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Foreign Trade

  • David Reisman
Chapter
Part of the Great Thinkers in Economics book series (GTE)

Abstract

Adam Smith said that the exchange between nations would rationally be governed by absolute advantage, Ricardo by comparative advantage. Malthus was on the side of Smith. Malthus rejected mercantilism in favour of free trade that maximised the sum of consumer satisfactions. He said that a lower price is only one of the gains from trade. There was also the exploitation of a unique advantage and the faster growth that resulted from diversification and catch-up. Beggar-thy-neighbour policies could, however, negate the global benefits if countries were attempting to dump their exports without also creating a demand for their trading partners’ products. Malthus believed that foreign trade could go too far. The home market must remain the principal source of demand.

Keywords

Foreign vent Credit Ricardo Capital 

References

By T. R. Malthus

  1. (1803 et seq. [1989]). An Essay on the Principle of Population: Or a View of Its Past and Present Effects on Human Happiness, with an Inquiry into Our Prospects Respecting the Removal of the Evils Which It Occasions (2nd edition, 1803; further editions in 1806, 1807, 1817, 1826) (abbreviated as SE I and SE II), 2 vols., ed. by P. James. Cambridge: Cambridge University Press.Google Scholar
  2. (1820 [1989]). The Principles of Political Economy (abbreviated as PR), ed. by J. Pullen. Cambridge: Cambridge University Press.Google Scholar
  3. (1836 [1989]). The Principles of Political Economy: The Alterations to the First Edition (abbreviated as PR II), ed. by J. Pullen. Cambridge: Cambridge University Press.Google Scholar

Secondary Literature

  1. Mill, J. (1808). Commerce Defended. London: C. and R. Baldwin.Google Scholar
  2. Ricardo, D. (1821 [1951]). Principles of Political Economy and Taxation. In P. Sraffa & M. Dobb (Eds.), The Works and Correspondence of David Ricardo (Vol. I, 11 vols.). Cambridge: Cambridge University Press.Google Scholar
  3. Smith, A. (1776 [1961]). The Wealth of Nations (E. Cannan, Ed., 2 vols.). London: Methuen.Google Scholar

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • David Reisman
    • 1
  1. 1.Nanyang Technological UniversitySingaporeSingapore

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