A Critique of the Joseph-Tomlinson Model of Unequal Exchange: Applications and Limitations

This chapter evaluates the model developed by Joseph and Tomlinson. Unequal exchangeUnequal exchange occurs when commodities, or other products, are traded, and there is an imbalance in the labor required to produce the traded items, according to their approach. This is especially important when there is a lopsided relationship favoring one trading partner over long time periods. For instance, labor-intensive exports, traded for capital-intensive imports, often are lopsided trades, in favor of the more industrialized trading partner. And, this becomes especially concerning when there is also abuse of dominance determining the imposed or coerced or manipulated terms of trade. The chapter examines two types of unequal exchangeUnequal exchange. Unequal exchangeUnequal exchange reflects monopolyMonopoly power—making it possible for the monopolist to charge prices far above normal or fair—above the costs of production, plus sales costs, plus a fair profit. There are other ways to conceptualize unequal exchangeUnequal exchange, based on invested energy, direct and indirect. Both types of unequal exchange has enormous welfare implications for African countries.