n the U. S. 10 days’ lab-
1” 3» U. S. 14
” Germany lt
” Germanv 10
WAGES
DER. At
-~
ToraL
WAGES
Propuce
20 wheat
inen
wheat
linen
DomEesTIC
SuppLy PRricE
$0.60
$0.90
$0.73%
$0.82%
This particular relation of prices and of money wages would be
reached (wages in the United States $1.80, wages in Germany
generally $1.10), as need not again be explained if the demand
for linen in the United States and the demand for wheat in Ger-
many were such that the money value of the wheat sent from the
United States exactly equalled the money value of the linen sent
from Germany. The general outcome would plainly be that
grade developed precisely as if the Germans had a comparative
labor advantage —a comparative effectiveness of labor — in
making linen. The conditions of labor cost are such that if these
were the only governing factors, no trade between the two coun-
tries would develop. But the exceptionally low wages of the
German linen workers cause Germany to have the equivalent of a
comparative advantage. The case is the converse of that just
considered.
Now push the matter a step still further. Tho we may conceive
of non-competing groups as separate and distinct, it never happens
