Class Struggle and the International Division of Surplus: The Distributive Surface in the Open Economy

ABSTRACT This paper extends the classical approach to income distribution to an open economy with country‐specific distributive variables. We study a two‐country system with trade in intermediate goods. Using Schur complements and ‐matrices tools, we characterize the wage–profit configurations compatible with semipositive prices, showing they define a three‐dimensional surface that generalizes the wage curve of closed economies. The inverse relation between wages and profits may not hold unconditionally within each country: wages and profits can rise or fall simultaneously. The distributive conflict thus unfolds across social classes and countries, adding a geopolitical layer to the classical theory of distribution.