128 ECONOMIC PROTECTIONISM

the principal subject for discussion. But the decisive argu-
ments may be extended to form a general theory of economic
protection. The old but ever renewed opposition between
tariff protection and free trade is thus given an interpretation
corresponding to modern commercial conditions. The essen-
tial argument of the free-trade theory consists in the con-
tention that the international exchange of goods is of benefit
to all the countries concerned, including those which are
unfavourably situated in regard to production, since each
country will devote itself to those branches of production
in which it has at least relatively the lowest costs. For
the international exchange of goods, this view regards as valid
the theory of comparative values which was first advanced
by John Stuart MiU as the law of comparative costs, and later
worked out by Bastable ^ with a special view to international
trade, and which has recently been advocated by Fontana-
Russo ^ as the very qviintessence of modern commercial policy.
In this connexion the fact is supposed to be decisive that the
value of a commodity is determined not by cost of production
but by the acquisition cost, that is, by the sacrBce which
is connected with the commodity given in exchange for it.
