ABSTRACT
During the 1950s and 1960s an important literature emerged that seriously challenged the mainstream economists’ orthodoxy that free trade would benefit the less-developed countries. The title of this essay refers to the contribution by the Marxist economist Arghiri Emmanuel with the spectacular title: Unequal Exchange: A study of the Imperialism of Trade (Emmanuel, 1972, but first appearing in 1968). Unequal exchange existed in the sense that this exchange represented a very unequal exchange of labour time or value, e.g. ten hours of the labour of an Indian tea plantation worker exchanged for one hour of the labour of a Western car worker. He argued that the developed countries (the ‘North’) exploited the less-developed countries (the ‘South’), primarily through trade rather than through investment and the re-patriation of profits, as traditionally argued by Marxists, and as a consequence free trade would hold back the progress of the South.
