Excerpt from the New Internationalist's "No-Nonsense Guide to Globalization":
(NI Publications Ltd, UK 2002, pp. 14-15)
<<When people talk about globalization today they're still talking
mostly about economics, about expanding international trade in goods
and services based on the concept of comparative advantage. This
theory [of free trade] was first developed in 1817 by the British
economist David Ricardo in his "Principles of Political economy and
Taxation" . Ricardo wrote that nations should specialize in producing
goods in which they have a natural advantage and thereby find their
market niche. He believed this would benefit both buyer and seller
but only if certain conditions were maintained, such as
(1) that trade between partners must be balanced so that one country
doesn't become indebted and dependent on another and
(2) that investment capital must be anchored locally and not allowed to
flow from a high wage country to a low-wage country.
Unfortunately in today's high tech world of instant communications
neither of these conditions exist, with the result that Ricardo's
vision of local self-reliance mixed with exports and imports is
nowhere to be seen. Instead export-led trade has come to dominate the
economic agenda with the only route to growth based on increasing
exports to the rest of the world.>>
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