Schools of Thought
The most important actor is the state
The ease with which owners of factors of production can move between industries in the domestic economy (Hiscox 2001)
inter-industry factor mobility
The amount of land, labor, and capital a country has
factor endowments
This kind of cleavage is found in a capital rich country with high land/labor ratio
class cleavage
This country has the absolute advantage in producing wine if Spain can produce 3 bottles in one worker day and Italy can produce 2 bottles in one worker day
Spain
The state is the instrument of capitalist class and uses state power to sustain capitalism system
Marxism
For a low level of factor mobility, this is the effect on class-based parties and peak associations
Internally divided over trade issue and adopt ambiguous policy positions
Argues that comparative advantage arises from cross-national differences in factor endowments
Hecksher-Ohlin model
This resource is abundant in a capital-poor country with high land/labor ratio
land
It costs Texas 3 worker days per gallon of oil and North Dakota 7 worker days per gallon of oil. This state has the absolute advantage in producing oil.
Texas
The proper objective is to enhance social welfare
Liberalism
These kinds of individuals are more likely to be in favor of trade restrictions (Mayda and Rodrik 2005)
individuals employed in import-competing industries
In open economies, international trade will cause the price of the factors of production to equalize
Stolper-Samuelson Theorem
This is an example of a society with an urban-rural cleavage that is capital rich and has a low land/labor ratio
Western European Fascism
It costs Texas 3 worker days to produce a gallon of oil and 7 worker days to produce one pound of beef. This is the relative cost of beef.
1 pound of beef = 7/3 gallons of oil
Emerged in Britain during the 18th century; international economy offers benefits to all countries
Liberalism
This kind of conflict is more likely when levels of mobility are relatively low (Hiscox 2001)
narrow industry-based conflict
A country benefits from trade when it produces a particular good at a lower cost than it costs to produce the good in any other country
absolute advantage
In a capital poor nation with a high land/labor divide, this is the effect of less trade on labor and capital
They rise
The relative cost of corn in Texas is 1 ear = .5 pounds of beef. The relative cost of corn in Kansas is 1 ear = .2 pounds of beef. This state has comparative advantage in producing corn.
Kansas
The image of IPE is conflictual: countries compete for desirable industries and engage in trade conflicts as a result of competition
Mercantilism
These kinds of people are more likely to organize collective action to achieve the desired policy outcome (Rogowski 1987)
political entrepreneurs
A country benefits from trade if it can produce a good more cheaply than it can produce other goods
comparative advantage
This resource is scarce in a capital poor country with a low land/labor ratio
land/capital
According to David Ricardo, 1987, this is why free trade is good for society.
comparative advantage