Question

Trade usually makes its participants better off.

a) Identify a local/global problem that might be caused by an economic policy that is based on the belief that free trade usually makes its participants better off.

Your answer needs to provide at least two paragraphs.
The first paragraph discusses the local/global problem.
The second paragraph explains how unregulated/free trade is causing the problem.

b) Identify an economist (Adam Smith) who agrees that in general free trade is a desirable way of organizing economic and social activity. Identify another economic concept (don't use Invisible hand) that this Economist supports. Discuss how this economic concept can help you improve your life or society.

Your answer needs to provide at least three paragraphs.
The first paragraph provides information about the economist.
The second paragraph identifies the economic concept that you have chosen.
The third paragraph discusses how you are going to apply this concept.

Answer all the questions in well developed paragraphs. The paragraphs should be at least five or six sentences long, and they should clearly include a topic sentence.

Answer 1

a)Free trade agreement or free trade policy is a concept which is based on a belief that free trade usually makes its participants better off i.e., being in a more advantageous position. Advantages of free trade includes •It enhances economic growth, efficiency and many more. But despite these, The global's biggest problem which is caused by free trade is ENVIRONMENTAL PROBLEMS. This problem is not only a local but a global issue. Let us discuss how free trade is a major reason behind the various environmental issues.

As when the production of goods increases, more advanced labour and capital intensive techniques are used, in short when there is an increase in production of goods as there are no tariff restrictions for trade(free trade), scale of production increases. With the increase in the scale of production, there are changes in the techniques of production, there is an increase of more leftover products also (secondary products) which increases, water and Air pollution.

And mostly, big industries are set up outside the city, near forest and vacant areas which affects the forest and encourages deforestation.

b) Introduction about the Author: Adam Smith

Adam Smith is known as the father of economics. He was a british economist, author and a philosopher born in scotland. Some famous notable ideas of Adam Smith include classic economics, free market, economic liberalism, division of labour and many more. He became more popular because of his book 'The Wealth of Nations', in which he analysed the relationship between the Work and production of a nation's wealth.

Adam Smith concept of Natural Liberty

What natural liberty is all about?

It's about eliminating the 'barriers' especially government barriers so that the individual can live his life freely, can act according to his own interests, can manage their property freely without any restrictions. Every individual in this world, until and unless he violates any law, he should be left free and should be allowed to work for his/her own interests, making his own life productive. He described about the three duties of sovereign according to the system of natural liberty: • protecting the society from violence. • saving the society from injustice. • maintaining public works and public institutions. Thus Natural liberty gave importance to individual preferences.

There should be a correct usage of liberty. As it is mentioned above that until and unless a person violates any law, he should be left free which means that we all love liberty but correct usage of it is important. For example law does not allow a person to have a liberty to murder, as it is a crime. Therefore until and unless a person comits any crime, he/she should be left free. He should be allowed to work. It opens a way for production and increase standard of living. By not violating laws, by proper usage of resources available, by not harming the society a person can enjoy his/her liberty. Practice of natural liberty means working with freedom of hate and jealousy.