Year: 1996
Type: article
Abstract: It has been over fifty years since Stolper and Samuelson (1941) pointed out that whereas free trade may be beneficial to a country in aggregate terms, even a broad-based factor such as labor may be hurt by the price changes which trade brings about. In particular, a staple of Heckscher-Ohlin trade theory is that relatively capital-abundant countries tend to import commodities which are produced by labor-intensive techniques at home, and the competition which such trade engenders serves to depress real wages. Recent battles to obtain passage of the NAFTA accord and Uruguay Round of GATT agreements in the United States have focused on the overall gains which freer trade is likely to produce, and have suggested, perhaps only implicitly, that the gains are sufficient to compensate potential losers among the working class. Such compensation schemes, however, are rarely introduced, although certain sections of the economy may achieve exceptions to a move to more liberal trade.
Author: Ronald W. Jones
Institution: University of Rochester
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $1,930
Funder: Chinese University of Hong Kong
OpenAlex ID: W2023907689