Essay Database

Adam Smith and the Classical Economists blasted merchants who lobbied for, and governments that surrendered to, demands for protection from foreign producers. They believed that international trade was an efficient mechanism for allocating resources and for increasing national welfare, regardless of the level of a country's economic development. Also, that any impediments to trade would detract from the gains from trade and therefore harm a country's economy. Adam Smith proved this by developing the theory …

…the theory of absolute advantage is that nations should import only those products in which another country has an absolute advantage. Adam Smith and all Classical Economists opposed any kind of restrictions on international trade. They strongly believed that international trade effectively increased the size of the market for any given country, allowed for more refined specialization, created an international division of labor, and thereby benefited all countries by increasing the world's productivity and output.