ABSTRACT
This chapter shows how freely conducted international trade will lead to countries specializing in the production of goods and services at which they are efficient, resulting in a greater volume of global production and prosperity from the resources available. International trade, freely conducted leads to an increase in global output because resources are more efficiently employed, and also to an increase in the well-being of individuals. The extent to which free trade leads to an improvement in the well-being of individuals, which individuals, by how much, as well as the implications of free trade for the natural environment of the earth, are just a few of the main issues being currently debated by economists, politicians, governmental officials and environmentalists. For a variety of reasons governments intervene in the workings of economic systems, so that international trade is not, in effect, conducted freely.
