International trade and finance are among the oldest subjects studied by economists. Along with public finance, money, and what we would now call economic development, they were the chief concerns of the “consultant administrators” whose doctrines and advice for emerging nation-states too many of us know only through their critics' eyes. And because so much of classical economics was written on and for an island, the international aspects of economic life played an extraordinary role in the development of economic thought and the theory of economic policy.

The concentration on problems and policies relating to foreign trade inspired many major contributions to analytical economics. Mill's treatment of price determination, the first full formulation of the law of supply and demand, appeared in his essay, Of the Laws of Interchange between Nations, to round out Ricardo's account of international specialization. Edgeworth's taxonomic work on tariffs and the terms of trade contained and contributed importantly to the theory of tax incidence in general equilibrium. Positive and normative concerns with the gains from trade gave birth to classical welfare economics, a contribution which Schumpeter described as the “most important exploit” of the trade theorists. And, on the monetary side, debates about bullion and the balance of trade, going back to Hume and earlier writers, furnished the first formal statement of the quantity theory of money.

In our own century, of course, international economics, like most other specialties, has been a net importer of techniques.