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an industry,1 by Professor Marshall as to the possibility of bring-
ing into play the law of increasing returns,2 by an ingeniously
devised system of Protection, and by other eminent economists,
in particular Professor Taussig8 and General Walker.4
In conclusion I subscribe to the elevated Utilitarianism which
inspires several passages in this section. I trust that Mill has
not exaggerated the readiness of the nations to follow an example
of commercial disinterestedness—as he has elsewhere certainly
exaggerated their readiness to abandon war. ‘Wars,’ says the
sanguine philanthropist, ‘ are now usually confined, in almost
every country, to those distant and outlying possessions at which
it comes into contact with savages.’6 Perhaps ‘ collective chur-
lishness ’ (Book V. ch. 10, § 1) in commercial relations will die
as hard as war.
(3) Cairnes.—Cairnes’ principal contribution to the subject is
his recognition of the part played by ‘ non-competing groups
within a nation.6 Mill indeed had discerned the existence of
such groups ; 7 but he made less use of them than might have
been expected, even with respect to domestic trade.8
Cairnes has also restated the fundamental distinction between
foreign and domestic trade at great length and with added clear-
ness ; but without I think substantially adding to, or taking from
Mill.9
On the nicer points of theory Cairnes falls behind his pre-
decessor. He does not seem fully to have apprehended the
effect of an impovement in the production of an exported article.
In the case of ‘ a great improvement . . . in the manufacture of
woollen goods in England ’ he concludes that ‘ English labourers,’
so far as they were consumers of foreign goods procured through
an exchange for woollens, would ‘ obtain those commodities more
cheaply.’10 This conclusion is erroneous if ‘ cheapness ’ is defined
with reference to some fixed standard, such as labour-cost, for it
has been shown that the effect of an improvement in the pro-
duction of an export might be to make the terms on which
1 Pol. Econ., Book III. ch. 5. 2 Address to Section F, British Association, 1890.
3 Tariff Sistory of the United States. i Quart. Jour, of Economics, April, 1890.
5 Book IV. ch. 1, § 2.
6 Leading Principles, Part III. ch. 2, § 1, p. 886. The subject is well treated by
Prof. Bastable in his Theory of International Trade, ch. 6.
7 As pointed out by Prof. Marshall in his masterly article on Mill’s Theory of
Value, Fortnightly Review, 1876.
8 Compare Prof. Sidgwick, Principles of Political Economy, Book II. ch. 2,4§ 9.
See, however, Mill, Book III. ch. 4. § 4.
9 Compare Prof. Marshall, loc. cit. sub finem.
10 Leading Principles, Part III. ch. 2, § 5, pp. 404-7.