Chapter 3.3: Free trade liberalism

Question 1

What is David Ricardo known for?

Answer 1

theory of comparative advantage

Question 2

who is know for the theory of comparative advantage?

Answer 2

David Ricardo

Question 3

What did 19th century liberals strengthened free trade?

Answer 3

Peace through trade,

the belief that free trade would guarantee peaceful relations between states

Question 4

Describe David Ricardo’s comparative advantage

Answer 4

• all nations can benefit from international trade even if no absolute advantage
• as long as they willing to specialise in the goods they have comparative advantage in, they can improve their welfare

Question 5

Which liberal theorists believed that free trade would promote not only wealth but peace?

Answer 5

Richard Cobden and John Bright

Question 6

How does free trade helps in peace and cooperation?

Answer 6

• free exchange of goods promote wealth creation
• reduce desire in nations to build empires and use military force for economic gain
• brings out common interest and would take away the reason for pursuing economic nationalism

Question 7

What are the two fundamental objections that free trade helps peace and cooperation as advocated by Richard Cobden?

Answer 7

E.H Carr

• benefits mainly powerful and economically advanced nations
• ideology of rich and powerful

World War 1

• despite high degree of economic interdependence and integration
• resurgence of mercantilism and military expansionism contradicts this