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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  consequence ­
  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  England ­
  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  contraction ­
  of  her  wheat  farming,  with  the  result