FREE TRADE VS PROTECTION
A policy of no restrictions on the movement of goods bcr wccn countries is known . as the policy if Free Trade. Restrictions placed with a icw 10 planning lunch industries constitute the policy of protection. ln the . the term ‘free trade’ has been used tu denote “that system of commercial policy which draws ,ill distinction between domestic and foreign commodities and, therefore, neither imposes additional burdens un the latter. nor grants any special flavors to the former.”! Free trade, however, dues not require the removal of all duties un comm commodities. It only insists that they shall he imposed exclusively for revenue and not at all for P’ auction. Adam Smith wrote: “If a foreign country can supply us with a commodity cheaper than ourselves can produce. cucumber buy it Prom them with Soil part of the produce uf 0111′ own industry, employed in a way in which we have some advantage.” lie continued Fletcher( “Whether the advantage which rune country has over another be natural or il C Trade. quircd is in this respect of no consequence. As long as one country has those advantages and the other wants them. it will always he 1I10re advantageous for the laucr rather to huy of the former than to make, “2
The only exception that Ad m Smith would make was industry is necessary for defense. These might he plotted since defense is more important than .
The doctrine of free trade is the extension of the doctrine of division of labour to the international field. In the words of Adam Smith again. “Individuals find it for their intcr cxt to employ their industry in a way in which they have some udvant.ruc over their neighbours.” And he adds. “What is prudence in the conduct of every private furuily can scarce he folly in that of great ‘ln short.the free trade theory
is that such a policy enables every country to devote it self it self till those fonll~ of production for which it is best suit the hasi, (If comparative advantages