ABSTRACT

This chapter presents a brief reassessment of the main features of Ricardo's views on foreign trade. It concerns in particular the method of analysis and some questions pertaining to the (in)validity of the labour theory of value at the international level. The chapter analyses whether, in Ricardo's opinion, there are significant differences between domestic and international activities. It deals with other important points such as the determination of the so-called international prices and the nature of specialisation, the characteristics of an equilibrium, and the nature and impact of destabilising shocks – all points showing the systematic interaction, in Ricardo's approach, of real and monetary phenomena. Ricardo's presentation of the beneficial character of international trade may entail an implicit polemical stance against various eighteenth-century restatements of the theory of the balance of trade in the guise of a balance of labour. Foreign trade is neither superior nor inferior to domestic trade as regards the basic variables of a country's economic activity.