Perelman poses a question about the price of Nike
trainers produced in Indonesia. He asks why they are
not lower.
In the writings of Marx there is very little about foreign
trade. He is reputed to have intended to write a volume of
Capital on the subject, but died before starting the task. On
most questions to do with how to run a socialist economy,
specific prescriptions from Marx are hard to come by, but at
least he provides conceptual tools from his analysis of
capitalism that can be re-applied to the new subject matter of
the socialist economy. With international trade we do not even
have this.
Marxian theory was generally derived from the theories of
Ricardo. Marx took over Ricardo's ideas and developed their
logical implications in a way which bourgeois economists were
reluctant to do. In the absence of any specific Marxian theory
of foreign trade, the obvious starting point must be Ricardo.
International trade allows an increase in total world
production. The surplus product that arises from the
specialisation allowed by such exchanges constitutes a source of
surplus value and thus profit, that does not depend upon the
direct exploitation of workers. Mercantile capitalism was able
to utilise this source of profit in the ancient and medieval
worlds when direct production was under the control of classes
of agrarian slaveholders or landowners. The ability of the
trader to appropriate a share of this surplus was the foundation
of the wealth of trading states like Rhodes and Venice.
The labour theory of value assumes that the equilibrium prices
of goods within a country will be in proportion to their labour
content. What can it predict about world prices?
We will restrict ourselves to two countries, Germany and
Indonesia and two comodities : Mercedes cars and Nike trainers.
Let us consider first the situation where the two countries have
not yet fully specialised. In this case the limits to the
relative prices of the two goods will be set by their national
labour values. If the price of German cars is
expressed in trainers it will be somewhere between 1000 ( the
German ratio of labour values ) or 2500 trainers
(which we assume to be the Indonesian ratio of labour values). It should not
fall below 1000 or rise above 2500. Because both goods will be
produced in each country the less economical domestic product
will be competing with a cheaper import, so the relative prices
of cars fall in Indonesia and the relative prices of trainers in
Germany. The existence of two different price ratios is what
gives rise to the international traders' profits.
It is unlikely that both countries will specialise totally and
it would be quite
fortuitous should the maximal output ratios of the two goods
correspond to the ratios in which they were demanded. It
follows that the equilibrium condition is likely to be one in
which one country specialises totally, but the other continues
to produce both goods. Under these circumstances the labour
value theory predicts that the exchange ratios of the goods in
both national markets will be determined by the ratio of their
labour values in the country that has not yet specialised. Hence
if aggregate demand for cars was greater than the German production level whilst
aggregate demand for trainers was less than Indonesias maximum production level
Germany would specialise completely in car production and Indonesia
would produce some cars and some trainers. In this case the
Indonesian domestic price ratio would determine the world price
ratio. German car producers would then earn excess profits
through being able to sell their cars at the higher Indonesian
prices.
If the reverse held, then German relative labour contents would
determine the world market exchange ratios for trainers and cars.
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Paul Cockshott , WPS, PO Box 1125, Glasgow, G44 5UF
Phone: 041 637 2927 [EMAIL PROTECTED]
[EMAIL PROTECTED]
