Free Trade Definition

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Free Trade
Free trade policies have been in effect since the first stages of the Industrial Revolution; however, the theory of free trade has always been linked with conflict. 1976 Nobel Prize winner, Milton Friedman, once said in an interview that many people forget, "the most important single central fact about a free market is that no exchange takes place unless both parties benefit” (PBS). This fundamental problem brought up by Friedman is prevalent in the minds of millions of Americans. Many workers unions, such as the AFL-CIO, oppose and protest free trade for the U.S. with the notion that it leads to discrimination in the workplace and displaces American jobs, rather than creates them. However, free trade programs such as NAFTA should
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Economist Adam Smith, author of The Wealth of Nations, was perhaps the first major figure in history to present and promote the idea of free trade. Smith is often times called the father of modern economics, credited for his writing involving laissez-faire and the idea of the "invisible-hand." (Adam Smith). In The Wealth of Nations, Smith states, "very good grapes can be raised in Scotland, and very good wine too can be made of them at about thirty times the expense for which at least equally good can be brought from foreign countries. Would it be a reasonable law to prohibit the importation of all foreign wines, merely to encourage the making of claret and burgundy in Scotland?" (458; bk. 4 ch. 2 par. 15). This question supports the principal idea of free trade: If a foreign country can create a product of the same quality for less expense over a separate country, there should be no laws to prohibit that production and commerce from taking place. However, just as it is in the U.S. 's modern economy, Smith 's ideas of free trade in 1776 were not completely favored by popular …show more content…
Those who oppose free trade for the United States, such as the AFL-CIO and its members, attack policies like NAFTA with the notion that they lead to poor labor conditions, unfair and imbalanced trade benefits, and shift American jobs out of the country. However, much of the data they use as their arguments against free trade can be rationalized. Therefore, free trade programs should continue to be created and spread internationally to maximize productivity globally and created economic growth for every

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