Here’s a letter to the Wall Street Journal:
Your excellent editorial “3M Isn’t a Coronavirus Villain” (April 13) explicitly exposes the folly of export restrictions. Yet implicitly it exposes also an even deeper absurdity – namely, the illogic of the mercantilist underpinnings of President Trump’s hostility to free trade.
Central to the mercantilist myths that have long guided Trump’s – and other protectionists’ – (mis)understanding of trade is the notion that exports are a benefit because they bring in money from foreigners, while imports are a cost because they’re paid for with money sent to foreigners. This misunderstanding explains, for example, Trump’s hostility to U.S. trade deficits.
The COVID-19 crisis, however, by making immediate and visceral the importance of access to actual goods such as facemasks and other medical supplies, clarifies a reality that in normal times remains obscure. That reality is this: exports are a cost – they are valuable goods and services that we produce but don’t consume because we ship them to foreigners – while imports are a benefit, being valuable goods and services that foreigners produce for us to consume. Exporting is, of course, worthwhile, but we export in order to import. And we gain more from trade the greater is the value of imports we receive in exchange for any amount of exports we sacrifice. Contrary to mercantilist superstition, we do not import in order to export.
Although the odds are long, let’s hope that the president’s understandable desire for Americans now to have in hand, not as much cash as possible but, instead, as many as possible medical supplies – that is, as many as possible actual goods – will prompt him finally to realize that we benefit the more we import relative to the amount that we export.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030