Adam Smith stated in his 1776 treatise “On The Wealth of Nations” that trade creates wealth. More specifically, voluntary trade between two parties MUST create value for both parties because, if it didn’t, they simply would not make a transaction. This means that by engaging in trade, people generate more value in the world: they create a net gain.
This net gain is described by the economic law of comparative advantage which “explains how trade can create value for both parties even when one can produce all goods with fewer resources than the other.” Comparative advantage ensures that everyone, from the most unskilled laborer to the most sophisticated engineer, can create value in the marketplace by voluntarily exchanging goods and services.
People often confine the principles of ‘trade creates wealth’ and ‘comparable advantage’ to economics, but they’re actually natural principles whose application is infinitely broader.
Trade ALWAYS creates wealth. People can ALWAYS engage in trade. Everyone can ALWAYS create wealth. Isn’t this the world’s most empowering concept? Not only can EVERY individual naturally create wealth in the world, it’s fantastically easy. There is only one rule: you must trade.
Trade is by definitely voluntary. If someone is being coerced into trading something of lesser value for something of greater value, that is not trade: that is violence. Violence has no place in trade. In fact, violence makes voluntary exchange impossible.
Violence breaks the laws of trade because it erodes the individuals fundamental right to private property. This allows violence to simulate the creation of wealth through theft. People ‘make’ money during war, but they do not create wealth, they have only used violence to steal the wealth of others. When people engage in violence, they prevent trade from taking place. This increases the amount of poverty in the world, ultimately hurting everyone because poor people trade less.
If your mission is to become wealthy, logically you must oppose any practice that reduces the amount of value you could capture for yourself. You must oppose the use of violent force and war.
If your mission is to live in a more peaceful world, logically you must oppose any restriction on the right of two people to engage in voluntary exchange. You must advocate the right of all individuals to engage in (truly) free trade.
Peace is a struggle, not on the battlefield but within ourselves and our communities. We must wage people through trade. We must encourage those who would engage in violence acts to engage in trade instead because it will make them more wealthy. Trade creates peace and it’s absence creates war. To build a more peaceful world, we must engage in trade.