Ben Broadbent: Winners from globalisation

Speech by Mr Ben Broadbent, Deputy Governor for Monetary Policy of the Bank of England, to the Scottish Council for Development and Industry, Aberdeen, 11 July 2017.

Two hundred and fifty years ago, a few miles south of here, Adam Smith began working on the Wealth of Nations.  It was published a decade later, in 1776.  So there were (at least) two revolutions that year, one marking the birth of a country, the other the birth of modern economics.  

One of Smith’s main targets was the doctrine of mercantilism – the idea that international trade is a zero sum game, one you win by exporting more than your neighbour.  He pointed out that, if it allows you to concentrate on things you do relatively well, and buy more cheaply the stuff that others do well, international trade can make both parties better off.