Critical Thinking

Schumacher (2012) and Palley (2008) Name Institutional affiliation Schumacher (2012) and Palley (2008) a Comparison Introduction The articles by Reinhard Schumacher and Thomas Palley discuss international trade from the perspectives of a classical Scottish economist, Adam Smith, and Gomory and Baumol (2000), and Samuelson (2004). Schumacher argue that Smith had the greatest impact on international trade economics, although his ideas have been watered down by deficient interpretation of his Theory of International Trade by dexography rather than more accurate method such as historiography, rational reconstruction and geistesgeschichte. Both articles are in support of international trade. However, the philosophers differ in that, Smith support free trade and higher output while GBS campaigns for trade policies to maximise gains through demand and supply. Smith bases his argument on the economic benefits of division of labour while GBS base their arguments on David Ricardos theory. The two theories are complementary in the contemporary time, and should not be viewed as rivals. Absolute advantage vs. comparative advantage Adam smith is best remembered for his theory of absolute advantage theory published in The Wealth of Nations in 1776. This is the ability of an individual, business, a country to produce goods and services at a