Name: Steven P Sanderson II

Date: 6/13/06
Class: Intro to Business BA11 5040
Professor: McNamara

In this paper which has been earmarked for extra credit I would like to talk about
a couple of things such as free trade and franchising. I am also going to touch briefly on
Entrepreneurship. Again since it is something I find interesting and something I have
been able to enjoy. First off free trade is defined as an idealized market model wherein
trade of goods and services between countries, flows unhindered by governments
imposed artificial costs. The term is given to economic policies, as well as political
parties that support increase in such trade. Free trade is a concept in economics and
government, encompassing: International trade of goods without tariffs or other trade
barriers like quotas, international trade of services, the movement of capital and labor
between countries.

The term free trade has become such a debated subject that it has not been
uncommon for so-called free trade agreements to impose additional restrictions. All
developed countries use some restrictions usually labeled as protectionism which is a
form of restraining trade between nations by use of things like the before mentioned
tariffs and quotas. The most notable critic of protectionism economist Dani Rodrick
claims “the only systematic relationship (between tariffs and economic growth) is that
countries dismantle trade restrictions as they get richer.”

Now today free trade is ever a hot topic not only because it allows free transfer of
goods but also services and jobs. This in my opinion has played a key role in outsourcing
jobs to more cost effective countries since movement of labor is encompassed by free
trade. Now with all of this happening meaning free trade I think we have entered almost
a trend that may come to a complete halt and I say this because you can only become so
efficient and cost effective before you start becoming inefficient again. The whole model
may even implode I don’t know but am interested in debating and finding out. I say that
it may come to a halt because there are only so many people in the world and they all
need to eat and sleep. Also with costs going up around the world by continually
experiencing inflation wages can only go one way and that is up. Maybe outsourcing will
never stop since one country is always going to be at the bottom of wages and the
cheapest place to do business.

I think free trade as it has come to be today has given way to a new wave of
entrepreneurialism. They have come to embrace franchises in a fast growing manner
which has allowed them to control their own business to a certain degree and has given
them access to global markets as the grow – they can purchase franchises in foreign
markets. I would not consider franchises going global a bad thing but in fact something
very good for everyone. For example if you owned a Jackson Hewitt franchise and it was
located on 25A in Setauket you would have to hire someone from the local market place
to run it not someone 5,000 miles away.
Franchise comes from the French for Free, whereas franchising is a method where a
franchisor license trademarks and tried and proven methods of doing business to a
franchisee in exchange for recurrent payment, and usually a piece of gross revenues or
profits as well as annual fees, in exchange. For the fees and other monies paid services
such as advertising and consulting are usually provided to the franchisee. Now like I said
earlier I believe this is a good form of free trade where jobs are kept and created in their
respective countries while still being able to do business in foreign countries and using
free trade. Now I now we will never be able to get away from outsourcing work as it has
proven to profitable for companies to utilize and actually helps the world economy by
lifting third world nations up to a higher economic form than they have previously
experienced but as I have stated in the class discussions I feel we need to worry about us
first.

One way of still using free trade comes to my mind and is specifically why I
decided to go back to school whether I ever get to see it come to fruition or not. I have
decided that I would like to start another business by way of using distributed computing
as a method of the business and charge a commission on every trade made. I would like
to set up a form of downloadable client that people can run on their computers that is an
automatic trading platform that would run based on parameters that my company would
set up and I would pay them a commission for running the program based on how much
profit they generate for the company. This would in effect allow me to utilize the entire
world or rather anyone with a computer and high speed connection, which there are quite
a few of them and growing every year. Now I say this would be a global company due to
the fact that we could trade currencies and in foreign markets at any time since all I
would have to do is get one person to use their computer for automatic trading.
Distributed computing is basically using someone else’s computing resources while they
are not using their pc. Now like I said in my reaction report on chapter 6 I hold
entrepreneurship dear to my heart not only because of the opportunities it holds but for
the simple fact that I enjoy it and would not want to live any other way.