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THE ECONOMIC JOURNAL
labour and sacrifice that Mangoldfs conception of a standard
commodity is significant.
But an actual commodity subserving this purpose is not
always to be found, as appears from the example which we have
just cited, and as Mangoldt himself has pointed out. It may
be observed that an actual standard would be forthcoming on
one hypothesis—namely, that the volume of trade is split up into
an indefinitely large number of items with every variety of cost
of production ; but in this case the standard commodity,
though existent in fact, would- probably be insignificant in
magnitude.
■ The results of the abstract problem with which the investi-
gation started are summed up at- p. 223 in a set of italicised
propositions, which may be read with assent and instruction.
The first alone excites some scruple :—
‘ There come first into international trade those commodities of which the costs
■of production compared with the costs of production of other commodities in the
-same land differ most widely from each other, then those for which the difference is
next greatest.’
At first sight there seems to be contained here a statement
as to the path or process by which the position of equilibrium is
reached ; whereas the equations of exchange enable us at best
to determine the final position, not the steps by which it is
reached. What Jevons called the ‘ Mechanics of Industry ’ is
statical, not dynamical.1 It appears, however, from the context
that the. author is aware of this characteristic.2 The assertion
which he makes in the proposition cited relates only to the first
step—not to the intermediate path—towards equilibrium ; and
the affirmation that the first step taken will be the most
advantageous one to both parties is tenable. ∙
The simplest case having been discussed, Mangoldt proceeds
to restore certain attributes which he began by abstracting.
First let us no longer suppose the quantity demanded to be in
inverse proportion to the labour-cost, but to vary with the rate of
exchange between exports and imports, according to some more
complicated law. The law which Mangoldt specially affects is
such that when the rate of exchange or ‘ price,’ P, is changed to
Pm, m being any factor, the quantity demanded, N, becomes
ɪ I have had occasion to defend this view against Professor Walras in the Revue
d’Économie Politique for January 1891.
2 ‘ Die Art und Weise wie sich der process der Vertauschung der Production
Vollzeiht ist an sich gleichgültig ’ (p. 213), [das] ‘ das Endergebniss immer das
namliche bleiben wird’ (p. 216, last par.)