Industrialization, Deindustrialization, and North-South...
Industrialization, Deindustrialization, and North-South Trade
Author(s)
Burgstaller, Andre
Abstract
A straightforward extension of Ricardo’s (1951) corn model to a North-South system is shown to be capable of producing a richly allusive account of trade-induced industrial growth and decline. A 5-act scenario is presented. The first act finds the UK, a northern economy, producing the wage-good corn and luxury manufacturers consumed out of rent, textiles, and motorcars. India, a southern economy, also is producing corn but as yet no manufactures. The UK is engaged in a process of export-led industrialization. However, in subsequent acts it becomes profitable for India to produce textiles, and then motorcars. The UK textile industry is wiped out, followed by its motorcar industry. In the last act, the UK’s process of deindustrialization has run its course. The formerly dominant industrial power has reverted to a purely agricultural economy. India’s industry and agriculture, on the other hand, are flourishing and expanding.
