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Once Again, Being Worthwhile to Incur Does Not Turn Costs Into Benefits

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Here’s a letter to a reader from Georgia:

Mr. B__:

Thanks for your e-mail.

You don’t understand how I can “back the view that exports are a cost [2] and not a benefit given how many companies are happy to export and how many others want to.”

The answer is straightforward. While you’re correct that many companies happily export, and many more would like to join their ranks, exporting is desirable only because it is a means of acquiring goods and services ultimately for consumption. What makes exporters happy is not the act itself of producing goods and services for delivery to foreigners. Instead, what makes exporters happy are the earnings they receive from their export sales – earnings that are then used to purchase goods and services for use here at home. If exporters were prohibited from spending the money they earn on their sales, they’d no longer be happy to export. They’d immediately stop exporting.

If you’re still unconvinced, consider the following. Suppose you’re given a choice between two options: (A) Work full-time but never be allowed to spend your earnings, or (B) Never have to work, but receive earnings as if you do work – earnings that you’re free to spend. If these are your only two options, the clearly better option is (B). The reason is that working – which is simply you producing goods or services for “export” to persons outside of your household – is a means for you to increase the number of real goods and services that you’re able to “import” into your household.

Producing goods and services for sale to strangers is a means, and a valuable one at that. That’s why people are happy to have jobs and why companies are happy to export to foreign countries. But means should not be confused with ends. And the end of all productive activity – including production for export abroad – is consumption. Exports are costs that we incur to acquire imports; exports are not an end in themselves.

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