148 
POLITICAL ECONOMY 
tion of these two sets of forces, the fortunate 
industries will expand and the unfortunate 
industries will contract, until a position of 
equilibrium is reached at which labour of the 
same capacity in equally agreeable occupa 
tions will tend to earn the same, and the 
remuneration of capital, so far as industrial 
risks are identical, will tend to be everywhere 
the same. Hence the conclusion that within 
an area over which competition rules and 
throughout which capital, labour, and enter 
prise are comparatively mobile, things will 
exchange according to their marginal costs of 
production. 
Thus, for our present purpose, may the 
theory of the home trade be portrayed—as a 
union of two distinguishable doctrines. It 
must not be supposed, of course, that the 
processes embraced by the one doctrine take 
place independently of the processes embraced 
by the other. The two sets of processes go 
on concurrently so that normally there is 
no noticeable breach between the prices of 
things and their costs of production. 
Now the fundamental distinction between 
home trade and international trade consists 
in the fact that in the latter the second set 
of processes, which I have called the reactions, 
cannot have the same free play as in the