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imply one at least of the following propositions : (1) The rise ' of
a competitor may diminish the value without diminishing the
quantity of a country’s exports (ibid, last paragraph). (2) A
diminution in the quantity of ■ exports does no great harm to
producers.
The first proposition, I think, cannot be maintained in the
light of the reasoning in Part II. respecting competition.1 The
second proposition may perhaps be maintained on certain
abstract assumptions. But on the concrete supposition that the
weaker producers2 of the exported articles may be driven out of
their occupation by a fall in price, and may not be able to find an
equally good occupation elsewhere, the proposition cannot be
maintained.
Mill goes on to argue (ibid., §§ 2 and 4) that low wages when
common to all branches of industry cannot be one of those causes
which enable one country to undersell another. The argument
is sound if low wages are understood in the Bicardian sense of a
small proportion of the joint product ; which is Mill’s meaning.
But the argument is not sound, I think, if low wages are under-
stood in the sense of low real remuneration received by
the labourer per unit of produce ;3 ceteris paribus, and in
particular not assuming any elevation in the similarly reckoned
remuneration of the capitalist-employing class—a very natural
meaning to attach to the term. . Mill’s employment in this con-
nexion of the Ricardian dogma that ‘ general low wages do not
cause low prices, nor high wages high prices within the country
itself ’ is questionable (§ 4, par. 2). The Ricardian assumption
that the labour-value of money (the efforts and sacrifices required
to procure a unit of gold) is constant is not very proper to the
mere accident ’ (sec. 8, par 3) may meet on the line O R making with O M an angle of
which the tangent = 1∙6 (the ratio of the total cost of linen to that of cloth) at the
point S, of which the abscissa is O T = 900,000 ; ‘ if England only wants linen to the
amount of nine tenths of 1,600,000 (1,440,000), and Germany only 900,000 of cloth ’
(loc. cit.).
‘ In any other case the equation of international demand would require a
different adjustment of international values .’ the general case—the comprehension
of which is not much facilitated by the particular suppositions hitherto entertained.
With reference to the interpretation of these sections of Mill, I ought to repeat
that I have had the advantage of reading Professor Marshall’s unpublished papers,
referred to with grateful acknowledgment in my Mathematical Part, ante, p. 443.
1 Ante, p. 439.
3 Ante, p. 46.
3 Wages in this sense is, or is proportional to, wages in the sense in which the
term is employed by Mill in the classical passage at the end of his chapter on
Profits (viz.;, the real remuneration of the labourer per unit of time, loc. cit., par. 2)
divided by ‘ efficiency ’ as defined in that section (viz., the amount of work done per
unit of time). ...