Trade Gains When the Opportunity to Trade Changes the State of Information.

J. S. Mill suggested that the destruction of old preferences and their replacement by new are among the greatest benefits imparted by free trade. However, Mill's argument relied on a possibly controversial ethical judgment. The present note approaches the question posed by Mill with only the conventional Paretian ethical baggage, and shows that, if all agents are rational in a sense to be made clear and if the well-being of each agent is independent of irrelevant alternatives, then trade is potentially gainful. Copyright 2001 by Blackwell Publishing Ltd.