TRADE

Trade involves the exchange, purchase, or sale of goods and services. Whether international or domestic, trade makes possible the division and specialization of labor on which our productivity is based. If we could not exchange or trade the products of our specialized labor, each person would need to be entirely self-supporting. Trade is, in economic terms, a means of increasing productivity, as much as investment, or technological progress. Specialized production, followed by trade, makes it possible for everyone to have more commodities than they had before trading, even if some gain more by trading than others. Even though trading, including international trade, is an indirect means of enhancing all domestic productivity, there is frequently a bias of nationalism, which runs deep and causes countries to be suspicious of one another. Countries often discourage international trade to protect domestic industries and the jobs of people who work in them. Nations will place taxes called tariffs on imported goods to make them more expensive and discourage people from buying them. Some degree of protectionism seems inescapable in a world of intensified production and competition, although there is a movement to create large international trading blocks to improve the standard of living of all the member nations.