Healthcare insurance costs and mandates
101st edition of Carnival of the Vanities

Everybody loses in restricting trade

It is an elementary economics that both buyers and sellers should benefit from an exchange. However, there is a small detail that many proponents of free trade miss! And that is, sellers have to make investment (capital, land and even labor) in order to produce and then sell something. Thus, they bear higher risk in a marketplace. If their products don't get sold, they are stuck with inventory and capital goods. The workers are stuck with investment in "wrong" skills.

Therefore, it is not surprising that sellers (as a role and not as particular individuals) will try to push whatever they have and limit competition.

Instead of repeating ad nauseum the cliche of free trade, we should expand the argument that any attempt by sellers to restrict competition will be met by other sellers doing the same. In that case, nobody will benefit because whatever money one earns by selling his/her goods and services in a unfree market can be used to buy only good and services whose quantity and quality is limited by unfree trade. Thus, there can't be any net advantage to gain by restricting the competition in market.

Only people who benefit from such a competitive politics of restricting the free trade are politicians and lobbyists.

Update: If you like this post, please vote for me (entry with 'Asish').


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