Imports by the people are for their use, and exports allow to pay for their use.

Frédéric Bastiat
Complete Works, Volume 2, pages 216 to 219 (in French)
January 24th, 1847

A speech by Paul de Noailles in the Upper House creates the opportunity for Frédéric Bastiat to give some clarifications about the balance of trade. Is it necessary to remind us that it is one of the red herrings of the protectionists and mercantilists? The latter, who were focusing on the quantity of gold that was entering or leaving the country, had attributed a negative sign to it when the quantity of gold leaving the country exceeded the quantity of gold entering the country. This is the main source of misunderstanding, whereby people see a negative trade balance as a curse, even today.

Today’s quote (cristal clear since at least 175 years now but explained by Adam Smith as early as 1776!) sets things straight. Exports constitute the cost of international trade while imports constitute its objective. Once this proposition is understood, one can see how restrictive policies are absurd when they aim at limiting imports and favouring exports. Who would, in their own mind, want to favour costs and limit the benefits of trade? The only answer I can think of is that the protectionists and politicians supporting such a policy do not understand international trade, should keep their mouths shut and stay home!

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