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POLITICAL  ECONOMY

trade  cannot  be  opened  between  any  two
countries  unless  there  is  a  difference  between
the  comparative  values  of  transportable
things  in  each  of  them.  I  speak  of  comparative ­
  values  instead  of  comparative  costs
so  as  to  include  the  trade  in  things  which  are
not,  or  cannot  be,  produced  in  one  or  more
of  the  trading  countries.  By  comparative
values  is  meant  the  ratios  of  values  in  the
two  countries.  Let  us  suppose  there  are  two
countries  only  and  two  commodities  only,
and  for  the  sake  of  simplicity  of  exposition  let
us  assume  that  both  countries  use  the  same
kind  of  money,  and  that  there  is  no  cost  of
carriage.  Then,  if  the  countries  are  England
and  Germany,  and  the  commodities  are  timber
and  steel,  and  these  commodities  fetch  respectively ­
  20s.  a  ton  and  40s.  a  ton  in  England,
and  25s.  a  ton  and  50s.  a  ton  in  Germany,  a
permanent  trade  cannot  arise  because  in  both
countries  steel  is  just  twice  as  expensive  as
timber.  Trade  of  a  kind  would  appear  in  which
England  would  export  both  steel  and  timber
and  import  money,  but  this  trade  would
come  to  an  end  as  soon  as  the  level  of  prices
was  the  same  in  both  countries,  timber  and
steel  realising  respectively  in  both  England
and  Germany,  22s.  and  44s.,  let  us  suppose.
Of  course  as  money  left  Germany  for  England