THEORY OE INTERNATIONAL VALUES
607
his elliptical use of either capital or labour where we might expect
both. These explanations apply to the following passages :—
We should have no greater value if, by the discovery of new markets, we ob-
tained double the quantity of foreign goods in exchange for a given quantity of ours
(P- 72).
The country may have ‘ greater skill ’ and ‘ better machinery ’ used in the
manufacture of exportable commodities ; yet ‘ the rate of profits will probably differ
but little ’ ; wages, or the real reward of the labourer, may be the same in both
(P- 81).
If capital freely flowed towards those countries where it could be most profitably
employed, there could be no difference in the rate of profit, and no other difference
in the real or labour price of commodities than the additional quantity of labour re-
quired to convey them to the various markets where they were to be sold’ (p. 77).
(2) J. S. Mill.—Mill’s contributions to the subject are con-
tained in his stupendous chapter on International Values (Pol.
Econ. Book III. ch. xviii.), the chapters on the Distribu-
tion of the Precious Metals, and the Competition of different
Countries in the same Market {ibid. chs. xxi. xxv.) and the sections
treating of the effects produced on international exchange by duties
on exports and imports (Book V. ch. iv. § 6), and the Doctrine of
Protection to Native Industry (Book V. ch. x. § 1) ; and the corre-
sponding passages in the Unsettled Questions.
Mill’s exposition of the general theory is still unsurpassed.
He presents clearly all the leading features : the distinction
between international and home trade (Bk. III. ch. 2, last par.),
the former requiring us to ‘ fall back upon an antecedent1 law,
that of supply and demand {ibid. ch. xviii. § 1) ; ’ the sense of
‘ cost ’ in which ‘ a country gets a commodity cheaper when
it obtains a greater quantity of the commodity with the same
expenditure of labour and capital ’ {ibid. § 9) ; the peculiarity
that international values are not ‘ in the ratio ’ {ibid, and cf.
ch. xvi. § 1) of cost in that sense ; but that a variation of cost
in that sense will be attended with a variation—though not
in general an equal variation—-in international value (Book III.
ch. xviii. §5). The additions and corrections which Mill’s work
has received will be noticed in the course of the following more
detailed review. . '
Mill begins by considering the establishment of a trade
between two nations. His classical illustration—the exchange
of English cloth for German linen—has been much imitated,
but little improved. The opening of a trade, which is considered
x Cf. Book III. ch. xvi. § 1. The term ‘ anterior ’ in this passage, of which Jevons
complains (Theory, p. 215, 2nd ed. ) fits well that conception of the distinction which
has been adopted in this study (see Part I. par. 1).