Front Page Titles (by Subject) Impediments to Exchange. - The Theory of Political Economy
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Impediments to Exchange. - William Stanley Jevons, The Theory of Political Economy 
The Theory of Political Economy (London: Macmillan, 1888) 3rd ed.
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Impediments to Exchange.
We have hitherto treated the theory of exchange as if the action of exchange could be carried on without trouble or cost. In reality, the cost of conveyance is almost always of importance, and it is sometimes the principal element in the question. To the cost of mere transport must be added a variety of charges of brokers, agents, packers, dock, harbour, light dues, etc., together with any customs duties imposed either on the importation or exportation of commodities. All these charges, whether necessary or arbitrary, are so many impediments to commerce, and tend to reduce its advantages. The effect of any one such charge, or of the aggregate of the costs of exchange, can be represented in our formulæ in a very simple manner.
In whatever mode the charges are payable, they may be conceived as paid by the surrender on importation of a certain fraction of the commodity received; for the amount of the charges will usually be proportional to the quantity of goods, and, if expressed in money, can be considered as turned into commodity.
Thus, if A gives x in exchange, this is not the quantity received by B; a part of x is previously subtracted, so that B receives say mx, which is less than x, and the terms of exchange must be adjusted on his part so as to agree with this condition. Hence the second equation will be
Again, A, though giving x, will not receive the whole of y; but say ny, so that his equation similarly will be
The result is, that there is not one ratio of exchange, but two ratios; and the more these differ, the less advantage will there be in exchange. It is obvious that A has either to remain satisfied with less of the second commodity than before, or has to give more of his own in purchasing it. By an obvious transfer of the factors m and n we may state the equations of impeded exchange in the concise form—