Oh bugger

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.

Paul Krugman.

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 thoughts on “Oh bugger”

  1. 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. 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.

  3. 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.

  4. 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.

  5. 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).

  6. 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.

  7. Every year the Germans very smugly crown themselves “Exportweltmeister” (export world champions) but would you rather build a BMW or drive one?

  8. @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…

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