What’s in This Chapter?

Imagine a country that discourages international trade because it believes that trading with other countries leads to a loss of domestic jobs. Similarly, imagine that within this country there are states or provinces that do not want to trade with other states or provinces, because they want to protect jobs within their region. Then imagine villages and towns that do not want to trade with each other for the same reason. And then imagine that people believe that it is best for them not to trade with other people because they are afraid that others will take away their employment.

What remains is an economy in which people are self-sufficient and one in which there is no trade, no specialization, little opportunity for advancement, limited economic growth, and a low life expectancy.

For the same reasons that it is beneficial to trade with individuals or other villages, it is beneficial, economically, to trade with other countries.

Countries with the freest international trade policies have the highest economic standards of living. Conversely, countries with the greatest degree of protectionist policies have the lowest standards of living.

This chapter discusses the advantages of free trade. It also looks at protectionist arguments and analyzes the strengths and weaknesses of these arguments.