When trade is considered by economists and commentators, too often the discussion centers on countries. This evolves from the misbegotten notion that countries, rather than individuals, trade.
Thanks to a facile approach to what is a very basic concept, we’re as a result bombarded with strange notions of trade “surpluses” and “deficits” as though free exchange could be anything but a positive. Happily, as former Fed Chairman Alan Greenspan has reminded us, for
“the world as a whole, of course, exports must equal imports, and the world consolidated current account balance is always zero.”
Greenspan’s underlying point is that the trade that so many discuss in terms of countrywide imports and exports is really about individuals freely exchanging their surplus for that produced by others. In that case, all trade by definition balances.
And with the individual in mind, we can see clearly the faulty premise of protectionism. For an individual to act in ways protectionist would be for that person to live needlessly a life of deprivation...
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