the fact that the general rate of profits and of interest is higher.
§ 3.But is it true that low wages, even in the sense of low Cost of Labour, enable a country to sell cheaper in the foreign market? I mean, of course, low wages which are common to the whole productive industry of the country.
If wages, in any of the departments of industry which supply exports, are kept, artificially, or by some occidental cause, below the general rate of wages in the country, this is a real advantage in the foreign market. It lessens the comparative cost of production of those articles, in relation to others; and has the same effect as if their production required so much less labour. Take, for instance, the case of the United States in respect to certain commodities, prior to the civil war. Tobacco and cotton, two great articles of export, were produced by slave labour, while food and manufactures generally were produced by free labourers, either working on their own account or paid by wages. In spite of the inferior efficiency of slave labour, there can be no reasonable doubt that in a country where the wages of free labour were so high, the work executed by slaves was a better bargain to the capitalist. To whatever extent it was so, this smaller cost of labour, being not general, but limited to those employments, was just as much a cause of cheapness in the products, both in the home and in the foreign market, as if they had been made by a less quantity of labour. If, when the slaves in the Southern States were emancipated, their wages rose to the general level of the earnings of free labour in America, that country might have been obliged to erase some of the slave-grown articles from the catalogue of its exports, and would certainly be unable to sell any of them in the foreign market at the accustomed price. Accordingly, American cotton is now habitually at a much higher price than before the war. Its previous cheapness was partly an artificial cheapness, which may be compared to that produced by a bounty on production or on exporta-
