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Wednesday, August 21, 2013

'What Trade Theory Doesn’t Explain'

Nancy Folbre:

... Trade theory emphasizes that those who benefit from free trade should be able to compensate those who suffer, making everyone better off. What trade theory doesn’t explain is why the beneficiaries would offer such compensation unless they are forced to do so. ...

And if one political party is absolutely opposed to redistribution no matter what -- even if it's to compensate the losers in a way that makes everyone better off -- then government can't ensure that the beneficiariues are "forced to" compensate the losers.

    Posted by on Wednesday, August 21, 2013 at 12:33 AM in Economics, Income Distribution, International Trade | Permalink  Comments (64)


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