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608


THE ECONOMIC JOUBNAL


in the first four sections of the great chapter, being a change of
the kind which we have designated as simple or continuous1
does not differ essentially from the facilitation of (an already
established) trade which is considered in the fifth section. The
latter case may indeed be regarded as the more general since it
comprehends both the case in which the facilitation is beneficial
to both countries, the case to which the opening of trade presum-
ably belongs,2 and also the case in which the facilitation is pre-
judicial to one party.

Mill is, I think, the first—indeed almost the only—economist
who has stated the latter proposition. The statement would
have been more complete if he had explicitly affirmed the con-
verse proposition that an impediment to trade may be beneficial
to one party.3

It would have been well too if Mill in his chapters on Inter-
national Values, and on the Competition of Different Countries
(Book III. chs. xviii., xxv.), had treated the cost of production in
each country not as constant, but as varying with the quantity
produced—as his successors 4 have done. The deficiency how-
ever is partly made up in the chapter on Taxes on Commodities
(Book V.), where, with special reference to international trade, it
is pointed out that ‘ duties on the produce of land or of mines
might be so high as to diminish materially the demand for the
produce, and compel the abandonment of some of the inferior
■qualities of land or mines. Supposing this to be the effect, the
consumers, both in the country itself and in those which dealt
with it, would obtain the produce, at smaller cost ’ (§ 6).s

It is a more serious complaint that Mill takes as the measure
■of the advantage which a country derives from trade, the increase
’ in the international value of its exports.® He thus confounds

ɪ. Ante, pp. 426, 436.

2 The state of null trade, represented by the , origin ’ at which the supply-and
demand curves intersect, is in general a position of unstable equilibrium, that is of
minimum advantage ; advantage less for both parties than that which is incident
to the proximate intersection of the curves, which is in general a position of maximum
advantage.              .

≡ Ante, p. 429.

4 JS.ff. Mangoldt, Eawcett, Bastable.

s Compare Ricardo’s theory that ‘ by a continued bounty on the exportation of
corn there would be created a tendency to a permanent rise in the price of com ’
(M'Oulloeh’s edition, p. 188). Compare also the observation made by Mill with
respect to taxes considered generally, that a tax, by checking the demand for a
commodity, may prevent what we should now call the law of increasing returns from
coming into operation (Mill, Book V. ch. 4, § 2,
sub finem).

s Cournot’s objection on this score is serious if Mill is held to mean—what he
certainly suggests—that England’s share of the total gain is in the ratio of (17
minus



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