“They each ... furnish a centre about which market values gravitate; but there is this difference between the two cases: The centre furnished by Cost of Production stands related to the fluctuations of the individual commodity; that supplied by Reciprocal Demand to the average fluctuations of considerable aggregates of commodities. A reduction in the cost of producing a hat will lower its price.... But an alteration in the reciprocal demand of two trading nations (or of two non-competing groups) will act upon the price not of any commodity in particular but of every commodity which enters into the trade. What such an alteration necessitates is a change in the _average_ terms on which the trade is carried on; but _it decides nothing as to the details by which the required average shall be attained and maintained_.... In the interchanges of non-competing domestic groups, what the reciprocal demand of the groups determines is the average relative level of prices within each group; the distribution of price among the individual products being regulated by the cause which governs value within it, namely, cost of production.”[190] It develops that the law of reciprocal demand fails completely of being a principle coördinate with, and similar to, that of costs. Instead of ruling exchange values in the same way as cost of production, only in another field, it turns out that the force of reciprocal demand is incapable of determining the value of any single good. The principle of reciprocal demand fails signally of fulfilling Cairnes’s promise of a principle other than that of cost, which will provide for a central point of gravitation of inter-group exchange ratios. The purport of the argument of Cairnes is no more than this: the law of reciprocal demand merely requires the general level of international exchange values to be such that in the long run the exports of a nation just discharge its liabilities, or, in other words, that its exports and imports will be led to balance, except for the payment of interest on foreign debts, cost of carriage to foreign ship-owners, _etc._ Cairnes applies the law without changing line or point to interchange between non-competing groups.