Early Thoughts on Inequality and Domination by Trade

Abstract

Although classical economists always stressed the harmoniously beneficial effects of free trade, hints and remarks on exploitation, domination, and inequality of exchange can be found. Adam Smith (1976, p. 594) admitted that ‘exclusive trade’ gives ‘evident advantages’ to the metropolitan country but argued nevertheless fiercly against mercantilism and the monopoly of colonial trade. He argued that it would be detrimental to the colonies, all other nations and even to the ‘mother country’ in the end, ‘like all other mean and malignant expedients of the mercantile system’ (Smith, 1976, pp. 610f).