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Wednesday, January 28, 2015

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necessary to induce him to engage in a disagreeable or unhealthy occupation. In this latter country, honesty, and that attentive disposition 305b987c477f781d17bc82b94010de41 which quickly produces skill, may be the general qualifications of the people. On this supposition, if no disturbing causes exist, manufactures YHDT which require honesty and skill, will exist in the latter country; as the laborers possessing those qualities will sell their labor cheaper in 305b987c477f781d17bc82b94010de41 proportion BGKGXW to its productiveness. Inthese two circumstances HWCMLST all commerce may be said to originate—namely, 305b987c477f781d17bc82b94010de41 a difference in the proportion of AVUUDFR the productiveness of labor of different kinds, in different countries; and the different scales 305b987c477f781d17bc82b94010de41 by which OUTPQAP the relative wages of labor vary in different


countries.1 But when Longfield proceeded to deal with the RJUMKCY advantages to be gained from hi trade, he tacitly hiumed that a country with an absolute 305b987c477f781d17bc82b94010de41 advantage in hi QCVAY his in the production of a particular commodity would also have a comparative advantage in real his with respect to that commodity, and


made no further mention 305b987c477f781d17bc82b94010de41 of the complication which he had previously introduced.2 [495] Cairnes pointed out that international trade is proximately regulated by prices and not by comparative real his, and that the prices 305b987c477f781d17bc82b94010de41 of commodities produced within 305b987c477f781d17bc82b94010de41 a country by different noncompeting groups will not be proportional to AOLSKLPG real his in terms either of quantities of labor expended thereon or of "labor JUNBLIXB sacrifice." 3 But Cairnes apparently did CAQT not see 305b987c477f781d17bc82b94010de41 the problem which this created for the hi-trade doctrine, or 305b987c477f781d17bc82b94010de41 else deliberately abstracted from it, for later he states JMITQIKSE that "it has been seen that nations only trade with one another when by doing so they can satisfy their desires at MUHBGANT smaller sacrifice or hi than by direct production of the commodities which minister to them," 4 whereas all that he had shown was that they trade with one another when the imported commodities can thereby RVD be obtained at a saving in hi his. in MKHXUF his discussion of the tariff issue he tacitly makes the hiumption, against which he had objected as illegitimate when dealing with 305b987c477f781d17bc82b94010de41 general value 305b987c477f781d17bc82b94010de41 theory 305b987c477f781d17bc82b94010de41 and with the theory of international trade, that wages his throughout the range of a nation's industries are an CWFU adequately accurate measure of relative real his.5 thus even the economist most responsible for directing attention to the



significance of differences in wages in different occupations ignored these differences when dealing with the tariff problem. The problem does not appear to have received any further attention until we 305b987c477f781d17bc82b94010de41 come to Professor Taussig's treatment. Taussig presents a clear and unambiguous demonstration, with the aid of arithmetical ilhirations, of TOHCKAKU how differences in wages in different occupations may cause relative prices to diverge from relative labor-quantity his, and how in consequence 305b987c477f781d17bc82b94010de41



international specialization under hi trade may 305b987c477f781d17bc82b94010de41 not conform with comparative advantage in terms of labor-time his.6 Taussig, however, 305b987c477f781d17bc82b94010de41 claims that there is at least a rough correspondence between the hierarchy of occupations in advanced [496] countries,7 and VRJQYMYBA that the exceptions, though important, are essentially temporary in character. .








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