Trade Theories and Realities: Why Economists Should Study Fairness (revised version)

Trade Theories and Realities: Why Economists Should Study Fairness This article describes economic theories of free trade, protectionism, and economic fairness. As well, how will free trade effect workers, consumers, and companies. Public debate between free trade and protectionism focuses on the positive aspects of their position while ignoring the negative aspects. For example, free trade tends to emphasise the opportunities that free trade will be beneficial for exporters and consumers. Opponents of free trade …

…face the competition with foreign firms who pay their workers less. Also, consumers may argue that it is unfair that they must pay higher prices for the imported goods if freer trade does not occur. Therefore, free trade can be viewed as fair by one group but unfair by another. Fairness needs to be taken seriously when evaluating international trade policies. The public prefers policies that are fair rather than policies that are merely efficient.