4. Who Profits from Free Exchange

Unless each. thinks he will be better off by reason of the exchange, why does he agree to it? One might argue that England, as a whole, would be better off if she kept her woolens, and we, our dollars. As a matter· of fact, such is the assumption of govern ment officials all over the world when they establish trade restrictions-tariffs, export quotas, exchange con22 troIs, and other trade barriers. Such officials, denying that these decisions should be· made by the parties con cerned, have substituted their own judgments of the ad vantage or disadvantage of an exchange. It would be just as logical for the government to step in and regulate the trading by two small boys of a baseball for a jack knife. After all, someone "in all his wisdom" may hon estly believe that Johnny would be better off if he kept his baseball than if he traded it for a knife. There are many people in the world today who hold that individuals are incapable of determining their own best interests. They will maintain, if they are consistent, that voluntary exchange of goods or services between in dividuals cannot be relied on to benefit the group as a whole. Such a belief is refuted by 150 years of progress under a fairly free exchange system within this country.