CHAPTER XIII

VALUES IN INTERNATIONAL TRADE

IY a preceding chapter (see Chapter IIL), the leading
principles of the valuation of goods exchanged directly
for one another were examined. We have now to apply
them to the problems of international exchange. In the
problems considered previously, two features were recognised
as dominating the terms of exchange, and limiting their
variability. The one was the comparative utility, of the
goods exchanged, to each of the parties to the exchange; the
comparative marginal utility, not the total utilities, The
other was the relative ability, in production of the two
commodities, of each of the two. These features, as before
stated, are operative in determining values in domestic trade.
But the presence, in the case of domestic trade, of a considerable
 degree of competition, for the services of the various
factors of production, between different industries, makes a
mode of treatment of the problem of value, in that case,
available which cannot be extended to the problem of value
in international trade. Where the division between two
industries is such that, in spite of a marked difference in the
power of labour, and other productive agents, to produce
value through their exercise in the two industries, there is no
considerable effective transfer of productive effort from the
one to the other, to take advantage of the superior opportunity
 for the production of value, the mode of treatment
cannot follow the lines laid down in Chapter V, The results
of that chapter are most useful in this case, but they do not
suffice for the solution of this problem.
In international trade, we find that goods are purchased,
by some countries, of kinds different from any produced