ncy. In like manner there is competition between the
direct and the indirect mode of obtaining goods. The man who, by using
a certain amount of labor for a week in making steel for exportation,
can obtain in exchange fifteen yards of silk, can undersell and drive
from the field the man who, by using the same amount of labor for a
week in silk making, can produce ten yards of silk. The importer
naturally supplants the manufacturer when, by bartering with
foreigners the product of a given amount of labor, he can get from
them more than can be produced at home by the same amount of labor.
The manufacturers naturally survive when direct production gives the
larger returns. In our studies of the economy of the society that is
most advanced and central, we may treat whatever is imported as, in an
indirect way, produced. In a sense the activities of that society are
nearly self-contained since, by the direct or the indirect method, the
people produce within their own boundaries the most of what they
consume. In doing so they naturally use with a maximum of economy the
forces at their command, and resort to traffic when that is
profitable.

_Mode of Treating the Exportation of Capital._--Capital is moving
across the boundary mainly in an outward direction. This fact,
standing alone, would be equivalent to a mere retarding of the rate of
increase of capital within the economic center; but the exported
capital, as it is used outside of the exporting society, produces an
income for owners living within it. The income comes in kind, since it
takes the form of goods which are an addition to those imported in the
course of ordinary exchanges. This tribute paid to capitalists within
the industrial center comes chiefly in the form of consumers' goods,
the receiving of which does not entail the producing of something to
send away in exchange for them. The material agent which creates the
imported goods remains outside of the society, and sends its product
into the society with no offset. The fact of such an income coming
from beyond the pale of an economic society has compelled us to
qualify the statement that the economy of the society is
self-contained, for there is a small part of its income which is not
created within its borders. This comes about by the exportation of
capital and the importation of some of its products.

_Effects of Drawing Interest from Investments beyond the Social
Boundary._--Not all of these are consumers' go