Economic Theories Of International Free Trade Essay

Throughout the centuries of economic theories, there have always been major disagreements amongst economists. Each believing their theory provides a better explanation or solution to the economic situations the globe finds itself in. The anomaly to these disagreements is the theory, first introduced by Adam Smith, which states that international free trade is in the best interest of the trading countries and the ever globalizing world as a whole. This essay shall compare the views of the great economists; namely Adam Smith and David Ricardo, on their economic theories of international free trade. Over the years of economic development and globalisation, trade has taken place between people and countries. Dating back to the beginning of AD, trade occurred between the Roman Empire, Parthian Empire and the Han Dynasty. During the days of colonisation, the colonised countries would export the raw materials to the colonising countries and import the finished manufactured goods from them. In the modern day, globalised world we live in, international trade occurs between countries companies, peoples and governments by the second (Elena, 2015). There are often restrictions on trade between countries, such as import taxes, to try incentives the population to buy domestically produced goods. Adam Smith, who is considered a pioneer of the great economists, was a Scottish born moral Philosopher, political economist and thought of as a key figure in the Scottish enlightenment. He wasShow MoreRelated Challenging Comparative Advantage Essay1410 Words   |  6 Pagesexplain the benefits of mutual trade (Carbaugh, 2008). Many underlying assumptions of comparative advantage depend on states of economic equilibrium and an absence of economy of scale. In reality, economies are dynamic and subject to innovation and interference; which has led to revised assumptions of return and competition (Krugman, 1987). 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