Abstract
A modified three-sector, two-good, Roemerian model, first developed by Hahnel (1980), is used to analyze different international trading regimes. “Free trade” leads to “unequal exchange,” which produces poverty in the South and unemployment in the North. “Fair trade” eliminates inequality but preserves a global division of labor that limits long-term development. A“global Marshall Plan” and a “ Solidarity trading regime” generate equitable and sustainable long-term development for the South and the North.
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