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 6: The Mainstream Conception of Spontaneous Structural Changes and its Formulation of the Theory of Commercial Policy

P. Sai-wing Ho

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

Extract

6.1 INTRODUCTION It should be clear from the discussions in Chapters 3 to 5 that Smith, Ricardo, Torrens, and Mill had devoted most of their attention to England's economic well-being, though the intensity of that devotion varies, with Torrens showing in his works the strongest nationalistic sentiments. This preoccupation with England implies, as was also argued in those chapters, a neglect of the development of its trading partners. As Myrdal remarked, 'When ... they [the classical economists] recommended free trade as a general policy, it was not on the ground that free trade would be to the good of the world but because it would be in the interest of their own country' ([1957] 1963, p. 146).1 This leading chapter in Part II of this book purports to show that the neglect is coupled with a simple-minded belief or faith in how structural changes in the food and raw produce (or primary) exporting countries would spontaneously take place under free trade conditions. This is contained in section 6.2, which also illustrates how that faith has been happily inherited by the mainstream economists. The four classical economists re-examined in the earlier chapters all opposed trade protection as an effort to promote structural changes and these oppositions are represented in section 6.3. Among them, Mill was the one who accepted the so-called infant-industry argument for such protection. Section 6.4 explores the possible roots of his endorsement of this case and closely scrutinises it (the eridorsemerit). The economicsmainsrream has portrayed Hamilton and List...

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