ON WAGES AND THE HOURS OF LABOUR. 481 
modities might decrease in intensity. Even if the aggregate be not 
maintained we reach the same conclusion, as the worker will have a 
decreased command over commodities, including imports and the ‘re- 
ciprocal demand,’ for the articles exchanged between nations will thus 
be affected. 
Turning to the products of labour that are bartered between nations, 
a reduction in the hours of labour may (1) destroy the gain arising from 
international trade, or (2) only diminish it. 
In discussing these two points, it is desirable to take two countries 
exchanging two products, and assuming the theory of international trade 
laid down by Ricardo, and explained and developed by Mill, Cairnes,. 
Bastable, and other writers, to inquire how far, if at all, the net pro- 
duce of the nation will be diminished by the effects of a reduction in 
hours on international trade. To the extent of any such diminution the 
results on wages, as regards the home trade already referred to, will be 
intensified. 
Mr. Bastable (‘Theory of International Trade,’ p. 23) illustrates the 
gain from international trade as follows :—‘Let it be granted that a 
unit of productive power in A can produce 10 2 or 20 y, and that a unit 
of productive power in B can produce 10% or15y. It follows from the 
law of comparative cost that it will be to the interest of A to confine 
itself to the production of y, and of B to devote its resources to the 
production of 2.’ 
_ (1) The ‘total gain’ per unit of productive power, i.c., the gain to be 
divided between A and B, is represented by 5 y. Assume a reduction in 
the hours of labour in A, in the y industries only, this reduction may be 
so great that a unit of productive power will now produce in A 102 or 
15 y—in other words, B has no longer any incentive to exchange z for y, 
inasmuch as it can produce y as well as z, under as favourable circum- 
'stancesas A. The foreign trade in these two classes of commodities will 
cease, and A will find its net produce diminished. 
(2) The reduction in hours may, however, only diminish the ‘total 
gain,’ eg.: If A with a unit of productive power produces 18 y instead 
| of 20 y, the total gain is reduced from 5 y to 3y. Will this reduction fall 
on A or on B, or on both? The answer depends on the effect the reduc- 
tion in productive power in A will have on the intensity of the ‘ recipro- 
cal demand,’ and though we may mention some of the conditions that 
will mainly affect the ‘reciprocal demand’ it is not possible to forecast 
with accuracy the amount of loss that will fall on A. 
G.) The demand for « may continue to be so intense in A, and the 
. ay for y may so decrease in B, that the whole loss may be thrown 
upon A. 
; (ii.) On the other hand, the foreign demand may continue its intensity, 
whilst the home demand remains as before; in such a case the loss will 
tend to fall on the foreign country: the home country may even be a 
gainer. 
Gi.) A third type of case may be mentioned, viz., that in which there 
is such a variation in reciprocal demand that the loss is divided between 
the two countries. 
__ Where an exporting country possesses a monopoly of production aris- 
‘ing out of climate or natural resources, it will be able to make a better 
bargain in the export market than if such a monopoly did not exist. To 
the extent that a country reducing its hours of labour possesses a mono-~ 
fi 
: 1890. II 
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