two entirely different things.  In works on International Trade, the reader will discover that the comparative nature of real costs is so unmistakable that a Doctrine of Comparative Costs is expounded with much formality at the outset.  This doctrine is apt to prove somewhat puzzling, when we have to deal with it as an apparent exception to the general tenor of economic theory.  Its difficulties disappear when we realize clearly that the real cost of anything is the curtailment of the supply of other useful things, which the production of that particular thing entails.

Sec.2. The Allocation of Resources.  However strange the above conception may seem, there should be no doubt that this cost is very “real.”  Here the irregularities and maladjustments of the economic world, the recurrence of trade depressions and the like, do much to obscure a clear vision of the essential realities.  At a time when there is much unemployment, and much machinery standing idle, it is so clear to common sense that we could produce more of some particular thing without diminishing the supply of other things, that any apparent statement to the contrary may perhaps seem the height of academic pedantry.  But let me ask the reader to consider with an open mind a familiar parallel.  During the recent war there was inevitably much waste and muddle in the utilization of the military resources of the Allies.  Some regiments would be kept inactive for long periods, not for purposes of rest or training, but owing to some defect of organization.  In the manufacture of munitions, an insufficient appreciation of the principles of joint demand led to the piling up of excessive stores of certain materials, which were useless until commensurate supplies of the complementary factors could be obtained.  It is unnecessary to multiply examples.  The waste of both man-power and material was immense.  But the allocation of these resources between, for instance, the various theaters of war was none the less a very real problem, which gave rise to much engrossing controversy.  It was an axiom that the more resources you employed in Mesopotamia or in Palestine, the less resources remained available for France.  No one thought of maintaining that, as long as there was any waste of these resources, so long as there remained any men to be “combed out” of unessential industries, you could pour troops and munitions into Salonika without stopping to consider the needs of other theaters of war.  Such a notion would have been clearly imbecile, for the sufficient reason that the sending of armies to Salonika would do nothing in itself to secure (however much it might incidentally stimulate) the more efficient use of the resources which remained.