INTERNATIONAL TRADE

CHAPTER 1

THREE CASES

Ar the outset I must ask the reader’s patience, and a withholding
 of judgment on his part, till the close of a systematic and
prolonged exposition. Some assumptions will be made in the
earlier chapters that must appear quite out of accord with facts,
and some extremely simple and apparently unreal situations will be
considered. It will be assumed, for example, that countries or
regions trade with each other by a process of barter, and that the
people concerned weigh deliberately the advantages of barter. It
will be assumed, again, that within each country commodities are
exchanged, by those making them, on the basis of the quantities
of labor given to their production. These commodities, too, will
be assumed to be produced at constant cost — that is, tho the volume
 of output may change, each unit is always produced by the
same quantity of labor. And so on thru a long list of provisional
 suppositions. As the subject is unfolded step by step, these
will be qualified and supplemented, and verisimilitude will be
attained, or at least some approach to verisimilitude. Many
comments and criticisms that must arise in the reader’s mind will
be met, I trust, as he proceeds. He is asked to judge the analysis
which follows as a whole, regardless of seeming inadequacy in any
one part considered by itself.
We begin by distinguishing three sorts of cases. To these may
be applied the terms: (1) absolute differences in cost; (2) equal
differences in cost; (3) comparative differences in cost.
In the analysis and interpretation of these cases, “cost” will
mean labor cost, measured in terms of time, — so many days. A