wages these days, especially as the economies of China and India emerge on the strength of their low wages, increasingly skilled workers and rising technological prowess. "This is a hot issue now, and in the coming decade, it will not go away, "he writes The essay is Mr. Samuelson's effort to contribute economic nuance to the policy debate over outsourcing and trade. The Journal of Economic Perspectives, a quarterly published by the american Economic Association, has a modest circulation of 21,000 but it is influential in the field ndeed, Mr. Bhagwati and two colleagues, Arvind Panagariya, an economics professor at Columbia and T. N. Srinivasan, a professor of economics at Yale University, have already submitted an article to the journal that is partly a response to Mr Samuelson. Theirs is titled"The Muddles Over Outsourcing The Samuelson critique carries added weight given the stature of the author. He invented so many of the economic models that everyone uses, "noted Timothy Taylor, managing editor of the Journal of Economic Perspectives For generations of undergraduates, starting in 1948, the study of economics has meant a Samuelson textbook, now in its 18th edition, with William Nordhaus, a yale economist, as a co-author since the 12th edition. Because he has taught at M.I.T. for six decades the elite ranks of the economics profession are filled with Mr Samuelson s former students, including Mr. Bhagwati and Mr Mankiw According to Mr. Samuelson, a low-wage nation that is rapidly improving its technology, like India or China, has the potential to change the terms of trade with america in fields like call-center services or computer programming in ways that reduce per-capita income in the United States. "The new labor market-clearing real wage has been lowered by this version of dynamic fair free trade, "Mr Samuelson writes put things in simplified terms, he explained in the interview, "being able to purchase grocer,8 But doesn't purchasing cheaper call-center or programming services from abroad reduce input costs for various industries, delivering a net benefit to the economy? Not necessarily, Mr. Samuelson replied. To ercent cheaper at Wal-Mart does not necessarily make up for the wage losses The global spread of lower-cost computing and Internet communications breaks down the old geographic boundaries between labor markets, he noted, and could accelerate the pressure on wages across large swaths of the service economy. "If you don ' t believe that changes the average wages in America, then you believe in the tooth fairy, "Mr Samuelson said His article, Mr. Samuelson added is not a refutation of David ricardos 1817 theory of comparative advantage, the Magna Carta of international economics that says free trade allows economies to benefit from the efficiencies of global specialization. Mr Samuelson said he was merely "interpreting fully and correctly Ricardian comparative advantage theory. That interpretation, he insists, includes some important qualifications"to the arguments of globalizations cheerleaders Those qualifications are not new to Mr. Samuelson. He noted that in a different context, he touched on similar matters as far back as 1972 in a lecture he delivered shortly after he won his Nobel Prize, titled International Trade for a rich Country For his part, Mr. Bhagwati does not dispute the model that Mr Samuelson presents in his article. " Paulwages these days, especially as the economies of China and India emerge on the strength of their low wages, increasingly skilled workers and rising technological prowess. "This is a hot issue now, and in the coming decade, it will not go away," he writes. The essay is Mr. Samuelson's effort to contribute economic nuance to the policy debate over outsourcing and trade. The Journal of Economic Perspectives, a quarterly published by the American Economic Association, has a modest circulation of 21,000 but it is influential in the field. Indeed, Mr. Bhagwati and two colleagues, Arvind Panagariya, an economics professor at Columbia, and T. N. Srinivasan, a professor of economics at Yale University, have already submitted an article to the journal that is partly a response to Mr. Samuelson. Theirs is titled "The Muddles Over Outsourcing." The Samuelson critique carries added weight given the stature of the author. "He invented so many of the economic models that everyone uses," noted Timothy Taylor, managing editor of the Journal of Economic Perspectives. For generations of undergraduates, starting in 1948, the study of economics has meant a Samuelson textbook, now in its 18th edition, with William Nordhaus, a Yale economist, as a co-author since the 12th edition. Because he has taught at M.I.T. for six decades, the elite ranks of the economics profession are filled with Mr. Samuelson's former students, including Mr. Bhagwati and Mr. Mankiw. According to Mr. Samuelson, a low-wage nation that is rapidly improving its technology, like India or China, has the potential to change the terms of trade with America in fields like call-center services or computer programming in ways that reduce per-capita income in the United States. "The new labor￾market-clearing real wage has been lowered by this version of dynamic fair free trade," Mr. Samuelson writes. But doesn't purchasing cheaper call-center or programming services from abroad reduce input costs for various industries, delivering a net benefit to the economy? Not necessarily, Mr. Samuelson replied. To put things in simplified terms, he explained in the interview, "being able to purchase groceries 20 percent cheaper at Wal-Mart does not necessarily make up for the wage losses." The global spread of lower-cost computing and Internet communications breaks down the old geographic boundaries between labor markets, he noted, and could accelerate the pressure on wages across large swaths of the service economy. "If you don't believe that changes the average wages in America, then you believe in the tooth fairy," Mr. Samuelson said. His article, Mr. Samuelson added, is not a refutation of David Ricardo's 1817 theory of comparative advantage, the Magna Carta of international economics that says free trade allows economies to benefit from the efficiencies of global specialization. Mr. Samuelson said he was merely "interpreting fully and correctly Ricardoian comparative advantage theory." That interpretation, he insists, includes some "important qualifications" to the arguments of globalization's cheerleaders. Those qualifications are not new to Mr. Samuelson. He noted that in a different context, he touched on similar matters as far back as 1972 in a lecture he delivered shortly after he won his Nobel Prize, titled "International Trade for a Rich Country." For his part, Mr. Bhagwati does not dispute the model that Mr. Samuelson presents in his article. "Paul