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Quotation of the Day…

… is from page 357 of Joseph Schumpeter‘s monumental, posthumously published 1954 History of Economic Analysis; Schumpeter here is discussing the famous book by the mercantilist Thomas Mun (1571-1641), England’s Treasure by Forraign Trade: Or, the Ballance of our Forraign Trade is the Rule of our Treasure, (published posthumously in 1664) (original emphasis):

The errors in question all center in a single proposition, which may, however, be stated on three different levels: (1) that the export surplus or deficit measures the advantage or disadvantage a nation reaps or suffers from its international trade; (2) that the export surplus or deficit is what the advantage or disadvantage from international trade consists in; (3) that the export surplus or deficit is the only source of gain or loss for a nation as a whole.

All three statements have been made [by Mun].  None of them is defensible.

DBx: Mercantilism supplies a grossly distorted – and, hence, grossly distorting – analytical lens through which to ‘view’ international trade.  Yet these lenses have never gone much out of fashion among the general public, and today they are all the rage at the White House.