Free Trade Is The Best? Essay

Free Trade Is The Best? Essay

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These three economists share the thought that free trade is the best answer to achieve economic growth because of a few things. Hume explains that free trade is good because “manufactures will continuously move production to the place with the least expensive labor”(Hume pgs. 281-285). He is saying there is always a developing country that has cheaper labor force so it is easier to move production there. Because this trade is cheaper in another place companies, to save money need to move their business production there and then send it back to the country of origin. “One reason that inexpensive labor is beneficial is that it allows poor nations to produce commodities more cheaply than wealthy nations where labor is expensive.”(David Harvey)This thought that, for Hume, was a product of his want for net exports to be bigger than imports. It would be taken in a different light among other economists but was the foundation for new thoughts on how trade can further economic growth. Hume unlike the other economists I will talk about did not care much for the growth of a developing country. More so as a way to use cheap labor to help his own countries well being and the smaller growth of the developing country go to the wayside.
Adam Smith continues along the same path of thought that was started by Hume. He agreed that there should be a movement of labor to cheaper producing areas but in a way that provided a more direct specialization. This “division of labor is what would be recognized today as an assembly line where workers do one task and one task only instead of producing a single good from start to finish.”(David Harvey) This type of specialization leads to a countries absolute advantage. This is also focused on how the developin...

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...ions of comparative advantages, absolute advantages, specialization and division of labor. Even to prove further that free trade helps is the development of these men’s policies in economies around the world and comparing them to countries with what Hume would say governmental tyranny toward trade. These implementations help guide developing countries become developed countries fast. Even with tariffs and other trade restrictions coming about in today’s world. Free trade is a necessity for specialization and division of labor needed for models in today’s world as well as past economies growing. Developing countries can learn a lot from the economic thoughts from these three men in ways to help them figure out their absolute and comparative advantages so they can participate in world trade to find faster and more efficient economic growth and allocation of resources.

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