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5.4 Brief introduction to the theory international trade

Modern world economy is a system of economic relations between different countries and regions of the world, based on international trade and the international division of labor. International trade develops because it brings benefits to the countries participating in it. In this regard, one of the main questions that the theory of international trade must answer is what underlies this gain from foreign trade, or, in other words, what determines the direction of foreign trade flows.

The basic principles of the international division of labor and international trade were formulated two centuries ago by the English economists Adam Smith and David Ricardo. A. Smith in his book "A Study on the Nature and Causes of the Wealth of Nations" (1776) formulated the theory absolute advantage and showed that countries are interested in the free development of international trade, since they can benefit from it regardless of whether they are exporters or importers.

Recall that absolute advantage is the ability to produce more units of a given product with the same input of resources, or (which is the same thing), to produce a unit of a good with fewer resources.

D. Ricardo in his "Principles of Political Economy and Taxation" (1817) proved that the principle of absolute advantage is only a special case general rule, and substantiated the theory comparative advantage. Recall that comparative advantage is the ability to produce a good or service at a relatively lower opportunity cost. Recall that the opportunity cost is lost production opportunities, expressed in the refusal to produce another good in the production of this one.

In the two centuries since Smith and Ricardo, the theory of international trade has undergone significant development, but the basic principles largely remained unshakable (at least until the 2008 Nobel laureate Paul Krugman proposed his theory of international trade). These principles can be summarized in one sentence: the international division of labor and trade are based on comparative advantage.

A country produces the product in which it has a comparative advantage. A country that specializes in the production of a product becomes its exporter (that is, a seller in international trade). At the same time, the country buys goods from other countries, being their importer.

The ratio of exports and imports is reflected in the trade balance. The balance of trade is the difference between exports and imports.

trade balance = Ex - Im

If import costs exceed export earnings (Im > Ex), then this corresponds to a state of trade deficit. A country buys more foreign goods than it sells domestic goods to foreigners.
In this case, the country needs more funds to settle with foreign counterparties for imports than it receives from foreign counterparties for its exports. In other words, as economists say, the trade deficit must be financed.

Financing the trade deficit, i.e. difference between import costs and export earnings can be:

• or at the expense of foreign (external) loans from other countries or from international financial institutions such as the International Monetary Fund, the World Bank, etc.;
• or through the sale to foreigners of financial assets (private and public valuable papers) and receipts into the country Money towards their payment.

In both cases, there is an inflow of funds from the foreign sector into the country (to the financial market), which is called capital inflow, and this makes it possible to finance the trade balance deficit.
That is, the trade deficit corresponds to the inflow of capital into the country.

If the income from exports exceeds the costs of imports (Ex > Im), which means a surplus (surplus) of the trade balance, then capital outflow occurs from the country, since in this case foreigners sell their financial assets to this country and receive the necessary for payment for export cash.
The trade surplus corresponds to the outflow of capital from the country.

Economic theory shows that international trade is a means by which countries, by developing specialization, can increase the productivity of available resources and thus increase the volume of goods and services produced and increase the level of well-being. We have already considered a simple model of trade, where in the course of trade two countries received an increase in their consumption opportunities, which can be shown as the movement of the CPV of each of the economies to the right-up.

Trade allows its participants to realize their comparative advantage. Steven Landsburg's The Couch Economist gives an example that the US has two ways of producing cars: in Detroit and Iowa. One of them involves the production of cars in factories in Detroit, the other involves the cultivation of wheat in the fields in Iowa. The second way implies that the grown wheat will be exchanged for cars in the course of international trade (for example, for Japanese Toyotas). Which of these methods is preferable? It all depends on the opportunity costs of each method. It may well be that, having a comparative advantage in growing wheat (i.e., lower opportunity costs), American economy will find that it is profitable for her to completely abandon the production of cars in Detroit in favor of the production of cars in Iowa (that is, in favor of growing wheat, its further export to Japan, and the import of Japanese cars).

5.4.1. Foreign trade policy

The modern world economy operates in the context of globalization, which is a new level and type of internationalization of production. Countries and regions of the world are closely interconnected not only by large-scale commodity and financial flows, but also by international production and business, information technology, scientific knowledge flows, close cultural and other contacts. The interdependence of individual countries and regions in the world economy has sharply increased. For example, American corporations also depend on cheap Chinese work force, as well as Chinese consumers from high-quality technological American goods.

Despite the fact that free trade leads to an increase in the economic well-being of all countries - both exporters and importers, in practice, international trade has practically never and never developed truly freely without state intervention. The history of international trade is at the same time the history of the development and improvement of state regulation of international trade. In the course of the development of foreign trade relations, the economic interests of various social groups and segments of the population, and the state inevitably becomes involved in this conflict of interests. The state is an active participant in international trade relations, conducting foreign trade policy(regulation of international trade). Foreign trade policy is one of the areas of state regulation of the economy.

The main instruments of foreign trade policy:

1. Import duty - the state monetary collection from the imported (imported) goods.
2. Export duty is a state monetary fee from exported (exported) goods.
3. Quoting (establishing a quota) is a limitation in quantitative or value terms of the volume of products allowed to be imported into the country (import quota) or exported from the country (export quota) for a certain period.
4. Licensing - regulation of foreign trade through permits issued government bodies to export or import goods in prescribed quantities for a certain period of time.
5. Voluntary export restriction - a quantitative restriction of exports based on the obligation of one of the trading partners to limit the volume of exports.
6. An export subsidy is a financial benefit provided by the state to an exporter to expand the export of goods abroad.
7. Dumping is the sale of goods on the foreign market at a price below the normal level, that is, below the price of a similar product on the domestic market of the exporting country.
8. An international cartel is an agreement between exporters of any product from different countries, aimed at ensuring control over production volumes and setting favorable prices.
9. An embargo is a prohibition by a state of the import into or export from any country of goods or financial assets.

Foreign trade policy measures aimed at protecting the domestic market from foreign competition through various instruments of trade policy are called policies. protectionism.

Despite the fact that modern economic theory associates protectionism (as well as any regulation of the economy) with welfare losses for society, protectionism is used everywhere. The logic of protectionism is to create favorable conditions for the development of domestic sectors of the economy, protecting them from competition with foreign goods.

Why is protectionism so bad? The obvious answer is that protectionism prevents the economy from realizing its comparative advantage. For example, if Russia has a comparative advantage in energy production and France in food production, then in international trade, according to the theory of comparative advantage, Russia should specialize in energy production and France in food production. With full specialization, Russia will focus only on oil production, and will import food from France for its own consumption. This state of affairs will not suit in the first place Russian manufacturers foodstuffs, which over time will find ever-increasing competition from imported French products. Under these conditions, domestic producers of Russian products will take actions aimed at lobbying their interests. In other words, using political support, domestic producers will try to create conditions for themselves that will limit competition from imports. This is precisely what the policy of protectionism is all about.

Protectionism harms competition because it distorts the incentives of companies. In order to win the consumer in a competitive economy, the company must win in competition, that is, to offer a product best quality or at a lower price. In the case of protectionism, when domestic products protected from foreign competition by import duties or other barriers, domestic producers have no incentive to improve product quality because they are protected from competition from foreign producers. Instead of developing new products and constantly improving quality, these companies are trying to lobby for more favorable protectionist conditions for themselves. Over time, the quality of the products of these companies begins to lag significantly behind the quality of similar foreign products. As a result, consumers receive a product of inferior quality than they would have received in the absence of protectionism.

A good example is Russia, with its strong oil industry and a weak auto industry. Having undoubted comparative advantages in oil production over many countries (the cost of oil production in Russia is lower than in the USA and European countries), Russia is realizing its comparative advantages. At the same time, it is also clear that Russia does not have a comparative advantage in the production of automobiles. If not for numerous trade barriers to foreign cars and numerous subsidies to the domestic auto industry, then Russian consumers could long ago buy better foreign cars cheaper than the Russian Lada. Maybe it would be more profitable for Russia not to produce cars at all and focus only on oil production? The theory of comparative advantage claims that this is the case. Why, then, does Russia produce cars and continue to subsidize and protect domestic producers with import duties? Most likely, the answer does not lie in the economic plane. Perhaps Russia does not want to depend on foreign car imports. Perhaps Russia does not want to lay off hundreds of thousands of workers employed in the domestic auto industry. Perhaps there are other motives. In any case, the current state of the domestic automotive industry is a clear example of the fact that protectionism, distorting the incentives of firms in protected industries, does not lead to the best consequences for consumers and society in the long run.

Arguments for protectionism

• Protection of young industries.
• Protection of politically sensitive industries
• Maintain employment.

Arguments against protectionism

• Loss of economic efficiency (or, as economists say, net social loss)
• Distortion of incentives for companies in protected industries.
• Retaliatory protectionist measures of other economies.

Modern trade relations are the intersection of many opposing trade interests. Each country is involved in a variety of trade and financial relationships with other economies. When pursuing a protectionist policy, each country should remember that the introduction of protective measures is accompanied by retaliatory restrictive measures on the part of trading partners. For example, under pressure from the American steel lobby, the US government in March 2002 introduced restrictive tariffs ranging from 8 to 30% on imports. various kinds steel and steel products produced in a number of countries in Europe, Asia and Latin America. Following this decision, a number of countries decided to impose retaliatory restrictive tariffs on a number of US goods. The matter went to trade war. As a result, the Bush administration decided to eliminate import duties, fearing the loss of international markets for a number of American goods.

In a more negative scenario, events developed in the post-Great Depression of the 1930s. After an unprecedented drop in demand in almost all developed economies of the world, countries Western Europe decided to resort to a tough protectionist policy to protect their domestic industries from foreign (primarily American) imports. As a result of the widespread use of trade restrictions, the volume of world trade decreased by 3 times from 1929 to 1933, and the recovery from depression by a number of countries stretched for ten or more years. Countries have responded to trading partner restrictions by imposing new trade restrictions. Countries, even realizing that total trade barriers lead to a deterioration in their well-being, could not refuse to use them. In conditions where trade barriers are used everywhere, if one of the participants in the trade wants to abandon them, while all the others continue to apply, this will lead to the total impoverishment of this participant. In other words, if there is a risk that other participants will continue to apply trade barriers, no one will want to be the first to abandon them. At that time, trading partners lacked coordination. Under these conditions, the General Agreement on Tariffs and Trade (GATT) was formed in 1947, which in 1995 was transformed into the World trade organization(WTO). The WTO is responsible for the development and implementation of new trade agreements, and also monitors compliance by members of the organization with all agreements signed by most countries in the world. That is, the WTO acts as the organizer of world trade relations, which the world lacked until 1947. The main function of the WTO is to monitor how the participants in trade relations comply with the agreements reached on trade liberalization.

The most popular model of trade relations is the model of trade in two goods between two countries. This model will be discussed in the Market Equilibrium chapter, after we are familiar with economic concepts supply and demand.

Mercantilist theory developed and put into practice in XVI-XVIII centuries, is first of theories of international trade.

Supporters of this theory believed that the country should limit imports and try to produce everything itself, as well as encourage the export of finished products in every possible way, seeking an influx of currency (gold), i.e., only exports were considered economically justified. As a result of a positive trade balance, the influx of gold into the country increased the opportunities for capital accumulation and thus contributed to the economic growth, employment and prosperity of the country.

Mercantilists did not take into account the benefits that countries receive in the course of the international division of labor from the import of foreign goods and services.

According to the classical theory of international trade emphasizes that "the exchange is favorable for each country; every country finds in it an absolute advantage, the necessity and importance of foreign trade is proved.

For the first time, the free trade policy was defined A. Smith.

D. Ricardo developed the ideas of A. Smith and argued that it is in the interests of each country to specialize in production, in which the relative benefit is the greatest, where it has the greatest advantage or the least weakness.

Ricardo's reasoning found expression in comparative advantage theory(comparative production costs). D. Ricardo proved that international exchange is possible and desirable in the interests of all countries.

J. S. Mill showed that, according to the law of supply and demand, the price of exchange is set at such a level that the total exports of each country can cover its total imports.

According to Heckscher-Ohlin theories countries will always seek to covertly export surplus factors of production and import scarce factors of production. That is, all countries tend to export goods that require significant costs factors of production, which they have in relative abundance. As a result Leontief's paradox.

The paradox is that, using the Heckscher-Ohlin theorem, Leontief showed that the American economy in the postwar period specialized in those types of production that required relatively more labor than capital.

Theory of comparative advantage was developed by taking into account the following circumstances affecting international specialization:

1. the heterogeneity of production factors, primarily the labor force, which differs in skill level;
2. the role of natural resources, which can only be used in production in conjunction with large amounts of capital (for example, in extractive industries);
3. influence on the international specialization of foreign trade policy of states.

The state can restrict imports and stimulate domestic production and exports of products of those industries that are intensively used relatively scarce factors of production.

The issues of foreign trade efficiency are among fundamental problems economic theory, on which economic thought has been working for the last three centuries. The development of foreign trade is reflected in the evolution of theories, models, concepts that explain the driving forces of this process.

The first attempt to create a theory of international trade, combining trade relations with domestic economic development, was made by mercantilists. Mercantilism theory was based on the idea that the wealth of a country depends on the amount of gold and silver. In this regard, the mercantilists believed that in the field of foreign trade it is necessary to maintain an active trade balance and implement state regulation foreign trade activities in order to increase exports and reduce imports.

Mercantilist theories of international trade gave rise to a direction of economic policy that has outlived it and remains relevant today - protectionism. The policy of protectionism consists in the active protection by the state of the interests of the domestic economy, as they are understood by this or that government.

As a result of the implementation of mercantilist policies using the tools of protectionism, complex systems have been created customs duties, taxes, barriers that ran counter to the needs of the emerging capitalist economy. Moreover, the static theory of mercantilism was based on the principle of enriching one country by reducing the welfare of other nations.

The next stage in the development of the theory of international trade is associated with the name of A. Smith - the creator absolute advantage theory. A. Smith believed that the task of the government is not to regulate the sphere of circulation, but to implement measures to develop production on the basis of cooperation and division of labor, taking into account the support of the regime free trade. The essence of the theory of absolute advantage is that international trade is profitable if two countries trade in goods that each produces at a lower cost.

The theory of absolute advantages is only part of the general economic doctrine of A. Smith, the ideologist of economic liberalism. From this doctrine follows the policy of free trade, opposed to protectionism.

Modern economists see the strength of the theory of absolute advantages in that it shows the clear advantages of the division of labor not only at the national level, but also at the international level. Weak side this theory: it does not explain why countries trade even in the absence of absolute advantages.

The answer to this question was found by another English economist D. Ricardo, who discovered law of comparative advantage, which says: the basis for the emergence and development of international trade can serve as an exceptional difference in the costs of production of goods, regardless of absolute values.

The role and significance of the law of comparative advantage is evidenced by the fact that for many decades it remained dominant in explaining the effectiveness of foreign trade turnover and had a strong impact on the entire economic science.

However, D. Ricardo left unanswered the question of the origin of comparative advantages, which form the necessary prerequisites for the development of international trade. In addition, the limitations of this law include those assumptions that were introduced by its creator: one factor of production was taken into account - labor, production costs were considered constant, the factor of production was mobile within the country and immobile outside it, there were no transport costs.

During the 19th century the labor theory of value (created by D. Ricardo and developed by K. Marx) gradually lost its popularity, faced with competition from other teachings; at the same time, there were great changes in the system of the international division of labor and international trade, caused by a decrease in the role of natural differences and an increase in the importance industrial production. As a response to the challenge of the time, neoclassical economists E. Heckscher and B. Olin created factor theory: mathematical calculations on it are given by P. Samuelson. This theory can be represented by two interrelated theorems.

The first of these, explaining the structure of international trade, not only recognizes that trade is based on comparative advantages, but also derives the reason for comparative advantages from the difference in endowment with factors of production.

Second - factor price equalization theorem Heckscher-Ohlin-Samuelson - affects the effect of international trade on factorial prices. The essence of this theorem is that the economy will be relatively more efficient by producing goods that make more intensive use of factors that are abundant in a given country.

The limitation of the theory is due to many assumptions. It was assumed that returns to scale are constant, factors are mobile inside the country and immobile outside it, competition is perfect, there are no transport costs, tariffs and other obstacles.

It can be noted that in the field of analysis of foreign trade until the middle of the 20th century. economic thought concentrated more on the study of the supply of goods and factors of production and did not pay due attention to demand due to the emphasis on considering the reduction in production costs.

The theory of comparative advantage has become the starting point not only for the development of the theory of factors of production, but also for two other areas, the specificity of which is determined by the fact that they pay attention not only to supply, but also to demand.

In this context, the first direction is associated with the theory of mutual demand, created by the follower of D. Ricardo J.St. Millem, who derived the law of international value, showing the price at which goods are exchanged between countries: the more foreign capital on the goods of a given country and the less capital used to produce export goods, the more favorable the terms of trade for the country will be. Further development of this theory was obtained in general equilibrium models created by A. Marshall and F. Edgeworth.

D. Ricardo's law also determined the development opportunity cost theory. The prerequisite for its creation was that the facts of economic life were in conflict with the labor theory of value.

In addition, replacement costs are not constant, as in the theory of comparative advantage, but growing according to a pattern known from general economic theory and in accordance with economic realities.

The foundations of the theory of opportunity costs were laid by G. Haeberler and F. Edgeworth.

This theory was based on the fact that:

• production possibility curves (or transformation curves) have a negative slope and show that the actual ratio of the output of different goods is different for each country, which encourages them to trade with each other;
• if the curves match, then trading is based on differences in tastes and preferences;
• supply is determined by the curve limit level transformation, and demand - the curve of the marginal level of substitution;
• the equilibrium price at which trade is conducted is determined by the ratio of relative world supply and demand.

Thus, comparative advantage is proved not only from the labor theory of value, but also from the theory of opportunity costs. The latter showed that there is no complete specialization of the country in the field of foreign trade, since after reaching an equilibrium price in mutual trade, further specialization of each of the countries loses its economic meaning.

Despite the fundamental nature and the evidence presented, the considered theories were constantly tested on the basis of various empirical data. The first study of the theory of comparative advantage was carried out in the early 1950s by McDougall, who confirmed the law of comparative advantage and showed a positive relationship between the equation of labor productivity in individual industries and the share of their products in total exports. Under the conditions of globalization and internationalization of world economic relations, basic theories cannot always explain the existing multivariance of international trade. In this regard, an active search for new theories that provide answers to various questions of international trade practice continues. These studies can be divided into two large groups. The first, using a neofactorial approach, is based on the assertion that traditional theories require clarification in particular regarding the quantity of factors of production and their quality.

Within this direction, the following models, hypotheses and concepts have been developed and proposed.

1. The study carried out by V. Leontiev in 1956 served as the basis for the emergence of a skilled labor model developed by D. Kising, who proved that not two, but three factors are used in production: skilled, unskilled labor and capital. In this regard, the unit costs for the production of export goods are calculated for each of the groups separately.
2. P. Samuelson's theory of specific factors of production showed that international trade is based on differences in the relative prices of goods, which in turn arise due to varying degrees of availability of factors of production, moreover, factors specific to the export sector develop, and factors specific to the import-competing sector is shrinking.
3. An important place in this direction is given to the issue of distribution of income from international trade. This question was developed in the Stolper-Samuelson, Rybchinsky, Samuelson-Jones theorems.
4. The Swedish economist S. Linder, who created the theory of intersecting demand, suggests that the similarity of tastes and preferences enhances foreign trade, as countries export goods for which there is a capacious domestic market. The limitation of this theory is due to the fact that it manifests itself with a uniform distribution of income between individual groups of countries.

The second group of studies, formed on the basis of the neotechnological approach, analyzes situations that are not covered by the presented theories, rejects the position on the decisive importance of differences in factors or technologies, and requires new alternative models and concepts.

Within the framework of this direction, the advantages of a country or a company are determined not by the focus on factors and not by the intensity of the spent factors, but by the monopoly position of the innovator in terms of technology. A number of new models have been created here, developing and enriching the theory of international trade from the side of both demand and supply.

1. Theory of economies of scale substantiated in the works of P. Krugman: the effect of scale makes it possible to explain trade between countries equally endowed with factors of production, similar goods, under the condition of imperfect competition. At the same time, the external effect of scale implies an increase in the number of firms producing the same product, while the size of each of them remains unchanged, which leads to perfect competition. Internal economies of scale contribute to imperfect competition, where producers can influence the price of their products and increase sales by lowering the price. In addition, a special place is given to the analysis large firms- transnational companies (TNCs), due to the fact that a company that produces products on the most cost-effective scale occupies a dominant position in the world market, and world trade gravitates towards giant international monopolies.

The neotechnological school associates the main advantages with the monopoly positions of the innovator firm (country) and offers new strategy: to produce not something that is relatively cheaper, but something that is necessary for everyone or many and that no one else can produce yet. At the same time, many economists - supporters of this direction, in contrast to the supporters of the comparative advantage model, believe that the state can and should support the production of high-tech export goods and not interfere with the curtailment of the production of other obsolete ones.

2. Intra-industry trade model based on the postulates of the theory of economies of scale. Intra-industry exchange provides additional benefits from foreign trade relations due to market expansion. In this case, a country can simultaneously reduce the number of goods it produces, but increase the number consumed. By producing a smaller set of goods, a country realizes economies of scale, increasing productivity and reducing costs. A significant contribution to the development of the theory was made by P. Krutman and B. Balassa.

Intra-industry exchange is associated with the theory of similarity, which explains the cross-trade of comparable goods belonging to the same industry. In this regard, the role of the acquired advantages associated with the development and implementation of new technologies is increasing. According to the theory of similarity of countries in this situation, a developed country has a greater opportunity to adapt its products to the markets of similar countries.

3. Supporters dynamic models both the Ricardian explanation of the international exchange of technological differences and the theses of J. Shum-Peter on the decisive role of innovations are used as initial theoretical justifications. They believe that countries differ not only in the presence production resources but also the level of technical development.

One of the first among dynamic models is the theory of the technological gap by M. Posner, who believed that as a result of the emergence of technological innovations, a “technological gap” is formed between countries that have them and do not have them.

4. Life cycle theory R. Vernon explains the specialization of countries in the production and export of the same product at different stages of maturity. In the Asia-Pacific region, where there is a continuous process of successive passage of certain phases of economic development, the concept of “flying geese” by K. Akamatsu took shape and was confirmed by practice, according to which a hierarchy of international exchanges is formed corresponding to different levels of development of groups of countries.

It examines the links between two groups of characteristics;

• evolution of imports - domestic production- export;
• the transition from consumer goods to capital-intensive from simple industrial products to more complex ones.

On present stage Special attention is given to the problem of combining the interests of the national economy and large firms - participants in international trade. This direction solves the problems of competitiveness at the level of the state and firm. So, M. Porter calls the main criteria of competitiveness factor conditions, demand conditions, the state of service industries, the company's strategy in a certain competitive situation. At the same time, M. Porter notes that the theory of comparative advantage is applicable only to basic factors such as undeveloped physical resources and unskilled labor. In the presence of developed factors ( modern infrastructure, exchange of information on a digital basis, highly educated personnel, research of individual universities) this theory cannot fully explain the specifics of foreign trade practice.

M. Porter also puts forward a rather radical position, according to which, in the era of transnationalization, one should not talk about trade between countries at all, since it is not countries that trade, but firms. Apparently, in relation to our time, when different countries apply protectionist mechanisms to one degree or another, when brands like “made in USA”, “ Italian furniture”, “white assembly”, etc. still retain their attractiveness, such a situation is still premature, although it clearly reflects a real trend.

5. Complements the neo-technological analysis of the factors of the international division of labor concept of I. B. Kreyvis, which uses the concepts of price elasticity of demand and supply, which measure the sensitivity of demand to price changes. According to Cravis, each country imports goods that it is either unable to produce itself or can produce in limited quantities and whose supply is elastic, while at the same time exporting goods with a highly elastic production that exceeds local needs. As a result, a country's foreign trade is determined by the comparative level of elasticity of the national and external supply of goods, as well as more rapidly technical progress in export industries.

In conclusion, we note that at the present stage of the theory of international trade, they pay equal attention to both demand and supply, they strive to explain practical matters arising in the course of foreign trade activities between countries, modifying the international trade system, and are formed on the basis of the criterion for specifying factors and their quantity, as well as the monopoly position of the innovator in terms of technology.

The deepening of globalization processes in world economic relations confirms the viability of all theories, and practice - the need for their constant modification.

Theories of comparative advantage. The theory of absolute advantage. Heckscher-Ohlin's theory of international trade. Leontiev's theory of international trade. Alternative theories international trade.

Theories of international trade

Theories of comparative advantage

International trade is the exchange of goods and services, through which countries satisfy their unlimited needs on the basis of the development of the social division of labor.

The main theories of international trade were laid down at the end of the XVIII - early XIX V. eminent economists Adam Smith and David Ricardo. A. Smith in his book “A Study on the Nature and Causes of the Wealth of Nations” (1776) formulated the theory of absolute advantage and, arguing with mercantilists, showed that countries are interested in the free development of international trade, since they can benefit from it regardless of whether whether they are exporters or importers. D. Ricardo in his "Principles of Political Economy and Taxation" (1817) proved that the principle of advantage is only a special case of the general rule, and substantiated the theory of comparative advantage.

When analyzing theories of foreign trade, two circumstances should be taken into account. First, economic resources - material, natural, labor, etc. - are unevenly distributed among countries. Second, the efficient production of different goods requires different technologies or combinations of resources. It is important to emphasize, however, that the economic efficiency with which countries are able to produce different goods can and does change over time. In other words, the advantages, both absolute and comparative, enjoyed by countries are not given once and for all.

The theory of absolute advantage.

The essence of the theory of absolute advantage is as follows: if a country can produce a particular product more and cheaper than other countries, then it has absolute advantage.

Consider a hypothetical example: two countries produce two goods (grain and sugar).

Suppose one country has an absolute advantage in grains and the other in sugar. These absolute advantages can, on the one hand, be generated by natural factors - special climatic conditions or the presence of huge natural resources. Natural benefits play a special role in agriculture and in extractive industries. On the other hand, the advantages in the production of various products (primarily in the manufacturing industries) depend on the prevailing working conditions: technology, qualifications of workers, organization of production, etc.

In conditions where there is no foreign trade, each country can only consume those goods and such quantities as it produces, and the relative prices of these goods on the market are determined by the national costs of their production.

Domestic prices for the same goods in different countries are always different as a result of peculiarities in the availability of factors of production, the technologies used, the qualifications of the labor force, etc.

For trade to be mutually beneficial, the price of a commodity in the foreign market must be higher than the domestic price of the same commodity in the exporting country and lower than in the importing country.

The benefit to countries from foreign trade will be an increase in consumption, which may be due to the specialization of production.

So, according to the theory of absolute advantage, each country should specialize in the production of the product in which it has an exclusive (absolute) advantage.

The law of comparative advantage. In 1817, D. Ricardo proved that international specialization is beneficial for the nation. It was the theory of comparative advantage, or, as it is sometimes called, "the theory of comparative costs of production." Let's consider this theory in more detail.

Ricardo took only two countries for simplicity. Let's call them America and Europe. Also, to simplify the matter, he took into account only two goods. Let's call them food and clothing. For simplicity, all production costs are measured by labor time.

It should probably be agreed that trade between America and Europe should be mutually beneficial. It takes fewer working days to produce a unit of food in America than in Europe, while it takes fewer working days to produce a unit of clothing in Europe compared to America. It is clear that in this case, America will apparently specialize in food production and, exporting a certain amount of it, will receive in return a ready-made dress exported by Europe.

However, Ricardo did not limit himself to this. He showed that comparative advantage depends on labor productivity ratios.

Based on the theory of absolute advantage, foreign trade always remains beneficial for both parties. Until the ratios domestic prices differences persist between countries, each country will have a comparative advantage, i.e., it will always have a product whose production is more profitable at the existing cost ratio than the production of others. The gain from the sale of products will be greatest when each product is produced by the country in which the opportunity cost is lower.

Comparison of situations of absolute and comparative advantage leads to an important conclusion: in both cases, the gain from trade stems from the fact that cost ratios in different countries are different, i.e. The directions of trade are determined by relative costs, whether or not a country has an absolute advantage in the production of a product. It follows from this conclusion that a country maximizes its gains from foreign trade if it specializes entirely in the production of a product in which it has a comparative advantage. In reality, such full specialization does not occur, which is explained, in part, by the fact that replacement costs tend to increase as output increases. Under conditions of increasing replacement costs, the factors that determine the direction of trade are the same as under constant (constant) costs. Both countries can benefit from foreign trade if they specialize in the production of those goods where they have a comparative advantage. But with increasing costs, firstly, full specialization is unprofitable and, secondly, as a result of competition between countries, the marginal costs of substitution are leveled off.

It follows that, as food production and ready-made clothing increase in specialization and production, a point will be reached at which the ratio of costs in the two countries equalizes.

In this situation, the grounds for deepening specialization and expanding trade - differences in the ratio of costs - exhaust themselves, and further specialization will not be economically feasible.

Thus, the maximization of gains from foreign trade occurs with partial specialization.

The essence of the theory of comparative advantage is as follows: if each country specializes in those products in the production of which it has the greatest relative efficiency, or relatively lower costs, then trade will be mutually beneficial for both countries from the use of productive factors will increase in both cases.

The principle of comparative advantage, when extended to any number of countries and any number of products, can be of universal significance.

A serious drawback of the principle of comparative advantage is its static nature. This theory ignores any fluctuations in prices and wages, it abstracts from any inflationary and deflationary gaps in the intermediate stages, from all sorts of balance of payments problems. It proceeds from the fact that if workers leave one industry, they do not turn into chronically unemployed, but will certainly move to another, more productive industry. Not surprisingly, this abstract theory was heavily compromised during the Great Depression. Some time ago, her prestige began to recover again. In a mixed economy based on the theory of neoclassical synthesis, which mobilizes modern theories chronic recessions and inflation, the classical theory of comparative advantage regains public importance.

The theory of comparative advantage is a coherent and logical theory. For all its excessive simplification, it is very important. A nation that ignores the principle of comparative advantage may pay a heavy price for this - a decline in living standards and a slowdown in potential economic growth rates.

Heckscher-Ohlin's Theory of International Trade

The theory of comparative advantage leaves aside the key question: what causes cost differences between countries? The Swedish economist E. Heckscher and his student B. Ohlin tried to answer this question. According to them, the differences in costs between countries are mainly due to the fact that the relative endowment of countries with factors of production is different.

According to the Heckscher-Ohlin theory, countries will tend to export surplus factors and import scarce factors of production, thereby compensating for the relatively low provision of countries with factors of production on a global scale.

It should be emphasized that we are not talking here about the number of factors of production available to countries, but about their relative availability (for example, the amount of land suitable for cultivation per one worker). If in a given country there is relatively more of a factor of production than in other countries, then its price will be relatively lower. Consequently, the relative price of the product in the production of which this cheap factor is used in more than others will be lower” than in other countries. Thus, comparative advantages arise, which determine the direction of foreign trade.

The Heckscher-Ohlin theory successfully explains many of the patterns observed in international trade. Indeed, countries export mainly products, the costs of which are dominated by their relatively excess resources. However, the structure of production resources at the industrial disposal the developed countries, gradually flattens out. In the world market, the share of trade in "similar" goods between "similar" countries is increasing.

Leontiev's theory of international trade

The famous American economist Wassily Leontiev in the mid-1950s. made an attempt to empirically test the main conclusions of the Heckscher-Ohlin theory and came to paradoxical conclusions. Using the input-output intersectoral balance model built on the basis of data on the US economy for 1947, V. Leontiev proved that relatively more labor-intensive goods prevailed in American exports, while capital-intensive goods dominated in imports. This empirically obtained result contradicted what the Heckscher-Ohlin theory suggested, and therefore was called the Leontief paradox. Subsequent studies confirmed the presence of this paradox in the post-war period not only for the United States, but also for other countries (Japan, India, etc.).

Numerous attempts to explain this paradox made it possible to develop and enrich the Heckscher-Ohlin theory by taking into account additional circumstances that affect international specialization, among which the following can be noted:

the heterogeneity of production factors, primarily the labor force, which can vary significantly in terms of skill level. From this point of view, the exports of industrialized countries may reflect a relative excess of highly skilled labor and specialists, while developing countries export products that require large inputs of unskilled labor;

state foreign trade policy, which can restrict imports and stimulate domestic production and exports of products of those industries that intensively use relatively scarce production factors.

Alternative theories of international trade

In recent decades, significant shifts have taken place in the directions and structure of world trade, which are not always amenable to exhaustive explanation within the framework of classical trade theories. This encourages both the further development of existing theories and the development of alternative theoretical concepts. The reasons are as follows: 1) the transformation of technological progress into the dominant factor in world trade, 2) the ever-increasing specific gravity in trade in counter deliveries of similar manufactured goods produced in countries with approximately the same supply of factors of production, and 3) a sharp increase in the share of world trade attributable to intra-company trade. Consider alternative theories.

The essence of the product life cycle theory is as follows: the development of world trade in finished products depends on the stages of their life, that is, the period of time during which the product has viability in the market and ensures the achievement of the seller's goals.

The product life cycle covers four stages - introduction, growth, maturity and decline. The first stage is the development of new products in response to emerging needs within the country. Therefore, the production of a new product is small-scale, requires highly skilled workers and is concentrated in the country of innovation (usually an industrialized country), while the manufacturer occupies an almost monopoly position and only a small part of the product enters the foreign market.

In the growth stage, the demand for a product grows and its production expands and gradually spreads to other developed countries, the product becomes more standardized, competition between manufacturers increases and exports expand.

The stage of maturity is characterized by large-scale production, the price factor becomes predominant in the competition, and as markets expand and technologies spread, the country of innovation no longer has competitive advantages. The shift of production to developing countries begins, where cheap labor can be effectively used in standardized production processes.

As the product life cycle enters the decline stage, demand, especially in developed countries, is reduced, production and sales markets are concentrated mainly in developing countries, and the country of innovation becomes a frequent importer.

The product life cycle theory quite realistically reflects the evolution of many industries, but is not a universal explanation for the development of international trade. If Scientific research and development, advanced technology ceases to be the main factor determining competitive advantage, then the production of the product will indeed move to countries that have a comparative advantage in other factors of production, such as cheap labor. However, there are many products (with a short life cycle, high transportation costs, having significant opportunities for quality differentiation, a narrow circle of potential consumers, etc.), which do not fit into the life cycle theory.

The theory of scale effect. In the early 80s. P. Krugman, K. Lancaster and some other economists proposed an alternative to the classical explanation of international trade, based on the so-called scale effect.

The essence of the effect theory is that with a certain technology and organization of production, long-term average costs decrease as the volume of output increases, i.e., there is an economy due to mass production.

According to this theory, many countries (in particular, industrialized ones) are provided with the main factors of production in similar proportions, and in these conditions it will be profitable for them to trade among themselves if they specialize in those industries that are characterized by the presence of the effect of mass production. In this case, specialization allows you to expand production volumes and produce a product at a lower cost and, therefore, at a lower price. In order for this effect of mass production to be realized, a sufficiently capacious market is needed. International trade plays a decisive role in this, as it allows expanding markets. In other words, it allows the formation of a single integrated market, more capacious than the market of any single country. As a result, consumers are offered more products and at lower prices.

At the same time, the realization of economies of scale, as a rule, leads to a violation of perfect competition, since it is associated with the concentration of production and the consolidation of firms that turn into monopolists. Accordingly, the structure of markets is changing. They become either oligopolistic with a predominance of inter-industry trade in homogeneous products, or markets of monopolistic competition with developed intra-industry trade in differentiated products. In this case, international trade is increasingly concentrated in the hands of giant international firms, transnational corporations, which inevitably leads to an increase in the volume of intra-company trade, the directions of which are often determined not by the principle of comparative advantage or differences in the availability of factors of production, but strategic goals the firm itself.

Bibliography

For the preparation of this work, materials from the site http://matfak.ru/

The evolution of theories of international trade is characterized by the following stages.

The theory of absolute advantage (A. Smith). A. Smith argued that the exchange is favorable for each country and that each country finds an absolute advantage in it. The situation of absolute advantage is formulated as follows: each country has a good that it can produce more per unit cost than other countries.

It follows from the theory that if any country can supply us with some commodity at a lower price, then it is much more profitable to buy it abroad. Instead, we should offer a product in the production of which our country has an absolute advantage. This assumes that each country, by value, will export as many goods as it imports, if international trade is free from restrictions.

The theory of comparative advantage (D. Ricardo). The theory is based on the idea that there are differences between countries in terms of production. In accordance with the law of comparative advantage, a country specializes in the production and export of those goods that are relatively cheaper to it, and imports of those that are relatively cheaper in other countries than at home.

The location of production between countries should follow the law of comparative costs - each country specializes in the production of those goods for which its relative costs are lower, although in absolute terms they may be higher than in other countries. A country's possession of advantages that enable relatively lower production costs is a prerequisite for gaining a strong market position.

D. Ricardo shows the extent to which an exchange between two countries is possible and desirable, highlighting the criteria for international specialization. The price zone within which international exchange is beneficial for each subject is defined, according to Ricardo, as follows: the ratio of prices in the world market is in the range between the ratio of production costs in a given country and the ratio of costs in the rest of the world before the establishment of trade relations.

The theory of international value (J. St. Mill) shows that there is a price that optimizes the exchange of goods between countries. The price of exchange is set by the law of supply and demand at such a level that the aggregate of each country's exports pays for the aggregate of its imports.

The theory of distribution of factors of production (E. Heckscher, B. Olin) suggests that national production differences are determined by the different endowments of production factors - labor, land and capital, as well as different internal needs for certain goods.

E. Heckscher and B. Olin formulated the following theorem: countries export products of intensive use of excess factors and import products of intensive use of factors that are scarce for them. Thus, the explanations for the comparative advantages that a country has in relation to certain products are at the level of endowment with factors of production.

The theory considers international trade not just as a mutually beneficial exchange, but also as a means by which the gap in the level of development between countries can be reduced.

Leontief's paradox. Using the Heckscher-Ohlin theorem, V. Leontiev showed that the American economy in the postwar period specialized in those types of production that required relatively more labor than capital. In other words, US exports were more labor-intensive and less capital-intensive than imports. This conclusion contradicted all pre-existing ideas about the US economy. By all accounts, it has always been characterized by an excess of capital, and according to the Heckscher-Ohlin theorem, one would expect the US to export rather than import highly capital-intensive goods.

The explanation for the paradox is that the quality of labor-intensive but high-tech export products is so high that the price compensates for the costs and provides a large profit.

Thus, the theory of comparative advantage was further developed and began to include the concept scientific and technological progress and uneven distribution between countries.

The theory of foreign trade multiplier (J. M. Keynes). The effect that foreign trade has on the dynamics of national income, employment, consumption and investment activity is characterized by a quite definite quantitative dependence for each country. This effect can be calculated and expressed as a multiplier (multiplier).

The foreign trade multiplier is a factor greater than one that measures the multiplier effect of a hard positive feedback (exports) on the output (national income):

where k is the share of exports in the country's national income.

Initially, export orders directly increase output and, consequently, wages in the industries fulfilling this order. Secondary consumer spending is then set in motion.

According to the foreign trade multiplier theory, the effect that foreign trade has on national income is calculated as follows:

where E - export;

D is the increase in the national income of the country.

Modern Western theories of the international division of labor are divided into two main groups:

different versions of the concept of “interdependence”;

Concepts of interdependence have gained currency since the mid-1970s. They are the official doctrines of a number of industrialized countries and international economic organizations.

K. Nuwenhuze (Holland) when substantiating interdependence refers to environmental factors, among which he singles out the instability of the environment, the limited and exhausted nature of the Earth's natural resources.

Since, in his opinion, there is a dependence of developed countries on developing countries in raw materials, and developing countries depend on advanced ones in engineering and technology, there is their mutual dependence on each other and “mutual pressure”. Proceeding from this, an international division of labor should be built.

R. Cooper (USA) identifies four types of interdependence:

structural (when countries are so interconnected and open to each other that changes in the economy of one country will inevitably affect another);

interdependence of economic policy goals;

interdependence external factors economic development;

political interdependence.

The theory quite positively and clearly highlights the trends of increasing interdependence of countries in the system of the world economy.

Concepts of interdependence are general in nature and are the starting point for theories of "modernization" of the international division of labor.

The main idea of ​​modernizing the international division of labor is that developing countries need to abandon the policy of protectionism and widely attract foreign capital to the economy. At the same time, it is necessary to establish a new sectoral focus of developing countries. They are encouraged to specialize in the production of labor-intensive, material-intensive and standardized products for export primarily to developed countries.

Developed countries should focus their interests on those sectors of the economy where there is a large share of highly skilled labor and intensive scientific and technological progress.

the least developed among the developing countries need to focus on the production of labor-intensive products and the supply of raw materials to the world market (the most underdeveloped countries do not fall into this scheme at all);

the "newly industrialized countries" of Southeast Asia should produce goods that require comparatively skilled labor and modern technology;

developed countries need to specialize in the production of capital-intensive and high-tech products.

This theory is consistently implemented in practice.

World market: concept and characteristics

The world market is a sphere of exchange based on the international division of labor between countries that are interconnected by foreign trade and other forms of international economic relations.

Under the foreign market understand the totality of foreign markets in relation to the market of a given country. That is, the external market is always less than the world market by the value of the given national market.

The external market has both geographical (country) and sectoral structure.

All external (in relation to this) country markets interact with each other and with the world market as a whole. The consequence of this is that each national market has a certain import component, which is determined by the share of market demand met by imports, and the national industry has an export quota, which is determined by the share of export deliveries in manufactured products.

Despite the intensification of integration processes, national markets remain separated from each other by national borders and regulatory systems of national economies.

Common elements of national economic regulation systems are:

the presence of state territorial borders with their special regime for the passage of imported and exported goods and services;

regulation of the movement of goods across the border through customs duties, quantitative restrictions on imports and exports;

the use of a system of non-tariff obstacles in the form of special national standards for the quality of goods, their environmental friendliness, and safety.

Industry structure foreign market is determined by the belonging of the goods to a particular sector, industry or sub-sector of social production.

The world commodity market is a set of national markets of states, relations between which are mediated by international trade in goods, including trade in licenses and services, and international movement of capital.

The material basis for the formation of any world commodity market is the international division of labor, while the national commodity market is based on the social division of labor within the country. The consequence of this is the relative independence of any world commodity market, which is manifested in the peculiarities of the dynamics and structure of development, in the presence of a high level of concentration of “unified” customer requirements for the product, the conditions of its operation and service.

The main parameter of the world commodity market is its capacity.

The capacity of the world commodity market should be understood as that part of the total market demand of all countries, which is satisfied by external sources, that is, imports. World Import Sizes this product(usually per year) can be approximately taken as the capacity of the world commodity market.

The capacity of the national commodity market is the volume of goods sold on it during a certain period (usually a year). It is calculated on the basis of industrial and foreign trade statistics in physical units or by value:

C = P + R - E + I + D - M - Eo + Io,

where C is the capacity of the national commodity market (total consumption of this commodity per this market countries);

P is the national production of a given good in a given country;

R is the balance of inventories in the warehouses of manufacturers in a given country;

E - direct export;

I - direct import;

D - decrease (M - increase) in stocks of goods from sellers and consumers in a given country;

Eo - indirect export (goods used in another product and exported abroad as part of it - for example, electric motors in machine tools);

Io - indirect imports (products that are part of more complex mechanisms imported into the country).

The import capacity of the national market for a particular product for the year is measured by the size of direct and indirect imports, to which is added (or subtracted) the difference in the available imported goods from consumers or importers compared to the previous year.

Sources of information about the market capacity are statistical, industry and company directories, industry and general economic journals.