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Smith on the Balance of Trade – “On the Wealth of Nations”, P.J. O’Rourke

May 15th, 2012 · No Comments · Economics, Policy, Politics

Smith wrote: ‘There is no commercial country in Europe of which the approaching ruin has not frequently been foretold.. from an unfavourable balance of trade,’ Smith wrote, making the news in the New York Times and the Washington Post very old news indeed. ‘Nothing,’ Smith wrote, ‘can be more absurd than this whole doctrine of the balance of trade.’ As Smith had already made clear, every freely conducted trade is balanced by definition. The definition doesn’t change because one trade gets an iPod and the other gets an IOU.

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