Reply by Professor Johnson to the Comments on his Paper

Abstract

Professor Johnson said he had tried to describe aspects of trade theory which were of interest both to those who constructed theory and for the future development of trade. Professor Caves had tried to carry some matters a little farther. Others might well like the distinction between members of a set of new hypotheses about sources of competition and the need to test these against the facts. Professor Johnson said he would not expect his own hypotheses to be generally successful. However, he did not think the product differentiation approach a good one. It responded to consumer needs in growing wealthy societies. We had to go beyond this to find its source in economic processes. He would emphasise that as countries became richer, people’s time became more valuable and they wanted to economise on it by using labour-saving devices.