8 International Economics: Mutual Benefit or Imperialism? Mainstream economics emphasizes the positive possibilities of international trade and investment to such an extent that most economists have difficulty imagining how more free trade, more international lending | 8 International Economics Mutual Benefit or Imperialism Mainstream economics emphasizes the positive possibilities of international trade and investment to such an extent that most economists have difficulty imagining how more free trade more international lending or more direct foreign investment could possibly be disadvantageous. They understand why colonial relations might be detrimental to a colony. When Great Britain prevented its North American colonies from trading with Spain and required them to buy only from England at prices set by England mainstream economic theory recognizes that Great Britain was benefitted but her new world colonies were made worse off. But mainstream economists point out that the era of colonialism is behind us. They point out that under free trade any country that is not benefitted by trade with a particular trading partner can look for other trading partners or not trade at all. They point out that when all are free to lend or borrow in international credit markets any country that is not benefitted by the terms of a particular international loan is free to search for other lenders offering better terms or not borrow at all. Mainstream theory teaches that as long as international trade and investment is consensual and countries do not mistake what the effects will be no country can end up worse off and all countries should end up better off. So now that colonialism is behind us the only reason mainstream economists can see why developing economies would be damaged by international trade or investment is if they make a mistake. Only if they think a good or service they import will be more beneficial than it turns out to be only if they think an international loan will improve their economic productivity more than it really can can developing economies be disadvantaged in the eyes of most mainstream economists. Political economists on the other hand argue that international trade and investment are often vehicles through which more .
