To the question: Can non-industrialised countries find a path to growth in the opening to the world economy, through the abolition of all kind of restrictions to external economic flows?, we had to give a very qualified answer: The liberalization of external relations in a world where factors of production are partly mobile and technological levels unequal induces not an optimal allocation of all resources, but a partial migration (capita/, qualified, labour etc.) from the poorer countries to industrial ones and consequently the under-utilization of the other local resources. – Market forces induce the use of comparative advantages in the sense of the best use of existing production structures (Ricardo) but not of the achievement of structural changes needed for the optimal uses of the factors of production (Heckscher-Ohlin), whether It be technical innovation, creation of externa/ides, better sectorial and regional integration. their effect is consequently limited to a better distribution of resources among sectors (Ricardo) and does not secure a growth process. – Does the general equilibrium model determine proper terms of trade and can the rate of exchange be fixed accordingly? – We discovered, that on different grounds the models of both Ricardo and J. S. Mill show, that terms of trade tend to be unfavourable to non-industrialised countries in absolute terms. – According to the theory of comparative advantages (natural and acquired) a country trading with the world market tends to concentrate its exports on a limited number of products. This number may be relatively large for a complex industrial economy, which has built up all kinds of advantages, but is dangerously small in non-industrialised countries relying mainly on natural advantages. It means, that tor them, market forces act against the development (by diversification) of their exports. – Even after Marshall-Lerner, Ricardo’s approach to the equilibrium of the balance of trade Is still predominant, despite the interference of other transactions, and despite Ricardo’s disregard for the loss of purchasing power of exports, when a devaluation occurs. Taking it into account results in the fact that there may be more than one, or no rate of exchange, which brings the balance of trade into equilibrium. – Due to the structure of their economy and of their exports and imports, non-industrialised countries have a lesser chance than others to bring their balance of trade into equilibrium by a devaluation. – Ricardo disregarded a fact which was considered as important by his predecessors: that trade is also a sector of activity, entering in competition with the others. A. Smith considered, that its development could deprive others from needed capital; Fr. Quesnay denounced the enrichment of traders as a burden on the economy. Such problems are acute in lesser developed countries, but the turn taken by Ricardo excludes the issue from the theory. – Ricardo separated the theory of external trade from the analysis of the operation and growth of the internal economy. It was not the case with his predecessors. It has been a great theoretical loss. To it, he substituted the gain in exchange; and present theories and policies still give a priority attention to it though it may be of secondary importance only. After having considered all the reasons, why external trade and a liberal external policy may not induce growth, as suggested by the models based on the classical economist we do not consider, that external trade does not have an important role to play, but It would be more along the lines developed by 18th Century writers, whom it may be urgent to rediscover.
