Tzouros Ypsilantis   Thursday, 26 Jan '17

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I will tell you a story today. It is useful and explains why free trade and open markets contribute to the well-being of the people.  

In a hotel in the summer  a tourist enters and asks for a room from the hotelier. 

50  euro makes sir, says the hotelier. Very nice, the tourist answers I will prepay your room. I will stay at this one day. So, she gives him 50 Euros, takes the suitcase and the key and goes up to his room. 

As he enters the elevator, the butcher enters the hotel. George, he says to the hotelier. We have a balance  50  euro. Could you pay me?   

But of course Thanasis, the hotelier answers him and gives them  50  euros to the butcher. 

The butcher takes the money and goes to his shop. 

At that moment, the breeder enters. Thanasis, I brought you the meat! Is  50  euro the bill! Will you give them to me please?  

And of course dude! The butcher answers and gives them  50  euros to the breeder. 

The farmer takes the note and goes home.  

You're back, my Costa, just in time, his wife tells him. Your best man came with his wife to see us and to welcome him I booked a room in the village hotel, one where we are repairing the hostel. 

Go pay the hotelier and help get people settled, until I prepare food. 

So, the breeder starts, goes to the hotelier. George, I brought you my best man, did you keep the room my wife told you? How much does the room cost? 

50  euro Costa! He takes them out  50  euros the breeder and gives it to the hotelier.

As he leaves the note at the front desk, the tourist comes out of the elevator and tells the hotelier. You know I did not like the room, I changed my mind. 

Okay sir says the hotelier. Here you take your money back and give him the 50 euros you had given him as a prepayment.  

As I mentioned at the beginning, this story shows in a simplified way how wealth is produced and how people prosper, as more and more people trade  and the faster they do it, the same amount of money creates more and more prosperity for them, since money corresponds to goods or services they buy. 

With this simplified example, you can think for yourself why it is against the interests of the people, the imposition of duties, as they act as a disincentive to expand the trading chain.

It is also easy to understand that the more people have the ability to trade with each other, the more value the money they use for everyone will gain.  

That is why free trade, often called economic globalization, has helped people around the world to prosper. 

Because it improved the ability and increased the number of people who can trade with each other and thus created even more prosperity for all.  

And the key question now. Given that this improves everyone's lives, why do some people persistently hide it and pretend not to know it, promoting economic nationalism and protectionism?

But why do they aim to isolate the economies of nation states and to dominate societies at the local level, since globally the sizes are different and can not isolate the economies.  

Their vehicle is the local governments that try to create small dictatorships to serve the interests of their local financiers.  

So open market. This is the only real protection for the well-being of all of us, especially the financially weak.  

PS In the picture I quote you you can see a simplified economic circuit, between businesses, households (consumers) and the state.  

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Source:  marketnews.gr