Ever since Adam smith, economists have recognized that gains form trade are the key to the wealth of nations. Specialization and division of labor have made possible the improved productivity that arises from technological change, better resource allocation, and specialized production, the key underlying features of modern economies. What economists have not realized unit recently is that the exchange process is not cost. Economists still misunderstand involved in exchange, assuming that exchange is cost or unproductive , or contending the such costs exist but are passive and therefore not important, or are neutral with respect to their consequences for economics.