Adam Smith And Traditional Theory Of Free Trade

One of international relations theories, liberalism, supports free trade. Liberals believe that free trade benefits everyone, increases efficiency, and raises productivity. A famous liberal thinker, Adam Smith, believes that free trade enhances national economic capacity through the increase of connection between countries. He believes that free trade provides states not only to play an important role in international economic affairs, for example division of labour, property and justice, but also to promote self-interests and national defence. Smith provided an argument, with his concept of absolute advantage, that two countries could benefit from trade if they specialise in the goods they produced better than their rivals and traded with

Adam Smith's view was that a free market would help everyone, poor and rich alike. It would increase the production of goods so that more would be affordable to everyone. A growing economy would make capitalists invest in new ventures.

To many commentator and many politicians, Capitalism is the only moral social system because it is the only system that respects the freedom of the producers to think and the right of the individuals to set their own goals and pursue their own happiness. In contrast, there is the ideal that capitalism is something greedy and immoral. Fifty years ago, the term “the morality of capitalism”, it was not simply considered by many economist and politicians, and without any correspondent in the real economic life. In addition, in the Bill Clinton’s word, the free market the best system for producing wealth and promoting prosperity; the private economy, and the primary engine of growth. Capitalism is presenting that it is an economic success and the

Adam Smith in the book The Wealth of Nations, lays out how is the best way for a nation to better their selves. It does not come from looking out for their fellow brethren, but rather looking out for themselves in the market. Second, labor is used efficiently when the natural talents of man is used to their best possibilities. Labor divided is more efficient because it allows time and skills to come together and create a market. A market that can increase its output while also increasing the economic pie at the same time. Lastly, free trade is all around good for the economy because it allows absolute and comparative advantages to play a role in the market.

Free trade was a political doctrine that emerged in the eighteenth century as opposed to then reigning mercantilism. Its basic premise is that the restrictions imposed by governments on the voluntary exchange of goods and services harm the economy

Free trade comes with its share of pros and cons. It is responsible for increased economic growth, better business environments, encourages investment

Adam Smith was one of the most inspirational economists back in the 18th century and now. Adam Smith’s date of birth was never known but he was baptized on the date of June 5th, 1723 in his hometown of Kirkcaldy, Scotland. Unfortunately, Adam Smith’s Dad passed away prior to his birth in Scotland. When Adam Smith was at the age of three, he was abducted by some gypsies in front of his house when he was playing. However, John Smith was left alive in a forest by a few gypsies. Twelve years later, Adam Smith had enrolled in Glasgow University with a scholarship taking the major of Moral Philosophy. After Adam Smith was in Glasgow University, he later enrolled in a college in Oxford named Balliol College but later went back to Glasgow University as a professor in 1751. Adam Smith’s major that he taught in Glasgow University was logic. In 1752, Adam Smith later received the position of being the chair of his major of Moral Philosophy.

Free trade has long be seen by economists as being essential in promoting effective use of natural resources, employment, reduction of poverty and diversity of products for consumers. But the concept of free trade has had many barriers to over come. Including government practices by developed countries, under public and corporate pressures, to protect domestic firms from cheap foreign products. But as history has shown us time and time again is that protectionist measures imposed by governments has almost always had negative effects on the local and world economies. These protectionist measures also hurt developing countries trying to inter into the international trade markets.

In the Humanistic Tradition the author, Gloria Fiero introduces Adam smith as a Scottish moral philosopher, pioneer of political economy, and a key figure in the Scottish Enlightenment. Smith also known as the Father of Political economy, is best known for one of his two classic works An Inquiry into the nature and causes of the Wealth of Nations. Fiero looks at Smith’s work because the division of labor is important. One thing Smith thinks is even more important for creating a wealthy nation, is to interact and have open trade with different countries. Fiero states,“It is necessary, though very slow and gradual, consequence of a certain propensity in human nature which has in view no such extensive utility; the propensity to truck, barter,

In 1776, even as Adam Smith was championing the ideals of a free market economy, he recognized that the interests of national security far outweighed the principles of free trade. More then two centuries later, that sentiment proves to still be accurate and in use. Since the early 1900s, the United States has used this precept to defend its position on trade barriers to hostile nations, and through the majority of the century, that predominantly referred to the Soviet Union and its allies.