International Trade, Factor Movements, and the Environment

By Michael Rauscher | Go to book overview

1
Introduction

1.1 Trade and the Environment: An Awkward Relationship

Starting with Adam Smith ( 1776) and David Ricardo ( 1817), economists have always viewed free international trade as a source of wealth and welfare gains. The voluntary exchange of commodities induces favourable patterns of specialization and, therefore, leads to an improvement in the international division of labour. Since each country is driven to utilize its comparative advantage and to produce what it can produce most efficiently, the global output is increased and gains from trade accrue to all countries. This optimistic view of free trade has been challenged both from inside the body of mainstream economic theory (e.g. the optimal-tariff and infant-industry arguments) and by outsiders like dependencia theorists. It has survived these critiques, albeit with some qualifications. Knowing that there are some exceptions to the rule, most economists now accept the general validity of the free-trade principle, at least as a good rule of thumb e.g. see Krugman ( 1987). This view is now being challenged again, this time by environmentalists. 'Free Trade: The Great Destroyer' is a title of a recent article by Morris ( 1990) in the Ecologist.

Environmentalists are sceptical about international trade for several reasons.1 First of all, there are the specialization effects. Some countries specialize in the production of pollution-intensive goods and this tends to increase environmental disruption there. These countries may experience welfare losses and in the case of transboundary pollution other countries too may be worse off with free trade than without. Second, the mainstream economic theories predict that international trade raises global output and consumption. With increased output, waste-management problems will also be increased. Third, there is a factor-mobility problem. Everything else being equal, mobile factors of production will move to countries where the pollution abatement requirements can be met relatively easily and cheaply, i.e. to the world's pollution havens. This environmental capital flight can have severe consequences. Since all countries are interested in attracting mobile factors of production, they may wish to adjust their environmental regulation. Ultimately, so the argument goes, there will be a disastrous competition among jurisdictions, which results in undesirably low levels of environmental regulation worldwide and the whole

____________________
1
See Cobb and Daly ( 1989), Ekins ( 1989), Goldsmith ( 1990), Morris ( 1991), Shrybman ( 1991, 1991/92), Arden-Clarke ( 1991, 1992), Batra ( 1993, chs. 11-12), Daly and Goodland ( 1994), and Røpke ( 1994) for instance.

-1-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this book

This book has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this book

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited page

Bookmark this page
International Trade, Factor Movements, and the Environment
Table of contents

Table of contents

Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
/ 340

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.