Evaluation of international Business | The Institute of Cost and ...

International trade has a rich history starting with barter system being replaced by Mercantilism in the 16th and 17th Centuries. The 18th Century saw the shift towards liberalism. It was in this period that Adam Smith, the father of Economics wrote the famous book ?The Wealth of Nations? in 1776 where in he defined the importance of specialization in production and brought International trade under the said scope. David Ricardo developed the Comparative advantage principle, which stands true even today.
The 19th century beginning saw the move towards professionalism, which petered down by end of the century. Around 1913, the countries in the west say extensive move towards economic liberty where in quantitative restrictions were done away with and customs duties were reduced across countries. All currencies were freely convertible into Gold, which was the international monetary currency of exchange. Establishing business anywhere and finding employment was easy and one can say that trade was really free between countries around this period.
Mercantilism
The first reasonably systematic body of thought devoted to international trade is called ?mercantilism? and emerged in seventeenth and eighteenth century Europe. An outpouring of pamphlets on economic issues, particularly in England and especially related to trade, began during this time. Although many different viewpoints are expressed in this literature, several core beliefs are pervasive and tend to get restated time and time again. For much of this period, mercantilist writers argued that a key objective of trade should be to promote a favorable balance of trade. A ?favorable? balance of trade is one in which the value of domestic goods exported exceeds the value of foreign goods imported. Trade with a given country or region was judged profitable by the extent to which the value of exports exceeded the value of imports, thereby resulting in a balance of trade surplus and adding precious metals and treasure to the country?s stock. Scholars later disputed the degree to which mercantilists confused the accumulation of precious metals with increases in national wealth. But without a doubt, mercantilists tended to view exports favorably and imports unfavorably.

Evaluation of international Business

For centuries, trade policy has the subject of an intense and spirited debates. Since the beginning of trade between nations, that trade has brought general economic benefits but has also harmed specific domestic interest groups. Even during periods of economic growth, one hears complaints from some domestic firms about the damaging effects of foreign competition on their industry. Economic analysis has provided a systematic framework for examining the underlying issues of international trade. Economics provides a way of distinguishing the self-interested claims that trade is harmful to some groups from other arguments that certain trade policies might benefit the nation as a whole.

Although economists have consistently stressed the overall gains from international trade, and in recent years have stressed the measurement of those gains, the debate over trade policy is a never ending one. When it comes to free trade, as Adam Smith once opined, ?Not only the prejudices of the public, but what is much more unconquerable, the private interests of many individuals, irresistibly oppose it.

Source: http://icmab.net/briefly-describe-the-evaluation-of-international-business/

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