Apples and Oranges

Jacob Moore: Can I have a copy of it? She doesn't keep pictures of her childhood.
Gordon Gekko: I don't even know you, and you already want something from me. So what do I get in return?
Jacob Moore: So you want to make a trade?
Gordon Gekko: Yeah. Okay. All right. I'll give you this and you give me another picture of Winnie--recent--without you in it.
Jacob Moore: I don't have one on me.
Gordon Gekko: I guess this one is on margin, huh?
--Wall Street: Money Never Sleeps

Jacob Hornberger offers a nice primer on free trade. Suppose Jess has 10 apples and Jen has 10 oranges. Because Jess would like some oranges and Jen would like some apples, they decide to trade. What would constitute a fair trade in this case? Many would likely say 5 apples for 5 oranges, or a 'price' of one apple per orange.

But this in incorrect. This is because individuals have their own subjective valuations based on their personal taste preferences. Jen, for instance, may like apples so much that she would be willing to part with 3 oranges in order to obtain an apple. Outsiders looking in might deem this trade 'unfair,' but to Jen it is completely fair given her affinity for apples.

The important point is that when two parties voluntarily engage in exchange, the price they decide upon IS the fair one because it motivated them to trade. And, because they did trade, both sides are better off than they would be others...lest they would not have traded.

When governments interfere with free, voluntary exchange, then that is when things become unfair. Through trade agreements, tariffs, sanctions, embargoes, et al., government intervention forces exchange prices away from the truly fair price that traders would voluntarily settle upon.

Because they prevent the fair market price, i.e., the prices voluntarily agreed upon between traders, from being freely determined, government-imposed restrictions on trade impair improvements in standard of living to be gained through trade.

Shred the treaties, lift the tariffs, and open the ports--even if other countries don't. By definition, free trade does not require government permission.