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Classical Theories of International Trade
Содержание
- 1. Classical Theories of International Trade
- 2. Lecture 2 Evolution of Trade TheoriesMercantilismAbsolute AdvantageComparative
- 3. Lecture 2OutlineIntroduction to MercantilismHistorical Background of MercantilismMain Points Mercantilist ThinkersConclusion
- 4. Lecture 2What is Mercantilism?the theory that a
- 5. Lecture 2Mercantilism had no systematic, comprehensive, consistent
- 6. Lecture 2The primary objective of Mercantilism was
- 7. Lecture 2When?16th – 18th C Where? Western Europe, particularly England and France
- 8. Historical Background of MercantilismGenerally, Mercantilism is associated
- 9. The decline of feudalism was influenced by
- 10. Lecture 2rise of markets and fairsgunpowderimprovements in
- 11. Lecture 2 The Decline of
- 12. Lecture 2 Reduction in PopulationPopulation of England
- 13. Lecture 2Less people with increased agricultural production
- 14. Lecture 2Medieval BreakdownFeudal system imposed
- 15. Lecture 21500s and 1600sInvention of printing with
- 16. Lecture 2Main Points of Mercantilism:Economics as applied
- 17. Lecture 2Economics as statecraft not analysisTendency to
- 18. Lecture 2Two Ways to Increase a Nations
- 19. Lecture 2Mercantilism = unfair or unbalanced tradeMercantilism
- 20. Lecture 2Triangular Trade Europeans transported manufactured goods to the west coast of Africa
- 21. Lecture 2 Traders then exchanged these goods
- 22. Lecture 2 Merchants then bought sugar, coffee,
- 23. Lecture 2 Long Term Resultsglobal trade
- 24. Lecture 2It measures the wealth
- 25. Lecture 2Wealth (Gold) can be accumulated by
- 26. Lecture 2RecapFeudal ideology significantly anti-capitalist, anti-financier. ButMerchants
- 27. Lecture 2Mercantilist ThinkersJosiah ChildBernard MandevilleDavid HumeVon HornickThomas Mun
- 28. Lecture 2Niccolo’ Machiavelli (1469-1527) Author of The
- 29. Lecture 2David HumeDavid Hume questioned mercantilist assumptions
- 30. Lecture 2 He thought that accumulating precious
- 31. Lecture 2Thomas MunEngland’s Treasure by Foreign Trade
- 32. Lecture 2 - Customs duties on imports
- 33. Lecture 2Mercantilism: ConclusionForeign trade as the source
- 34. Скачать презентанцию
Lecture 2 Evolution of Trade TheoriesMercantilismAbsolute AdvantageComparative Advantage Factor proportion TradeInternational Product CycleNew Trade TheoryNational Competitive Advantage
Слайды и текст этой презентации
Слайд 2Lecture 2
Evolution of Trade Theories
Mercantilism
Absolute Advantage
Comparative Advantage
Factor proportion
Trade
Слайд 3Lecture 2
Outline
Introduction to Mercantilism
Historical Background of Mercantilism
Main Points
Mercantilist Thinkers
Conclusion
Слайд 4Lecture 2
What is Mercantilism?
the theory that a country’s power depended
mainly on its wealth to build strong navies and purchase
vital trade goods.
Слайд 5Lecture 2
Mercantilism had no systematic, comprehensive, consistent treatise, no leader,
common method, or theory.
Each “mercantilist" sought advantage for a
specific, trade, merchant, joint-stock company or social group."Protectionism" is often seen as a primary characteristic of Mercantilism.
Слайд 6Lecture 2
The primary objective of Mercantilism was to increase the
power of the nation state.
One of the important aspects
of national power or strength was wealth that was equated with specie. The states that followed a policy of mercantilism tended to see trade, colonialism and conquest as the primary ways of increasing wealth.
Слайд 8Historical Background of Mercantilism
Generally, Mercantilism is associated with the rise
of the “Nation state.”
Feudal institutions were weakened by the increasing
use of money and a greater reliance on exchange within the economy.The Protestant Reformation weakened the role of the church and consequently the civil role of the state was expanded
There was a rise of Humanism (the concern for well-being of humans in the short term).
Lecture 2
Слайд 9
The decline of feudalism was influenced by changes in technology
“enclosure
movement” and the commercialization of agriculture
Increasing use of money in
the economy reduced the role of barter and reciprocity, people wanted to sell or work for moneynailed horse shoe, harness, stirrup, horse collar, heavy plough
rise of mechanical power [water, wind] used in textile and mining
urbanization
Lecture 2
Слайд 10Lecture 2
rise of markets and fairs
gunpowder
improvements in navigation, shipping, transport
moveable
type, (standardization, mass production and marketing of books in a
variety of languages),mechanical clocks, mechanisms, instruments,
Increased skills of craftsmen who made machines
Слайд 11
Lecture 2
The Decline of Feudalism and the Plague
The "Black
Death" of 1346-61
restricted trade
reduction in population
Increased production of wool; need
industry and commerce to process and sell wool and textiles.strengthening of guilds leads to an emphasis on trade
Слайд 12Lecture 2
Reduction in Population
Population of England fell by about
1.5 million (out of a population of 3.5 to 5
million in 1346).Result was more money per person but also more animals, land and goods per person, prices fell.
Labour shortage pushed wages and earnings up.
Слайд 13Lecture 2
Less people with increased agricultural production (some problems with
harvests and animals dying, but on average diets improved.)
Labour became
more mobile, masters on feudal estates had to "hire" labour. This led to the rise of "free" labour. If you couldn't hire workers, then you rent the land to others. Small farms with limited labour shifted to pasture and sheep rather than tilling the soil.
Слайд 14
Lecture 2
Medieval Breakdown
Feudal system imposed many imposts upon merchants/tradesmen/moneylenders;
but social change went against feudalism:
Growth of specialist manufactures in
towns: the guildsGrowth of specialist traders between nations: the Mercantilists
Revolt against religious strictures against merchants/lending, church hypocrisy
Religious revolts: beginnings of Protestantism bound up with growth of merchants/financiers
A new ideology/analysis struggled for dominance: Mercantilism
Слайд 15Lecture 2
1500s and 1600s
Invention of printing with movable type gave
rise to economic literature written by lay people
Thomas Wilson (1525-81)
wrote Discourse on Usury (1572)Charles Dumoulin (Latinized as Molinaeus) wrote Treatise on Contracts and Usury (1546)
Denied that interest was forbidden by divine law
Suggested public regulation of lending and interest
Inflow of gold and silver from the New World
Слайд 16Lecture 2
Main Points of Mercantilism:
Economics as applied statecraft
Promotion of National
wealth and power
Importance of trade surpluses
Trade surplus leads to a
net gold inflow, and thereby to greater national wealth and powerEncourage domestic production and exports, discourage imports
Слайд 17Lecture 2
Economics as statecraft not analysis
Tendency to see gold and
“treasure” as constituting national wealth
Emphasis on balance of trade surpluses
Emphasis
on maximizing productivity and outputRole of government in encouraging domestic manufacturing and exports while minimizing imports
Link between money supply and prices
Слайд 18Lecture 2
Two Ways to Increase a Nations Wealth
obtain as
much gold and silver as possible
establish a favorable balance of
trade, in which it sold more goods than in bought
Слайд 19Lecture 2
Mercantilism = unfair or unbalanced trade
Mercantilism Explained
colonies existed for
the benefit of the Mother Country
Source of Raw materials
= cheap shipped to M. C. to be turned into finished goods
Finished good shipped to Colony = expensive
profit goes to M. C.
Pass laws forbidding colonies from producing their own goods
Слайд 20Lecture 2
Triangular Trade
Europeans transported manufactured goods to the west
coast of Africa
Слайд 21Lecture 2
Traders then exchanged these goods for captured Africans
who were then sold in the Americas
Слайд 22Lecture 2
Merchants then bought sugar, coffee, and tobacco in
the West Indies and sailed back to Europe to sell
these products.
Слайд 23Lecture 2
Long Term Results
global trade routes shifted over
time
the old silk routes declined
West Asia and the Islamic world
were displaced as the centralized location of global tradethe Atlantic and Pacific sea routes become the new focus of global trade
Слайд 24
Lecture 2
It measures the wealth of nation by the
size of its accumulated treasures i. e. gold & silver.
Focus
is international trade, rather than internal commerceNationalism essential: promote nation by gain from trade
Trade imbalance the object: export more than import
Слайд 25Lecture 2
Wealth (Gold) can be accumulated by encouraging exports and
discouraging imports.
This theory aims at creating trade surplus.
Limitations:
Accumulation of wealth
takes place at the cost of another trading partner; a win-lose game & a zero-sum game for global wealth (international trade).Supported only in short run.
Overlooks other resources such as its natural resources, manpower & its skill levels, capital, etc.
Used by colonial powers as a means of exploitation and not development.
Слайд 26Lecture 2
Recap
Feudal ideology significantly anti-capitalist, anti-financier. But
Merchants essential
“Exotic” commodities from
other lands
Trade between different fiefs/kingdoms
Finance essential
Merchant activity
Wars
Merchants tolerated (but controlled,
taxed)
Слайд 28Lecture 2
Niccolo’ Machiavelli (1469-1527)
Author of The Prince, 1512
Machiavelli's work is
associated with the rise of nation state
Morality was necessary as
guide to private actionsPolitics should be free from ethical or theological influence
general postulate about human nature, self- interest
Слайд 29Lecture 2
David Hume
David Hume questioned mercantilist assumptions in his essays.
He denied that money and gold were equivalent to wealth.
Instead, they had merely instrumental value.He thought that accumulating precious metals would result in higher prices.
Hume believed that imports as well as exports were beneficial.
He suggested that trade was not equivalent to warfare, since both to the parties to the transaction benefit.
Слайд 30Lecture 2
He thought that accumulating precious metals would result
in higher prices.
Hume believed that imports as well as
exports were beneficial.He suggested that trade was not equivalent to warfare, since both to the parties to the transaction benefit.
Слайд 31Lecture 2
Thomas Mun
England’s Treasure by Foreign Trade (1664)
Mercantilist Programs
- Importance
of trade and the social position of the merchant
-Bring all
unused land into production- Fully utilize natural resources including fisheries
- Reduce consumption of imports, particularly luxuries
- Export goods with inelastic demand—can charge higher prices
Слайд 32Lecture 2
- Customs duties on imports to be consumed
domestically
-Export in own ships
-Encourage distant trade
- make England a
trans-shipment point- Export of bullion permitted, if for purposes of trade (non-bullionist position)
- “Make the most we can of our own”
Слайд 33Lecture 2
Mercantilism: Conclusion
Foreign trade as the source of surplus
No analysis
of production
In practice
Added to feudal imposts on commerce
Created government-sanctioned monopolies
ostensibly
to increase national wealth; butoften in practice enriched favoured individuals
