Free Trade and Protectionism

The concept of free trade is an often misunderstood notion. The economic theory behind free trade is a concept called comparative advantage. Different regions of the world have different resources and the idea of comparative advantage is that each region should focus on leveraging those comparative strengths -- and trade with other regions in order to supplement their own production. There is not an economist on the face of the planet that would dispute the idea that when nations focus on comparative advantage, global economic prosperity is dramatically enhanced.

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News & Politics

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• Free trade
• obama
• WTO
• EU
• economy in crisis
• US economy

[LucisFerre1]

@LucisFerre1

Part I

When you realize that we trade cash for imports, and we PROFIT in that transaction, that we and our nation are increasing our wealth with each rational profitable transaction. In that example, we're exporting cash and importing goods that are cheaper than we can manufacture them ourselves. That's a net gain in wealth. The same principle applies to "exports".

[LucisFerre1]

Part II When I buy a cheaper yet identical foreign product, I have money left over to spend at the local store. That creates domestic jobs. Why have 300 American employees manufacturing $15.00 ballcaps when we can have 300 American employees importing many more $5.00 ballcaps? The latter helps America's poor more than anyone else by increasing our standard of living.

[Pinups2Showboats]

Telling the truth is easy, getting people to understand seems impossible, but thanks for telling it.