Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public PolicyClark, John Bates
General
Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public Policy
Clark, John Bates
Economics
_How the General Unification of Methods of Production Calls at First
for an Increased Exportation of Capital from the Central Area and
Checks the Immigration of Laborers._--A study of the causes of the
interchanges which take place between the economic center and its
environment shows that the movement of goods, the diffusion of modern
methods of making goods, and the movements of capital and labor across
the border of the economic society we are studying are interdependent.
Opening a field for a profitable export trade increases the
productivity of labor at home and tends to attract immigration. On the
other hand, establishing in the outer zone a market for the products
of the center prepares the way for introducing modern manufactures
into the more densely peopled parts of the outer area. The company
that sells cotton goods to the Chinese or the Hindoos will find that
there is more to be made by utilizing the cheap labor of those peoples
for making the goods by efficient machinery. Commerce tends to diffuse
a knowledge of the most economical processes of manufacturing, and
this interposes a certain stay on migrations of labor toward the
center. It will in time help to retain Chinamen in China and Hindoos
in India. It does, however, cause a movement of capital from the
center outward, followed in time by a creation of wealth in the outer
zone for proprietors residing within the center. The Englishman draws
dividends from investments in many lands not within the field covered
by the present studies. In so far as he reinvests them, as capital, in
those lands, they supply a need that, without them, would have to be
supplied by a new exportation of capital from the home country, and
they therefore tend to check such exportation. In so far as the
dividends are brought home they directly neutralize a certain amount
of exportation of capital.
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