heir business upon closely
similar conditions. One Lancashire cotton exporter competes much more
closely with other Lancashire exporters than he does with German,
American, or Japanese exporters of similar goods. So it is everywhere,
save in the exceptional times and circumstances in which governments
themselves take over the regulation and conduct of foreign trade.

For certain purposes it is, no doubt, convenient to have balances and
analyses of foreign trade presented separately, so as to show the
volumes and values of different goods which pass from the members of
one nation to those of another. But the imputation of political
significance to these statistics, taken either in aggregate or in
relation to separate countries, as if they were themselves indices of
public gain or public loss, has most injurious reactions upon the
intelligent understanding of commerce.

The second flaw is the assumption of a limited amount of market, which
carries with it the assumption that the groups of traders, gathered
under their national flags, are engaged in a conflict in which they are
entitled to embroil their governments. By tariff bargaining and by all
sorts of diplomatic weapons each government is called upon to assist
its nationals and to cripple or exclude the nationals of other states.
Now it is untrue that the world market is strictly limited, with the
consequence that every advance of one group of traders is at the
expense of another group. The world market is indefinitely expansible,
and is always expanding; and commercial experience shows that the rapid
expansion of the overseas trade of one country does not preclude the
expansion of trade of other countries. I do not, of course, deny that
at a particular time and in relation to some particular lucrative
opportunity, genuine clashes of interests may arise. But, envisaging
the whole range of foreign commerce, one feels that the image of it as
a prize which governments can, and ought to win for their traders at
the expense of the traders supported by other governments, has been a
most fertile source of international misunderstanding.

Perhaps the worst of the three fallacies, and in a sense the
deepest-rooted, is the concept of export trade as of more value than
import trade. This is often traced back to the time when governments
deemed it desirable to accumulate in their countries treasures of gold
and silver and to this end encouraged the sale of goods abroad and
dis