Re: Critique of Comparative Advantage Please-Suggestions

I believe that the recent second editon of David Korten's When Corporations 
Rule the World (2002) has a nice layman's discussion on this issue, mostly 
(as I vaguely remember) centering around critiqing the assumption that 
money itself can be separated as a factor as "not moving" across borders. 
In a globalized world, money is the commodity par excellence however he is 
arguing, which voids existing 19th century economistic assumptions and 
legitimations of comparative advantage that held money as some 
variable"within the state" instead of an international nexus (as it was 
then as it is now), leading to a whole different sense of trade influences 
when money becomes a manipulatable international variable.

The whole book I can recommend as an excellent recap of the flaws of a 
corporatist globalzation and piratical international finance. The book 
details their public institutions, and the very visible externalities they 
are expanding worldwide.


Regards,


Mark Whitaker


At 05:22 PM 2/2/2003 -0500, you wrote:
> The Cambridge Journal of Economics 2001 has a critical review
> article on trade theory and policy. I sent some highlights of the article to
> the Post-Keynesian Thought (pkt) forum on 09mar02. Here they are.
>
> Gert Kohler
>
> REFERENCE:
> Sonali Deraniyagala and Ben Fine, "New trade theory versus old trade policy:
> a continuing enigma" Cambridge Journal of Economics 2001, 25, 809-825
>
> My EXCERPTS ------------------------------------
> p809 "As reported in Prasch (1996), support for free trade amongst academic
> economists in the USA is astonishingly high at 97%!"
>
> STATIC GAINS
> p810 "Static, once-and-for-all gains arise as the misallocation of resources
> under protection and import substitution is corrected, . . . empirical
> estimates of the welfare costs of these relative price distortions rarely
> exceed 2 or 3 percentage points of GDP . . . negligible welfare gains . . ."
>
> "DYNAMIC, LONG-TERM GAINS FROM LIBERALISATION"
> The authors examine rent seeking, X-efficiency, IRS, and long-term
> productivity arguments and find that
>
> p810 arguments for those are "lacking both theoretical consistency and
> empirical validity"
>
> NEW TRADE THEORY
> p.812 "established in the 1980s (Ethier, 1982; Krugman, 1984, 1986; Brander
> and Spencer, 1985; Eaton and Grossman, 1986; Grossman and Horn, 1988;
> Grossman and Helpman, 1991)."
>
> p812 "incorporating a fuller range of factors. However, they provide few, if
> any, unambiguous conclusions."
>
> LINKS WITH NEW GROWTH THEORY
> p814 "Models linking trade and endogenous growth . . . provide few
> generalisable conclusions."
>
> EMPIRICAL EVIDENCE from Cross-Country Research
> p817 "many of these studies suggest that the effects of liberalisation on
> growth are ambiguous and complex"
>
> p818 Greenaway et al 1998 - "use panel data across liberalisers and
> non-liberalisers (with/without and before/after) to come to a negative
> conclusion on the effect of trade reform on growth . . ."
>
> p820 "liberalisation beyond trade, to capital markets, has not been
> favourable to industrial performance" - The authors mention the influence of
> other factors, including exhange rates, interest rates, demand.
>
> CONCLUSIONS
> p821 "the thrust of the theoretical and empirical literature is far from
> supportive of such postures" [sc for "free trade"]
>
> p821 "it is totally inappropriate to address trade theory and policy
> separately from other aspects of industrial policy and performance and
> macroeconomic considerations."
>
> in reply to:
> -----------------------
> Milo Jones wrote:  Other than the Asia Times article
> highlighted on the list recently, can anyone point me towards some rigorous
> economic critiques of "Comparative Advantage" in World Systems or other
> economic literature? I am looking for "quantitative" and/or "practical"
> rather than normative criticism of the doctrine, and am not having too much
> luck in "mainstream" textbooks and articles...
> -------------------------