Segak. — The Struggle for Foreign Trade. 521 



than that at which she could herself produce them, although 

 to the exporting nation they may have cost more. Though 

 it may appear paradoxical, it is nevertheless true that it may 

 he to a country's interest to import goods which she could her- 

 self actually produce with less cost than the exporting country, 

 for she obtains them at still smaller cost by exchanging for them 

 goods for the production of which she has a still greater ad- 

 vantage. The cost to her is not the amount of labour and 

 capital actually spent in the foreign country on producing the 

 goods, nor even what would be required for herself to produce 

 the same goods, but the still smaller amount spent on 

 producing the goods which are exchanged for them. The 

 reason that one country gains by trading with others is not 

 that other nations produce at less cost than itself, but lies in 

 the differences in the characters of the capabilities of the 

 various nations. 



A nation may be very wealthy and still exchange little com- 

 paratively by way of foreign trade. The United States, e.g., 

 is amongst the wealthiest nations in the world, whether its 

 wealth be measured absolutely or relatively to population ; but 

 relatively to population its foreign trade is amongst the smallest, 

 being- only about £7 per head, while that of New Zealand is 

 about £33. From what we have briefly considered above, it 

 would appear that foreign trade will tend to be large if a nation 

 has some great special advantages, or even special disadvantages, 

 in the production of some goods, or in the supply of some ser- 

 vices. A special advantage will lead the nation to export the 

 goods produced with this special advantage and purchase others 

 for the production of which she is not so well fitted ; a special 

 disadvantage will lead her to purchase the goods she can only 

 herself produce at such disadvantage and pay for them by ex- 

 porting those for the production of which she is better fitted. 

 We may say that causes producing a great differentiation in 

 national productive powers tend largely to promote foreign 

 trade. Now, the most general and at the same time most con- 

 siderable causes affecting the relative powers of production 

 in various branches of industry are the relation of population 

 to land and the magnitude of the community or of the national 

 estate. 



The first of these is the relation of labour to land. If the 

 population is small compared with the area of good land, even 

 though there may be abundance of coal and water-power, the 

 nation will have a great relative advantage, not in manufacture, 

 but in the production of food and raw materials. Australasia, 

 Canada, and Argentine export foodstuffs, minerals, and other 

 raw materials, and import manufactured goods. Even the 



