The trader principle is a recognition of the fact that the most effective way of gaining values from others is not by deception or theft, but by trading value for value to the mutual benefit of both parties. This is the application of the principle of justice to one's dealings with other men: an individual must not seek from others that which he has not earned, i.e. that which he has not "paid for" to the satisfaction of the other party.
Explanation and Justification
From food, clothing, and shelter to automobiles, computers, and pharmaceuticals, the list of human needs is endless. Since man must produce the values he requires to survive, each of these needs opens up an enormous field of work and study. No one man, no matter how great, can master every human endeavor; every minute spent tilling a garden to satisfy one's need for food is one minute not spent knitting sweaters to keep oneself warm in the winter. If every individual had to produce alone everything he needed to survive, the human race would likely have died out long ago. It would be far more efficient if one person could concentrate his efforts on growing food, another on making clothing, and another on building homes. This is the principle of the division of labor.
Other people can be of great value to a man; they can provide him with innumerable benefits, both material and spiritual. The only question is how a man should go about trying to attain these values from others. The most immediately obvious method is to simply take the things one needs through the use of physical force. While the attainment of concrete goods in this manner may provide for one's survival in the short term, in the long term such a policy is devastating to one's ability to live. An individual's focus, in such a case, necessarily becomes not reality-centered, but other-centered. Such a man becomes intensely focused not on mastering existence, but on mastering his fellow man. He becomes a parasite in body and in mind, relying on others to think and produce for him, absorbing his ideas blindly from those around him as he absorbs the product of their labor. Thus, such a policy violates the virtue of Independence. In turning his focus towards seizing the goods produced by others, a man neglects cultivating his own ability to produce, violating the virtue of Productiveness and damaging his own Self-esteem. Such an individual must concoct elaborate lies to ensure that he is not caught, violating the virtue of Honesty and leading to a constant psychological state of paranoia. Perhaps most importantly, by his Initiation of Force, such a man negates the judgments and conclusions of his victim, inhibiting the victim's ability to make use of his faculty of reason, the very faculty at the root of production. Thus the force-wielder relies on his victims' ability to produce while destroying that within them which makes production possible. When practiced consistently on a widespread basis, the negation of the mind in this manner leads to mass poverty and the total collapse of production, as is readily evident in the case of historic dictatorships.
The proper alternative to such a policy is the principle that each individual is to be treated as an independent producer with the goal of sustaining and furthering his own life. The proper means of dealing with other rational men is through negotiation and trade. Other people should not be a primary, but when allowed the freedom to fully exercise their capacity of reason, they become an enormous (and continuous) secondary source of value.