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62 Economics in One Lessonthat they pay for the imported sweater they help employment—as theAmerican manufacturer no doubt predicted—in the sweater industryin England. With the $5 left over they help employment in any numberof other industries in the United States.But the results do not end there. By buying English sweaters theyfurnish the English with dollars to buy American goods here. This, infact (if I may here disregard such complications as multilateralexchange, loans, credits, gold movements, etc. which do not alter theend result) is the only way in which the British can eventually make useof these dollars. Because we have permitted the British to sell more tous, they are now able to buy more from us. They are, in fact, eventuallyforced to buy more from us if their dollar balances are not to remain perpetuallyunused. So, as a result of letting in more British goods, wemust export more American goods. And though fewer people are nowemployed in the American sweater industry, more people areemployed—and much more efficiently employed—in, say, the Americanautomobile or washing-machine business. American employmenton net balance has not gone down, but American and British productionon net balance has gone up. Labor in each country is more fullyemployed in doing just those things that it does best, instead of beingforced to do things that it does inefficiently or badly. Consumers inboth countries are better off. They are able to buy what they wantwhere they can get it cheapest. American consumers are better providedwith sweaters, and British consumers are better provided withmotor cars and washing machines.3Now let us look at the matter the other way round, and see the effectof imposing a tariff in the first place. Suppose that there had been no tariffon foreign knit goods, that Americans were accustomed to buying foreignsweaters without duty, and that the argument were then put forwardthat we could bring a sweater industry into existence by imposing a duty of $5 onsweaters.There would be nothing logically wrong with this argument so faras it went. The cost of British sweaters to the American consumer