The Wrong Conclusion on Comparative Advantage
Comparative advantage allowed all counties to effectively communicate and trade with each other, yet Raul Prebisch and Vijay Prashad find fault with this notion. Prebish’s essay, “The Economic Development of Latin America and Its Principal Problems,” and Vjay Prashad’s “
The
“…the establishment economists in the Unites states and Europe as well as their leading politicians saw the development economists and the leaders of the Third World as ‘Irresponsible wild men, radical utopians who should at most be entrusted with minor extension and offshoots’ of policy already decided by the First World-dominated institutions” (Prashad 64).
Stinger neglects to fully recognize the accomplishments of the
Prebisch argues that the darker nations have been ravaged by the colonialism of the
Also, Third World companies needed to learn how to better utilize their raw materials and distribute their finished products in the 1940s (Prashad 65). The
The Second World nations, the Soviet Union and
Prebisch said, “We thought that an acceleration of the rate of growth would solve all problems. This was our great mistake. What was needed alongside growth were ‘changes in social structure,’ indeed a “complete social transformation” (73). Prebisch shows that he was completely oblivious his own answer: Capitalism works. Prebisch should have put aside his Marxist values and realized that capitalism has enhanced the overall economy and, as long as all parties fully participated, made the world function on the same playing field. Prebisch even states he might have even endorsed capitalism when Preshad analyzes, “This [Prebischian theory] did not mean that every region should produce everything for itself and therefore live in a state of pure autarky. On the contrary, trade is crucial because some regions have smaller markets than others, and raw materials and agricultural lands are not evenly distributed along national lines” (67). Ultimately, both authors contradict each other and inadvertently acknowledge the accomplishments of the First World’s effect on the
Works Cited
"BBC NEWS Africa Profile:
Prashad, Vijay. The Darker Nations a People’s History of the Third World.
