Table of Contents

Handbook on the History of Economic Analysis Volume III

Handbook on the History of Economic Analysis Volume III

Developments in Major Fields of Economics

Edited by Gilbert Faccarello and Heinz D. Kurz

Volume III contains entries on the development of major fields in economics from the inception of systematic analysis until modern times. The reader is provided with succinct summary accounts of the main problems, the methods used to address them and the results obtained across time. The emphasis is on both the continuity and the major changes that have occurred in the economic analysis of problematic issues such as economic growth, income distribution, employment, inflation, business cycles and financial instability. Each Handbook can be read individually and acts as a self-contained volume in its own right. It can be purchased separately or as part of a three-volume set.

Chapter 25: International trade

Andrea Maneschi

Subjects: economics and finance, history of economic thought


International trade is one of the oldest forms of globalization. Its motivations, advantages and possible drawbacks have been speculated on in the Western world for centuries by philosophers, businessmen, theologians and economists. The Greek philosophers wrote about how trade, within and among city-states, affected the welfare of their citizens. Aristotle among them advocated autarky or self-sufficiency as an ideal to be pursued by city-states. Others viewed trade as the only way a state can obtain the goods it lacks, and recognized that needed imports require exports in exchange. In Plato’s words, in order for a state to create a commodity surplus it can exchange with other states, “home production must not merely suffice for themselves, but in quality and quantity meet the needs of those of whom they have need” (Plato 1963: 371a). Other writers were wary of “unnecessary exchange” and unregulated trade undertaken for the sake of money accumulation rather than the satisfaction of real needs. Aristotle asserted that “states which make themselves marts for the world only do it for the sake of revenue; and if a state ought not to indulge in this sort of profit-making, it follows that it ought not to be an exchange centre of that kind” (Aristotle 1946: 1327a). Rephrasing this in present-day terms, globalization may not be advantageous if it is undertaken purely for the sake of profit! Moreover, while the import of necessities may be justified, the Greeks regarded that of luxury goods with suspicion as it may lead to the corruption of morals.

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