The International “Free Market” for Trade and Investment: Capital’s Global Power Play


No doctrine is more sacrosanct to neoclassical (NC) economists than “free trade” or the application of SDM PCFM thinking to the international sphere and no doctrine is more enshrined rationale than as providing a fundamental for free trade David Ricardo’s principle of “comparative advantage” (Ricardo 1817, Chap. 7). Even economists who are critical of standard NC macroeconomic and microeconomic theories when applied to international trade believe that the comparative advantage proof of the benefits of free trade1 is an essential overarching principle that should maintain its position at the core of the undergraduate curriculum in economics.2

David Ricardo’s theory of comparative advantage is thus central to any discussion of “free trade” ideology in economics. Its two essential doctrines: (a) that the benefits of trade are not limited to absolute advantages in production, and (b) that trade deficits are self-correcting, lie at the core of free trade thinking, and Ricardo’s parable,...


Exchange Rate Free Trade World Trade Organization Real Wage Trade Deficit 
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© The Author(s) 2016

Authors and Affiliations

  1. 1.Benedictine UniversityIllinoisUSA

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