class. That is all.

Let us take an example, and to simplify the problem let us leave out of
account those exotic products--like tea or rubber or raw cotton--which
_can_ only be produced in one of the exchanging countries. Let us take
the case of Germany and England, both producing cutlery and both
producing cloth. There is no reason why each country should not produce
_both_ articles exclusively for its own use; and as a matter of fact for
a long time they did so. But presently it was found that the cost of
production of certain kinds of cutlery was less in Germany, and the cost
of production of certain kinds of cloth less in England. Merchants and
dealers came in and effected the exchange, and so an intertrade has
sprung up. The effect of this on the workers in England is simply to
transfer a certain amount of employment from the cutlery trade to the
cloth trade, and on the workers in Germany to transfer an equal amount
from the cloth trade to the cutlery trade. This may mean dislocation of
industry; but the actual number of persons employed or of wages received
in both countries may in such a case remain just the same as before.
There is nothing in the mere fact of exchange to alter those figures.
There is, however, a gain, there is a marginal advantage, in the
exchange; and that is collared by the merchants and dealers. It is, in
fact, _in order to secure this margin_ that the merchant class arises.
This is, of course, a very simple and elementary statement of the
problem, and the exceptions to it or modifications of it may be supplied
by the reader. But in the main it embodies the very obvious truth that
trade is created for the advantage of the trader (who often also in
modern times is the manufacturer himself). What advantages may here and
there leak through to the public or to the employee are small and, so to
speak, accidental. The mere fact of exchange in itself forms no index of
general prosperity. Yet it is often assumed that it does. If, for
instance, it should happen that the whole production of cutlery, as
between Germany and England, were secured by Germany, and the whole
production of cloth were secured by England, so that the _whole_ of
these products on each side had to be exchanged, then doubtless there
would be great jubilation--talk of the immense growth of oversea trade
in both countries, the wonderful increase of exports and imports, the
great prosperity, and so forth; but really and obviously it