[OPE-L:8403] Comparative advantage: Comparative exploitation

From: gerald_a_levy (gerald_a_levy@msn.com)
Date: Tue Jan 28 2003 - 15:57:30 EST

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An article by Gernot Kohler:

"Comparative advantage: Comparative exploitation"

http://www.atimes.com/atimes/Global_Economy/EA29Dj02.html


>From the "Conclusion":
"The talk about comparative advantage is frequently nothing but
propaganda.  The theory of comparative advantage lends itself to
that kind of abuse because its validity is limited to trade between
countries with similar wage-price levels. However, if there are 
significant wage-price differences between countries, as is
frequently the case, then the theory of comparative advantage is
invalid and the trade tends to be an unequal exchange."

Nicely illustrated with numerical examples.

Solidarity, Jerry

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