ABSTRACT
This chapter analyzes and modifies the Hahnel unequal exchange model and attempts to show that, after some corrections, it does indeed provide an "analytical Marxist" version of unequal exchange that is not based on the more traditional "specific" labor theory of value that underlies Emmanuel and Amin's original formulations. It discusses the implications of this modified Hahnel model for global inequality, underdevelopment, and "fair trade" policy. The modified Hahnel/Roemer model can be used to explore policy options for global trade that include versions of "fair trade", a "global Marshall Plan", and "developmental trade". Hahnel advocates a "fair trade" regime that would simply set the terms of trade so as to, in effect, compensate the southern countries for their lack of machine capital stock by letting them import machines from the north at a low enough price to equalize work effort in both the north and south.
