First, there exists the extreme liberal, or neoliberal, view. Liberal thought values individual freedom and tends to be optimistic about the potential for mutual gains in human interaction, including under globalization. Most liberals are enthusiastic about the economics of the free market. In the international realm, such thinking is most obvious in liberal views concerning free trade (though many liberals would take a slightly more ambiguous view than the neoliberal one set out here).
Liberals argue that trade benefits everyone because it helps people concentrate on what they are best at (the formal version of this argument is the theory of ˜comparative advantage'). For example, Britain sells tweed jackets and country sportswear to French aristocrats who pay for it by selling wine to the British. Less obviously, even a country that is not the best in the world at making anything can benefit from free trade because it allows them to devote their resources to whatever it is that they are relatively good at and buy in everything else. Imagine a person deciding whether to spend an hour growing rice to feed their family or to spend an hour working in a textile factory. If the person earns more working in the factory, they can spend some of their wages on buying the rice that they would have produced and still have money left over for other things. Comparative advantage (a state's most efficient production) varies from state to state (for example, Argentina may be better at beef farming than textiles). Allowing free trade sends price signals that encourage people to work at what they are best at, a strategy that benefits everyone over the long term. Globalization has helped to reduce transport and transaction costs so the potential gains from specialization are increased. Globalization has also increased competition giving people incentives to keep becoming more efficient.
Liberals argue that multinational production works in a similar way.
