ABSTRACT
The question of the appropriate attitude of the nation toward the opportunities and hazards posed by international trade was one of the original concerns of political economy. Perhaps the first great debate in economics, between the classical economists and the mercantilists, was a debate over the appropriate policy of the state vis-à-vis trade with other countries. In simple terms, this debate concerned the wisdom of free trade as opposed to restrictions on the movement of goods across borders. For example, when the United States opens its economy to free trade, does it lose markets to others and thus diminish its citizens’ welfare, or does the scope of its buying and selling activities expand, improving efficiency and raising the level of welfare of the population? Does opening the U.S. economy to trade facilitate or retard the process of economic growth and development? If we envision a world without political restrictions on trade across national boundaries, will all (or most) nations benefit, or will only a few benefit while others lose out? Do the nations that make up the global economy have a harmony of interests best served by free trade, or do economic interests conflict so that political guidance and restrictive policies are needed to secure the national interest?
