Trade effects civilization, economy?

Question

How does trade effect the economy?

How does trade effect civilization?

Answer 1

protected trade effects civilization by creating economically beneficial trading relationships based on absolute advantage (Adam Smith).

Unprotected, (free trade) destroys national sovereignties and creates a shared division of labor, leading eventually to a one world market and one world government (Von Mises, Bastiat).  It also equalizes wage rates and standards of living, by bringing down the standards in more developed nations and slightly increasing standards of living in less developed nations. (www.americanprotectionist.com)

To John below,

get up with the times,  Ricardo's comparative advantage theory has been proven false and is plainly illogical when you view the forest instead of the trees.  Cutting edge economics and thousands of economists have already thrown comparative advantage out the window.

Answer 2

trade benefits the standard of living of both trading partners when it is done intelligently.   In a complex economy, trade will benefit some, and disadvantage others, but in the aggregate, trade is beneficial, all other factors held constant.

Look up the key words "comparative advantage" for a detailed description of how a poorer trading partner and a wealthy trading partner can both come out ahead through trade.

But do not discount the many pitfalls to poorly conceived and executed trade deals.  Often there are not sufficient constraints on trade deals and the poorer country may be allowed to exploit its workers or pollute the environment with such intensity as to greatly outweigh the benefits of trade.

Still, both nations are better off when each spends their labor doing what they do best, regardless of whether they do anything better than their trading partner.

In terms of civilization, I would say that increased trade helps export the cultures and benefits of both trading partners, but also extends the negative effects of each culture to both partners.   So you get the good with the bad.  In the end, the world wide culture would become more interactive and more interdependent with one another perhaps?  This could lead to a reduction in wars over time, as each culture is somewhat invested in the other.