SECTION V.. The Advantages of International Trade.

THE ADVANTAGES OF INTERNATIONAL TRADE.

The truth that no exportation is permanently possible without importation, and that, in international trade, also, both sides better their condition, was clear to the Italians in the fifteenth century, and in the sixteenth and seventeenth centuries to the Netherlanders.[A2-5-1]

Every nation can, through its instrumentality, for the first time, acquire not only those commodities which nature entirely refuses to it, but such also which it can itself produce only at a great cost.[A2-5-2] And here it is not so much the absolute costs of production as the comparative which are decisive.[A2-5-3] The country A may be superior to the country B in all kinds of productiveness; but when this superiority for the group of commodities x amounts to only 50 per cent., and for the group y, on the other hand, to 100 per cent., it is to the interest of A, which possesses only a limited quantity of the factors of production, to produce a surplus of the commodities y, and to exchange that surplus against what it wants of x.[A2-5-4] B, also, would willingly agree to this, even if it were not to get the commodities y entirely as cheap as A might supply them, but still decidedly cheaper than their production would cost in B itself. But, if both parties derive advantage from international trade, there is no necessity whatever that this advantage should be equally great on both sides. As in every struggle over prices, the gain here also is greatest on the side of the nation whose desire to hold fast to their own commodities is farthest from being outweighed by the want of the foreign commodity, and which, at the same time, employs most productively the equivalent received in imports in exchange for its exports.[A2-5-5] Yet, in estimating this productiveness, it is necessary to take the whole national life into consideration.[A2-5-6]

The international distribution of the precious metals is subject to the same law. These, also, are procured most cheaply by the nation which, directly or indirectly (by the production of counter values wished for by the whole world), employs the most productive economic activity upon them, and at the same time (it may be by especially well developed credit), is in the least urgent need of them.[A2-5-7] Therefore, on the whole, their value in exchange is wont to be lowest among the richest and most highly cultivated nations.[A2-5-8] Such a relative cheapness of gold and silver is not only a symptom of economic power, but considering the preëminent energy of these very commodities, at the same time, a means to procure most foreign commodities with a smaller expenditure of one's own forces.[A2-5-9] Hence, a great change in the distribution, hitherto usual, of the precious metals, produced, possibly, by great advances made in production here, or by an increase in consumption there, or by means of commercial prohibitions, etc., may be just as advantageous to the country which receives more as hurtful for the country which pays more;[A2-5-10] and both, all the more as the revolution in prices enhances the most productive elements of the nation there, and here the most unproductive.[A2-5-11] Hence, even when it cannot, in general, be said that one branch of commerce, carried on in a normal manner, should necessarily remain behind another in economic productiveness, those which have nothing to fear from a disturbance of their balance by the measures of foreign states are distinguished by the greatest security, and those are capable of the greatest growth which exchange articles to be manufactured (Fabrikanden), and the means of subsistence against ordinary manufactured articles.[A2-5-12] [A2-5-13]

On medieval complaints concerning the absenteeism of monasteries: Bodmann, Rheingauische Alterthümer, 751. From a higher point of view, it cannot, indeed, be ignored that absenteeism, largely developed, cripples the organic whole of national life. The most highly cultured and influential classes become estranged from their country, the great mass remaining behind coarser, economic production more one-sided, and all social contrasts more sharply defined. Disturbances in Rome, when Diocletian removed his residence from there; the decline of the Netherlands, very much promoted by the discontent which Philip II.'s departure for Spain produced. It was estimated, however, in 1697, that the English absentees caused a gain to France of £200,000 per annum. (Discourse of Trade, p. 93.) It is said that about 1833, 80,000 Englishmen traveled on the continent, and consumed £12,000,000 there. (Rau.) According to Brückner, the Russians who travel in foreign countries take 20,000,000 rubles a year out of the country with them. (Hildebrand's Jahrb., 1863, 59.) That the countries which receive these travelers receive no very great benefit from them, see in J. B. Say, Cours pratique. In Paris, there were, even in 1797, so many strangers who so enhanced the rents paid for maisons garnies that their expulsion was proposed. (A. Schmidt, Pariser Zustände, III, 78.)]