148

POLITICAL  ECONOMY

tion  of  these  two  sets  of  forces,  the  fortunate
industries  will  expand  and  the  unfortunate
industries  will  contract,  until  a  position  of
equilibrium  is  reached  at  which  labour  of  the
same  capacity  in  equally  agreeable  occupations ­
  will  tend  to  earn  the  same,  and  the
remuneration  of  capital,  so  far  as  industrial
risks  are  identical,  will  tend  to  be  everywhere
the  same.  Hence  the  conclusion  that  within
an  area  over  which  competition  rules  and
throughout  which  capital,  labour,  and  enterprise ­
  are  comparatively  mobile,  things  will
exchange  according  to  their  marginal  costs  of
production.
Thus,  for  our  present  purpose,  may  the
theory  of  the  home  trade  be  portrayed—as  a
union  of  two  distinguishable  doctrines.  It
must  not  be  supposed,  of  course,  that  the
processes  embraced  by  the  one  doctrine  take
place  independently  of  the  processes  embraced
by  the  other.  The  two  sets  of  processes  go
on  concurrently  so  that  normally  there  is
no  noticeable  breach  between  the  prices  of
things  and  their  costs  of  production.
Now  the  fundamental  distinction  between
home  trade  and  international  trade  consists
in  the  fact  that  in  the  latter  the  second  set
of  processes,  which  I  have  called  the  reactions,
cannot  have  the  same  free  play  as  in  the