An Argument For Free Trade

1493 Words Sep 20th, 2015 6 Pages
An Argument For Free Trade
Proposed by: Scott Wilson
Submitted to: Dr. Debasish Chakraborty
Central Michigan University
September 20, 2015

An Argument For Free Trade
Since David Smith introduced the theory of the free market force known as the invisible hand in The Wealth of Nations, the argument for free trade was levied against the argument for protectionism. Smith believed that by providing people the freedom to produce and trade as they please, with limited government interference, enlightened self-interest would provide prosperity for all (Smith, 1937.) In Scotland, quality grapes had to be grown in hothouses, while grapes in France did not, which provided France a comparative advantage. Heating Scottish grapes made them more expensive than French grapes. But Scotland did have an abundance of wool which could be traded for grapes. Tariffs on French grapes would cost the Scottish consumer more as well as introduce inefficiency. Countries can enjoy higher levels of consumption if they produce the goods that they are relatively efficient at producing and import to goods that they are relatively inefficient at producing (Inside, 1994.) Specialization in activities that provide a comparative advantage is beneficial when a country produces what it produces best, keeping some for consumption and trading the rest. Even though protectionism advocates believe it is necessary to protect national security, save jobs, and help strategic infant industries, the…

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