Bolts and screw machine products oil field machinery and tools

Domestic Production and Foreign Trade; The American Capital Position Re-Examined Author(s): Wassily Leontief
Source: Proceedings of the American Philosophical Society, Vol. 97, No. 4 (Sep. 28, 1953), pp.

Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission.

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.

DOMESTIC PRODUCTION AND FOREIGN TRADE; THE AMERICAN CAPITAL POSITION RE-EXAMINED1

French Cookbook by Tante Marie

I. THE STRUCTURAL BASIS OF
INTERNATIONAL TRADE

2 As an example of the recent empirical studies in that

1The study described in this paper constitutes a part

This is the first preliminary progress report on
a study designed to analyze the structural basis of
trade relationships between the United States and
the rest of the world.

II. DIRECT AND INDIRECT INPUT

The more minute the breakdown of industries

in the basic input-output table, the more detailed the final results will be. The following analysis is based on a 200 industry breakdown consolidated in some of its stages-for purposes of computation and simplified presentation-into fifty sectors (38

	s I

Motor vehicles (145) Iron and steel Other fabricated metal products Nonferrous metals Other electrical machinery	of dollars)	(Man years)

Total requirements in all industries per million dollars of final output of motor vehicles

VOL. 97, NO. 4, 1953] DOMESTIC PRODUCTION AND FOREIGN TRADE

of which trade their products directly on the inter-

inventories of raw materials and "goods in proc- ess" by 124 thousand dollars. All together this adds up to 566 thousand dollars which represent the total additional capital (in 1947 prices) which would have to be invested in the American auto-

mobile industry if its capacity were raised so as to enable us to produce an additional million dollars' worth of cars per year.

The figures entered in columns 2 and 3 were

The main reason for such a two-stage procedure is economic. If based throughout on the 200 x 200 input-output table the computation of direct and indirect requirements would cost a thousand dollars more. The errors caused by the short cut are not likely to be of decisive importance since

	of export and imports

of total

1,617 ,910

d See text, page 335, for the derivation	of these figures.	The direct

Some of the 200-order industries	were split in the process of aggre-			as export items.
200-order industry	SIC No.		port value, i.e., foreign port value plus transpor-

The basic data on the direct capital requirements	(capital coefficients)	based on output statistics	which probably	did not include operations

19. Other fabricated metal products

Steel springs (108)
Nuts, bolts and screw machine products (109)

TABLE 2-Continued

Direct and indirect

29. Miscellaneous manufacturing (157-163)
30. Coal, gas and electric power
Coal mining (16)
Electric light and power (167)
Natural, manufactured and mixed gas (168)
31. Railroad transportation (169)
32. Ocean transportation (172)
33. Other transportation

34. Trade
Wholesale trade (176)
Retail trade (177)

-	//	5 9	/	6 0	19~ 6	1 1 2 8 1	1 1 4	1 0 3

if

_ 2.25

) 2.

ion and foreign trade, Proc. Amer. Philos. Soc. 97: (4): 340-341, 1953.

ILLARS OF U.S. EXPORTS AND IMPORT REPLACEMENTS

EXPLANATION OF PLOT OF

WASSILY LEONTIEF

other, minor items, is assumed to remain at the

To replace a million dollars' worth of imports	Evans and Hoffenberg, ibid.)	The results of these origi-

thus present the United States' imports as depending on the level of final demand which, in particular, itnplies that any rise in exports would necessarily require an increase in imports.

For the purposes of the present analysis, this conclusion

6 and 8, respectively.

V. EMPIRICAL FINDINGS AND THEIR

observation is that the United States possesses

With the typical competitive imports-such		as cars,	To reach the conclusion that this means that there exists a comparative surplus of capital and
tion is entirely different.	If the problem of comparative

1947 COMPOSITION)

be quite small. It was still, however, taken into account

Our data obviously cannot explain why Ameri-

and twenty thousand dollars' worth of equipment,

The extent to which the high relative efficiency

The fact that workers are frequently replaced

7 To clarify the internal logic of the argument leading

to this assertion, let us consider-from the point of view

From the point of view of sheer arithmetic, the

unusual situations, this decision could and would be made
without any regard to the actual distribution of the com-
bined labor and capital resources of the world between the
different countries. This distribution could be taken into

It is particularly important to observe that under the

Before directing your attention to the wider

all the countries.

A visual presentation of the quantitative rela-

The results of this visual examination are sub-
stantiated by the following numerical compilation.

* Turnover within the line segments is not exactly
lars due to rounding and the omission of the Other Non-
ferrous Mineral Mining industry--f. footnote f, table 2.

To facilitate the identification of all the indi-

worth of the average combination of exportable