Not Everything Is Scarce. Example: Economic Ignorance

(Don Boudreaux)

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Here’s a letter to Bloomberg:

Editor:

In “The U.S. Can’t Import Its Way to Economic Prosperity” (July 30), Conor Sen claims to reveal troubling imbalances in Americans’ patterns of commerce. Readers made fretful by this revelation, however, can rest easy: Mr. Sen is very confused. For proof, look no further than Mr. Sen’s identification of U.S. universities admitting large numbers of foreign students as an example of “an excessive focus on importing economic activity rather than investing in and developing it locally.”

First, educational services provided by Americans to foreigners are U.S. exports, not imports. Writers for Bloomberg should know this basic fact. Further, because by Mr. Sen’s own argument foreign students pay a great deal for these services, American universities thereby earn more resources to ‘invest and develop locally’ and, thus, to enhance their capacity to teach and carry out research.

Most worryingly, though, Mr. Sen seems unaware that trade is reciprocal. Americans cannot through trade rely more heavily on foreigners without foreigners relying more heavily on Americans. And because each trade is done by persons who could choose not to do that trade, each and every trade improves the well-being of all parties to it. Therefore, like President Trump, candidate Biden, and the bevy of conservatives and progressives who today carp incessantly about the buying and selling decisions made by their fellow Americans, Mr. Sen has absolutely no basis for asserting that the pattern of commerce that results from Americans’ freedom to trade should be “more balanced.”

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