Trade among individuals allows people to specialize in activities they can
do well and to buy from others the goods and services they cannot easily
produce. A good doctor who is a bad carpenter can provide medical
services not only for her own family but also for a good carpenter without
the training or the ability to practise medicine. Trade and specialization
are intimately connected.
Without trade, everyone must be self-sufficient; with trade, people can specialize in what they
do well and satisfy other needs by trading.The same principle applies to regions. Without interregional trade, each
region would be forced to be self-sufficient. With trade, each region can
specialize in producing products for which it has some natural or
acquired advantage. Prairie regions can specialize in growing grain or
raising livestock, mountain regions in mining and forest products, and
regions with abundant power can specialize in manufacturing. Cool
regions can produce wheat and other crops that thrive in temperate
climates, and hot regions can grow tropical crops like bananas, sugarcane,
and coffee. The living standards of the inhabitants of all regions will be
higher when each region specializes in products in which it has some
natural or acquired advantage and obtains other products by trade than
when all regions seek to be self-sufficient.
This same principle also applies to countries. A national boundary is a
political invention and rarely delimits an area that is naturally self-
sufficient. Countries, like regions and individuals, can gain from
specialization. More of some goods are produced domestically than