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 5: Mill: Trade, Uneven Development, and Perpetual Overflow of Capital from England

P. Sai-wing Ho

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


5.1 INTRODUCTION l While Torrens is commonly treated as a 'minor figure' in the mainstream interpretation of the history of international trade theories, John Stuart Mill, as noted in section 2.2 above, is highly esteemed because of the contributions that he made in moving Ricardo's England-Portugal model in the direction of a simple general equilibrium system. Along the way he also introduced a rudimentary demand-supply analysis in the determination of both international and domestic values. 2 These are more than sufficient to ensure an important place for him in that mainstream interpretation. But Mill brought more. He is regarded as having pioneered the analysis of the optimal-tariff case for trade protection, although credit here is sometimes shared with Torrens. Last, but not least, he cogently expressed the infantindustry case for trade protection, a subject which will be further examined in section 6.4 in the following chapter. 3 These recognitions, however, have only focused on those contributions of his which are related to mainstream trade theories. Can one argue with equal force, as was done in the case of Torrens in Chapter 4 above, that the other contributions of Mill have been ignored because the original context of his discussion has been swept aside? There are some difficulties here because that original context of discussion, while basically Ricardian, has many 'new' elements added to it. These, to borrow an expression from Bharadwaj (1978), were to pave the way for Marshall and others to 'subvert classical analysis,.4 It is then not...

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