A. Price specie Flow Mechanism (Mechanism of Metal Waste Flow Rates).
Export surplus to be paid by specie (precious metals) caused an increase in the money supply which will directly lead to rising prices ¬. Goods and services services quantity theory of money from Locke. As a result of rising prices of goods and services in the country services exports will decrease and imports will rise. As a result of import surplus will occur and precious metals will flow out. Thus the favorable trade balance (favorable) will not be maintained continuously. Trade balance adjustment mechanism which is automatically known by the name "¬ price specie flow mechanism".
Mechanism "price specie flow" which is automatic, shows no longer need to manage the trade balance, as recommended by the mercantilist. Adam Smith. And supporters ~ mashab Classical opinion was that free trade will encourage each person to do his own interests, but also automatically will benefit the community as a whole. So the doctrine of economic liberalism, this 18th century contains two main elements, laissez faire. (government intervention is the minimum) in the country, and free trade with other countries.
B. Critics Adam Smith on Merkantillisme.
Criticisms raised revolve around:
a. The definition of wealth (wealth)
b. Daktrin coaching a strong national State
c. Idea that a country can accumulate continuously through the continuity of precious metal export surplus.
Smith said that the size of the prosperity of a country / nation does not lie in the amount of precious metals, but the number of goods owned. So for Smith, a. prosperous country is a developing country production of goods and services services (the other is not GNP) through trade, and not a country that tried to impede trade alone can accumulate eye for precious metals.
Smith criticized the amount of government intervention aimed at building a strong state. Prosperity and wealth of the country can only be obtained by running the principle of laissez faire in the country and the principles of free trade with other countries. The use and allocation of production factors are the most efficient, so that the maximum overall results can be achieved, if left to private parties. Smith's third criticism similar to "price specie flow mechanism" was Hume.
C. Donations Adam Smith's theory of international trade.
International specialization of each country who do international trade will be encouraged to specialize in the production of goods that have an absolute advantage (absolute advantage). Absolute advantage is defined as profit expressed by the number of hours / days of work required to make these items. This advantage would be obtained if each country can produce certain goods with hours / days working less than if the goods were made by other countries.
Through foreign trade surplus could be exchanged for other goods produced by other countries are in surplus, so that each country can benefit because the increase of goods that can be consumed. This theory is known as the theory of throwing the surplus (surplus venttor). This theory is then used by Hla Myint to develop his theory about the use of surplus production capacity is still unemployed in countries that are developing for the development of each country was.
Adam Smith's theory is still very simple. He did not question the possibility of countries do not have an absolute advantage and international trade exchange basis.
II.II. MODERN THEORIES IN INTERNATIONAL TRADE
Pioneers of modern theory of international trade known as Heckscher and Ohlin. To further their theory we shall call the theory or the theory of Heckscher Ohlin H 0, expressed his conception. which can be summarized as follows:
main inter-regional trade and inter-State, is located at a distance problem. On the basis of this assumption is removed Ohlin transport costs are negligible. That the goods traded between countries on the basis of the proportion and intensity of production factors are used to produce these goods. On the basis of this call Ohlin theory. proportions theory of production factors intensity of production factors (factor intensity factor proportions theory). So the theory of H 0, the boundary limits of the most narrow definition menyatakam that: something the state will / should produce goods that use factors of production are relatively much (much in the sense that the relative factor prices were cheap),. So if the price of labor, labor (wages) is expressed as PL1 country. I and II PL2 in the country and the price of capital sebgai PC1 and PC2, the HO theory states that if:
PL1
PL2 PC 2 PC1 PC2
So Country I certainly would produce more goods that are labor-intensive because labor cost is relatively cheap and vice versa with the state II, which will produce more goods that are capital intensive, * Thus it is clear that countries will export goods I and State II A will B. exporting Of course, if prices of production factors is changed so as hargarelatifnya changed, the intensity of production factors will change as well. So if for any reason the price of labor, wage increases, the PL will increase as well. As a result employers will replace PK production methods toward more intensive methods of capital, because capital is now relatively cheap.
With the emphasis on the production and export goods that use factors of production factors are relatively large, then the price of production factors are relatively much will rise. In this "relatively large" refers to the number of phisiknya, rather than relative prices. as well (equalization of factor prices).
A. Theory of International Product Life Cycle (IPLC)
The theory that explains why a product that initially as export products, eventually becomes a product imported from a country. This situation is because the role of innovation in trade patterns. With the advance of comparative advantage of scale of the State, that State exports rose to a higher level (the case of Japan). In fact international trade, developing countries are lower levels of development can be a supplier countries in the middle level manpower export uneducated.
B. Theory of Economic Scale and the Experience Curve.
Economies of scale achieved by the growing plant and the output increases, so the cost per unit of product decreased. Production costs also may decline because of the learning curve. Companies that produce more, will also be studying ways to improve production efficiency, leading to reduced production costs by a certain amount.
Economies of scale and experience curve affect international trade because it allows the industries of a country becomes a low cost producer but not a factor in abundance. Then the nations to specialize in some products and trade with other countries to supply the rest of the nation's needs.
C. Stefan Linder's theory.
Stefan Linder with the demand-oriented theory explains that consumer tastes are influenced by income levels, and therefore the level of income per capita of a nation determine the type of goods will be requested. Therefore, the industry will produce goods to satisfy the request, the kinds of products made to reflect the country's income per capita .. Goods for domestic consumption will eventually exported.
Linder's theory to conclude that international trade in some manufactured goods will be greater between countries with per capita income levels equal than the State which is not the same perkapitanya income level. Traded goods are goods where there are overlapping requests (overlaping demand), which means that consumers in both countries asking for the same goods.
D. Theory of Competitive Advantage by Michael Porter.
Advantage of a nation in an industry can be explained by looking at the competitive forces in the industry on the domestic market of a State or international markets, where the state of competition in an industry depends on five basic competitive forces, namely: the domestic industry competition, new entrants, suppliers, buyers and substitute products.
These forces by Porter then called the structural aspects of the industry. Structural analysis of the industry can be used to diagnose the industry competition in each country or in international markets, although the situation may be different institutionally. With this analysis determined the strength apat pressure / force of an industry competition and therefore can determine the profitability of industry and also can be found in the company's position in the industry, where companies can protect themselves as well as possible to competitive pressures or pressure can affect the positive direction .
An outline of Porter's theory, states that the four types of variables will have an impact on kempampuan local companies in a state to use State resources were to gain a competitive advantage:
a. Demand conditions, the nature of domestic demand. If customers have a company's request, he will produce high quality products and innovative, and will gain a competitive advantage which the smaller domestic pressure.
b. Factor conditions, the level and composition of production factors. Lack of natural bounty has led the nations to invest in the creation of advanced factors, such as workforce education, free ports and advanced communications systems, to enable their industries to compete globally.
c. Related industries and supporting suppliers and industry support services.
d. Strategy, structure and competitive rivalry expansion of domestic firms, the barriers to entry, and organizational and management style. Companies affected by the severe competition in domestic markets, the constant will increase the efficiency, which makes them more competitive internationally.
Porter's concept was always based on the application of business theory with practice no doubt, is one which concerns the relationship between suppliers and the industries represented in the form of the value chain (value chain) he emphasized the values that agreed to be retained and maintained by the continuance both sides (muttually).
CHAPTER III
CONCLUSION
Development of International Trade Theory. From the explanations that have been submitted about the theory of international trade, it can be concluded as follows:
a. International trade comes mainly caused by differences in relative prices between countries. The difference comes from differences in the cost of producing these baranga. This result, differences in the gift of God for production factors, the differences in the level of technology that determines the intensity of the use of production factors used, the differences in the efficiency of utilization of production factors, the differences in measuring foreign exchange.
b. International trade theory shows that the nations will gain a level higher life by specializing in goods that have comparative advantage. The implication-hambtan trade barriers, which stop the entry of goods with little market countries, will have an impact on the welfare of the nation.
c. International trade leads, increasing demands to reduce barriers to entry of goods between countries (free trade), at least within the framework of this theoretical claim, although still a country that the government took an important role in determining the direction of international trade.
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