two nations will trade together at
that rate of interchange, provided that the linen required in England be
exactly 1000 times 17 yards, neither more nor less. For the cloth and
the linen will then exactly pay for one another, and nobody on either
side will be obliged to offer what he has to sell at a lower rate, in
order to procure what he wants to buy.

Now if the increase of wealth and population in Germany should greatly
increase the demand in that country for cloth, the demand for linen in
England not increasing in the same ratio,--if, for instance, Germany
became willing, at the above rate, to take 1500 times 10 yards; is it
not evident, that to induce England to take in exchange for this the
only article which Germany by supposition has to give, the latter must
offer it at a rate more advantageous to England--at 18, or perhaps 19
yards, for 10 of cloth? So that the division of the advantage becomes
more and more favourable to a country, in proportion as the demand for
its commodities increases in foreign countries.

It is not even necessary that the country which takes its goods, should
supply it with any commodity whatever. Suppose that a country should be
opened to our merchants, disposed to buy from us in abundance, but which
can sell to us scarcely anything, as every commodity which it affords
could be got cheaper by us from some other quarter. Nevertheless, our
trade with this country will enable us to obtain from all other
countries their commodities at a lower price. At the first opening of
this commerce of mere exportation, we must have received in payment a
large quantity of money; for which our customer will have been
indemnified by other countries, in exchange for her commodities. Prices
must consequently be lower in all other countries, and higher with us,
than before the opening of the new branch of trade; and we therefore
obtain the commodities of other countries at a less cost, both as we pay
less money for them, and as that money is lower in value.

8. Another obvious application of the same principle will enable us to
explain, and to bring within the dominion of strict science, the
rivality of one exporting nation and another, or what is called, in the
language of the mercantile system, _underselling_: a subject which
political economists have taken little trouble to elucidate, from the
habit before alluded to of disregarding almost entirely, in their purely
scientific inquiries, those circums