The name is absent

THEORY OE INTERNATIONAL VALUES

г x — N; where r is an improper fraction, in cases instanced by
the author, ⅛ and ⅝.¹ Employing this conception, Mangoldt
enunciates that condition of equilibrium which would now be
described as the intersection of two curves. ■

He then goes on to consider the phenomenon which would
now be described as the multiple intersection of demand and
supply curves (pp. 228, 229, and cf. § 68). His views on this
curious subject are very interesting. He thinks that in general
of several possible positions of equilibrium that one tends to
be realised which is most favourable to the more active of the
two nations. But there are stated some probabilities on the other
side, which seem not very easy to apprehend (p. 229). It may
be observed that Mangoldt, like Mill,² supposes neutral equilibrium
—the coincidence of the two curves as we may say—to be
possible.

So far the cost of production has been assumed to be con-
stant, whatever the amount produced. Mangoldt next supposes
(p. 232) the relation between cost and quantity which is now
called the law of diminishing returns to prevail, and illustrates
the general theory by a particular example, which is rendered
more workable by resorting to the simple law of demand at first
assumed—namely, that the quantity demanded is in inverse ratio
to the cost.

Finally, the cost of transport is taken into consideration
(p. 233). Mangoldt propounds the remarkable theory that upon
a certain hypothesis the carrying trade between two countries
tends to fall to that one which has the smaller absolute produc-
tivity (p. 235). The distinction between the ‘ active ’ and ‘ passive ’
nation which we have already met with in connection with
plural equilibrium here recurs (p. 240). Mangoldt illustrates his
theories more suo by laborious examples. He sums up the section
on cost of transport in a series of propositions, among which the
following—very freely paraphrased—seem the most remarkable.

(1) The carrying trade between two nations tends to fall into

¹ As I understand, i£ (as in Cournot’s demand curve) x be the price and y the
r
corresponding quantity demanded, = f (x) ; we have f (m x) = — f (x).

In the particular case where the law applies only to small changes of x, put
dy                                           '

m = (1 + α), α small. Whence y + a ~^l = y — ary.

Above, p. 610.

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