338 THE GENERAL THEORY OF EMPLOYMENT bk. vi

tenance of prosperity that the authorities should payclose attention to the state of the balance of trade. Fora favourable balance, provided it is not too large, willprove extremely stimulating; whilst an unfavourablebalance may soon produce a state of persistent depres-sion.

It does not follow from this that the maximumdegree of restriction of imports will promote themaximum favourable balance of trade. The earliermercantilists laid great emphasis on this and wereoften to be found opposing trade restrictions becauseon a long view they were liable to operate adverselyto a favourable balance. It is, indeed, arguable thatin the special circumstances of mid-nineteenth-centuryGreat Britain an almost complete freedom of trade wasthe policy most conducive to the development of afavourable balance. Contemporary experience of traderestrictions in post-war Europe offers manifold ex-amples of ill-conceived impediments on freedom which,designed to improve the favourable balance, had in facta contrary tendency.

For this and other reasons the reader must not reacha premature conclusion as to the practical policy to whichour argument leads up. There are strong presump-tions of a general character against trade restrictionsunless they can be justified on special grounds. Theadvantages of the international division of labour arereal and substantial, even though the classical schoolgreatly overstressed them. The fact that the advan-tage which our own country gains from a favourablebalance is liable to involve an equal disadvantage tosome other country (a point to which the mercan-tilists were fully alive) means not only that greatmoderation is necessary, so that a country secures foritself no larger a share of the stock of the preciousmetals than is fair and reasonable, but also that animmoderate policy may lead to a senseless internationalcompetition for a favourable balance which injures all