The Foundations of Free Trade Theory and their Implications for the Current World Recession

Nicholas Kaldor
Additional contact information
Nicholas Kaldor: Cambridge University

Chapter 4 in Unemployment in Western Countries, 1980, pp 85-100 from Palgrave Macmillan

Abstract: Abstract Traditional theory, both classical and neo-classical, asserts that free trade in goods between different regions is always to the advantage of each trading country, and is therefore the best arrangement from the point of view of the welfare of the trading world as a whole, as well as of each part of the world taken separately.1 The purpose of this paper is to show that these propositions are only true under specific abstract assumptions which do not correspond to reality. I want to show that conditions can exist (and indeed are likely to exist) in which unrestricted trade may lead to a loss of welfare to particular regions or countries and even to the world as a whole — the world will be worse off under free trade than it could be under some system of regulated trade.

Keywords: International Trade; Free Trade; Price Elasticity; Full Employment; Unit Labour Cost (search for similar items in EconPapers)
Date: 1980
References: Add references at CitEc
Citations: View citations in EconPapers (15)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:intecp:978-1-349-16407-3_4

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349164073

DOI: 10.1007/978-1-349-16407-3_4

Access Statistics for this chapter

More chapters in International Economic Association Series from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().