3.1. Foreign Trade
![An Essay on Economic Theory by Richard Cantillon](https://cdn.mises.org/styles/responsive_4_3_650w/s3/static-page/img/An-Essay-on-Economic-Theory_750x516.jpg.webp?itok=YiIwLywF 650w,https://cdn.mises.org/styles/responsive_4_3_870w/s3/static-page/img/An-Essay-on-Economic-Theory_750x516.jpg.webp?itok=fBrL7U1O 870w,https://cdn.mises.org/styles/responsive_4_3_1090w/s3/static-page/img/An-Essay-on-Economic-Theory_750x516.jpg.webp?itok=cnuy5wMN 1090w,https://cdn.mises.org/styles/responsive_4_3_1310w/s3/static-page/img/An-Essay-on-Economic-Theory_750x516.jpg.webp?itok=2zk8BH6g 1310w,https://cdn.mises.org/styles/responsive_4_3_1530w/s3/static-page/img/An-Essay-on-Economic-Theory_750x516.jpg.webp?itok=mtXAWopD 1530w)
Here the circular-flow economy is extended to international trade. Instead of barter or exchange with money, Cantillon explains how international trade takes place on the basis of bills of exchange. He showsthat a state which accumulates money will enjoy a temporary gain in international trade, but that states where manufacturing industries develop will enjoy a higher standard of living. The only clear exception Cantillon makes to free trade is his famous endorsement of the English Navigation Acts, where domestic shipping is protected, not in its own right, but to provide ships and sailors during wartime.
From Part 3: International Trade and Business Cycles. Narrated by Millian Quinteros.