S-WoPEc
 
Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
Ratioinstitutet - The Ratio Institute Ratio Working Papers

No 40:
Taxation and Domestic Free Trade

Richard Johnsson ()

Abstract: In this paper it is argued that the domestic division of labor and trade is organized according to the same principle as the international division of labor and trade – the Ricardian comparative advantages. After all, the ultimate source of these comparative advantages is the individual. The comparative advantages of individuals then lend themselves to groups of people, companies, regions and countries. It is these that make it worthwhile for people to cooperate on any larger scale at all; we all rely on them and they imply that there is room for everyone in society. But just as tariffs ruin the international division of labor, taxes and similar domestic government interventionism destroy the domestic division of labor among people. This is illustrated by means of the ‘division of labor condition’, where taxes enter as a possible restriction to trade, thus creating a Darwinist society of the survival of the fittest. The least productive individuals and those who face the highest barriers to trade run the risk of ending up on the outskirts of society. The more productive ones will run the risk of overreaching as they are forced to perform more and more tasks themselves. The result is not only more home labor and more black markets, but also real barter and situations where nothing gets done at all. To restore the division of labor, and to make room for everyone who wants to participate in it, it is argued that removing barriers to domestic trade is the only possible option.

Keywords: Division of labor; Comparative Advantage; Trade; Productivity; Growth; Taxes; Unemployment; Household Labor; Informal economy; (follow links to similar papers)

JEL-Codes: B30; B53; D13; D31; D51; D60; D70; E23; E24; E31; E60; F00; F10; F20; F40; H20; H30; J22; J23; J24; J31; J38; J44; J60; O11; O12; O13; O40; P16; (follow links to similar papers)

16 pages, April 29, 2004, Revised June 7, 2004

The publication refers to a Swedish version of the paper.

Before downloading any of the electronic versions below you should read our statement on copyright.
Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.

Full text versions of the paper:

rj_domestic.pdf    PDF-file
Download Statistics
This paper is published as:
Johnsson, Richard, (2004), 'Komparativa fördelar och arbetsdelningsvillkoret' in Karlson, Nils, Dan Johansson and Richard Johnsson (eds.) Skatter & välfärd, pages 140-164, Ratio.



Questions (including download problems) about the papers in this series should be directed to Martin Korpi ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:ratioi:0040 This page was generated on 2014-12-14 19:26:16