The general argument in favor of freedom of international trade is the argument in favor of division of labor. The man who does one thing, and does that well, and exchanges his products for the products of other specialists will have more and better things than the man who insists on doing everything for himself. Specialization means exchange and normally the exchanges are profitable for both parties to the transaction. This doe* not cease to be true because a political boundary line happens to separate the two exchangers. Brown who lives in England and Smith who lives in this country exchange goods because they consider the exchange mutually profitable. If either of them believed he was the loser by exchanging, he would not exchange. The men who engage in international trade are intelligent and keenly alive to their own interests. It is not necessary for the government to make laws restricting exchange of goods so as to protect them from loss. As soon as it appears that a particular kind of trade will result in loss for either party, that kind of trade will cease.

159. The Conclusion

There is much merit in the general argument in favor of freedom of trade. It shows a lack of logic to spend immense sums digging canals and building railroads and developing steamships to facilitate commerce between nations and at the same time to levy prohibitive restrictions upon that international trade for the purpose of stopping it. Still the free trade argument is in need of some modifications. The persons who carry on international trade do so for profit, and no doubt they would cease to do so if it involved loss to them; but their interests are not necessarily the interests of the nation and sometimes their interests run counter to the interests of the nation. This will be found true in those cases referred to in connection with the infant industry argument for protection where industries would be able to take care of themselves if only they were permitted to get a start. The importers have no special interest in developing these infant industries and here their interests are against the interests of the nation. To this extent the infant industry argument is justified. But there is always danger that industries will be singled out for protection that will not ultimately be able to stand on their own feet without protection, and hence that it will always be uneconomical to conduct in the country. Moreover, even where the proper industries are selected for protection, it will usually be found impossible to remove the protection after the period of infancy is past. These considerations are not arguments against the development of infant industries by protection but against the abuse of protection for that purpose.