CAPITAL AND INTEREST 
75 
way to construct illustrative figures such as are used in this chapter is to treat 
the price level as constant; and the influence of capital should be shown 
by a process of discounting, as just indicated. So far as a discounting 
process operates differently on different commodities, there are possibilities of a 
modifying influence on international trade. And the nature of the modifica- 
tions will be elicited clearly enough by this method of procedure. 
[ admit unhesitatingly that the discount method (Ricardo’s) is sound. For 
some purposes, it is the only one that is sound. It is logically the only one 
tenable for the purposes which Ricardo had in mind when writing the chapter 
on Value in his Principles: that of analyzing the relations between wages and 
value, and in general the relations between distribution and value. But it does 
not seem to me necessarily imposed for the purpose of the present inquiry. 
It would simply lead to the same results, but by a more troublesome route. 
[llustrative figures such as I have worked out could be arrived at equally well 
by the discount method; and they would point to the same general con- 
clusions. They are more easily calculated and more easily followed on the 
method which I have used, and are equally valid as regards the particular 
problem in hand; namely, that of showing in what way the item of interest 
has a modifying effect. True, they make the tacit assumption that advances in 
the prices of all goods take place as this item is introduced ; the advances being 
greater or less according as the item counts more or less. In order to carry to 
its logical outcome this assumption of general price advances, it would be neces- 
sary to assume also equivalent changes in the monetary supply. For the 
completeness of the reasoning the reader who is intent on full logical con- 
sistency should bear in mind this additional assumption. For the purpose of 
tracing the effect on international trade — the sole object here in view — it 
has seemed to me easier and simpler to use the method of supplement, rather 
than the method of discount. If the object in hand were to consider each and 
every aspect of a theoretic analysis — monetary theory as well as the theory of 
distribution, domestic prices as they would be with and without a return to 
capital — the strict Ricardian procedure would alone be consistent and 
conclusive.