https://books.google.co.in/books/about/International_Finance_and_Open_Economy_M.html?id=TOXtAAAAMAAJ&redir_esc=y

Dear Sir Yoshinori Shiozawa

You are very right. It is worthy to deal unemployment in trade related theories and it should effect on trade. I have tried to find some related work but as you said there is few work on this topic.

https://books.google.com/books?hl=en&lr=&id=_xRA-KgcwpQC&oi=fnd&pg=PA1&dq=keynesian+unemployment+theory+in+international+trade&ots=0oq_ZolVyy&sig=iNjk1-S_igFxvo0NoepW59N3EgY#v=onepage&q=keynesian%20unemployment%20theory%20in%20international%20trade&f=false

http://www.jstor.org/stable/pdf/2233252.pdf?seq=1#page_scan_tab_contents

http://onlinelibrary.wiley.com/doi/10.1111/1468-0297.00317/full

http://www.jstor.org/stable/23598124?seq=1#page_scan_tab_contents

Regards

Saqib

Dear Rudrarup Mukherjee,

thank you for the information. To my astonishment, there are several books wrtitten by different authors with the same title:

International Finance and Open-Economy Macroeconomics

Do you know the major difference of these books? Why do you recommend me the book by Francisco L. Rivera-Batiz and Luis Rivera-Batiz?

Something can be found in chapters 5 and 6, about the so called Z-D diagram, in John T. Harvey, Currencies, Capital Flows and Crises: A post Keynesian analysis of exchange rate determination (Routledge Advances in Heterodox Economics) , 2008.

Dear Muhammad Saqib Irshad

thank you for the information.

I could have traced up to some documents as follows. The second URL gave me publicity pages of the Economic Journal. I look through the pages but could not detect a book that you have indicated.

(1) Dixit, A.K., and V. Norman 1980 Theory of International Trade. Cambridge University Press, Cambridge.

(2) ROYAL ECONOMIC SOCIETY PRIZE. Economic Journal 95:574.

(3) Davidson, Paul 1998 Post Keynesian Employment Analysis and the Macroeconomics of OECD Unemployment. Economic Journal 108(448): 817–831.

(4) Blecker, Robert A. 1989 International competition, income distribution and economic growth, Cambridge Journal of Economics. 13(3): 395-412.

By a pure chance, I had the book by Dixit and Norman. I could find a draft for the Paul Davidson's paper. I could not get access to Blecker's paper.

I will report later about Dixit and Norman (1980) when I will have read the relevant pages.

many authors have criticized the keynesian theory of unemployment but i find The Failure of the “New Economics”: An Analysis of the Keynesian Fallacies. by Dr. Henry Hazlitt more useful . Hence i recommend this

Dear Satfano Lucarelli, Swayam Prakash, and Yuri Mansury,

thank you, all. I am inundated by full of information.

Yoshinori Shiozawa

Dear Yoshinori,

please take a look at: G. Dosi, K. Pavitt, L. Soete. The Economics of Technical Change and International Trade . New York University Press. Washington Square, New York. (1990). It is available at http://www.lem.sssup.it/books.html

best

Maciej

Dear Maciej Grodzicki,

you taught me a good site. I find many interesting documents free to download. As for Dosi, Pavitt, and Soete book (1990), I bought the second hand copy some month ago and read it through last month when I went to Nagano (a mountain region at the center of Japan).

I am interested of this book, because it is one of rare books that studies technical change in the context of international competition. Another book in this kind is Vernon (ed.) The technology Factor in international Trade (1970).

First few chapters of Dosi, Pavitt, and Soete (1990) is wonderful. It explains well how the existing schemes of trade theory are not a good framework to treat technical change in international competition. However, I had an impression that later chapters are not very successful. Because the authors could not present a new analytical framework, their analysis is complicated and not well organized. Chapter 6 which is totally based on RCA (revealed comparative advantage) is simply a phenomenological arguments and I did not see any insights on the theme.

With your advice, I checked the book again and I found that Chapter 7 Technology Gaps in Open Economy indeed treats Keynesian unemployment. At the first reading, I could not see that it was arguing this subject. In the Index, there is no keywords like "unemployment," "involuntary unemployment," or "effective demand." I could only find keywords like "Keynesian adjustment process," "Keynesian efficiency," "Keynesian gap," and ""Keynesian view." They all appear in Chapter 7 and I should have understood that authors are arguing Keynesian unemployment in their way.

I will re-read the chapter again, but I have an impression that their framework is not well adapted for the analysis of technical change. Their main tool is Dornbusch-Fischer-Samuelson. They treats demand function as given. It is true that they have omitted full employment condition from their assumptions, but I wonder if it is sufficient for their and our purposes.

Dear Maciej, have you any different interpretation or understanding about the reading of this chapter?

John Maynard Keynes (1883-1946) was a British economist who popularized the idea that the government should play an active role in managing the economy. Cyclical unemployment is also called Keynesian unemployment. Keynes’ most famous book, published in 1936, is entitled The General Theory of Employment, Interest, and Money.

Martha,

Keynes was a great hero for economists of old generation who received education before 1970. So he remains still now one of my main source of inspiration. Unfortunately, Keynes did not leave any substantial thought on international trade although he worked much on international monetary system.

I am now working in construction of a theory that may treat involuntary unemployment under international trade situation. Strangely, there is no such theories. Harrod wrote a book on International Economics and argued unemployment but it is by no means clear how we can analyze unemployment. He was not much interested in construction analytical framework. His books are full of inspiration and good common sense, but the analytical scheme always remains somewhat obscure.

In the traditional trade theories, say in mainstream economics, there is no theory with which to analyze involuntary or Keynesian unemployment. Some papers and books argue unemployment, but almost all of them argue that unemployment emerges because the price and wage system is sticky and stays out of equilibrium.

I have an idea on the new scheme as a part of development of my theory on international values: The New Theory of International Values: an Overview.

I have uploaded a draft version in my contribution page in ResearchGate. It is published as a chapter of a book published this year. If you are interested in the new theory, I will send you a PDF copy of mine. Unfortunately the new theorem on which I believe we can construct a Keynesian theory of unemployment does not appear in this paper, because the new theorem is quite new one that was obtained in the end of this August. I am planning to talk about this new result in the coming conference of Keynes Society Japan on December 3 in Tokyo.

Dear Yoshinori:

yes, Iam interested , You could send me a PDF copy

Best Regards

Dear Martha,

thank you for paying interest for the New Theory of International Values. I have send the PDF copy to your mail box.

Yoshinori

P.S. The session on Trade and Unemployment of the Keynes Society Japan annual conference has ended successfully by the contents and discussions.

It was pity that we had smaller audience than expected. It may reveal the general atmosphere among Keynesians that international trade theory has little to do with their interest. This is deplorable because we are now in a globalized economy (if you like it or not) and employment policy cannot be analyzed without international trade relations.

I tend to agree with Yoshinori ShioShiozawathat self-dominated Keynesians (usually Post-Keynasians) are not much interested in open economics in general, and trade in particular.

As one of them told me years ago when I wanted to read about endogenous money (monetary circuit) and stock-flow modelling in an open economy: everything is too complicated if we include international trade and financial flows.

If we drift a bit from Old or Post Keynesianisms, it may be of interest to look into the "New Keynesian" school which tried in the 1990s to give micro-foudations to Keynesian macroeconomics.

Because of frictions in adjusting prices ((including wages), an economy may remain in desiquilibrium and suffer unemployment when faced with an external shock. But I am not sure this frictional unemployment is what is usually ment by Keynesian unemployment

An other way may be the French "School of Regulation" and the issue of realising the production: the extension of GVC trade, in particular with China, recently increased world production of tradable goods without a parallel increase in consumption of similar goods (Chiese households save a lot and when they get indebted, it is to pay for housing, a non-tradable product). There is therefore an underconsumption of manufactured goods, and unemployment in old industrialised countries. But this is more kind of Marxist or Post Marxist approach because it is structural rather than cyclical.

in brief, I cannot help much.

best.

Hubert

I am very much interested in this topic and in fact have published several papers in Japanese Economic Review. I apply my dynamic stagnation theory with wealth preference to a two-country two-commodity framework and obtain various keynesiandemand Keyensunesian results. If you are interested in, please have a look.

"Macroeconomic Interdependence between a Stagnant and a Fully Employed Country”, Japanese Economic Review, forthcoming, 2017, of OI: 10.1111/jere.12156.

“International Economic Interdependence and Exchange-rate Adjustment under Persistent Stagnation,” Japanese Economic Review, 65, No.1, March 2014, 70-92.

“International Asymmetry in Business Activity and Appreciation of a Stagnant Country's Currency,” Japanese Economic Review, 57, No.1, March 2006, 101-120.

"Country Size, Specialization Patterns and Secular Demand Stagnation", ISER Discussion Paper No.1017, November 2017.

Hubert,

thank you for giving your short account on our problem. You showed me a good point of discussion.

As you put it, Post Keynesians are only interested in macroeconomic models and depends much on their intuition. They generally reject microfoundations as delusions (e.g. King, 2015, Advanced Introduction to Post Keynesian Economics, chap. 4). King admits that it is necessary to have their own microeconomics (ibidem., chap. 5). What he presents as Post Keynesian microeconomics is a set of descriptions of individual agents' behavioral principles. There is no analysis how these actions compose an economic process as a whole. In sum, Post Keynesians lack their microeconomics but they are not aware of this facts.

Although King (2015, p.54) pretends that Post Keynesians put more emphasis on globalization (than mainstream economics) but his interest is only on global financial crisis. It is quite natural that Post Keynesians have no theory to analyze Keynesian unemployment in international trade situation.

New Keynesians are not Keynesians in the normal sense of the word. It is a variety of neoclassical economics as long as theoretical framework is concerned. They are different from the mainstream neoclassicals by the fact that they are more concerned in unemployment and think that political interventions are sometimes useful. As Hubert wrote, the main mechanism that New Keynesians depict as cause of prolonged unemployment is the stickiness of prices. For example, they think that prices become sticky because there is for example menu cost (cost to re-write menus). They were ingenious in inventing theories why the prices are sticky.

The unemployment which occurs because prices are not adjusted is a kind of involuntary unemployment, but this easily leads to the elocution that unemployment is caused by the fact that trade unions are refusing to bring down their wage rates.

My theory of international values as well as domestic values contends that wages and prices do not change for sometime because there is no reason to change wage rates and prices for firms. For example, in the case of international values, the condition (iii) of the fundamental theorem (Shiozawa, 2017 The New Theory of International Values: An Overview, p.18) is given in this form:

J w ≧ A p.

Each row of this inequality means that the full cost of production is greater or equal to the unit price of the product. Except for competitive production techniques that satisfies this inequality by equation, all other production techniques are unprofitable. We have on the other hand (this is a new result which does not appear in Shiozawa, 2017), if the set of competitive techniques form a spanning tree as bipartite graph of countries and products, the international values are unique up to scalar multiplications. Then, there are no needs that prices change even world demand changes as far as it can be produced as net product by means of competitive techniques. We are looking a similar world but the reason why prices remain unchanged differs deeply.

Of course, when time passes, each firm tries to improve their production techniques and set of production techniques changes. In this case, international values change. This means wage rates and prices change.

Regulation approach group is very powerful in Japan. Robert Boyer comes every year to Japan and passes two or three weeks. They are very keen in finding new trends in economy. Thus they argue Global Value Chains and Trade in Value Added. However, in my impression, they are poor in theory making. Boyer contends that they are intentionally aiming an “intermediate theory,” not a grandiose theory like Marx. They are practical in choosing their models. They do not inquire very deeply why this or that relations hold. They are satisfied by an ad hoc models and do not try to seek the very foundation of the stylized facts in their favor.

As conclusion, I may say that combining trade theory and Keynes's theory unemployment is very difficult and no conventional theories are adapted for it.

Thank you, Professor Ono, for showing interest in my question.

I could only get copies of the following two papers:

• "Macroeconomic Interdependence between a Stagnant and a Fully Employed Country”, Japanese Economic Review, forthcoming, 2017.
• "Country Size, Specialization Patterns and Secular Demand Stagnation", ISER Discussion Paper No.1017, November 2017.

As the mode of thinking is very different between you and me, it would take a lot of time to read your papers.

If you like, please read my paper on international values. I will send a copy by e-mail to you. My paper is concerned so-to-speak microfoundations of international trade theory.

Up to date, there are only two general theories which can treat input trade: general equilibrium theory and my theory of international values. The former assumes by assumption full employment. By consequence, it can analyze unemployment only by assuming that prices are not fully adjusted. The new theory of international values does not take such a framework.

In particular, I have gotten a new result (which does not appear in my paper of 2017) by which I can redefine the regular value by a system of production techniques and not relying on the maximal frontier of production possibility set. If the production is available within the system, there is no necessity to change product prices. Firms do not have incentives to change the production techniques either, because to do so means the switch to a technique with higher cost of production. In this sense, we can safely argue in constant values (wage rates and prices) as long as the world demand remains to be producible by the production techniques belonging to the system.

Questions of technical change and shifts from a system of production techniques to another are problems to be developed in the coming future.

Dear Yoshinori:

"It is important to recognise that Keynes had a brief period, in the early 1930s, as a protectionist. But for the vast majority of his life, both before and after, he favoured free trade, and believed it promoted peace". Keynes and International Economic and Political Relations A paper by Professor Don Markwell, Deputy Vice-Chancellor (Education) of The University of Western Australia

Dear Yoshinori:

I didn´t found literature about Trade Theory and keynesian Unemployment.

Thank you, Martha, for your efforts to find literature related to trade theory and Keynesian unemployment. This is a theme that is not usually asked in trade theory. This signifies the great lacuna in the present trade theory. As I have argued above, mainstream trade theory excludes (involuntary) unemployment by assumption.

I have found a copy of the paper you cited "Keynes and International Economic and Political Relations" by Don Markwell at

http://www.trinity.unimelb.edu.au/Media/docs/TrinityPaper33-61f67cdc-82f0-4363-a011-7beded1c37ba-0.pdf

This seems very interesting. I have made a hard copy and started reading it.

Dear Martha,

I have read Don Markwell's lecture Keynes and International Economic and Political Relations. It describes transition of Keynes's thought on international trade policy. As you have cited, he had a brief period, in the early 1930s, as a protectionist. However, there is no description on what kind of trade theory Keynes had. We may conclude that Keynes had no concrete idea on international trade theory. It seems in this field he was practical statesman who considered without having any firm theory. In this case, he was much more like a dentist than a scientist.

Dear Stefano Lucarelli,

I gave quick eye on John T. Harvey Currencies, Capital Flows and Crises: A Post Keyensian analysis of exchange rate determination. It is sharply focused on foreign exchange rate. In various place, the author talks about unemployment but it is treated not as a main subject of research.

Do you really think Harvey has developed a specific theory on Keynesian unemployment in international trade situation?

Yoshinori

A good news for us!

Hideo Sato has published (in the form of a discussion paper) probably the first paper (in English) that treats Keynesian unemployment in the context of international trade:

Research A Graham-type Trade Model with Keynesian Unemployment: Simul...

As we have discussed, there are only a few papers or books that treat Keynesian (or involuntary) unemployment. Even in the cases where the authors argue unemployment, their theoretical framework has been ambiguous. Sato's paper is based on Graham's model. A few of international economists know who Graham is. Although he was a great international economists in the first half of the 20th century, his great insight had not been succeeded and has been almost forgotten.

I once posed a question on him but there were only a few people who showed interest on the question:

Do you know anyone who pay (paid) due attention to Frank D. Graham’s theory of international values?

https://www.researchgate.net/post/Do_you_know_anyone_who_pay_paid_due_attention_to_Frank_D_Grahams_theory_of_international_values

One of my colleagues taught me a book:

Johan Deprez and John T. Harvery (eds.) (1999) Foundations of International Economics: Post Keynesian Perspectives. London and New York: Routledge.

It was for me a bit disappointing, because the book contained among 14 chapters only one chapter that treated trade problem. Other papers are arguments on open macro economy and exchange rates.

There is an opportunity to write about Keynes and trade theory.

It is wonderful if you have a chance to write about Keynes and trade theory. I hope our discussion here may contribute to your writing.

Yoshinori thanks, I will to try, because I think Keynes is one of the most important economists, He gave solutions a big problems: unemployment

Dear Martha,

If you do that, please consult two of my papers:

(1) The new theory of international values

Compare Theorem 4.2 and Theorem 4.3. I will send you the published copy by an e-mail..

(2) The Nature of International Competition between Firms

This is a chapter of a book which will be published this year. I will send you a PDF copy of the draft before English revision. Sections 3 to 5 would be useful.

Ysohinori

Eight months have passed since I have posted this question. 19 people are following. And yet, we have detected no books or papers that argue Keynesian unemployment in the international trade framework. This is a very strange state of affairs if we reflect that world economy is going more and more globalized.

John Maynard Keynes and International Relations: Economic Paths to war and peace.

Author(s):Markwell, Donald Reviewer(s):Lawlor, Michael S. Published by EH.NET (February 2008)

"In the chapter of introduction, begins with a brief discussion of the writings of John Maynard Keynes and how students of Keynes have failed to study his thinking from the perspective of international relations".

"It focuses on the topic of the international relations views expressed by Keynes over his long career, from his involvement in the First World War as a Treasury official and as Lloyd George’s economic advisor at the Paris Peace Conference; through his interwar position as a prominent analyst of international monetary problems; to the part he played in the British Treasury during the Second World War. There he was very influential on the policies of how Britain would pay for the war, the form that the post-war international payment systems would take under the Bretton Woods system, and the negotiation of the terms of the American post-war loan to Britain in 1946, shortly before his death".

I have found an article by Claude Schwob in French which sheds some light on this question. It was written in the context of the ill-fated International Trade Organisation (ITO), which was agreed internationally at the Havana Conference in 1947-48 but not ratified by the United States.

The article discusses Keynes, James Meade and Lionel Robbins together because they collaborated in an official British wartime committee which considered the policies that eventually framed the ITO.

Here are the article’s citation and a link to a free download of it:

Schwob, C. (2007). Keynes, Meade, Robbins et l'Organisation Internationale du Commerce. L’Actualité économique, 83(2), 255-283. doi:10.7202/017519ar.

At the link below you can read the abstract in both French and English and download the paper freely: Article Keynes, Meade, Robbins et l'Organisation Internationale du Commerce

If you cannot read French, you can still read the paper’s three-page bibliography, over half of which is devoted to writings by Keynes.

Keynes may not have developed an elaborate theory of international trade but this paper argues that from about 1930 until his death he did have consistent ideas on trade policy in relation to unemployment. However, for him trade policy was subordinate to domestic policies that would provide for and maintain full employment and, with it, economic stability. It seems that during the war he still held to the principle he advocated in the early 1930s that, in the exceptional circumstances of the time and the role of Great Britain as the leading economic power, some closure of the economy was justified by the need to prevent necessary financial measures, such as lower interest rates, from being undermined by foreign exchange pressures. Meade was the main evangelist and designer of the ITO, but Keynes accepted it as a tool for the international cooperation which he desired in this field. An essential counterpart (probably more important than trade policy as such in Keynes’ mind, although not achieved at Bretton Woods) was his idea of an international currency, the bancor, which was meant to balance international payments and avoid excessive commercial competitiveness.

I hope that is a fair précis both of Schwob’s findings and what can be deduced as Keynes’ thinking on international trade and unemployment, and the place of trade policies in his wider set of policy prescriptions.

Thank you, Martha and Thomas,

I started to read Claude Schwob (2007) that I downloaded from

Article Keynes, Meade, Robbins et l'Organisation Internationale du Commerce

It is a long paper and I could not read it at one stroke.

I started to read the article too, after make comments and opinions about it. I dowloaded french version. I share with you.

Best regards

Thank you! I look forward to your thoughts on this - Yoshinori Shiozawa (and anyone else) too.

Best regards,

Tom

Incidentally, it occurred to me that if any economist should have followed up this line of thought it was Charles Kindleberger. So I looked in an old copy of his textbook on International Economics, but found no mention of either employment or unemployment in either the index or the contents page.

Perhaps this is a reflection of the assumption of a closed economy in so much of neo-classical theory - even affecting as great a thinker as Keynes, who turned much of the neo-classical ideas he was trained in inside-out.

I have read through Claude Schwob's paper suggested by Thomas Lines 5 days ago:

Keynes, Meade, Robbins et l’Organisation Internationale du Commerce, L'Actualité économique, 83(2): 255–283.

This was an interesting paper to read. We see now trade dispute which is going on between the two big economies, the U.S. and China. We know the existence of the WTO, how it is working, but I did not know the prehistory of the WTO. This paper was a story about how three British economists Keynes, Meade and Robbins struggled to establish an organization for international cooperation in the field of international trade. Their efforts eventually failed, but we can know how our predecessors worked for the establishment of an organization that we now think as something like a natural order.

As for my own interest (the theme of this question page), no hint was discovered, as it has been expected from Thomas's introduction. There were two or three places that Keynes talks about unemployment and employment policy, but all of them are concerned with the national economy. Descriptions on Meade and Robbins contained no reference on unemployment.

As Thomas pointed out, it is sure that Keynes had "consistent ideas on trade policy in relation to unemployment", but it is also evident that he had no time to develop "an elaborate theory of international trade" and argue his involuntary unemployment in that framework. Guessing from some of his fragments, it is possible that Keynes was thinking that unemployment is a domestic problem and not a question to examine or argue in international framework.

In the time where Keynes lived, this may have been a plausible attitude, because each national economy was much more independent with each other. But, how about now. Global value chains (or global supply chains, or global production networks) are spreading rapidly and accumulating importance. We cannot talk about employment policy only thinking of a domestic economy. Now, we cannot go without considering repercussions of a domestic policy on the other economies. If we do not have any good theory, how can we argue international cooperation and a coordinated economic policy? Do someone have any ideas?

Thank you for these comments on that paper. I think they are quite shrewd. Insofar as Keynes did have ideas on the international economy and unemployment, my reading of it is that he wanted to insulate the domestic policies needed for full employment from harmful external influence by varying interest rates to affect the exchange rate and, in extreme cases, with tariffs. The only wider application beyond the UK economy was his desire to achieve balance in international payments through his “bancor” currency system. I accept that this was not a developed theory but some inferences I have drawn from what he did write.

Keynes attributed the unemployment of the 1930s in considerable part to the influence of gold (which he called a “barbarous relic”) through the operation of the Gold Standard. This no doubt explains his emphasis on currency systems rather than trade as such. Trade theory was in any case very rudimentary at that time: little more than Ricardo’s wine-and-textiles case, with little awareness even of the Heckscher-Ohlin Theorem. So Keynes did not think of working on it.

Incidentally, if you’re looking for the prehistory of the WTO, do not forget the General Agreement on Tariffs and Trade, which was agreed in 1947 (and started in 1948) as an interim measure in the expectation that the ITO would follow soon. Using the important concept of “most favoured nation,” it gradually reduced tariffs between its member nations in a series of negotiations called “trade rounds.” However, there were major exceptions to trade liberalisation for agricultural products and textiles & clothing, to the detriment of developing countries (most of which were not members of GATT). The GATT Uruguay Round, starting in 1986, decided to set up some additional, more ambitious agreements and this created the WTO, which started in 1995. The GATT is still one of the agreements administered by the WTO. There is a good encyclopedia account of this at www.britannica.com/topic/World-Trade-Organization.

Keynes was focused on the analysis of macroeconomic and financial issues. So one of the conclusions of the article by Claude Schwob is that "Keynes sees international institutions as highly endowed with economic skills. The central institution it refers to concerns monetary and financial aspects of international cooperation But it must be accompanied by other international institutions, whose role is to regulate the global economic activity of the non-financial sphere".

Thomas Lines > Trade theory was in any case very rudimentary at that time: little more than Ricardo’s wine-and-textiles case, with little awareness even of the Heckscher-Ohlin Theorem. So Keynes did not think of working on it.

Yes, I agree with you. We easily forget that the trade theory was very "rudimentary" in 1930's,

My question of this page (the original question) is not limited to know whether Keynes himself developed a theory of unemployment in international trade situation. I am wondering why later Keyensians and New and Post Keynesians di not tried ti develop such a theory. This defect must owe that they are only interested in macroeconomic viewpoint (as Martha rightly pointed out). To argue international trade, we needs a microeconomics (or value theory in a more appropriate name).

I have just written a reply to another question about international trade, which deals with some of that issue (although without reference to unemployment as such). It is at https://www.researchgate.net/post/Why_do_countries_engaged_in_international_trade?view=5b86241fb93ecd74ae65f2c0.

I am not very familiar with post-Keynesian theory, but I am not aware that it has dealt with the wider consequences of free international trade and capital movements any better than the neo-classical or Austrian schools have. Someone please tell me if I am wrong about that.

the world economy changed with globalization and trade treaties, protectionism remained in the past as an industrialization strategy

Quite so, Martha Pantoja. And in making those changes, the rich countries “took away the ladder” from the others, in Ha-Joon Chang’s memorable phrase.

Globalisation is not an act of God but in large part the result of economic policy changes. Any or all of these can be reversed if desired. To my mind, the most important is to reimpose what are now called capital controls (and used to be called exchange controls) as a norm, however difficult it may be to achieve. Given the power that financial interests now hold over the richest countries’ governments, I can see that it will be hard to do politically as well as technically. But in light of the continued widening of international income gaps between rich and poor countries, I think it is absolutely necessary.

Hello Tom, I mentioned the globalization because in the few articles in which Keynes analyzes international trade, he mentions protectionism as a mechanism to protect the national industry. Keynes his works are focused on macroeconomic analysis and the financial issue: The economic consequences of peace, The general theory of employment, interest and money and the Keynes Plan, to name a few.

Best Regards

Hello Yoshinori:

Post-Keynesian economists emphasize the need for a fiscal policy that encourages occupation and rents, because they were based on the main writings of Keynes. The post-Keynesian school is based mainly on: skepticism about the way the market works, especially the functioning of the market. work, the insufficiency of aggregate demand to maintain full employment, the emphasis on uncertainty and the role played by time in decision-making, recognizing monetary factors as influential in the real economy and accepting that the price of a product is determined by large companies.

The Keynesians of Cambridge: Kahn, Joan Robinson, Harcourt, Nicholas Kaldor and the "North American Post-Keynesians": Sidney Weintraub, Paul Davidson, Hyman Minsky, Alfred Eichner, Jan Kregel, etc. The post-Keynesians take up the original ideas of Keynes.

On the practical policy side, Professor Dani Rodrik just published an interesting comment with the title, “Can Trade Agreements Be a Friend to Labor?” It is at https://www.project-syndicate.org/commentary/trade-agreement-labor-provisions-small-practical-effect-by-dani-rodrik-2018-09.

you`re right Thomas, economic theories differ from reality.

It`s interesting Professor Dani Rodrik article, because it highlights, among other points, United States-Mexico Agreement, in labor point out that 40-45% of a car be made by workers earning at least $16 per hour.But this is not because tHEY want to be friendly with Mexican workers in the automobile industry, the objective is to make it more expensive and to invest in the US.

Thank you, Martha. Yes, we should always be sceptical of claims about who benefits from any policy. When my country joined the European Economic Community in 1973, one of the costs was the abandonment of its “cheap food” policy, which had been pursued by every British government since the Repeal of the Corn Laws in 1846, leading to the removal of all taxes and tariffs from foodstuffs and other necessities of life. This was widely accepted as humane because it reduced the cost of living for everyone. It was only much later (in fact, when I did a degree in Development Studies) that I understood that it was really a mechanism to reduce the subsistence wages of factory workers, so that British manufactures could compete better with those of other countries that were beginning to industrialise. The 1846 law (which was pushed through by a Conservative Prime Minister, Robert Peel) was actually more significant in marking the end of the landowners’ domination of British politics in favour of the new class of factory owners.

Hello Thomas:

In the world we speak of free trade, there are many treaties and trade agreements for example Mexico has a network of 12 Free Trade Agreements with 46 countries (FTAs), 32 Agreements for the Promotion and Reciprocal Protection of Investments (APPRIs) with 33 countries and 9 agreements of limited scope (Economic Complementation Agreements and Partial Scope Agreements) within the framework of the Latin American Integration Association (ALADI).

However,

However, some countries have resumed protectionist measures to protect their economies and be more competitive, such as dumping.

Even now, it is open to debate whether Mexico is better placed as the poster boy of globalised free trade and integration than it was when, as late as 1980, it rejected membership of the GATT in a referendum. There are strong arguments on both sides, but Mexico’s membership of NAFTA has certainly not been an unqualified success. That surely must lead to a conclusion that free trade and integration have to be judged on their merits and demerits, according to the context. This reflects an old bedrock principle of development, now so frequently ignored.

Hello Thomas;

I see a double discourse in relation to international trade, it talks a lot about free trade, but in reality it is looking for some countries are strong protectionist measures, in many cases for developed countries.

That‘s nothing new. The GATT is held up as having systematically reduced trade barriers through periodic rounds of negotiations between its member states. However, although its members accounted for most of international trade, even by 1967 they were no more than 50 in number: very many newly independent countries and other smaller states did not join.

And the GATT had two major exceptions to trade liberalisation. The first was in agriculture, which its members were allowed to protect for purposes of food security. There was a strong case for this (and there still is), but it had the side-effect of making it more difficult for commodity-dependent developing countries to export some of their most important commodities.

The second was the Multi-Fibres Arrangement (MFA), which was introduced in 1974 as a temporary measure but repeatedly renewed until 2004, ten years after the creation of the WTO; and a previous arrangement for cotton textiles had started in 1961. The MFA imposed national quotas on non-members’ exports of textiles and clothing to GATT members. And if a country didn’t have a quota, it could be hard work to acquire one. Since this tends to be the first sector to industrialise in most countries, the MFA acted as a serious brake on poorer countries’ industrial development.

Are you looking for something like this?

https://www.oecd.org/site/tadicite/50287285.pdf

If John Maynard Keynes were alive he would recommend "The Economic Consequences of the Peace.

Best Regards