mopolitanism as yet applies to a small proportion of the whole area of investment, even as between Great Britain and the United States, where the stream is freest; but when one takes into consideration the present condition of such countries as the Transvaal, Argentina, and Chili, it is clear that the barriers of nationality are visibly breaking down so far as certain occupations of capital are concerned. The cosmopolitanisation of labour, so far as certain large labour markets are concerned, does not lag far behind. The spread of knowledge and the facilities of modern carriage have greatly abated the force of Adam Smith's dictum that "man is of all baggage the most difficult of transport." Common or unskilled male labour has acquired immensely increased ft con Ind if mobility within the last three decades. Such widely diverse peoples as Irish, Scandinavians, Slavs, Italians, Germans, Malays, Chinese, have exhibited so keen a capacity of migration as largely to equalise over considerable tracts of the earth the conditions of the low-skilled labour market. There are even certain skilled trades, such as mining and engineering, in which national boundaries present few obstacles. The effective class boundaries separating the professional, shopkeeping, mechanic, and labouring classes are perhaps in most of the advanced industrial nations quite as difficult to cross as the national boundaries separating workers in the same trade or handicraft. A Welsh miner or an English engine

driver finds it far easier to earn a livelihood in his own craft in the United States or South America than to enter a profession or a commercial career in Great Britain; a German clerk can more easily get employment in England, France, or America than become a lawyer or a farmer in Germany; Swiss waiters, Scotch gardeners, English coachmen, Italian cooks, German musicians, Jewish pedlars-to quote a few salient examples—have a capacity to change their country far exceeding their ability to change their occupation in their own country. Even if we direct our attention to young labour just entering the labour market, it is becoming easier to gain employment either in some field of unskilled work or along the lines of some special aptitude in a foreign land than to enter an employment far removed in economic character or social position in one's native country. So far as the older European countries are concerned, the transferability of either capital or labour among them is as yet very slight, affecting a very little proportion of the whole field of production; but the new world of North and South America, South Africa, and Australasia, and some backward parts of the old world, now submitted to swift development, form huge areas of cosmopolitan industry. These countries can in no wise be regarded as "non-competing groups" in the old sense of exclusive nationalities, and they are becoming larger factors in world-industry each decade. Α

common meeting-ground for Europeans of all nations, they are acting to a quite perceptible extent as equalisers of the economic conditions of the European nations. Though there is no appreciable direct flow of agricultural and other manual labour between Great Britain, Germany, Italy, and Russia, the common tide of migration into American countries exercises a marked tendency to raise the economic conditions of the more backward European nations to the level of the more forward ones. The growing size of this indirect competition considerably qualifies the application of the theory of "non-competing groups" to nations which show little transferability of capital and labour among themselves.

§ 2. Moreover, it must be remembered that we are concerned with the question of the extent to which nations are "non-competing groups," not on its own account, but for its bearing on the question of the terms upon which goods will be exchanged between members of these "non-competing groups." If the non-competing character be so strongly marked in respect of certain nations, and certain classes of goods they sell, as to enable these goods to exchange at a high premium over equal final costs as compared with other goods of other nations, it seems theoretically possible to devise a scientific tariff to assist those exchanging at a disadvantage to recoup themselves. If, in other words, Germany, France, United States, or Russia, are selling us goods artificially

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enhanced in value by the inclusion of economic rents or high profits, which rest either on natural or contrived scarcity of supply, it is arguable that, by placing a suitable tax on such goods, we might secure for our treasury and so for our nation the whole or part of this rent or surplus value, thus altering the terms of the national exchange to our advantage.

How curiously remote this consideration is from the ordinary conception of the tariff problem appears from the fact that such a proposed tax would be directed against "the foreigner" on the ground that he is selling goods too dear, whereas the zest of our tariff reformers is all directed against him for selling goods too cheap.

Now since cheapness in imports means two things, first, that the foreigner is giving us more than he gets; second, that the industries which furnish the cheap goods cannot bear a duty and will therefore shift it on to us, the proposal to retaliate by duties on cheap imports is one of palpable folly. The case of selling cheap for a time in order to sell dearer later, which is one of the charges against "dumping nations, deserves separate consideration; the real injury committed in such a case would consist not in the temporary cheapness, but in the subsequent preponderating dearness. The only bearing of the theory of "non-competing groups" on international trade has reference to the dearness it imputes to certain classes of imports or exports. Are the restraints upon

mobility of capital and labour between nations such as to enable certain groups of exporters in foreign nations to raise abnormally the value of articles we find it necessary to take from them in exchange for the goods we send them? Are they able, by means of monopoly of natural resources, or by legal restraints or social interferences which limit production or commerce, to pay us small quantities of dear goods, taking from us in return large quantities of cheap goods, "dear" and "cheap" having reference to the presence and absence of a surplus over the necessary_economic cost of production ?

It is, of course, quite conceivable that we might be so dependent upon a commodity of necessity or prime convenience produced abroad by a noncompeting group" that the price might be exorbitantly raised to us. The price we pay the Standard Oil Company for our oil may stand considerably higher than marginal cost of production, limited as it is only by considerations of elasticity of demand in view of the law of substitution. A cornering of our principal wheat supply, now in the United States, later, perhaps, in Canada, may raise the rate of exchange for wheat against our commodities indefinitely high. The real tariff problem has reference to these and similar cases of monopoly, and the practical possibility of devising means for altering the balance of exchange which is against us to one in our favour. It is where national boundaries and national policy serve to raise