154 
POLITICAL ECONOMY 
comparative values which were different can 
become identical. The explanation is to be 
found in one, or the other, or both of these 
circumstances : (1) that altering the quantity 
of a particular thing produced in a country 
is likely to alter its marginal cost of production, 
and (2) that when an article ceases to be 
produced in a country, so that all its supplies 
of the article are imported, additional imports 
must lower the value of the article in conse 
quence of the law of diminishing utility. 
Let us take the case of two countries, 
say England and France, one of which, say 
England, is exporting cotton goods and the 
other exporting wheat. At first let the cost 
per piece of cotton goods and per bushel 
of wheat respectively be 40s. and 21s. in 
England, and 41s. and 17s. in France. Trade 
will arise between the two countries, as we 
have seen, France exporting wheat and Eng 
land exporting cotton goods. When England 
exports the cotton goods to France, which 
were not previously sent there, England’s 
cotton industry must naturally expand, and 
the result may be that the marginal cost of 
production of the cotton goods will eventually 
drop to 39s. a piece. Correspondingly, 
England’s importation of wheat will cause a con 
traction of her wheat farming, with the result