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I know some economists during the second half of the 20th century had the exact opposite view of the Mercantilist philosophy. For example Mercantilism says a c

I know some economists during the second half of the 20th century had the exact opposite view of the Mercantilist philosophy. For example Mercantilism says a country should maximize exports and minimize imports as much as possible. Meanwhile Milton Friedman, one of the most prominent economists of the 20th century, said that a country that had large amounts of imports with minimal exports was a very successful country. The idea being that such a country was essentially buying things from other countries at minimal cost. Edit: The following link quotes something he said regarding this: https://fee.org/articles/milton-friedman-the-way-we-talk-about-trade-confuses-the-issue/#:~:text=The%20gain%20from%20foreign%20trade,cost%20of%20getting%20those%20imports. https://fee.org/articles/milton-friedman-the-way-we-talk-abo...

owebmaster 2y ago
and what does Milton Friedman say about a country having enough money to import without export?
- deleted 2y ago
  [deleted]
- smogcutter 2y ago
  [flagged]
- cjbgkagh 2y ago
  The US is able to exports its inflation, not all of it but a lot of it. A membership tax for the ‘rules base order’.
  - owebmaster 2y ago
    OP mentioned a country, so not just the US, that is why I asked. Edit: Alright, by reading the link, what Friedman means, I think, is that a country still need to export more than import, but should export just the minimum enough to pay for the imports. In volume (so I'd guess manufactured products not commodities).
    - cjbgkagh 2y ago
      There is another side of the ledger e.g. currency so the question is then how does a currency remain valuable when more has to be produced to keep buying things, as opposed to selling things. US has been running a trade deficit for only the past 60 years, since the Nixon shock which is probably very related. While on paper the US is per capita wealthier today I think that’s more to do with ponzi economics.
      - owebmaster 2y ago
        > While on paper the US is per capita wealthier today I think that’s more to do with ponzi economics. It is still the most developed economy but with a healthcare and education expense bigger than any other country while the citizens still need to pay a fortune for it.
- fsckboy 2y ago
  >a country having enough money to import without export? there's no such thing. when you import, you send your currency overseas to pay for the goods. There is nothing they can do with your currency except send it back to you by buying things from you, lending it to you, or making direct equity investments in your companies. (otherwise there is this huge growing pile of your currency accumulating overseas which drives down your purchasing power since it's in surplus) not sure if Friedman said that, but he did know more about econ that me, and what I've said is accurate.
  - daseiner1 2y ago
    USD remains the world’s reserve currency, and the primary currency of global trade. i.e., the exporter, paid in dollars, can also use those dollars to buy goods from other nations beside the US.
    - graeme 2y ago
      What the OP said is true. Countries do trade USD with each other, but considered as a group the net effect is that countries can only: >send it back to you by buying things from you, lending it to you, or making direct equity investments in your companies. That's true whether one foreign country exists or 10,000.
  - 8note 2y ago
    thats not accurate to how the US trade works coutries trade with the US to get USD, but then trade that USD with each other some countries stack up the USD like saudi arabia, but theyve got a pretty strong partnership with america on defense and foreign investment
    - _heimdall 2y ago
      I would have expected other countries to largely be holding securities. Am I wrong there, are they actually holding primarily USD?
      - 2y ago
deleted 2y ago
[deleted]
makeitdouble 2y ago
Regardless of current events: Both are looking at volume, when the nature of what's exchanged probably matter as much if not more. If a country massively imports raw materials and exports a low but steady volume of high level finished products, as long as the raw materials are reasonably cheap it will be a winning strategy. A country importing high technology goods and balancing that with raw resources will potentially be in a worse condition if raw materials stay a commodity or deplete.
rawgabbit 2y ago
Friedman was not saying we should maximize imports. Instead he was saying we should maximize the ratio of imports to exports. Essentially to get as much stuff from others (imports) while paying as little as possible (via exports). ”And the proper objective for a nation as Adam Smith put it, is to arrange things so that we get as large a volume of imports as possible, for as small a volume of exports as possible.” With that said. He appears to be arguing for colonialism. Take stuff from others and pay a pittance for it.
- MyOutfitIsVague 2y ago
  It's more an argument for classical economics. Getting the most benefit for the least cost is the most fundamental economic motivation.
TZubiri 2y ago
This always felt quite subjective to me. There's also the tautological paradox where price is defined by trade, so the trade balance will always be equal by any measure, if country A exports 1T bushels of wheat and country B exports 1 computer chips, we subjectively know who is winning in the exchange, but it will tally up to equal values in the balance sheet.
- ViktorRay 2y ago
  I think many economists would argue that both countries are winning in this exchange. Many would argue that such a transaction would be an example of a “positive sum game” where each side gains more than they lose.
  - TZubiri 2y ago
    Oh yeah that trade can be positive sum is a given. And that most trade is generally positive sum is also a quite reasonable take that we seem to share. That said, even if a trade is positive for both parties, the surplus/profit of a trade might not be (and mathematically almost never is) 50/50. In the example outlined 1B wheat for 1 computer chip might be positive for both countries, but everyone would agree that the exporter of 1 chip is getting the better end of the positive sum trade.
Raymond122 2y ago
[dead]
Eddy_Viscosity2 2y ago
Any of the maximize or minimize arguments are going to be simplistic and reductionist. The optimal real world strategies are always going have to account for other factors like relationships, political stability, goal alignments, power/dynamics, etc, etc. These factors will be different for each nation you're dealing with and will greatly affect what the best import/export and tariff ratios should be. And these may also change over time. The importance of these factors (different for each nation) are so strong as to overwhelm any of the economist theories about maximize/minimize.

owebmaster 2y ago

and what does Milton Friedman say about a country having enough money to import without export?

deleted 2y ago
[deleted]
smogcutter 2y ago
[flagged]
cjbgkagh 2y ago
The US is able to exports its inflation, not all of it but a lot of it. A membership tax for the ‘rules base order’.
- owebmaster 2y ago
  OP mentioned a country, so not just the US, that is why I asked. Edit: Alright, by reading the link, what Friedman means, I think, is that a country still need to export more than import, but should export just the minimum enough to pay for the imports. In volume (so I'd guess manufactured products not commodities).
  - cjbgkagh 2y ago
    There is another side of the ledger e.g. currency so the question is then how does a currency remain valuable when more has to be produced to keep buying things, as opposed to selling things. US has been running a trade deficit for only the past 60 years, since the Nixon shock which is probably very related. While on paper the US is per capita wealthier today I think that’s more to do with ponzi economics.
    - owebmaster 2y ago
      > While on paper the US is per capita wealthier today I think that’s more to do with ponzi economics. It is still the most developed economy but with a healthcare and education expense bigger than any other country while the citizens still need to pay a fortune for it.
fsckboy 2y ago
>a country having enough money to import without export? there's no such thing. when you import, you send your currency overseas to pay for the goods. There is nothing they can do with your currency except send it back to you by buying things from you, lending it to you, or making direct equity investments in your companies. (otherwise there is this huge growing pile of your currency accumulating overseas which drives down your purchasing power since it's in surplus) not sure if Friedman said that, but he did know more about econ that me, and what I've said is accurate.
- daseiner1 2y ago
  USD remains the world’s reserve currency, and the primary currency of global trade. i.e., the exporter, paid in dollars, can also use those dollars to buy goods from other nations beside the US.
  - graeme 2y ago
    What the OP said is true. Countries do trade USD with each other, but considered as a group the net effect is that countries can only: >send it back to you by buying things from you, lending it to you, or making direct equity investments in your companies. That's true whether one foreign country exists or 10,000.
- 8note 2y ago
  thats not accurate to how the US trade works coutries trade with the US to get USD, but then trade that USD with each other some countries stack up the USD like saudi arabia, but theyve got a pretty strong partnership with america on defense and foreign investment
  - _heimdall 2y ago
    I would have expected other countries to largely be holding securities. Am I wrong there, are they actually holding primarily USD?
    - 2y ago

deleted 2y ago

[deleted]

makeitdouble 2y ago

Regardless of current events: Both are looking at volume, when the nature of what's exchanged probably matter as much if not more. If a country massively imports raw materials and exports a low but steady volume of high level finished products, as long as the raw materials are reasonably cheap it will be a winning strategy. A country importing high technology goods and balancing that with raw resources will potentially be in a worse condition if raw materials stay a commodity or deplete.

rawgabbit 2y ago

Friedman was not saying we should maximize imports. Instead he was saying we should maximize the ratio of imports to exports. Essentially to get as much stuff from others (imports) while paying as little as possible (via exports). ”And the proper objective for a nation as Adam Smith put it, is to arrange things so that we get as large a volume of imports as possible, for as small a volume of exports as possible.” With that said. He appears to be arguing for colonialism. Take stuff from others and pay a pittance for it.

MyOutfitIsVague 2y ago
It's more an argument for classical economics. Getting the most benefit for the least cost is the most fundamental economic motivation.

TZubiri 2y ago

This always felt quite subjective to me. There's also the tautological paradox where price is defined by trade, so the trade balance will always be equal by any measure, if country A exports 1T bushels of wheat and country B exports 1 computer chips, we subjectively know who is winning in the exchange, but it will tally up to equal values in the balance sheet.

ViktorRay 2y ago
I think many economists would argue that both countries are winning in this exchange. Many would argue that such a transaction would be an example of a “positive sum game” where each side gains more than they lose.
- TZubiri 2y ago
  Oh yeah that trade can be positive sum is a given. And that most trade is generally positive sum is also a quite reasonable take that we seem to share. That said, even if a trade is positive for both parties, the surplus/profit of a trade might not be (and mathematically almost never is) 50/50. In the example outlined 1B wheat for 1 computer chip might be positive for both countries, but everyone would agree that the exporter of 1 chip is getting the better end of the positive sum trade.

Raymond122 2y ago

[dead]

Eddy_Viscosity2 2y ago

Any of the maximize or minimize arguments are going to be simplistic and reductionist. The optimal real world strategies are always going have to account for other factors like relationships, political stability, goal alignments, power/dynamics, etc, etc. These factors will be different for each nation you're dealing with and will greatly affect what the best import/export and tariff ratios should be. And these may also change over time. The importance of these factors (different for each nation) are so strong as to overwhelm any of the economist theories about maximize/minimize.