Abstract
Fifty-five years ago John Henry Williams of Harvard University launched a devastating attack on the English classical theory of international trade.1 He criticised the static nature of the theory, the unrealism of its assumptions and its neglect of the interrelations of trade and growth. A theory which assumed fixed quantities of productive factors already existent and fully employed and rules out international factor mobility became merely an exercise in ‘cross-section value analysis’, i.e. a demonstration of static allocative gains. As such it was singularly incapable of dealing with the relation of international trade to ‘the development of new resources and productive forces’ and hence could not offer an explanation for the glaring facts of persistent inequalities of income and structural imbalances among countries. ‘Logically followed through’, said Williams, ‘the classical doctrine of international trade contradicts itself; its conclusions contradict its premises.’2 J. S. Mill was criticised for failure to see (a) ‘the relation of international trade to national economic development spread over time’3 and (b) that specialisation according to comparative advantage was in conflict with the internal mobility assumption. Specialisation for foreign markets freezes the domestic industrial structure and heightens the vulnerability of the economy to external shocks. Smith and, to a lesser extent, Marshall were exempted from this criticism.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Notes and References
John H. Williams, ‘The Theory of International Trade Reconsidered’, Economic Journal (June 1929) (reprinted in American Economic Association, Readings in the Theory of International Trade ed. H. S. Ellis and L. A. Metzler (Philadelphia: Blakisten, 1949)).
Williams, op. cit. p. 263.
See Gottfried Haberler, ‘International Trade and Economic Development’ — The Cairo Lectures, reprinted in Richard S. Weckstein (ed.) Expansion of World Trade and the Growth of National Economies (New York: Harper & Row, 1968) p. 103.
Williams, op. cit. p. 267.
All are reprinted in J. Robinson, Collected Economic Papers, vols 1–5 (Oxford: Blackwell, 1951–79).
Myrdal’s early critique is contained in his book An International Economy (New York, 1956).
A. Emmanuel, Unequal Exchange: The Imperialism of Trade (London: New Left Books, 1972);
S. Amin, Imperialism and Unequal Development (New York: Monthly Review Press, 1977).
André Gunder Frank, Dependent Accumulation and Underdevelopment (London: Macmillan, 1978).
The expression ‘productive powers’ was used by Hamilton as well as by later French writers such as Jean-Antoine Chaptal, Charles Dupin and Louis Say. List adopted the concept from these French economists and acknowledged his indebtedness, but List’s application of the idea was wider than theirs.
See also George Shelton, Dean Tucker and Eighteenth Century Economic and Political Thought (London: Macmillan, 1981) pp. 126–132, and
J. M. Low, ‘An Eighteenth Century Controversy in the Theory of Economic Progress’, Manchester School of Economic and Social Studies, vol. II, no. 3 (Sep 1952).
Josiah Tucker, Four Tracts together with Two Sermons on Political and Commercial Subjects (Gloucester, 1774) Tract 1, p. 30.
Tucker, Four Tracts, op. cit. p. 28.
Idem, p. 47.
Idem, p. 14.
Idem, p. 49.
Scottish Record Office, Karnes Collection — Tucker to Karnes, 6 July 1758.
Tucker, Four Tracts, op. cit., 3rd ed. (Gloucester, 1776) p. VII. Also British Library Add. MS. 4319, Tucker to Dr Birch, 19 May 1760.
See Samuel McKee Jr (ed.) Papers on Public Credit, Commerce and Finance by Alexander Hamilton (New York: Columbia U.P., 1934).
For analyses of the Report see Joseph Dorfman, The Economic Mind in American Civilization 1606–1865 (New York: Viking Press, 1946) vol. 1, pp. 408–11, and
Louis M. Hacker, Alexander Hamilton in the American Tradition (New York: McGraw-Hill, 1957) pp. 171–83, 132–37, 147–54, 162–4.
Samuel McKee Jr (ed.) Hamilton’s, Papers, op. cit. p. 227.
George C. Fitzpatrick (ed.) The Writings of George Washington (Washington, D.C.: 1931–44) vol. 30, p. 186.
Hamilton’s Papers, pp. 197–8, 228–9.
The Thoughts on Political Economy was the first systematic treatise on economics by an American writer. The Elements was an enlarged second edition of this work.
Raymond, Elements of Political Economy (Baltimore: Johns Hopkins U.P., 1823) vol. II, pp. 225–6, 231–2.
Ibid. pp. 245–6.
For Rae’s writings see the reprint in R. Warren James, John Rae: Political Economist, 2 vols (Toronto: Univ. of Toronto Press, 1965).
For a recent appreciative reassessment of Phillips’s work see James H. Thompson, ‘Willard Phillips: A Neglected American Economist’, History of Political Economy, vol. 16, no. 3 (Fall 1984) pp. 405–21.
Henry Carey (1793–1879) wrote extensively on economics. His major work (in 3 vols) was Principles of Social Science (Philadelphia, 1858–9).
His protectionist ideas were first developed in Past, Present and Future (1848) and
further elaborated in The Harmony of Interests, Agricultural, Manufacturing and Commercial (Philadelphia, 1851).
Carey, Harmony of Interests, p. 72.
Friedrich List (1789–1846) was born in the town of Reutlingen in Wurttemberg (south Germany) just a few days before the French Revolution broke out. He worked as a civil servant for twelve years in his native state of Württemberg until he was appointed at the age of 28 to a newly created Chair in Public Administration at the University of Tübingen. He was forced to resign his professorship on account of his political activities and involvement with the Hendels- und Gewerbsverein. In 1819 he was elected to the lower chamber of the Württemberg Diet as a representative of Reutlingen. But again, his liberal reforming agitation antagonised the reactionary ruling authorities and List was expelled from the Assembly and sentenced to ten months’ hard labour. This led to his voluntary exile, first in Paris and later in the United States until his return to Germany in 1830 and the continuation of his work on behalf of German economic unity.
See Charles Patrick Neill, Daniel Raymond, an early Chapter in the History of Economic Theory in the United States (Baltimore: Johns Hopkins U.P., 1897) p. 57.
Margaret E. Hirst, Life of Friedrich List (New York, 1909) pp. 114–15.
W. O. Henderson, Friedrich List: Economist and Visionary 1789–1846 (London: Frank Cass, 1983) p. 155.
See William Notz, ‘Friedrich List in America’, American Economic Review, vol. 16, no. 2 (June 1926) pp. 248–65.
See also Edgar Salin and Rene Frey, ‘Triedrich List’ in Encyclopedia of the Social Sciences, vol. 9 (New York: Collier-Macmillan, 1968) pp. 409–12, and ch. 1
‘Economic Nationalism: Friedrich List, Germany’s Handicapped Colbert’ in Louis L. Snyder, Roots of German Nationalism (Bloomington, Ind. U.P., 1978) pp. 1–34.
List, Werke, vol. VI, pp. 153–4.
List, National System, pp. 124–6.
Ibid. pp. 138–9.
Ibid. p. 139 n.
List, Outlines of American Political Economy (1827) in Werke, vol. II p. 105.
List, National System, p. 158.
Ibid, p. X.
List, Outlines (1827) Letter II.
Quoted in K. W. Rowe, Matthew Carey: A Study in American Economic Development (Baltimore: Johns Hopkins U.P., 1933) p. 48.
List, Werke, vol. VI p. 366. List’s discussion at this point and elsewhere suggests the hypothesis that dominant countries would always support an open liberal world-trading system, while laggards would prefer a controlled system. The evidence indicates that this is indeed the case.
List, National System, p. 46.
Ibid. p. 61.
Ibid. p. 61.
S. Sideri, Trade and Power: Informal Colonialism in Anglo-Portuguese Relations (Rotterdam: Rotterdam U.P. 1970) p. 13.
See Charles Gide, Cours d’economie politique (Paris: Sirey, 1931) part II p. 47;
Eduard Heiman, History of Economic Doctrines (London: Oxford U.P., 1945) p. 132;
Rudolph Hilferding, The Economic Policy of Finance Capital edited with an Introduction by Tom Bottomore (London: Routledge & Kegan Paul, 1981) p. 304.
List, National System, p. 75.
Lionel Robbins, The Theory of Economic Development in the History of Economic Thought (London: Macmillan, 1968) p. 116.
E. H. Carr, The Soviet Impact on the Western World (London, 1946) p. 23.
Joan Robinson, Collected Economic Papers (Oxford: Basil Blackwell) vol. V, p. 134.
Myint, Economica op. cit. (Sep 1977).
Collected Economic Papers, vol. I, p. 205.
Lionel Robbins, The Theory of Economic Policy in English Political Economy (London: Macmillan, 1952) p. 10.
List, National System, p. 323.
Ibid. p. 324.
Wealth of Nations (ed.) R. H. Campbell and A. S. Skinner (Oxford: Clarendon Press, 1976) p. 539.
List, National System, p. 319.
Ibid. p. 350.
Viner’s review of vol. IV of List’s collected works in Journal of Political Economy (June 1929), reprinted in J. Viner, The Long View and the Short, Studies in Economic Theory and Policy (Glencoe I11.: The Free Press of Glencoe, 1958) pp. 389–91.
A. Anikin, A Science in its Youth (Pre-Marxian Political Economy). (Moscow: Progress Publishers, 1975) p. 334.
‘List on the Principles of the German Customs Union. Dangers to British Industry and Commerce’, Edinburgh Review no. CLII (July 1842) pp. 521–2.
The Times, 16 Jan 1847, p. 4.
Travers Twiss, View of the Progress of Political Economy Since the 16th Century (London, 1847) p. 248.
Marshall, Principles, 8th ed. (London, 1936) p. 727. Marshall did, in fact, make a special trip to the United States to study the practical effects of the theories of Carey and the other American protectionists.
Schumpeter, History of Economic Analysis, op. cit., p. 504.
Dorfman, op. cit. p. 584.
For an image of List as ‘the only truly cosmopolitan German citizen of his age’ who foresaw and welcomed a united Europe see E. N. Roussakis, Friedrich List, the Zollverein and the Unity of Europe (Bruges, 1968) p. 147.
Kohn was one of the pioneer investigators of nationalism. The remark is contained in his book The Idea of Nationalism (New York, 1944) p. 322.
Snyder, op. cit. p. 34. For an image of List as ‘the only truly cosmopolitan German citizen of his age’ who foresaw and welcomed a united Europe see E. N. Roussakis, Friedrich List, the Zollverein and the Unity of Europe (Bruges, 1968) p. 147.
Gustav Schmoller, in ‘Verhandlungen des Vereins für Sozialpolitik’, Schriften des Vereins für Sozialpolitik (Berlin, 1902) p. 270.
Author information
Authors and Affiliations
Copyright information
© 1987 Leonard Gomes
About this chapter
Cite this chapter
Gomes, L. (1987). Free Trade and the National Economists. In: Foreign Trade and the National Economy. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-08992-5_7
Download citation
DOI: https://doi.org/10.1007/978-1-349-08992-5_7
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-08994-9
Online ISBN: 978-1-349-08992-5
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)