>Rakesh, > >Could the Portuguese workers' collectives agree to exchange their wine >for slightly labor hour equivalence in British cloth? This would still >enable them to procure their goods at slightly less labor cost. And >would the British owners of cloth agree to this, seeing that they would >come out slightly ahead?
But, Peter, say there is just one British capitalist, facing a maximization problem. The Portuguese workers are offering him a trade. One bottle of wine for one unit of cloth. But the British capitalist realizes that shifting to the production of two units of cloth wouldn't save him a dime; he's not concerned that it would save his labor force 20 hours. What I am trying to get across is that the rational labor saving that an international division of labor allows can only be realized after there has been an international workers' revolution. Then workers' collectives can share labor time data and make decisions. Ricardo's capitalists would never go for a trade just because it allowed workers in each nation and as a whole to save labor time; they would only go for trade if it allowed them to reduce costs and/or make greater profits. And this is not the same thing, or could interfere, with the reduction in labor time that is ultimately the source of true wealth. Maybe this point is not compelling or more likely I haven't devised a compelling example or general demonstration. But just as there can be perverse results with reswitching, I want to suggest that there can be perverse results in international trade in terms of rational labor time saving as a result of exploitation. > >By the way, the point about trading companies was simply to emphasize >that the Ricardian "moment" is one of pure exchange; profit in >production is not at issue. (Note: this is Ricardian trade theory >only. There is some allowance for production in the 20th century >version.) > >Peter yes the 20th and 21st century is a long way away in both theory and reality from Ricardo's quaint example, but I must say that his analysis of the use of bills of exchange (leading to mutual cancellations so that no bullion need be exported) is unbelievably intricate. Rakesh
