Revisiting the Relevance of International Trade Theory

Probably one of the most controversial contributions to the literature of international trade theory was offered by the late social economist John Culbertson. In his view, low wage competition among corporations in a world characterized by capital mobility and massive trade deficits undermines the foundation trade theory based on David Ricardo’s celebrated notion of comparative advantage. Instead, there are several good reasons to believe that international trade with China, India, Vietnam, etc. will be governed by absolute advantage. The current essay is dedicated to the virtually ignored work of Culbertson, and it is meant as an invitation for social economists to critically evaluate the argument and in the process make an attempt to point out where it goes wrong.

Mark A. LutzEmail:

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Mark A. Lutz   was born in New York, grew up in Switzerland, and earned his M.A. and Ph.D. degrees in economics at the University of California, Berkeley. He taught at the University of Maine from 1970 till his retirement in 2001. For three decades he has been a member of the Association of Social Economics, serving in various capacities, including as president, and was also privileged to be awarded the Thomas Divine Award. His longtime interests have centered on a more humanistic approach to economics, a viewpoint centered on human wellbeing, which can be traced back to the early 19th century. It’s a vision of the economy where there has long been much skepticism about the alleged benefits of unregulated market competition coordinating economic activity within or between nations.