From Adam Smith to Paul Krugman, the issue of the international economy has been a cornerstone in economic doctrine. Analyzed in depth by the neoclassical trend, which sets out a series of arguments based on the design of quantitative models for analysis of "optimal" and "efficient." The international economy under this paradigm examines how are conducted trade relations of nations or blocs of economic integration, as well as the procedures for obtaining the expected performance and above all, achieve the goal of global economic development.
However, neoclassical theory has been dysfunctional, and that there is a contrast between theory and reality, which makes a wide gap between what we think and what you do not what suits the majority, reducing power circles shrinking throughout the world.
Adam Smith, the international economy contributed to different concepts, based on liberalism time and the influence of Quesnay Physiocrat took over everything. Among one of the concepts provided by this economist stressed the absolute advantage that explains the different possibilities of trade with two countries with respect to the exploitation of the good or service (Berube, 2002). Countries should focus its production of low cost goods in respect of other goods and services, this represents a greater specialization of labor in the new division of the same, achieving symmetry in trade relations between nations. Absolute advantage explained simply in his major work Inquiry into the Nature and Causes of the Wealth of Nations. (Smith, 2005)
However, this concept is not applicable in certain cases. Some countries have absolute advantage in all its market compared to other countries with total absolute disadvantage. This is where David Ricardo highlights its disintegration with Smith, thus establishing one of the guiding principles of economic theory: comparative advantage, as Ricardo decided how two different nations or uneven production, interact with each other and can both benefit international trade. (Bengochea, et al, 2002)
This is consistent, applying liberalism internationally, to extend processes capital accumulation. Ricardo's analysis was supplemented later in the classical reconfiguration of the economy, with thinkers such as Stuart Mill and Alfred Marshall himself, including marginal analysis explained by Menger, Walras and Jevons, [1] putting an emphasis on demand analysis , and breaking the dominance of Jean Baptiste Say, the greatest economist of the time along with David Ricardo. (Roll, 2003)
is important to note that the constant of ceterius paribus, and the focus of the exchange of two nations on certain property, under certain conditions achieve perfect symmetry of the terms of trade. The new power relationships change as the kind of centralization of capital, but with the inclusion of more technology, expertise and efficiency, in this way raises another reconstruction of bourgeois social class-oriented economic assessment of psychological and financial capital. (Landreth and Colander, 2006)
international trade restrictions, according to neoclassical satisfaction do not benefit society. Part of the analysis of this trend is to expose humans as a mere consumer undifferentiated to establish trade barriers in international markets, consumers are not able to satisfy their needs be they real or imaginary.
indifference curves lie in an imaginary representation of satisfaction: greater satisfaction, less need and greater well-being, this is referred to in neoclassical enforcement about the tariff, due to higher domestic prices, these also increase with increasing consumption gaps, gaining less than the product that satisfies a desire or need for society, restricting trade and welfare (demand for international goods.) Moreover domestic producers are benefiting in the short term, however this causes the increased costs and lack of international competitiveness at a given time, coupled with the loss of consumption (not welfare) and the increased costs that would restrict further protection [2] (Carbaugh, 2004).
the developing nations in trade policy based on growth from within and fiscal policies in the same trade restrictions are susceptible to oligarchic repression of national economic concentrates on the otherwise developed nations will increase the cost of living, something hidden in part because trade policy is based on the impoverishment of the neighbor (developing countries) while the domestic supply although injured, is constant. This means that protectionism neoclassical logic is only valid as long as the developed nation it is applied, while the peripheral countries should be subject to the liberalization of their economies, both with the insignia of social welfare based on utilitarianism or undifferentiated consumption. All kinds of international relations will be subject to the political position of a nation and the effect of satisfaction of a society.
Neoclassical theory has not solved the dilemma of relations of power and concentration of the accumulation of capital in international negotiations, and that the same free market, as mentioned Lenin (1917), has made it the well-being, but of those who have taken advantage of economies of scale and state strategy financial coercive and reactionary, leading to unequal benefits, whose tendency is that comparative advantages are of such gaps wider than a country to appropriate the "minimal comparative advantage", this can be neither an advantage nor a trade equitable.
Ricardo and neoclassical, the Swedish economist Ohlin, solve certain questions raised earlier in economic theory, making some specific clarifications in the international economy. First, note that there is a proportional relationship of nations, according to the factors of production that best know how to handle or are abundant, for example, there are nations where capital is abundant and could be specialized technology and in other countries , the factor would be the labor or workforce, both can be competitive and focus to produce goods and services based on the abundant factor and it represents a lower cost, this is known as the "endowment of factors." (Ossa, 2002)
In one of his most important works, "foreign trade and trade policy" (1926), Ohlin analyzes the dynamic equilibrium of prices in an open economy given by the exchange of capital, which modifies the structure of domestic prices and terms of trade of exporting and importing nations, as applicable.
Ohlin, Meade subsequently analyzed were the change control mechanisms, which explain how a nation that has given abundant factor and produces the same good, given its factor, may end up exporting the goods imported and importing the rather than exports, because the mechanisms of international market prices, mismatches of internal trade balances and the game of the factors. However, these changes also relate to historical behavior of business cycles. (Bhagwati, 1972)
This type of analysis presents scenarios where nations exchanged without trade restrictions. The neoclassical and neo-classical post, usually have a reduced reality to the model to analyze the trend of all in terms of variables that explain under certain perception of it. Phenomena such as the exacerbation of global poverty, polarization of developed nations and peripheral capital accumulation in a minority class, subject to such international structural policies, and the dehumanization of the global economy in the last century clearly shows that the neoclassical model does not represents reality or reality is a small class.
In terms of the international economy, the relative differences in the factors, the foundations of trade and absolute match their actual practice, in other words, there is fair trade as long as there is first a Unlike the production factors for a country to another, and second coincidence of needs of these factors by both nations. Ohlin model, enables us to understand that these factors relative differences tend to disappear according to changes in prices and trading conditions, it assumes the following:
a relatively developed nation by the technological capital, may not be in the course of the game dynamic and historical cycles, as itself a developing nation may not, by the labor capital .
What happens when a great nation has advantage in both capital factors such as skilled labor force? When this country that is supposed to be industrialized and use their expertise in this case factors other than low, its production process will require only factors that abound in countries peripherals, such as cheap labor, giving a double advantage. Leontief to note that exports from the industrialized nations use a lot of cheap labor and no specialized abundant factor, explains the internal contradictions of these countries highly capitalized in terms of Ohlin what is not possible. Linder subsequently complemented this logic with an interesting explanation, arguing that only large, industrialized nations exchange goods provided they maintain a match demand or income levels are similar, ie when the factors of production of its competitive advantages match each other, so there is symmetry in international trade, being logical that have similar characteristics as those observed by Leontief on the various interactions and changes of factors. (Op cit, Carbaugh, 2004).
Trade restrictions tend to be normal if you want to achieve maximum benefit and not just lies in the taxation of fees, sworn enemies of free market and desfronterialización. It is valid to recognize the existence of unfair competition such as dumping practices, which are the main causes of global imbalances in trade.
Notes
[1] The marginal theory is psychological principles of market economy, to explain the theory of value from a purely subjective weighting each individual value given to the utility of consumption of a particular satisfier. Some concepts developed by Walras, Manger, Jevons, Bon Bawerk, etc., Are: marginal utility, indifference curves, etc. Subsequently, this doctrine was embraced by the neo-classical, hence some considerations on the partial equilibrium economic dynamics, quantitative theory economy, demand dominance etc.
[2] If it is a great nation that would restrict the export supply is constant but absorb the cost of the tariff, if the nation is small, so regulate the cost is absorbed by the consumer for the increase in domestic relative prices and producers are benefited by centralizing domestic consumption although the long-term competitiveness will be poor and inefficient in the international arena. See Carbaugh, Robert (2004). International Economics. Mexico: Thomson.
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