Adam Smith, Jean-Baptiste Colbert, and Ito Hirobumi economic theories delve into the necessity of laissez-faire in international trade. While Smith believes that countries working together to promote free commerce creates wealth for all, Colbert and Hirobumi argue that free trade is a hindrance to a nation’s prosperity. Smith, Colbert, andHirobumi take different positions towards free trade, and each theoryis different in its philosophical approach towards international trade.

Smith’s book,The Wealth of Nations, systematically analyzes the effect of a free market characterization on international trade. He argues that laissez-faire results in creating the best market outcome for the countries involved. According to Smith, “If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.” (Mifflin 172).The surplus resources and labor within the nation can be redirected to more rewarding endeavors (Mifflin172). Adoption of Smith’s ideas on free international trading will result in wealth creationfollowing a country’s comparative advantage.

On the other hand, Colbert argues thateconomic growth in France depended on material prosperity gained through expansion of international trade and maintenance of favorable trade balance.In his memorandum towards King Louis XIV, Colbert states that “He believed that material prosperity would raise the yield of taxes but that this prosperitywould grow only with a managed economy: that is, with the mercantilistic encouragement ofnative industries and exports and the discouragement of imports from abroad” (Mifflin 1).Therefore, Colbert advocates for the promotion of domestic industry through government regulation of markets, by maximizing the exports of a nation at the expense of other countries.

Ito Hirobumi, a Japanese economist, argues that the custom’s tariff depends on whether the goods are locally produced and the importance of the product to the people. He claims that “One reduces import tariffs on goods that are needed by one’ s own people in order to help keep their prices down. In the case of goods that are produced both at home and abroad one ensures as far as possible that one’ s own people use the domestic products.”(Mifflin 14). Finally, Hirobumi points at Britain’s call for free trade as deceptive, noting that the country foundation and wealth originated from protective tariff practices. Hirobumi economic outlook fosters domestic growth by imposing import tariffs depending on the nation’s production capacity.

Smith, Colbert, and Hirobumi take different approaches regardingfree trade and trade policies in the international market. While Smith advocates for free market trading to promote globalization, it fails to protect a country’s domestic industries from cheaper imports from competing countries. On the other hand, Colbert trade theory protects local productions at the expense of mutually-beneficial international trading and advantages offered by laissez-faire.Arguably, his approach may lead to trade wars between competing countries, resulting in reduced growth and trade. Hirobumi’s trade tactic does not incorporate free commerce; however, he devised a tactic that fosters domestic growth and international trade. The difference between the three theories are irreconcilable; yet, all approaches have contributed significantly to contemporary foreign trade policies.

The economic outlook of Smith, Colbert, and Hirobumi are different, with each policyadopting a different approach towards International trade.

The three theorists have contributed significantly to contemporary economic research, with complex economic international trade policies resulting from the basics laid in their theories. Therefore, the approaches have remained relevant in understanding different outlooks toward International trade.

Work Cited

Mifflin, Houghton. The Human Record: Since 1500.  Houghton Mifflin, 2001.

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