Early Trade Theories
1.Mercantilism 重商主義
Mercantilism is the economic thought that exist in 16-18s.The central of Mercantilist thinking include:重商主義盛行於16-18世紀的歐洲。
1.The country’s wealth is reflected in a country’s holding of precious metals.
一個國家的富有是看其擁有的金銀數量
2.World’s resources are static, which means economic activity is a zero-sum game.
世界上的資源是個靜態的,經貿活動是一零和遊戲
3.Economic system is consist of three component: manufacturing sectors, rural sector and foreigner colonies.
經濟體系由三個部門組成，製造部門、內陸及國外殖民。
4.Merchant class is the most critical group to the successful functioning of economic system.
商人是經濟體系中最重要的階層。
5.Labor theory of value: commodities are valued relatively in terms of their relative labor content.
勞動價值說：產品的價值有勞力的投入來衡量。商品價值量由生產這種商品的社會必要勞動時間決定。
6.Pursue trade surplus and disgust trade deficit.
追求貿易順差。
7.Being bullionism, the role of government is to subsidize export of good but limit the export of silver and gold, also, control the wage and encourage birth.
政府補貼出口關稅進口，限制黃金流出，控制薪水且獎勵生育。
Paradox of mercantilism : rich nations in mercantilist world would cause large number of very poor people.矛盾在於，重商主義所謂的富有國家，創造出許多貧窮的人民。
2.David Hume and Adam Smith
In the early 18s, the idea of mercantilism has changed. By the late 18th, Classical writers such as David Hume and Adam Smith started to challenge the basic tenets of Mercantilism.
2.1 The Price-Specie-Flow Mechanism 物價現金流動機制
David Hume’s Price-Specie-Flow was the first attack on Mercantilism. Mr.Hume mentioned that, it’s not impossible for a nation to continue to maintain a positive balance of trade indefinitely.
David Hume argued that the accumulation of gold by trade surplus would cause an increase in money supply, an increase in money supply would lead to increase in price and wage which make the nation less competitive on export.
The Classical price-species-mechanism rest on some assumptions:
支持的前提假設
1.formal link between money and price, provided in Quantity Theory of Money 金錢與物價的正向關係-貨幣數量理論
MV= PY
2.Demand of traded goods are price elastic 交易貨物有價格彈性
3.Perfect competition in both good and factor market.完全競爭市場
To establish the relationship between price behavior and wage behavior.
4.Gold standard exits. 越多黃金，越多貨幣供給
All currencies are pegged to gold.
2.2 Adam Smith and Invisible Hand
Adam Smith perceived that a nation’s wealth is reflected in its productive capacity(ability to produce final goods and service), not it’s holding of precious goods.
亞當斯密認為國家的富有取決於其生產能力。
Self-interest would lead individuals to specialize in and exchange goods based on their own special ability. The proper government is to make market free with a laissez-faire policy.
自利會帶領大家從事專業化工作並與他人交換，政府的任務是無為而治，使市場自由。
Countries should specialize in good or service that they have absolute advantages. The labor Theory of value is employed and the exchange ratio reflects the opportunity cost.
國家應該生產有絕對利益的產品，可以以較少投入生產同樣產品代表有絕對利益。
