Question

A free market solution, in economic terms, refers to idea that the overall prices for goods and services are determined by the supply and demand in the free market without using governmental intervention.

The issue I choose is international trade, the pros and cons are presented below

Pros: Without barriers such as tariffs, free trade can lead to economic growth and benefit all countries involved. Also, free trade can have comparative advantages for each countries, meaning that each country can specialize in what they can do best and trade it with others, creating a win-win result. Last, it can also bring job opportunities as foreign investment flows in and interact with local market.

Cons: Without protection from government, the workers from local weak industries might find it harder to survive. For example, American textile workers might feel sad as their products and prices can not compete with the foreign products which are cheap, thus more welcomed by domestic consumers. The other thing is making working conditions poorer than before. Due to the free trade, many poor countries now take low-skilled jobs from developed countries, and their workers are low-paid and with poor working conditions.

HOW WOULD I REPLY TO THIS?

Answer 1

Over the years, protectionism or centrally administered economics has ceased to exist over most parts of the globe. Meaning that slowly and gradually, government control over business is losing. The core reason for this is the fact, that most economies have begun to realize the importance of free trade economics in their countries.

Free trade economics is nothing but a concept which believes that the forces of market demand and supply should be used to determine what goods and services are to be produced by a nation and the entire world as a whole if implements this policy, it would be for their own good as maximum consumer satisfaction can be received and competition leads to development of new technology and resources which maximize producer as well as consumer benefit.

Over the years, the fast pace growth in numerous countries such as China and India can be said to be a result of this globalization as well as free trade economics. Even though, some economist have raised concerns over labour movement and underpayment to people, yet with rise in total income of these countries as a result of increased jobs due to inflow of foreign money as well as increased exports, have led to living standards increasing gradually over time and are expected to rise even further in the near future.

Countries are in a win situation due to market economics, primarily because they can receive goods freely and without any significant trade barriers on one hand, and on the other, technological development is possible as competition increases. Since the 1990's, the overall productivity levels across numerous low- and high-income countries alike has been increasing and is leading to better living conditions for one and all.

Please feel free to ask your doubts in the comments section if any.