Even more fundamentally, we should be able to teach students that imports, not exports, are the purpose of trade. That is, what a country gains from trade is the ability to import what it wants. Exports are not an objective in and of themselves: the need to export is a burden that the country must bear because its import suppliers are crass enough to demand payment.
Damn. I’ve been known to make this point often enough myself. But I was sadly deluded enough to think that I was being vaguely original in doing so.
Ho hum.
15 responses so far ↓
1 Kit // May 10, 2009 at 2:31 pm
He is missing the point that a “country” doesn’t import or export anything but it is suppliers and consumers that do.
National borders have no place in economics and everything to do with politics.
2 dearieme // May 10, 2009 at 2:40 pm
Original?? Dear God, my father instructed me in this obvious truth in the 50s.
3 Pa Annoyed // May 10, 2009 at 2:46 pm
Mercantilism, surely?
4 MatGB // May 10, 2009 at 3:27 pm
Nah—your family growing grain analogy was one of the better explanations I’d read, and I’ve paraphrased it in discussions a few times, but I’d read similar in Krugman and others beforehand.
Plus Charlie Stross goes on about essentially the same concept in some of his Merchant Princes books. I think.
5 Owen Barder // May 10, 2009 at 3:30 pm
I learned pretty much all my economics from his book Peddling Prosperity (including this).
I liked his stuff better when he did economics.
6 Mark Wadsworth // May 10, 2009 at 3:34 pm
Don’t worry, I’ve heard other people attribute this idea to you, but all in all, I’d like to say “what Kit says”.
7 Rumbold // May 10, 2009 at 3:37 pm
My economics teacher used to say that there was nothing good per se in waving off a ship full of products you had just produced.
8 willbblake // May 10, 2009 at 6:04 pm
Is this analogous to breathing in being better than breathing out?
9 Jeff Wood // May 10, 2009 at 8:13 pm
Dunno, Rumbold. If I wave off a ship full of products, and get paid for the shipment, that seems pretty good per se.
But then I work with businessmen, not economists.
10 DocBud // May 11, 2009 at 1:47 am
Exports are like going to work, imports like going shopping.
11 David Gillies // May 11, 2009 at 1:49 am
The way I like to look at it is that emphasising exports over imports is like emphasising putting more hours into your job for less money (or fewer things bought with your salary).
12 The Great Simpleton // May 11, 2009 at 9:06 am
Our exports are someone elses imports. They export so they can buy those imports. We export because we want to buy someone elses exports.
So, as Kit says in the first comment, the whole thing would be a lot easier and simpler if politicians stayed out of the way and confined themsleves to bonking each other and fiddling expenses.
13 DavidV // May 11, 2009 at 11:21 am
Every year the Germans very smugly crown themselves “Exportweltmeister” (export world champions) but would you rather build a BMW or drive one?
14 dearieme // May 11, 2009 at 11:39 am
“National borders have no place in economics “: what, even in a world of fiat currencies?
15 john b // May 15, 2009 at 2:04 pm
@DavidV – indeed, this is why the German and Japanese economies are doing even worse than the UK/UK ones: we spent a decade inventing imaginary money and used it to buy BMWs and HDTVs; but they’re the ones who sold the BMWs and HDTVs in exchange for the imaginary money…
Leave a Comment