Benefits of Free Trade

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The benefits of free trade have been known since Adam Smith discovered them in his 1776 book, "The Wealth of Nations." Economists such as Milton Friedman, Friedrich Hayek and Ludwig von Mises have continued to expound on the benefits since then. Free trade, defined as the ability of people from different countries and cultures to trade with each other without artificial government barriers, is essential for a free society.

Resource Allocation

Free trade allows people in different cultures to allocate resources more efficiently. For example, individuals in a country with an excess of wheat can trade the wheat for something they need more urgently.

Market Share

Free trade increases the market share for producers, allowing them to sell their goods internationally.

Comparative Advantage

Individuals in countries get to specialize in what they do best--trading with other countries for things they do not produce on their own.

Competition

Free trade inspires companies to perform well as the competition increases. For example, without Toyota, Ford would have even less of a reason to produce quality cars.

Democracy

Free trade allows people to "vote" with their dollars. If people don't like a particular product, the solution is simple: they do not buy the product.

Cost

The competition inspired by free trade doesn't just bring the quality of materials up, but it also brings the cost-of-living down, improving conditions worldwide.

Freedom

All arguments from utility aside, free trade allows freedom of choice, which is preferable to coercion.

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