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Opponents of free trade often point out that the comparative advantage argument for free trade has lost its legitimacy in a globally integrated world--in which capital is free to move internationally. Herman Daly, a leading voice in the discipline of ecological economics, emphasizes that although Ricardo's theory of comparative advantage is one of the most elegant theories in economics, its application to the present day is illogical: "Free capital mobility totally undercuts Ricardo's comparative advantage argument for free trade in goods, because that argument is explicitly and essentially premised on capital (and other factors) being immobile between nations. Under the new globalization regime, capital tends simply to flow to wherever costs are lowest--that is, to pursue absolute advantage."

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Jul 25th, 2008 at 01:03:48 PM EST
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