Friday, March 07, 2008

Benefits of Free Trade

In this video Milton Freedmen shines a light on how many people come together to make a pencil.

For the pencil to be made; people, companies and governments from around the world have had to communicate, create relationships and co-operate. Trade creates relationships built on mutual benefits, i.e Trade is a win, win result for all involved. Trade is important for a countries wealth and development, because of this governments spend a lot of time and money trying to stimulate trade. Some people argue that subsidies to businesses just make them inefficient, creating businesses that can't be sustained by consumer demand.
What would happen if the government stopped subsidies? Could the businesses survive? Should they survive? If the market was just driven by consumer demand, would it be stable and grow? What is the role of government?

Let me know what you think.