LA CONSTATACIÓN DE HECHOS PRESUNTAMENTE DELICTIVOS

Another important development that emerged during the post WW2 period was an effort to define a clear boundary between the positive and normative theories of international trade. As opposed to the positive theory of trade, which is concerned with the exposition of facts or actual economic phenomena (Samuel 1994, 24), normative theory is concerned with welfare judgments of commercial policy (Corden 1984, 65). According to Bhagwati (1964, 4), Ohlin was among the earliest trade economists who demanded that the distinction between positive and normative aspects of trade theory be clearly drawn, proposing these two areas be written in separate books or chapters. Although a demarcation line separating the two is pretty clear nowadays, economists initially found it difficult to distinguish them. Commenting on Ohlin’s demand, Harberler (1958, 3) contended that this aim is easier postulated than accomplished, and pointed his critic at Ohlin, he argued that: “… in the midst of ‘objective theory’ he [Ohlin] proves in typical classical manner that interregional trade and division of labour results in an increased social product without making it clear that this statement implies a value judgement on his part and is not merely ‘objective analysis’”.

A fundamental issue concerning the normative theory of trade revolves around the question of gains from trade. There existed a number of economists who explored this issue, prominent among them included Paul Samuelson, Robert Baldwin, Murray Kemp and Jagdish Bhagwati. Samuelson perhaps was the first modern economist who formalised the modelling of gain from

trade. Samuelson (1939, 195-205) developed a model involving small countries –countries which could not influence their terms of trade – and showed that there are gains from trade provided world prices are different from autarky prices. In addition, he also expounded that the gains are not limited to circumstances that the country moves from autarky to free trade; the gains will also exist in the cases of countries moving from autarky to restricted trade. Essentially Samuelson made two contributions to the theory of trade from this model. First, he proved that there are gains from trade in a general model involving many goods and many factors of production. Second, he showed that the potential gains do not depend on the redistribution of income, but rather on improved consumption opportunities brought about by trade.

To supplement his earlier analysis of gains from trade, Samuelson (1962, 820-829) provided a second model involving two commodities with the use of production possibility frontiers. In this second model Samuelson also extended his analysis to cover the case of a large country by the use of the “Baldwin envelop” curve. Baldwin (1948, 748-762) originally constructed an enveloped curve to examine consumption possibilities facing a large country, in which the country is in the position to influence world prices, and thus its terms of trade. Samuelson demonstrated that when the enveloped curve is applied to his model the curve fits outside the autarky frontier at all but one point; the point at which no trade will occur because world prices converge with autarky prices. Hence, Samuelson showed that the existence of an opportunity to trade makes a country potentially better off regardless of whether the country is small or large.

Quite similar to Samuelson, Murray Kemp (1972, 803-819), proved using different mathematical expositions that free trade is potentially superior to no trade, even for large countries. In addition, he also expounded that “compensated” restricted trade is also superior to no trade. He

argued that the manner in which trade is restricted is not important, citing tariffs, quotas and exchange rate as examples of the restrictions. Kemp also examined a question concerning the ranking of trading situations, in particular whether lower tariff rates would be superior to higher rates. To this question, he found that a lower tariff is superior to a higher tariff in similar manner as no tariffs are superior to lower tariffs. Kemp concluded that this proposition holds true because under free trade all necessary conditions to achieve “Paretian optimum” are satisfied. In particular, the marginal rate of transformation between goods in production equals both the marginal rate of transformation between goods in international trade and the marginal rate of substitution in consumption. He argued that the imposition of a tariff will destroy these equalities.

Jagdish Bhagwati investigated the stability and generality of the theorems expounded by Samuelson and Kemp. Based on Samuelson’s proposition that free trade was superior to autarky under competitive price system, Bhagwati (1968, 137-148) examined whether or not this proposition holds for the case of other economic systems. Bhagwati proved that Samuelson’s proposition holds true not only for economies characterized by a competitive price system, but also for planned economies. Bhagwati also examined Kemp’s theorem that restricted trade is superior to no trade, and he found the theorem lacks ammunition for generalization thus he advanced some qualifications. Bhagwati argued that Kemp’s proposition valid only under three classes of policies as provided in Kemp’s examples: tariffs, quotas and exchange restrictions. If the theorem is extended to cases involving taxes on domestic production or subsidies on consumption, it is no longer valid. When a production subsidy (or tax) on exportable (or importable) is granted, it reduces social welfare below that of no trade situation. So in the case of restricted trade, it is impossible to compensate the losers while keeping the gainers at their original welfare level. Bhagwati also advanced qualifications to Kemp’s theorem that low tariffs are superior to high tariffs. He argued that Kemp’s theorem holds true only if exportables are of no inferior in

comparison to importables. Thus, if the inferiority of exportables in societal consumption could not be ruled out, a reduction in the level of tariffs may lead to the deterioration of economic welfare.