A scourge is a calamity. It would not be if one would be richer after it occurs than before.

Frédéric Bastiat
Complete Works, Volume 2, pages 112 to 116 (in French)
December 11th, 1847

This article is a response to a diatribe published in Le National ascertaining that the balance of trade in the United Kingdom that year was “negative”, i.e. that more gold left the country than entered it. They concluded that free-trade is harmful to England. Frédéric Bastiat being convinced, as Adam Smith was, that this is a non sequitur, attempts to show what is the mistake here.

Firstly, he reminds us that exchanges are conducted by producers, traders and consumers. The balance of trade is none of their business, not any more for international business transactions than domestic ones (I do not care about the trade balance with my butcher, which is necessarily “negative” because my gold allows me to buy his meat). However, it is true that the amount of English gold decreased in 1847, which “impoverished” the country. Yet the cause is not free-trade, which explains how it was made possible, but the poor harvest. The means of sustenance had to be bought abroad, failing it would have brought famine to the country.

This is one of the ideas that will be developed in Damned Money! according to which gold is not an end in itself but a means to it. The export of cash is only reflecting the sad truth that a scourge of bad harvest had hit the country.

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