The purpose of this paper is to give empirical content to the approach of international trade based on the principle of absolute advantage and to show that differences in productivity may give rise to transfers of value towards the units of capital with an absolute advantage in production. Our approach is based on the classical/Marxian theories of value and competition and it is operationalized using input-output data for the years 1995, 2000, and 2005 of four euro-zone countries (Greece, Spain, Finland, and the Netherlands). The derived results are consistent with the view that productivity differences persist over the years, which is equivalent to saying that the absolute advantage in production does not change into comparative advantage.
AgosinR.TussieD.1993. Trade and growth: New dilemmas in trade policy. London: Macmillan Press.
2.
AminS.1974. Accumulation on a world scale: A critique of the theory of underdevelopment. New York: Monthly Review Press.
3.
AntonopoulosR.1999. A classical approach to real exchange rate determination with an application for the case of Greece. Review of Radical Political Economics31 (3): 53-65.
4.
BaranP.1957. The political economy of growth. New York: Monthly Review Press.
5.
BuschK.GrunertG.TobergeteW.1985. The internationalization of capital. Theseis12: 29-47.
6.
CagatayN.1994. Themes in Marxian and Post Keynesian theories of international trade: A consideration with respect to new trade theory. In Competition, technology and money: Classical and Post Keynesian perspectives, ed. GlickM.Aldershot: Edward Elgar.
7.
CarterA.1970. Structural change in the American economy. Cambridge, MA: Harvard University Press.
8.
ChangH.2007. Kicking away the ladder: The “real” history of free trade. In Globalization and the myths of free trade: History, theory, and empirical evidence, ed. ShaikhA. Routledge Frontiers of Political Economy. New York: Routledge.
9.
DeraniyagalaS.FineB.2001. New trade theory versus old trade policy: A continuing enigma. Cambridge Journal of Economics25 (6): 809-825.
10.
EmmanuelA.1972. Unequal exchange: A study of the imperialism of trade. New York: Monthly Review Press.
11.
ErsouE.2008. The determination of long-run real exchange rate under an alternative theory: The case of Turkey. Unpublished PhD dissertation, Marmara University, Istanbul.
12.
FrankA. G.1967. Capitalism and underdevelopment theory. Indianapolis: Indiana University Press.
13.
KarshenasM.2007. Real exchange rates, labor markets and manufacturing exports in a global perspective. In Globalization and the myths of free trade: History, theory, and empirical evidence, ed. ShaikhA. Routledge Frontiers of Political Economy. New York: Routledge.
14.
KrugmanP.1998. What’s new about the new economic geography?Oxford Review of Economic Policy14 (2): 7-17.
15.
KrugmanP.ObstfeldM.2012. International economics: Theory and policy. 4th ed.Reading, MA: Addison-Wesley.
16.
MandelE.1969. Late capitalism. London: New Left Books.
17.
Martinez-HernandezF.2010. An alternative theory of real exchange rate determination: Theory and empirical evidence for the Mexican economy, 1970-2004. Investigaciσn Econσmica69 (273): 55-84.
MilbergW.1994. Is absolute advantage passe?: Towards a Post Keynesian/Marxian theory of international trade. In Competition, technology and money: Classical and Post Keynesian perspectives, ed. GlickM.Aldershot: Edward Elgar.
21.
MilbergW.2002. Keynes’s rejection of comparative advantage: Say’s law in the open economy. In Keynes, uncertainty and the global economy, ed. DowS.HillardJ.Aldershot: Edward Elgar.
22.
MiliosJ.1989. The problem of capitalist development. In Capitalist development and crisis theory, ed. KomninosG. M.- N.London and New York: Palgrave Macmillan.
23.
NorbergJ.2004. How globalization conquers poverty. In Globalization and world capitalism: A debate. Cato Institute.
24.
PasinettiL.1977. Lectures on the theory of production. New York: Columbia University Press.
25.
RicardoD.[1819]1951. Principles of political economy and taxation. Cambridge: Cambridge University Press.
26.
Ruiz-NapolesP.1996. Alternative theories of exchange rate determination, a case study: The Mexican peso and the United States dollar. Unpublished PhD dissertation, The New School for Social Research, New York.
27.
SeretisS.TsalikiP.2012. Value transfers in trade: An explanation of the observed differences in development. International Journal of Social Economics39 (12): 965-982.
28.
ShaikhA.1980a. Foreign trade and the law of value, part I and II. Science and Society43 (3): 281-302 and 44 (1): 27-57.
29.
ShaikhA.1980b. On the laws of international exchange. In Growth, profits and property, ed. NellE.Cambridge: Cambridge University Press.
30.
ShaikhA.1984. The transformation problem from Marx to Sraffa. In Ricardo, Marx and Sraffa, ed. FreemanA.MandelE.London: Verso.
31.
ShaikhA.1991. Competition and exchange rates: Theory and empirical evidence. Working Paper No. 25, Department of Economics, Graduate Faculty, New School for Social Research, New York.
32.
ShaikhA.2007. Globalization and the myth of free trade. In Globalization and the myths of free trade: History, theory, and empirical evidence, ed. ShaikhA. Routledge Frontiers of Political Economy. New York: Routledge.
33.
ShaikhA.AntonopoulosR.2012. Explaining long term exchange rate behavior in the United States and Japan. In Alternative theories of competition: Challenges to the orthodoxy, ed. MoududJ.BinaC.MasonP. L.Abingdon: Routledge.
34.
SmithA.[1776]1937. The wealth of nations. New York: Random House.
35.
StiglitzJ.2002. Globalism’s discontents. The American Prospect13 (1): 16-21.
36.
TsalikiP.TsoulfidisL.2010. Dominant technique and economic theory. Paper presented at 14th Conference of European Society for the History of Economic Thought, Amsterdam, March.
37.
TsalikiP.TsoulfidisL.2013. Essays in political economy (in Greek). Thessaloniki: Tziolas Editions Publishing.
38.
TsoulfidisL.2010. Competing schools of economic thought. Heidelberg: Springer.
39.
TsoulfidisL.PaitaridisD.2009. On the labor theory of value: Statistical artefacts or regularities?Research in Political Economy25: 209-232.
40.
TsoulfidisL.TsalikiP.2005. Marxian theory of competition and the concept of regulating capital. Review of Radical Political Economy (37): 5-22.
41.
TsoulfidisL.TsalikiP.2012. Classical competition and the concept of regulating capital. In Alternative theories of competition, ed. BinaC.MasonP.MoududJ.London: Routledge.
42.
WeeksJ.2001. Globalize, globa-lize, global lies, myths of the world economy in the 1990s. In Phases of capitalist development: Booms, crises and globalizations, ed. RobertA.MakotoI.RichardW.ZuegeA.Basingstoke: Palgrave.
43.
WeeksJ.2010. Capital and exploitation and economic crisis. London: Routledge.
44.
WintersA.McCullochN.McKayA.2004. Trade liberalization and poverty: The evidence so far. Journal of Economic Literature42 (1): 72-115.
