The Other Canon of Economics, Volume 1: Essays in the Theory and History of Uneven Economic Development

Other Canon Economics: Essays in the Theory and History of Uneven Economic Development is a collection of essays by Erik S. Reinert that argue that neo-classical economics damages developing countries by adhering to the theory of comparative advantage. He shows that countries that trade increasing returns goods have advantages over those that trade diminishing returns goods, and that these implications should be considered in today's development strategies.

Format: Hardback
Length: 250 pages
Publication date: 13 February 2024
Publisher: Anthem Press

Other Canon Economics: Essays in the Theory and History of Uneven Economic Development is a comprehensive collection of essential essays on development economics, authored by one of the most renowned and influential development economists and historians of economic policy today. In his insightful writings spanning from 1994 to 2020, Erik S. Reinert makes a compelling argument that neo-classical economics poses significant harm to developing countries, primarily through its adherence to the theory of comparative advantage. Reinert's work builds upon a rich intellectual tradition initiated by Italian economists Giovanni Botero (1589) and Antonio Serra (1613). Through his analysis, Reinert demonstrates that countries that specialize in trading goods with increasing returns, such as high-end manufacturing, hold advantages over those that engage in trading goods with diminishing returns, such as commodities. These findings have profound implications for contemporary development strategies, which Reinert suggests should be approached as industrial strategies.

The theory of comparative advantage, which underpins neo-classical economics, asserts that countries can specialize in producing goods and services in which they have a relative advantage over other countries. This is based on the assumption that each country's resources are limited, and by focusing on producing goods in which they have a comparative advantage, they can maximize their productivity and efficiency. However, Reinert argues that this theory is flawed and detrimental to developing countries. One of the main criticisms of the theory is that it fails to account for the fact that developing countries often face significant barriers to entry into the global market, such as lack of infrastructure, capital, and technology. As a result, they are often at a disadvantage when competing with more developed countries that have access to these resources. Reinert also points out that the theory of comparative advantage assumes that all countries are operating in a perfectly competitive market, which is not the case in reality. In many developing countries, there are significant government interventions, subsidies, and protectionist policies that distort the market and create artificial advantages for domestic industries. These policies can hinder the development of competitive industries and prevent developing countries from benefiting from globalization.

Another issue with the theory of comparative advantage is that it can lead to the exploitation of developing countries by more developed countries. Countries with a comparative advantage in labor-intensive goods, such as textiles or clothing, may be able to produce these goods at a lower cost than developing countries, which can then sell them in the global market at a higher price. This can result in significant income inequality and poverty in developing countries, as the benefits of economic growth are not shared equally. Reinert argues that developing countries should focus on developing their own industries and promoting economic growth through policies that encourage innovation, investment, and human capital development. This can include measures such as providing access to education and training, investing in infrastructure, and promoting free trade and open markets.

In addition to his criticisms of the theory of comparative advantage, Reinert also offers insights into the history of economic development and the role of economic policies in shaping economic outcomes. He discusses the development of the industrial revolution in Europe and the United States, which was driven by a combination of technological innovation, government intervention, and the accumulation of capital. Reinert argues that these factors were crucial in promoting economic growth and reducing poverty, and that similar policies can be implemented in developing countries to promote sustainable and inclusive economic development.

Overall, Other Canon Economics: Essays in the Theory and History of Uneven Economic Development is a valuable contribution to the field of development economics. Erik S. Reinert's insights and arguments provide a critical perspective on neo-classical economics and its implications for developing countries. His work highlights the need for a more nuanced and inclusive approach to development that takes into account the unique challenges and opportunities faced by different countries. By promoting policies that encourage innovation, investment, and human capital development, developing countries can achieve sustainable and inclusive economic growth and reduce poverty.

Weight: 454g
Dimension: 229 x 153 x 26 (mm)
ISBN-13: 9781839982972