ABSTRACT
This chapter presents the 'cultural balance of trade' as opposed to the traditional economic balance of trade. International trade theory is one of the oldest and most venerable parts of the body of economic theory. In terms of cultural balance of trade, the IFPI data is incomplete for Europe prior to 2000 due to lack of data from some countries. There is no necessity for the balance of trade in end cultural products, and in cultural capital and labour to correlate strongly with each other. Trade theory suggests that a nation could dominate an end product market largely by relying on imported capital. Mainstream economic theory argues in favour of free trade, so that a long-run equilibrium where the music and equipment of one or two countries dominate the music consumption of the whole world may, in principle, be globally optimal.
