McKean on Government Efficiency
intensive goods to countries other than the United States. This may be considered as supporting the generally held opinion that Japan's foreign trade is two-sided.10 We suspect that foreign trade might have a similar nature. If data were available on the capital-labor ratios for United States exports broken down by countries, then more conclusive findings might be expected about the position of the United States in the international division of labor.11 Another interesting fact is that the capital-labor ratio for United States exports to Japan is not only larger than that for the United States total exports but also exceeds that for competitive imports. This means that United States exports to Japan are more capital-intensive than United States domestic production for replacing its competitive imports from the rest of the world. This would seem also to demand more careful investigation into the so-called Leontief paradox. We would like to refrain from drawing any sweeping conclusions here. 10 Cf. Economic Planning Board, Survey of Japanese Economy (I956-57). ' According to A. Daniere, relative foreign inefficiency is less in the production of B than in the production of A, where A denotes manufactured goods and B raw materials (ores, oils, rubber, and other important United States imports), due to differences in material resource endowment. Since these raw material products, on the whole, require a high capital-labor ratio, the large raw material component of United States imports suggests, in agreement with the authors' view, that the Leontief capital intensiveness situation holds better in the trade with raw material areas than with industrial countries. See Andre Daniere, American Trade Structure and Comparative Cost Theory, Economia Internazionale, Ix (August, I956), 426.
- DOI
- 10.2307/1927276
- Volume
- 41 (4)
- Pages
- 446
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