Fifteen years after the Global Financial Crisis: Recessions and Business Cycles in the History of Economic Thought

One conclusion and two explanations: Bentham’s economic analysis of international trade

Sigot Nathalie, PHARE, Univ. Paris 1 Panthéon-Sorbonne

The paper analyses Bentham’s theory of international trade, seeking to demonstrate its consistency with his utilitarianism. Bentham’s principal concern was that restrictions to international trade would result in a loss in social welfare. He would broach this topic in two ways, thus providing two sorts of arguments in favour of trade liberalisation. In his first writing on this topic, his key argument was that economic policies threatened security within the country, by calling into question individual property rights. When he returned to the issue almost thirty years later, his perspective had changed, albeit not his conclusions regarding the harmful consequences of such restrictive policies: now his reasoning was based on a logic that appears similar to that of the surplus analysis. Related to the issue of security is also the price of subsistence goods: Bentham paid attention to the policies that should be applied to corn, which was the primary food source for people at the time. However, this safety imperative led him to hesitate regarding the international trade policy to be pursued for corn. I conclude by comparing Bentham’s arguments for free trade with Smith’s and Ricardo’s.

Area: Eshet Conference

Keywords: J. Bentham ; Theory of International Trade ; Liberalism ; Surplus analysis.

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