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Quotation of the Day…

… is from page 11 of Edwin Cannan’s superb November 13th, 1931, Sidney Ball Lecture – a lecture titled “Balance of Trade Delusions“:

So firmly rooted was the belief that it was better to give to the foreigner than to receive from him that even ardent free traders would defend imports not on the ground that it is a happy thing to receive goods and services and the less you pay for them the better, but because, as they put it, “if you don’t import you won’t be able to export!” As if to send out goods and services and get back as little as possible was the ideal.

DBx: Brilliant!

Cannan (1861-1935), who taught at the London School of Economics, was one of the early 20th century’s greatest expositors of basic economic reasoning. In the speech from which this quotation is drawn, Cannan intellectually destroys the notion that a nation that runs a so-called ‘negative’ balance of trade – that is, a trade deficit – is necessarily (as most protectionists still in ignorance insist today) “losing” at trade.

I thank my GMU Econ colleague Dan Klein for alerting me to this lecture by Cannan.

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