ABSTRACT
This chapter shows that the world trade system is inefficient because of an inherent feature of market forces. It employs the recently formulated grammar of macro-economic geography in Prigogine's arguments, and thus put them in a much wider context. The spatial price equilibrium model may be regarded as the epitome of an efficient geographical system. Given separate supply and demand schedules for a single commodity in each of a number of regions together with the transport costs between each pair of regions, either by the action of competitive traders or by programming algorithms an equilibrium set of prices is obtained. A trade system undergoing fluctuations is extremely complex, with individual areas experiencing their own changes in supply and demand, and these changes moving out in space to influence other areas.
