Why, then, should the closing down of international labor mobility have slowed down, or even have much affected, the tendencies toward factor price equalization predicted by neoclassical theory, tendencies that have proved to be so powerful historically? If it is profitable to move a textile mill from New England to South Carolina, why is it not more profitable still to move it to Mexico? The fact that we do see some capital movement toward low-income countries is not an adequate answer to this question, for the theory predicts that all new investment should be so located until such time as return and real wage differentials are erased. Indeed, why did these capital movements not take place during the colonial age, under political and military arrangements that eliminated (or long postponed) the 'political risk' that is so frequently cited as a factor working against capital mobility? I do not have a satisfactory answer to this question, but it seems to me a major - perhaps the major - discrepancy between the predictions of neoclassical theory and the patterns of trade we observe. Dealing with this issue is surely a minimal requirement for a theory of economic development.