… is a repeat from ten years ago, but one whose relevance today is too great not to reprise; specifically, it’s from pages 476-477 of the 5th edition (2015) of Thomas Sowell’s Basic Economics::
At one time, it was believed that importing more than was exported impoverished a nation because the difference between import and exports had to be paid in gold, and the loss of gold was seen as a loss of national wealth. However, as early as 1776, Adam Smith’s classic The Wealth of Nations argued that the real wealth of a nation consists of its goods and services, not its gold supply.
Too many people have yet to grasp the full implications of that, even in the twenty-first century. If the goods and services available to the American people are greater as a result of international trade, then Americans are wealthier, not poorer, regardless of whether there is a “deficit or a “surplus” in the international balance of trade.
