Free trade Blessing in Disguise Essay

Published: 2020-01-22 13:21:30
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Category: Trade

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Antagonists of government intervention envisage a liberalized or free trading arena. While international trade has been present throughout much of history , its economic, social, and political importance has only recently become apparent. Walter Block sees free trade as the only philosophy compatible with international peace and prosperity. Free trade involves the eradication of current trade barriers so as to encourage countries to specialize in production. Society thrives on trade simply because trade makes specialization possible.

(Blinder p. 1). The basis of the free trade argument is an economic theory known as comparative advantage and was devised by David Ricardo in the late 19th Century. The Ricardian model is perhaps the most important concept in international trade theory. In a Ricardian model, countries specialise in producing what they produce best. Unlike other models, the Ricardian framework predicts that countries will specialise solely instead of producing a broad array of goods. Ricardo argues that trade will not affect .

Take for example the situation of the Lawyer and the secretary. Some lawyers are better typists than their secretaries. Should such a lawyer therefore fire his secretary on these grounds, and do his own typing? Not likely. Though the lawyer may be better at both typing and presenting cases, he will fare better if concentrating his energies on arguing cases and leaving the typing for his secretary. Specialization not only aids in making the economy more efficient, it also leaves the lawyer and secretary with productive work to do.

Nations act in much the same way. Countries are said to hone their skills on a particular good or service and trade with others that have done the same. Through peoples desire to acquire new skills and knowledge, coupled with the yearning for a greater range of products growing, the call for countries to abandon protectionist policies is imminent. Conclusion In conclusion protectionist policies should be abandoned in order to make way for the freer flow of goods.

As discussed protectionist policies are detrimental to the overall economic success of a nation. Through such policies as subsidies, producers are less likely to better their products due to the absence of international competition. The implementation of freer trade promotes specialization of production and aids in consumers receiving better quality goods at a reduced price. In order for greater consumer choice and freedom protectionist policies should be re-evaluated.

Reference List

Blinder, A 1992, Free Trade, Liberty Fund Inc, Princeton, USA

Bigelow, B & Peterson, B (ed.) 2002, Rethinking Globalization: Teaching For Justice In An Unjust World, Rethinking Schools Press, Wisconsin, USA.

Dunning, H 1993, The Globalization of Business, Routledge, London

Dunning, H 2000, Regions, Globalization and the Knowledge-Based Economy, Oxford, New York

Economic Planning Advisory Council 1994, Regional Trading Agreements, Australia, August 1994, background paper no. 40, Canberra.

Hill, Charles W.L. 2006, Global Business Today, Mcgraw-Hill Irwin, New York.

International Monetary Fund 1988, Issues and Developments in International Trade Policy, December 1988, Occasional Paper no. 63, Washington.

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