CHAPTER 14 
INTRODUCTORY 
THE preceding chapters have been almost without exception 
heroically abstract. They have dealt with the “pure theory” of 
international trade. To many a reader the assumptions and con- 
clusions will have seemed to be no more than intellectual play- 
things. These calculations of the possibilities of gain from 
exchange of goods between the trading countries, these figures on 
the barter terms of trade and their limits, this analysis of the forces 
that determine the precise terms at which the terms settle them- 
selves — all have an air of unreality. They resemble those cal- 
culations of barter rates between individual exchangers which 
appear in the books on pure economics, and the calculations which 
analyze utility, marginal utility, marginal pairs, the familiar A’s 
and B’s, the Primus, Secundus and Tertius of economic lore. 
Thruout we seem to be dealing not with living human beings but 
with puppets moved by the economist’s sleight of hand. 
A similar air of unreality pervades our calculations on the flow 
of specie from country to country, and the consequent changes 
in prices and money incomes. True, these are not quite so ab- 
stract as the calculations on the barter terms of trade. They seem 
to come nearer to the actual world ; and it is precisely because they 
have at least the appearance of a closer approach to reality that 
the figures on prices and money wages have here been worked out 
more elaborately than has been the practice in previous expositions 
of the subject. Yet even so, the results have a smoothness, a 
neatness, a specious conclusiveness, that must lead the man of 
affairs and the economic realist to pause. Can things work out 
quite so easily and automatically? Do the conditions of produc- 
tion and exchange respond to changing prices in accord with this 
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