By Keith Griffin (auth.)
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Extra resources for International Inequality and National Poverty
Technical change, after all, reduces the demand for certain commodities and certain factors of production, at least in the short run. If the factors so released are unable to find employment elsewhere, the net effect of an innovation may be to reduce rather than to raise welfare. e. in underdeveloped countries. Even as ardent a free trader as Sir John Hicks accepts this. He notes that ... the labour that is thrown out (as a result of technical change) may be in one country, and the expansion in demand for labour, which is the effect of the accumulation of capital that results, may be in another.
Thus even when research conducted in rich countries is potentially of direct benefit to the poor, the potential benefits are not (or are not fully) translated into actual benefits because of the mechanism of unequal exchange, namely, the pricing policies of multinational enterprises. VI. FLOWS OF SKILLED MANPOWER International inequality is transmitted not only by commodity flows but also by movements of factors of production. This is an unorthodox position. The more common view is that factors of production would 27 The international transmission of inequality move from countries where they are abundant (and hence poorly remunerated) to countries where they are scarce (and hence well rewarded).
See his Frontiers of Development Studies (London: Macmillan, 1972) Ch. 22. It has been estimated that, in the 25 years since the end of the Second World War, 93 wars occurred in the Third World. See Istvan Kende, Local Wars in Asia, Africa and Latin America, 1945-1969, Center for Afro-Asian Research of the Hungarian Academy of Sciences (Budapest, 1972). Op. cit. See the pioneering article by R. M. Solow, 'Technical change and the aggregate production function', Review of Economics and Statistics (Aug.