Chapter Objectives
In this chapter, you will learn about:
- Review the Orthodox Economics Comparative Advantage and Trade Story.
- Examine Critiques of Orthodox Free Trade Story.
- Identify an Alternative Approach for Evaluating the Impact of International Trade.
In Chapter 27: Globalization and Protectionism several concerns associated with free trade are tackled and, presumably, debunked. In 27.2 International Trade and Its Effects on Jobs, Wages, and Working Conditions, three issues are raised.
- Fewer Jobs?
- Trade and Wages
- Labor Standards and Working Conditions
In 20.3 Arguments in Support of Restricting Imports, another five issues are tackled.
- Infant Industry Argument
- Anti-Dumping
- Environmental Protection
- Low Foreign Wages
- National Interest Argument
But, are these issues really non-starters? Does orthodox economics effectively minimize the above outlined issues? From the standpoint of heterodox economists, the answer to both of these questions is no. There is a significant body of research available, within the context of a more pluralistic traditions in economics, that point to other interpretations of international trade in which the standard orthodox economic free trade story has very real weaknesses.
The intention of this section is to provide a counter-perspective to that of the orthodox comparative advantage story. The critique is directed toward the orthodox presentation of its theoretical ideas, specifically how orthodox theory promotes the merits and benefits of free trade. The critique will take two forms. The first and primary criticism will focus on the wide array of ways in the orthodox theoretical story fails as both a technical and functional theoretical presentation. The second element of criticism will, in periodic instances, include references to history as well as empirical evidence to document instances in which the orthodox comparative advantage story appears to not fulfill its claims.