214 ECONOMIC PRINCIPLES

than formerly. It would also mean that such of those goods
as are also produced at home are affected by decreasing
returns, and that the improvement either does not affect
them, or is outweighed by the effect of this diminution of
returns, It would, further, mean that the marginal utility of
the exports abroad fell more than in the proportion of the
decrease of cost of producing them which is implied in the
improvement.
When this combination of circumstances can be found,
the country where the improvement occurs would actually
lose, so far as its foreign trade was concerned, as a result of
the improvement. If we examine similarly the other cases,
of the amount of imports increasing or decreasing as a
consequence of the change in question, instead of remaining
unchanged as in the case which has been examined, we
should arrive at results of a similar nature. In general, such
an improvement would be an advantage to the country
where it arose, and also to those in trading relations with it.
But, under special conditions, the opposite is possible, that
is, that actual loss may follow improvement. Conversely, it
might be shown that, under special conditions, a gain might
accrue to a country, in its foreign trade, from a decrease in
its facilities of production as affecting goods for export.
One feature in the two cases not specially examined
above calls for attention, namely, that when the volume of
imports changes, an important consideration is, whether they
are affected by decreasing or by increasing returns as a
whole, or by constant returns. The investigation of the
various cases which can arise is not easily made without
some symbolic logical apparatus, and is even then somewhat
lengthy. The purpose of calling attention here to a problem
whose complete solution can hardly even be indicated, is to
afford opportunity for noting that, though the general
conditions point to loss to a country as resulting from any
causes which diminish the effectiveness of its industry,
conditions are conceivable where a gain would accrue.