The Global Free Trade Error: The Infeasibility of Ricardo's Comparative Advantage Theory / Edition 1

by Ron Baiman

Overview

The doctrine of "free trade" is second only to that of "free markets" in undergirding ideological support for our current global economic structures and rules. From David Ricardo’s "comparative advantage principle" to James Meade’s Neoclassical or mainstream economics proof of self-adjusting free trade equilibrium, the free trade doctrine has had a lasting and destructive hold on Neoclassical economic thinking since its inception.

The Global Free Trade Error provides a detailed analysis of these foundational models and counter-poses these to alternative Neo-Marxist "unequal exchange" models of global trade and finance. In the first part of the book the three core free trade models alluded to above are respectively demonstrated to be: overdetermined, inapplicable, and infeasible. In particular, Ricardo’s parable is shown to support managed trade rather than free trade as Ricardo and two centuries of economic texts have claimed. In the second part of the book, unequal exchange analyses of global trade are shown to provide logically coherent and useful insights into global trade and finance. In the third and final part of the book, this unequal exchange perspective is used, within a general "demand and cost" setting, to develop a set of global managed trade principles for a more equitable and sustainable world trade regime.

This book will be of great interest to those who study political economy, history of economic thought, and international trade, including trade agreements and tariffs.

Product Details

ISBN-13:	9781138852952
Publisher:	Taylor & Francis
Publication date:	03/06/2017
Series:	Routledge Frontiers of Political Economy
Pages:	180
Product dimensions:	6.12(w) x 9.19(h) x (d)

About the Author

Ron Baiman teaches economics in the MBA program at Benedictine University, U.S. He has written numerous academic and policy papers, served for many years on the Editorial Board of the Review of Radical Political Economics, and is the author of The Morality of Radical Economics: Ghost Curve Ideology and the Value Neutral Aspect of Neoclassical Economics, and co-author and co-editor of the Choice award winning collection: Political Economy and Contemporary Capitalism.

Table of Contents

List of figures

List of tables

Acknowledgements

1 Introduction

PART I The illogical foundations of free trade ideology

2 The infeasibility of free trade in classical theory: Ricardo’s comparative advantage parable has no solution

3 The limits of free trade in Neoclassical theory: from Heckscher-Ohlin to unequal exchange

4 Globally sustainable and balanced international trade based on exchange-rate adjustment is mathematically unstable and therefore economically infeasible

PART II The logical (and moral) foundations of unequal exchange trade theory

5 Unequal exchange without a labor theory of prices: on the need for a global Marshall Plan and solidarity trading regime

6 Unequal exchange and the rentier economy

PART III Globalization that supports human and planetary well-being

7 Toward a new political economy for the U.S.

8 There is no alternative to managed global trade

Index

Editorial Reviews

‘The doctrine of "free trade" is second only to that of "free markets" in undergirding ideological support for our current global economic structures and rules. The Global Free Trade Error provides a detailed analysis of these foundational models and counter-poses these to alternative Neo-Marxist "unequal exchange" models of global trade and finance.’ — www.urpe.org (February 20, 2017)

From the Publisher