Final answer:
It is true that Adam Smith's first formulation of international trade theory was politically motivated. He criticized mercantilist policies and advocated for free trade based on comparative advantage, challenging the established order and influencing international trade policies towards market efficiency.
Step-by-step explanation:
The statement that Adam Smith's first formulation of international trade theory was motivated by political considerations is true. Smith's critique of mercantilism in his seminal work, The Wealth of Nations (published in 1776), served as a foundational text for modern economic thought, particularly in the realm of international trade. Within the context of the political and financial connections of his time, Smith argued against the protectionist mercantilist policies which dictated governments' economic strategies and advocated for free trade based on the principle of comparative advantage. He believed this would enable nations to specialize and prosper, thereby refuting the zero-sum game of mercantilism that claimed one nation's gain was another's loss.
Smith's ideas contended with the realities of influence by merchants on governmental policies and the practice of European powers in leveraging mercantilism to fund and motivate colonial expansion, which had brought wealth disproportionately to Europe's ruling classes. By advancing arguments for trade liberalization and minimal government intervention, he significantly influenced the trend towards more open international trade policies that are based on the efficiency of markets rather than government-managed economies.