ay in goods, workmen will of course be
needed to make those goods; and the more we buy from abroad, the more
we shall need of home produce to send in exchange. Thus, the purchase of
foreign goods encourages home manufactures in the best possible way,
because it encourages just those branches of industry for which the
country is most suited, and by which wealth is most abundantly created.

#99. The Mercantile Theory.# Perhaps, however, it will be objected that
our foreign imports will be paid for not in goods but in money; thus the
country will be gradually drained of its wealth. This is #the old
fallacy of the Mercantile Theory#, which was to the effect that a
country becomes rich by bringing gold and silver into it. It is an
absurd fallacy, because we can get no benefit by accumulating stocks of
gold and silver. In fact, to keep precious metals causes a loss of
interest upon their value; people who are rich may afford to have costly
plate, and the pleasures they derive from it may be worth the interest.
But to have more gold, or silver money than is just sufficient to make
the ordinary payments of trade causes dead loss of interest. Nor is
there any fear that the country will be drained of money entirely. For,
if money became scarce, its value would rise according to the laws of
supply and demand, and prices of goods would fall; then imports would
decrease, and exports increase. It is only a country like Australia or
North America, possessing gold or silver mines, which could go on paying
money for its imports, and then it is quite right it should do so, the
metal being a commodity which can be cheaply produced in the country.
Gold and silver must be got out of mines, and therefore a country which
buys goods with money must either have such mines, or else get the metal
from other countries which possess mines. In no case, then, can we
import foreign commodities without producing at home goods of equivalent
value to pay for them, and thus we see beyond all doubt that foreign
trade is a means of increasing, not decreasing, the activity of
industry at home.

#100. Is Political Economy a Dismal Science?# This is only a Primer, a
very brief and elementary account of some parts of political economy,
and it is evidently impossible to argue out the subjects of such a
science in so small a compass. But the purpose of this little treatise
will be fulfilled if those who begin with the primer can be persuaded to
go on and study l