First published in 1982. Foreign control of capital is a major problem for many developing countries and can lead to the exercise of a form of colonial control whereby capital is provided for political rather than economic reasons. This book discusses the implications of this phenomenon for trade theory and the amount of pressure that foreign countries can exert. The opening chapter examines the themes of de-industrialisation, of stagnation after an initial spurt in economic activity, and the premise that inflows of capital do not necessarily generate growth and expansion. These initial discussions are developed in the subsequent chapters where the effects of foreign ownership on the host country’s economy and trade are dealt with fully. This work would be of interest to students of economics and development.
Preface; 1. Colonialism and Foreign Ownership of Capital: A Treatment in a Model of International Trade; 1.1 The Model 1.2 Output-Endowment Theorems and Welfare 1.3 An Increase in the Price of the Exportable Good Using Foreign Capital and Welfare 1.4 Conclusions; 2. Some Welfare Propositions in a Three Commodity, Three Factor Model of International Trade in the Presence of Foreign Owned Capital; 2.1 The Model 2.2 Changes in the Degree of Distortions and Welfare 2.3 Terms of Trade, Factor Rewards and Welfare 2.4 Economic Expansion and Welfare 2.5 Conclusions; 3. Foreign Capital, Non-Traded Goods, Class Conflict and the Pure Theory of Trade; 3.1 The Model 3.2 Changes in Commodity Prices, Factor Rewards and Welfare 3.3 Output-Endowment Theorems of Welfare 3.4 Conclusions; 4. On Foreign Capital Specificity in the Non-traded Goods Sector and Some Propositions in the Pure Theory of International Trade; 4.1 The Model 4.2 Changes in Factor Endowments, Output Levels and Welfare 4.3 Commodity Prices and Factor Rentals 4.4 Conclusions; 5. On Employment and Welfare Effect of Foreign Capital Accumulation in a Minimum Wage Model of an Open Economy; 5.1 The Model 5.2 Effects of An Increase in Foreign Factor Accumulation; 6. Indentured Labour and its Exploitation in a Neoclassical Model of International Trade; 6.1 A Model of Exploitation of Indentured Labour 6.1a Wage Determination in Sector 2 6.1b Rest of the Model 6.2 Results; Author Index; Subject Index