The Difference Between Domestic and International Trade

If capital goods and a and b are freely movable from england to india and vice versa, while there is no mobility of labor, wage rates in india must tend to be 50 %. Ricardo saw the difference between domestic trade and foreign trade in differences in the mobility of capital and labor. There prevails on the whole earth a tendency toward an equalization of wage rates for the same kind of labor. It has been asserted that ricardo's law was valid only for his age and is of no avail for our time, which offers other conditions.