Why Haven't Global Markets Reduced Inequality?

Eric Maskin, Albert O. Hirschmann Professor, School of Social Science. Proponents of free trade have argued that expanding global markets should reduce income inequality in poorer countries. So far, however, there is no compelling evidence that such a reduction has occurred. In this lecture, Professor Maskin outlines the theory on which the free traders' argument is based -- the theory of comparative advantage -- and proposes an alternative theory that seems more consistent with the evidence to date.