Here’s another letter to Ricky Miller:
Mr. Miller:
Accusing me of being “totally mistaken” in describing exports as costs, you write that “American businesses voluntarily export, and want to export even more, which proves exports are benefits, not costs.”
With respect, you confuse means with ends. To achieve desired ends, we use available means. When I want a meal, I buy one at a restaurant. But my spending money in this way, although done voluntarily, is not itself to me a benefit; to me the benefit is the meal that I receive in exchange for my money. My expenditure is the means – here it is a cost that I willingly incur – to acquire a meal, which is my end. While I make myself better off by purchasing this meal, the improvement in my welfare would be even greater were the restaurant to give me the meal free of charge.
In effect, I export to the restaurant the goods and services that I would otherwise purchase with the money that I spend on the meal. But I do this exporting only as a means of importing to myself the meal supplied by the restaurant. We even say, in ordinary speech, that “the meal cost me twenty-five dollars” – meaning that my giving up the $25 for the meal is, itself, a sacrifice. The reason that we don’t say that “the meal benefitted me twenty-five dollars” is because the benefit that I obtain by purchasing the meal is the meal, not my turning over $25 to the restaurant.
If you still disbelieve me, ponder this fact: if the act of exporting is itself the ultimate end – the true benefit – of trade, then we Americans can make ourselves fabulously rich by every hour producing mountains of goods, loading these goods onto cargo ships, and then dumping all the cargo in the middle of the ocean. Only if you believe that dumping cargo in the middle of the ocean paves a sure path to prosperity do you truly believe that the act of exporting is itself a benefit (rather than a cost incurred in payment for the benefit called “imports”)
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
