PSC 1000 Lecture Notes - Lecture 2: Appeasement, Opportunity Cost, Munich Agreement
Document Summary
Heckester ohlin theorem: predicts that the incomes of the relatively abundant factor will go up and the incomes of the relatively scarce factor will go down. Labor is the relatively scarce factor, you are in a good position. India you can pay people much less because there is abudant labor. If a country used to have high tariffs on imports and they lower their tariffs: opens it up to international trade and makes the companies more competitive. At the end of the day it"s about costs. Those domestic competitors/ politics (interest groups) makes a strong pro trade group say they don"t want war-- this happens more in a democratic nation because they care about their people. Relative power is redundant because power is always relative. Free trade -> empowers groups that favor trade -> opportunity cost of war for those groups -> decreasing war.
