Note A2-5-3 — Chapter III

Compare v. Mangoldt, Grundriss der V. W. L., 185 ff. By the English, the discovery of this truth is attributed to Ricardo, Principles, ch. 7. Compare the further development in J. Mill, Elements (1821), III, 4, 13 seq.; Torrens, The Budget (1844) and J. S. Mill, Essays on some unsettled Principles of Political Economy (1844), No. 1, and Principles, III, ch. 18 ff. But even Jacob, Grundsätze der Polizeigesetzgebung (1809, p. 546 ff.), was acquainted with the truth that generally both sides gained, but the one party, possibly more than the other. According to Lotz, Revision (1811), I, 161, the gain and loss of each party rises and falls in proportion to the difference between the degrees of value which each party, so far as he is himself concerned, attaches to the goods given and the goods received. And even Cantillon, Nature du Commerce (1155), p. 226, 369 ff., had a presentiment of the reason why countries having a low value in exchange of money can continue notwithstanding to sell in foreign countries. And so, too, Hume, Essays (1752), On Interest, who, without looking through the spectacles of the mercantile system, perceived that countries with a flourishing trade must necessarily draw much gold and silver to themselves. Recently, Cairnes has shown by practical examples that Australia imports Irish butter and Norwegian wood, and the Barbadians meat and flour from New York, although both might themselves produce such articles cheaper. (Essays, etc., 1873. Leading Principles, 1874, p. 379.)