Absolute Vs Comparative Advantage in Εconomic Τheory

Labour Theory Value in International Perspective

Seretis Stergios and Persefoni Tsaliki1

Abstract

The present paper aims to expand and further pursue the quest on the labour theory of value in the international arena. Our analysis relies on the notions of socially necessary labor time and regulating capital whose interface forms the theoretical ground upon which we explain the transfer of labour values between and within industries and by extension between and within economies. It is argued that international trade is regulated by the absolute advantage principle. We show that the notion of socially necessary abstract labour time spent in the production process can be the theoretical tool that might help to explain, empirically and theoretically, international competition and the formation of international trade terms between economies. More specifically we attempt to show that the differential productivity between sectors or economies may determine the structure of international trade. We focus on socially necessary labor time in order to provide answers to current problems such as international deficits, international competitiveness, etc.

Key words: Absolute Advantage, Value Transfers, Competition, Regulating Capital, Input-Output Tables.

JEL Classifications: B51, D46, F10, L11, P16

1 Department of Economics, Aristotle University of Thessaloniki

Seretis Stergios: [email protected] Persefoni Tsaliki: [email protected]