Prebisch and the terms of trade

If the last decades have been dominated by mainstream economic theories that promoted free trade and free capital movements, the 2007–2008 Global Financial Crisis served as multiple purposes wake-up opportunity for many economists. First, it highlighted their inaptness in explaining and predicting many economic phenomena. Second, it helped critical economic perspectives in gaining terrain since, among their lines, there were forefront theories that both theoretically and empirically warned against the crisis. Third, it helped raise critical attention from university students who more vigorously started to ask for more critical courses since they claimed economic courses were narrow, uncritical, dogmatically taught and detached from reality. Together with the models taught, also the values at their base were questioned underlining how the economy is currently set up to reproduce and deepen inequalities and environmental harm. This work contributes to the broader goal of fostering academic discussion by sharing a critical analysis of the central ideas of ECLAC's classical structuralism addressing the development challenges that the countries of Latin America and more broadly of the Global South face today. We do that by presenting in an accessible, though rigorous way, the Prebisch-Singer theory as a strong and challenging base against the dogmatic free-trade wave of theories and policies sponsored and promoted in the Latin American and Caribbean countries, as in most of the other countries of the Global South, during the last decades. Prebisch and his Structuralist scholars' followers' legacy regain vital relevance once again in view of the last decades' reprimarization of Latin American countries. The paper contains the translated transcript of the video “Prebisch and the terms of trade” produced by ECLAC.