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.
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.
Original?? Dear God, my father instructed me in this obvious truth in the 50s.
Mercantilism, surely?
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.
I learned pretty much all my economics from his book Peddling Prosperity (including this).
I liked his stuff better when he did economics.
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”.
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.
Is this analogous to breathing in being better than breathing out?
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.
Exports are like going to work, imports like going shopping.
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).
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.
Every year the Germans very smugly crown themselves “Exportweltmeister” (export world champions) but would you rather build a BMW or drive one?
“National borders have no place in economics “: what, even in a world of fiat currencies?
@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…