that is to say, that the same amount of labour and capital produces a greater return in every branch of industry in one country than in another. Yet between two such countries a trade advantageous to each may be carried on. We will suppose that Isle Pleasant loses its special advantage in producing plantains, and when this advantage is lost, that San Francisco can produce all commodities at a smaller sacrifice of labour and capital than it takes to produce them in the island. It may be thought that in this case the San Franciscans would no longer wish to supply any of their wants from the products of the island, since they have themselves an advantage over the islanders in every branch of industry. This, however, will not be the case. Although the San Franciscans have the advantage in every kind of industry, their advantage is less in some industries than in others; and if their advantage over the islanders is less, for instance, in the production of matting than in the production of leather goods, a trade might be set up which would be permanently advantageous to each country
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IV.]
FOREIGN TRADE.
95
