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 must 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. The possession of the country's advantages, which allow for 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. Ohlin) suggests that national production differences are determined by different endowment with factors of production - 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, explanations for the comparative advantage 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 in accordance with the Heckscher-Ohlin theorem, one could 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 of scientific and technological progress and the uneven distribution of it 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 that fulfill 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 highlights 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 of external factors of 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 into 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 the share of highly skilled labor is large and scientific and technological progress is intensively proceeding.

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 satisfied 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.

The sectoral structure of the 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. The size of world imports of a given product (usually per year) can be approximated 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 a given commodity in a given market of the country);

P is the national production of a given commodity 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 in comparison with the previous year.

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

Theories of international trade have undergone a certain process of development. The main questions they tried to answer were "what is the reason for the division of labor between states" and "on what basis is the most effective international specialization chosen?"

Classical theories of international trade

Theory of Comparative Advantage

The first theories were laid down by the founders of classical economic theory, Smith and Ricardo, in the 18th and early 19th centuries.

Thus, Smith laid the foundation for the theory that the reason for the development of international trade is the benefit that importers and exporters can receive from the exchange of their goods. He also developed the theory of “absolute advantage”: a country has this advantage if it has a product that, relying on its own resources, can produce one more unit than another. Such advantages can be natural (climate, soil fertility, natural resources) or acquired (technology, equipment, etc.).

The benefit that a country will receive from international trade will consist in an increase in consumption, which will occur due to a change in its structure and specialization.

Riccardo's comparative cost theory, developed and supplemented by Haberler

It considers 2 countries producing 2 types of goods. For each country, a curve is constructed that clearly shows which production is more profitable for each country. This theory is simplified, it shows only 2 countries and 2 goods, it comes from the condition of unlimited trade and labor mobility within the country, as well as the presence of fixed production costs, the absence of transport costs and technical change. That is why the theory is considered quite illustrative, but not very suitable for reflecting the real conditions of the economy.

Heckscher-Ohlin theory

This theory, created in the 20th century, was intended to reflect the features of trade based to a greater extent on the exchange of manufactured goods (because of this, the dependence of countries' trade on their natural resources has significantly decreased). According to their theory of international trade, the differences in costs incurred by countries in the manufacture of products are explained by the fact that:

• in the production of different products, factors are used in different ratios;
• countries are very differently provided with the necessary factors of production;

From this follows the law of proportionality of factors, which reads as follows: for each state wants to specialize in the production of the goods that require the presence of those with which it is well endowed. in fact, it is an exchange of those factors that are in excess for those that are rarer for this country.

Leontief's paradox

In the late 40s of the 20th century, the economist Leontiev, while empirically testing the conclusions of the previous theory on the basis of data from the American economy, came to an unexpected paradoxical result: mainly labor-intensive products were exported to the United States, while capital-intensive products were imported. This was contrary to Heckscher-Ohlin's theory of international trade, since in the United States capital, on the contrary, was considered a much more abundant factor than labor costs. Leontiev suggested that in any combination with a given amount of capital resources, 1 man-year of American labor is equal to 3 man-years of foreign labor, which was associated with a higher qualification level of American workers. According to the statistics he collected, the United States exported goods whose production required a more skilled labor force than imported ones. Based on this study, in 1956 a model was created that took into account 3 factors: skilled labor, low-skilled labor and capital.

Modern theories of international trade

These theories try to explain the features of international trade in the modern world, which no longer obey the logic of the classical theory of international trade. This is due to the fact that it occupies an increasing place in the economy, the volume of counter deliveries of goods similar in quality is increasing.

Product life cycle theory

The life stage of a product is the period during which it has value in the market and is in demand. The stages of a product's life are product introduction, growth, maturity (sales peak) and decline. When a product ceases to satisfy the needs of its market, it begins to be exported to less

Theory of economies of scale

The main essence of this effect is that with a special technology and the level of organization of production, the average long-term costs will decrease as the volume of output of the goods increases, making savings. It is profitable to sell the surplus produced goods to other countries.

International trade is a form of communication between producers of different countries, arising on the basis of the international division of labor, and expresses their mutual economic dependence.

International trade is a process of buying and selling between buyers, sellers and intermediaries in different countries.

The term "foreign trade" refers to the trade of a country with other countries, consisting of paid import (import) and paid export (export) of goods.

At different times, various theories of world trade appeared and were refuted, which in one way or another tried to explain the origin of this phenomenon, to determine its goals, laws, advantages and disadvantages. The following are the most common theories of international trade.

Mercantelist theory of international trade.

Of the theories of international trade, the mercantilist theory was the first to appear, developed and put into practice in the 16th-18th centuries. Thomas Maine and Antoine Montchretien were prominent representatives of this school. Supporters of this theory did not take into account the benefits that countries receive from the import of foreign goods and services in the course of the international division of labor, and only export was considered economically justified. Therefore, the mercantilists believed that the country needed to limit imports (except for the import of raw materials) 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). The influx of gold into the country as a result of a positive trade balance increased the opportunities for capital accumulation and thus contributed to the economic growth, employment and prosperity of the country.

The main drawback of this theory should be considered the idea of ​​mercantilists, dating back to the Middle Ages, that the economic benefit of some participants in a barter transaction (in this case, exporting countries) turns into economic damage to others (importing countries). The main advantage of mercantilism is the export support policy he developed, which, however, was combined with active protectionism and support for domestic monopolists. In Russia, the most prominent mercantilist was probably Peter I, who encouraged Russian industry and the export of goods in every possible way, including through high import duties and the distribution of privileges to domestic monopolists.

A. Smith's theory of absolute advantages.

From a completely different premise (compared to the mercantilist theory) came the theory of absolute advantages. Its creator, Adam Smith, begins the first chapter of his famous book, An Inquiry into the Nature and Causes of the Wealth of Nations (1776), by saying that "the greatest progress in the development of the productive power of labor, and much of the art, skill, and intelligence with which he directed and applied, were, apparently, the result of the division of labor", and further concludes that "if any foreign country can supply us with some commodity at a cheaper price than we ourselves are able to produce it, much it is better to buy it from her with some part of the product of our own industrial labor applied in that area in which we have some advantage.

The theory of absolute advantage states that it is expedient for a country to import those goods for which its production costs are higher than those of foreign countries, and to export those goods for which its production costs are lower than those of foreign countries, i.e. there are absolute benefits. In contrast to the mercantilists, A. Smith advocated freedom of competition within the country and on the world market, sharing the principle of "laissez-faire" put forward by the French economic school of physiocrats - non-intervention of the state in the economy.

The strongest side of the theory of absolute advantages should be attributed to the fact that it demonstrates the advantages of international trade for all its participants, to the weak side - that it leaves no place in international trade for those countries in which all goods are produced without absolute advantages over other countries.

The theory of comparative advantages D. Ricardo.

Former London dealer David Ricardo, in his book "Principles of Political Economy and Taxation" (1817), devoted a chapter to this theory, in which he proved that it is beneficial for all countries to participate in international trade.

D. Riccardo proved that international exchange is possible and desirable in the interests of all countries.

The essence of the theory of comparative advantage is this: 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. The principle of comparative advantage, when extended to any number of countries and any number of products, can be of universal significance.

Thus, the theory of relative advantage recommends that a country import that good whose production costs in the country are higher than for the exported good. Subsequently, economists proved that this applies not only to two countries and two goods, but also to any number of countries and goods.

The main advantage of the theory of comparative advantage is the convincing evidence that international trade is beneficial to all its participants, although it may give less benefit to some, and more to others.

The main drawback of Ricardo's theory can be considered that it does not explain why comparative advantages have developed. A serious drawback of the theory of comparative advantages 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. The theory proceeds from the fact that if workers leave one industry, they do not turn into chronically unemployed, but move to another industry that is more productive.

Theory of ratios of factors of production.

The above question is largely answered by the theory of the ratio of factors of production, developed by the Swedish economists Eli Heckscher and Bertil Ohlin and detailed in the latter's book entitled Interregional and International Trade (1933). Using the concept of factors of production (economic resources), created by the French entrepreneur and economist J.-B. Say and later supplemented by other economists, the Heckscher-Ohlin theory draws attention to the different endowment of countries with these factors (more precisely, labor and capital, since Heckscher and Ohlin focused on only two factors). The abundance, excess of some factors in the country makes them cheap compared to other, less represented factors. The production of any product requires a combination of factors, and a product whose production is dominated by relatively cheap, surplus factors will be relatively cheap both at home and in the foreign market, and thus will have a comparative advantage. According to the Heckscher-Ohlin theory, a country exports those goods, the output of which is based on factors of production that are surplus to it, and imports goods, for the production of which it is less endowed with factors of production.

Leontief's paradox.

The Heckscher-Ohlin theory is shared by most modern economists. However, it does not always give a direct answer to the question why this or that set of goods prevails in the country's exports and imports. An American economist of Russian origin V. Leontiev, studying US foreign trade in 1947, 1951 and 1967, pointed out that this country with relatively cheap capital and expensive labor participates in international trade not in accordance with the Heckscher-Ohlin theory: it turned out to be more capital-intensive not export, but import.

The so-called Leontief paradox has the following explanations:

a highly skilled American workforce requires a large investment of capital to prepare it (ie, American capital is invested more in human resources than in production capacity);

the production of American export goods is spent in large volumes of imported mineral raw materials, in the extraction of which American capital was invested.

But in general, the Leontief paradox is a warning against the straightforward use of the Heckscher-Ohlin theory, which, as its subsequent testing has shown, works in most, but not in all cases.

Russia can rather be attributed to a case typical of the Heckscher-Ohlin theory: an abundance of natural resources, the presence of large production capacities (i.e., real capital) for the processing of raw materials (metallurgy, chemistry) and a number of advanced technologies (mainly in the production of weapons and dual-use goods ) explain the greater export of raw materials, simple metallurgical and chemical products, military equipment and milking goods.

At the same time, the Heckscher-Ohlin theory does not answer the question why little agricultural products are exported from modern Russia with its huge agricultural resources, but, on the contrary, it is imported in huge quantities; why, in the presence of a relatively cheap and skilled labor force, the country exports little, but imports a lot of civil engineering products. Probably, to explain the causes of international trade in certain goods, it is not enough just to have different endowments of countries with factors of production. It is also important how effectively these factors are used in a particular country.

Theory of competitive advantages.

This theory was developed by the American economist M. Porter. One of the common problems of foreign trade theories is the combination of the interests of the national economy and the interests of firms participating in international trade. This is connected with the answer to the question: how do individual firms in specific countries obtain competitive advantages in world trade in certain goods, in specific industries?

In his book "International Competition" (1990), he concludes that the international competitive advantages of national firms depend on the macro environment in which they operate in their own country.

Based on the study of the practices of companies in 10 leading countries, which account for almost half of world exports, he put forward the concept of "international competitiveness of nations". The competitiveness of a country in international exchange is determined by the impact and interconnection of four main components:

factor conditions;

demand conditions;

the state of service and related industries;

strategy of the company in a certain competitive situation.

Factor conditions are determined by the presence of economic factors, including those arising in the production process (increase in labor productivity with a shortage of labor resources, the introduction of compact, resource-saving technologies with limited land, the development of information technologies). The second component - demand - is decisive for the development of the company. At the same time, the state of domestic demand, in conjunction with the potential opportunities of the external market, decisively influences the firm's situation. Here it is important to identify national characteristics (economic, cultural, educational, ethnic, traditions and habits) that affect the exit of the company outside the country. M. Porter's approach assumes the prevailing importance of the requirements of the domestic market for the activities of individual companies.

Third - the state and level of development of service and related industries and industries. Availability of appropriate equipment, close contacts with suppliers, commercial and financial structures. Fourth, the firm's strategy and competitive situation. The market strategy chosen by the firm and an organizational structure that provides the necessary flexibility are important prerequisites for successful entry into international trade. Sufficient competition in the domestic market is a serious incentive. Artificial dominance through state support is a negative solution that leads to waste and inefficient use of resources. The theoretical premises of M. Porter served as the basis for developing recommendations at the state level to increase the competitiveness of foreign trade goods in Australia, New Zealand and the USA in the 90s.

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 for this are as follows: 1) the transformation of technological progress into the dominant factor in world trade; 2) the growing share in trade of counter deliveries of similar industrial goods produced in countries with approximately the same supply of production factors; and 3) a sharp increase in the share of world trade attributable to intra-company trade. Let's look at some alternative theories.

Theory of the product life cycle.

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, i.e. the period of time during which the product has viability in the market and ensures the achievement of the goals of the seller.

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 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 research and development, advanced technology cease to be the main factor determining competitive advantages, then the production of a 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, significant opportunities for differentiation in quality, a narrow circle of potential consumers, etc.) that 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, the long-term average production costs per unit of output 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 by the strategic goals of the company itself.

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 in the late 18th and early 19th centuries. 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 an 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 advantages play a special role in agriculture and extractive industries. On the other hand, the advantages in the production of various products (primarily in the manufacturing industries) depend on the prevailing production conditions: technology, qualifications of workers, organization of production, etc.

In conditions when there is no foreign trade, each country can consume only those goods and such quantities as it produces, and the relative prices of these goods in 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 the 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. As long as there are differences in the ratios of domestic prices between countries, each country will have a comparative advantage, that is, 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 the ratios of costs 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 of 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 cultivable land per 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 to a greater extent than others, will be lower than in other countries. Thus, comparative advantages arise, which determine the direction of foreign trade.

As you know, the foundations of the theory of international trade were formulated in the late 18th - early 19th centuries. eminent 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 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.

Theories of international trade

Modern theories of international trade have their own history of the question - why do countries trade with each other? - was set by economists simultaneously with the emergence at the beginning of the 17th century of the first schools of economic thought, which began to pay attention to the development of foreign trade. Classical and neoclassical theories have one significant drawback: in order to confirm them with practice, you need to withstand many restrictions and assumptions, which, unfortunately, are difficult to implement in real life, this has led to an active search for new theories that explain various problems of foreign trade in modern conditions.

Mercantilist theory of international trade

The first attempts to define the meaning of foreign trade, to formulate its goals was made at the stage of transition of feudalism to capitalism - XV-XVIII centuries. - in the economic doctrine of the mercantilists (T. Man, C. Davenant, J. B. Colbert).

Adhering to a static view of the world, they proceeded from the following:

the country's wealth was associated with the gold and silver it possessed; the world had a limited amount of wealth;

the wealth of one country could only increase at the expense of the impoverishment of another.

to export more goods than to import, which allows to increase the influx of gold, production and employment;

regulate foreign trade to increase exports and reduce imports through tariffs, quotas and other instruments;

strictly limit the export of raw materials and allow duty-free import of raw materials that are not mined in the country, which will allow to accumulate gold and keep export prices for finished products low;

prohibit all trade of the colonies with other countries, except for the mother country, as well as the production of finished goods.

Mercantilists believed that the true wealth of the country is gold (money) and, based on this, created the theory of foreign trade. In their opinion, foreign trade should be focused on the maximum safety and increase in the amount of gold in the country. In this regard, it was recommended to stimulate exports and limit imports so as not to spend gold on buying goods outside the country. At the same time, bans were introduced on the trade of the colonies with all countries except the mother countries, on the development of production in the colonies - they should only become suppliers of raw materials to the mother country.

Mercantilists, offered enrichment of some countries at the expense of others. The main drawback of this theory should be considered the notion of mercantilists, dating back to the Middle Ages, that the savings benefit of some participants in a barter transaction turns into economic damage to others (importing countries). The main advantage of mercantilism can be attributed to the political support he developed for exports, which, combined with active protectionism and support for domestic monopolists in Russia, was probably the most prominent mercantilist - who in every possible way encouraged the Russian industry to export goods, including through high import duties, a bunch of privileges domestic monopolies.

The school of mercantilism existed for more than a century and a half and contributed to the theory of international trade: for the first time, the importance of foreign trade for the economic growth of countries was emphasized, and the balance of payments was described. At the same time, the views of the mercantilists were limited, which consisted in the fact that they saw the enrichment of one nation only at the expense of the impoverishment of another, and achieved this with the help of protectionist policies.

Classical theory of international trade

The foundations of the theory of international trade were formulated at the end of the 18th - beginning of the 19th centuries by A. Smith and D. Ricardo within the framework of the classical school. For the first time, the free trade policy was defined by A. Smith when he substantiated the theory of international trade, proving the need to liberalize the conditions for the import of foreign goods by relaxing customs restrictions. A. Smith proved the necessity and importance of foreign trade, emphasizing that "the exchange is favorable for each country; each country finds an absolute advantage in it." A. Smith's analysis was the starting point of the classical theory, which serves as the basis for all types of free trade policies.

D. Ricardo supplemented and developed the ideas of A. Smith. He showed why nations trade, to what extent exchange between two countries is most beneficial, highlighting the criteria for international specialization. It is in the interests of each country, D. Ricardo believes, to specialize in production in which it has the greatest advantage or the least weakness, and for which the relative benefit is the greatest.

Theory of Absolute Advantage

The writer Adam Smith begins the first chapter of his famous book "An Inquiry into the Nature and Causes of the Wealth of the People" in 1776. That "the greatest progress in the development of the productive power of labor and a significant share of art, ingenuity."

With what it is directed and applied, were the result of the division of labor and comes to the conclusion: that if any foreign country can supply us with any commodity at a cheaper purchase than we ourselves are able to manufacture it, it is much better to buy it from her to some part of the product of our own industrial labor, applied in that area in which we have some advantage.

The theory of absolute advantage says that it is advisable for a country to import those goods for which its production costs are higher than those of foreign countries, and to export goods for which its production costs are lower than those of foreign countries, i.e. there are absolute benefits. In contrast to the mercantilists, A. Smith advocated freedom of competition within the country and on the world market, sharing the principle put forward by the French economic school of the physiocrats. government intervention in the economy.

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

international trade comparative advantage

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 disadvantage of A. Smith's theory was that the factors of production have absolute mobility within the country and move to regions where they receive the greatest absolute advantage. But after some time, the advantage of some regions over others may disappear, and therefore, foreign trade will also cease.

However, his merit was that through the presence of natural and acquired advantages, he explained intercountry trade flows.

Theory of comparative advantage

D. Ricardo in his "Principles of Political Economy and Taxation" (1817) formulated a more general principle of mutually beneficial trade and international specialization, including A. Smith's model as a special case. He showed that international trade is beneficial to every country, even if none of them has an absolute advantage in the production of specific goods. D. Ricardo formulated the theory of comparative advantages by introducing the concept of an alternative price. The opportunity price is the ratio of the labor time required to produce a unit of one good to the labor time required to produce a unit of another good. The law of comparative advantage can be formulated as follows: countries specialize in the production of those goods for which their labor costs are comparatively lower, although they can absolutely be somewhat higher than abroad. From this followed the conclusion: free world trade leads to specialization in the production of each country, the development of the production of relatively advantageous goods, an increase in output throughout the world, and also to an increase in consumption in each country.

The theory of comparative advantage had certain shortcomings that further contributed to its withering away. Among them:

the theory proceeds from the presence of only two countries and two goods;

implies the dominance of free trade;

based on fixed production costs;

assumes no transport costs;

does not take into account the effect of scientific and technological revolution, technical changes;

proceeds from the presence of complete interchangeability of resources in their alternative use.

• for the first time described the balance of aggregate supply and demand;
• · proved that the country receives a gain from foreign trade, not causing damage to other countries, but seeking opportunities for the development of trade within the country and refusing to introduce trade barriers;
• · summed up the scientific basis for the development of further theories.

Heckscher-Ohlin-Samuelson theory

At the end of XIX - beginning of XX centuries. as a result of structural shifts in world trade, the role of natural differences as a factor in MRI has decreased.

E. Heckscher and B. Olin (20-30 years of XX century) created a theory explaining the causes of international trade in manufactured products.

Countries are endowed to varying degrees with labor, capital, land, as well as different needs for certain goods. In a country where there is a lot of labor resources and not enough capital, labor will be relatively cheap and capital expensive, and vice versa. Thus, the Heckscher-Ohlin theory can be formulated as follows: each country exports those goods for the production of which it has relatively excess factors of production, and imports those goods for the production of which it experiences a relative shortage of factors of production. According to the Heckscher-Ohlin model:

trade is based on the comparative advantages of countries;

the reason for comparative advantage is the difference in the endowment of countries with factors of production.

In the middle of the XX century. American economists L. Samuelson and W. Stolper improved the Heckscher-Ohlin theory by imagining that in the case of homogeneity of factors of production, identity of technology, perfect competition and complete mobility of goods, international trade equalizes the price of factors of production between countries. The concept is based on the model of D. Ricardo with the additions of Heckscher and Ohlin and considers world trade not just as a mutually beneficial exchange, but also as a means to reduce the gap in the level of development between countries.

Leontiev's theory of international trade

An American economist of Russian origin, V. Leontiev, studying the structure of US exports and imports in 1956, found that, contrary to the Heckscher-Ohlin theory, relatively more labor-intensive goods prevailed in US exports, and capital-intensive goods dominated in imports.

This result became known as Leontief's paradox.

Further studies showed that the contradiction discovered by V. Leontiev can be eliminated if more than two factors of production are taken into account when analyzing the structure of trade.

By including in the analysis more than two factors of production, including scientific and technical progress, differences in the types of labor (skilled and unskilled) and their differentiated pay in different countries, V. Leontiev explained the above paradox and thus contributed to the theory of comparative advantages.

Neotechnological theory of foreign trade

The weak side of classical theories is that for their practical confirmation it is necessary to comply with numerous restrictions and assumptions. Therefore, economists of the XX century. search for new theories that explain various aspects of international trade, based on classical theories, developing or refuting them.

At the present stage, the neoclassical school coexists with the neotechnological school, which has been developed since the middle of the 20th century. based on NTR. The theories of international trade that emerged on the basis of scientific and technological revolution completely rejected the basic concepts of classical theories and offered other approaches to explaining world trade. Features of the Neotech School of International Trade:

inclusion in the research process of additional new factors and variables, including various human and capital resources of countries, scientific and technical progress, conditions of an imperfect market for goods and production factors and international mobility of the latter, etc.;

the macroeconomic approach to the analysis of world trade was supplemented by a microeconomic one, the main advantages were associated with the monopoly position of the firm (country) - innovator;

the object of international trade in this case was technology, both embodied in science-intensive goods and in the form of licenses;

neotechnological school connects the main advantages with the monopoly position of the firm (country) - the innovator. Hence the new strategy for individual firms: to produce not what is relatively cheaper, but what everyone or many people need, but which no one else can produce yet;

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.

Neotech includes:

the theory of the technological gap by M. Pozner (1961);

S. Camp's theory of scale effect (1964);

theory of imperfect competition P. Krugman (1979);

R. Vernon's theory of product life cycle (1966);

the theory of the competitive advantage of the nation by M. Porter (1986), etc.

Technology Gap Theory

As a result of scientific and technical progress, innovations in one of the industries initially occur in one or more leading countries. These countries for a certain time occupy a monopoly position in the world in the production of a novel product. Thus, the advantage gained by the innovator country is the result of the technological gap that has arisen in the levels of development of individual countries.

This can change the country's foreign trade specialization, encouraging it to partially abandon the production of traditional products, in which it has a relative advantage, and to switch to the production of original products that have no analogues in the world.

Theory of economies of scale

With certain technologies and organization of production, long-term average costs are reduced with an increase in the volume of output, i.e. economies of scale arise. According to the theory, many countries (especially developed 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 with specialization in those industries that are characterized by the presence of the effect of mass production. For the effect of mass production to be realized, a capacious market is needed. International trade plays a decisive role in this by expanding markets. It allows you to form a single integrated market, more capacious than the market of a single country. As a result, consumers are offered more products and at lower prices.

Product life cycle theory

The theory was developed in the second half of the 60s.R. Vernon, C. Kindelberg and L. Wales. According to the concept, a new product goes through a life cycle with stages: introduction, expansion, maturity and aging, on the basis of which modern trade relations between countries can be explained in the exchange of finished products.

According to the life cycle, countries specialize in the production of exports of the same product at different stages of maturity.

M. Porter's Theory of Competitive Advantage of the Nation

Key message: Firms, not countries, compete in the international market, so it is important to understand how a firm creates and maintains competitive advantage and to understand the country's role in this process. The competitiveness of a country in international trade is determined by the impact and relationship of four main components, called the "competitive rhombus". The competitiveness of a country in international exchange is determined by the interaction and interconnection of the main components (determinant of competitive advantage):

factor conditions - specific factors of production that are needed for successful competition in a given industry;

conditions of demand for goods and services, i.e. what is the demand in the domestic market for the products and services offered by the industry;

the strategy of firms in a given country, their structure and rivalry, i.e. what are the conditions in the country that determine how firms are created and managed, and what is the nature of competition in the domestic market;

the nature of related and supporting industries available in the country - the presence or absence in the country of related or supporting industries that are competitive in the world market.

Firm Theory

The theory is connected with the strengthening of the role of individual firms and corporations in international trade. Advantages are always received not by the nation, but by a separate firm - the exporter of this product. Only after the expansion of production and saturation of the domestic market, the firm can enter the foreign market. To sell your products, you need to find a buyer country, in which the demand structure in the domestic market would be as close as possible to the demand structure of the exporting country. This makes it possible to carry out trade transactions between countries that are at the same level of economic development, and between developed industrial countries. This provision was first substantiated by the American economist E. Linder. In the future, supporters of the theory of the firm substantiated the need for a merger of companies in developed countries with firms in young industrial states. This was due to the convergence of the levels of scientific and technological development, the strengthening of production and marketing contacts, the joint solution of scientific and technical problems. This process has embraced knowledge-intensive industries. The most active role in it was played by small and medium-sized companies.