Why trade?

People don't seem to understand why they get money. Money is an asset, but assets basically do nothing unless it is used. Consider keeping a gold coin in a vault sealed for eternity, you've just made that gold coin worthless to anyone in the universe except for what is inside your mind.

We do things we're good at so we can produce optimally for what we are working at. We get money for the purpose of improving the standard of our lives. Money used to consumed functions so. Money saved to be invested is done so more can be consumed in the future.

So we give money in return for goods or services that we would like to have. The objective of working is to improve our lives after all. Many have no problem understanding money until here.

And when it concerns nations, people forget exactly what this medium of trade is all about. They ask for government policies that seek to reduce imports through all means that are remotely profitable. Take for example the scenario in some western countries; to make agriculture viable, otherwise uncompetitive industries have to be subsidized just so they can export for competitive prices, which means that revenues must be lower than taxes spent on subsidies because the net effect after accounting revenues and subsidies are lower prices (net loss). This basically means that subsidizing nations are subsidizing the consumption of foreigners.

If people just learn that it is alright to import more competitive goods from other nations, they will get more bang for the buck. Higher standards of living will follow from being able to consume more, or invest for future consumption. All the while, labor from uncompetitive industries can be conserved for sectors that will actually yield a net income for the nation.

If governments and people really do understand that, there will be no tariffs or quotas on foreign goods and no subsidies for uncompetitive industries. We will just do what we have a comparative advantage in and buy anything else. Is it very different than working in a desk job to pay for your bills, loans, food, and entertainment? Not quite I'm sure.

Or would you prefer to go fish with a small net, go mine coal for electricity, work on the fields for meat, and build your own TV set just because you feel it's not nice to spend money? In the end of the day, by working on the desk job (which you're good at) you get to enjoy a higher standard of living than if you were self-sufficient and DIY everything.

Trade benefits both sides and so do free trade.