Principles of Political Economy · John Stuart Mill
INTERNATIONAL TRADE AND VALUES.
195. What is the meaning of the statement that “it is not a difference in the _absolute_ cost of production which determines the interchange [of commodities between countries], but a difference in the _comparative_ cost”? 196. What are the advantages which a country derives from foreign trade? 197. Explain clearly the following passage: “We may often, by trading with foreigners, obtain their commodities at a smaller expense of labor and capital than they cost to the foreigners themselves.” 198. Is there any essential difference between trade between country and country, and trade between county and county, or even between man and man? What is the real nature of trade in all cases? 199. Why is it necessary to make any different statement of the laws of value for foreign than for domestic products? What is the cause for the existence of any international trade? 200. How would a serious decline in the efficiency of England, as compared with other countries, in the production of manufactures affect the scale of money incomes and prices in England, and why? 201. Mr. Mill refers the value of home products to the “cost of production”; of foreign products to the “cost of acquisition.” Examine the truth of this distinction. 202. It is said that in the home market the value of commodities depends on the cost of production, in the foreign market on the cost of acquisition. Comment on this distinction.
203. Is the cost of production the regulator of international values? 204. Discuss the following statement: “International value is regulated just as inter-provincial or inter-parishional value is. Coals and hops are exchanged between Northumberland and Kent on absolutely the same principles as iron and wine between Lancashire and Spain.”—Ruskin, “Munera Pulveris,” p. 84. 205. What determines the value of imported commodities? 206. Why does cost of production fail to determine the value of commodities brought from a foreign country? Does it also fail in the case of commodities brought from distant parts of the same country? 207. It is on the matter of fact that there is not much migration of capital and labor from country to country that Mr. Mill has based his whole doctrine of “international trade and international values.” Explain and comment on the above statement. 208. What are the causes which determine for a nation the cost of its imports? 209. It follows from the theory of international values, as laid down by Mill, that the permanent residence of Americans in Europe may enhance the cost of foreign imports to Americans residing at home. Explain in what way. 210. Suppose two countries, A and B, isolated from the rest of the world, and a trade established between them. In consequence of the labor of A becoming less effective, the cost of production of every article which can be produced in that country is greatly increased, but so that the relation between the costs of any two articles remains the same. What, if any, will be the effect of the change on the trade between A and B? Does your answer depend upon your using the phrase “cost of production” in a sense different from that given to it by some economists? 211. Show that every country gets its imports at less cost in proportion to the efficiency of its labor.
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