ries. Finally, I will introduce recent ideology which criticize the neoclassical theory of growth and explain why till this day the economies of the world experience divergence instead of convergence.
The neoclassical economic theory was formally introduced as the revised idea for economic growth of the more previous intellectual ideology known as the classical economic theory. Basically, the classical economic theory suggests for each country to exclusively put full labor force into producing a commodity in which it fully specializes in. Having specialized commodity in hand, regardless of the value, and taking the free trade policy into consideration, countries trade for commodities that they believe would be less profitable for their own country. With the classical economic theory, full specialization in the production of a specific commodity allows countries to encounter stable opportunity coast. Meaning, countries do not have to constantly reorganize their own labor force into producing various commodities, thus having to deal with opportunity cost. This sort of ideology would eventually cause commodities to be overvalued and profit inequality would lead to chaos and economical downfall. For this reason, the more modern 'substitute theory,? the neoclassical economic theory, alters the old ideology. By contrast, the neoclassical economic theory allows countries to practice partial specialization, meaning each country would divide labor into producing various commodities. However, the production process of commodities, suggested by the neoclassical economic theory, requires two factors, labor and capital
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