It would be no answer to say, that Germany could probably still have
found the means of importing cloth from England, by exporting something
else. If she had purchased cloth with anything else, she would have
purchased it dearer: as is proved by the fact, that having free choice,
she found it most advantageous to purchase it with linen. When she could
get 10 yards of cloth for 17 of linen, that was the mode in which she
could get it with least labour. Being pressed by competition, she gave
successively 17, 18, 18; but rather than give 19 yards of linen, she
perhaps would prefer to give, as costing her rather less labour, 10
yards of silk, (which we will suppose to be the quantity which in
England will purchase 10 yards of cloth.) It is obvious that, although
Germany has found the means of supplying herself with cloth, by
exporting a different article from that in which she was undersold, yet
the advantage of the trade between her and England is now shared in a
proportion much less favourable to Germany.

There is no difficulty in showing that the same series of consequences
takes place in exactly the same manner through the agency of money. The
trade in cloth and linen between England and Germany being supposed to
exist as before, Flanders produces linen at a lower price than that at
which Germany has hitherto afforded it. The exportation from Germany is
suspended; and Germany, continuing to import cloth, pays for it in
money. By so doing she lowers her own prices, and raises those in
England: she has to pay more money for cloth, and to pay it in a
currency of higher value. She thus suffers more and more as a consumer
of cloth, until by the fall of her prices she can either afford to sell
linen as cheap as Flanders, or to export some other commodity which she
could not export before. In either case, her trade resumes its course,
but with diminished advantage on her side. [4]