Patrick J. Buchanan, a former presidential candidate argued in his book on the global economy that there is a flaw in David Ricardo’s theory of comparative advantage.
“Classical free trade theory fails the test of common sense. According to Ricardo’s law of comparative advantage if America makes better computers and textiles than China does, but our advantage in computers is greater than our advantage in textiles, we should (1) focus on computers, (2) let China make textiles, and (3) trade computers for Chinese textiles.
The doctrine begs a question. If Americans are more efficient than Chinese in making clothes, why surrender the more efficient American industry? Why switch to a reliance on a Chinese textile industry that will take years to catch up to where American factories are today? “
Please read the above statement and write a paper of two typed pages in response to the statement. In your paper, you should explain what forces drive international trade. Be careful to explain who gains and who loses in the exporting and importing countries as a result of trade. You should also take a position and say whether you agree or disagree with Patrick Buchanan and defend your position.
The best way to go about doing this assignment is to first refer to chapter 9. You should also consult at least three professional journals and other sources. (No blogs or wikepedia). If you do not know how to access professional journals, please call the library and ask the reference librarian.
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