Friday, 7 March 2014

Cannan on Plato on trade

An interesting quote from Edwin Cannan's "A Review of Economic Theory", London: P. S. King and Son, Ltd. 1929.
In relation to foreign commerce, he [Plato] says of his citizens, "What they produce at home must be not only enough for themselves, but such that both in quantity and quality as to accommodate those from whom their wants are supplied," which shows appreciation of the fact that the real purpose of exports is to procure imports. (p.2).
Now if only many contemporary people had as much insight into trade as Plato. How often do we have some commentator or journalist or politician tell us that we must increase exports, as if exporting per se is a good thing and thus an end in and of itself? Or how often do we hear calls to import less without the commentator seemingly able to grasp the fact that this means exporting less as well? Plato at least got the point that it is importing that makes us better off, not exporting. We only export to pay for our imports.

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