The fact, that England can,
notwithstanding her taxation and her high rate of wages, actually
undersell other nations, seems to be well established: and it
appears to depend on the superior goodness and cheapness of those
raw materials of machinery the metals--on the excellence of the
tools--and on the admirable arrangements of the domestic economy
of our factories.
449. The different degrees of facility with which capital can
be transferred from one mode of employment to another, has an
important effect on the rate of profits in different trades and
in different countries. Supposing all the other causes which
influence the rate of profit at any period, to act equally on
capital employed in different occupations, yet the real rates of
profit would soon alter, on account of the different degrees of
loss incurred by removing the capital from one mode of investment
to another, or of any variation in the action of those causes.
450. This principle will appear more clearly by taking an
example. Let two capitalists have embarked L10,000 each, in two
trades: A in supplying a district with water, by means of a
steam-engine and iron pipes; B in manufacturing bobbin net.
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