Proponents of free trade argue that voluntary exchange meets the demands of justice because each party to the trade leaves the trade richer than he or she was before. Johan Norberg writes in his book In Defense of Global Capitalism: It may seem odd that the world's prosperity can be augmented by swapping things with each other, but every time you go shopping you realize, subconsciously, how exchange augments wealth. You pay a dollar for a bottle of milk because you would rather have the milk than your dollar. The shop sells it at that price because they would rather have your dollar than keep the milk. Both parties are satisfied with the deal, otherwise it would never have taken place. Both of you emerge from the transaction feeling that you have made a good exchange, your needs have been provided for.
Advocates of free trade note that parties to a transaction participate freely because it improves their own lot. This lesson applies more generally to trade among nations. If producers and consumers in world markets adopt the same producing and consuming behaviors that they do as individuals, then exchange among nations is just and wealth increasing.
Other academics have focused on the connection between open exchange and the larger program of freedoms in society. Nobel laureate Milton Friedman argues in Capitalism and Freedom that there is a very real connection between economic freedom and the political freedoms. In this way, voluntary exchange is a component of a larger bundle of freedoms in society. Friedman illustrates this view tellingly: No one who buys bread knows whether the wheat from which it is made was grown by a Communist or a Republican, by a constitutionalist or a Fascist... Instead of recognizing that the existence of the market has protected [the oppressed] from the attitudes of their fellow countrymen, [critics of free trade] mistakenly attribute the residual discrimination to the market.
Discrimination can therefore be a self-punishing choice for producers - who select workers on the basis of something other than performance - and for consumers, for whom it is costly to determine the often anonymous sources of goods and services. Voluntariness permits incentive structures that accord with fairness.
Other academics have focused on the connection between open exchange and the larger program of freedoms in society. Nobel laureate Milton Friedman argues in Capitalism and Freedom that there is a very real connection between economic freedom and the political freedoms. In this way, voluntary exchange is a component of a larger bundle of freedoms in society. Friedman illustrates this view tellingly: No one who buys bread knows whether the wheat from which it is made was grown by a Communist or a Republican, by a constitutionalist or a Fascist... Instead of recognizing that the existence of the market has protected [the oppressed] from the attitudes of their fellow countrymen, [critics of free trade] mistakenly attribute the residual discrimination to the market.
Discrimination can therefore be a self-punishing choice for producers - who select workers on the basis of something other than performance - and for consumers, for whom it is costly to determine the often anonymous sources of goods and services. Voluntariness permits incentive structures that accord with fairness.
Advocates of free trade find many economists in their ranks; economists nearly unanimously support measures to increase the flow of goods between nations, and thereby to make trade freer.
Countries, like people, are more or less talented at producing various goods.
When countries specialize in producing what they are relatively more talented at producing, they can trade with other countries doing the same thing, and all participating countries can enjoy a more extensive package of total goods and services than they did before. Economists call this the Ricardian trade model, and empirical evidence appears to confirm trade's enriching effect on participating countries.
Countries, like people, are more or less talented at producing various goods.
When countries specialize in producing what they are relatively more talented at producing, they can trade with other countries doing the same thing, and all participating countries can enjoy a more extensive package of total goods and services than they did before. Economists call this the Ricardian trade model, and empirical evidence appears to confirm trade's enriching effect on participating countries.
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