Rethinking Trade and Commercial Policy Theories

Rethinking Trade and Commercial Policy Theories

Development Perspectives

P. Sai-wing Ho

This controversial book offers a unique approach to rethinking the trade and development literature and will therefore strongly appeal to researchers, academics, and students of trade and development as well as those involved in the history of economic thought.

Chapter 3: Smith and Ricardo: Trade and Uneven Development

P. Sai-wing Ho

Subjects: development studies, development economics, economics and finance, development economics, international economics


3.1 INTRODUCTION One corollary that follows from the discussion in section 2.1 is that, for a model to be capable of analysing the changing impact of trade on various countries' progress, it must accommodate development into its analysis. To do so, what matters is perhaps not so much which specific inter-country difference is assumed to begin with. Rather, it is the structure of the underlying theoretical framework within which an inter-country difference is rooted that is relevant. It is with this in mind that this and the following two chapters attempt to reinterpret the classical economists' trade (and in the case of Torrens and Mill, trade and investment) theories within a simple framework of capitalist development. At the risk of oversimplifying their differences, one can suggest that the classical economists were all interested in studying the capitalist growth and development process, especially that in England. 1 They did put different emphases on the factors which pertain to that process so that when they extended their analyses to the international context, they made different contributions to a better understanding of growth, development, and trade. Nevertheless, because of their common interest in examining that process, and because of the strong influence which Smith and Ricardo had exerted on Torrens and Mill, their analyses can neatly be stitched together within a framework of their simple conception of capitalist development. The resulting theory comprises what Myint (1958) has labelled as Smith's 'productivity theory', Ricardo's argument against the Com Laws, Torrens's advocation of commercial reciprocity...

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