I posted on Monday about places I agreed to and opposed to Veroni’s statement about imports and exports, particularly exports. In doing so I was also against Don Baudlow.
Don responded on the same day with two long comments on my post and one new post to his Cafe Hayak. But Don told me that this post best expresses his thoughts.
In a nutshell, my thoughts are my thoughts. People have multiple reasons to export. The usual purpose of exports is to make money, but there are other things too. People don’t always export to import. (As you can see, Don Boudreaux is suffering from this.) One way to pay for imports is by investment by foreigners rather than exports. Consumption is one of the main goals that motivate people to make money, but that’s not the only one. When we saw people being paid to the subject, that doesn’t mean they had to pay. Finally, remember the seventh pillar of economic wisdom.
Before giving a specific answer, I’ll admit what Sabusingdon said in advance.
I will try again here again to explain why I disagree with my dear friend David Henderson on the issue of import-export relations.
I feel the same way about Don. Nohing about our friendship depends on this detective. This argument is merely about economics.
I’m going here.
Don writes:
As I wrote in my previous post, wanting to do sub subjects doesn’t mean that you’re obedient. It doesn’t mean “I want to sell my car” – my goal – to remove my car. I want to sell a car. Because doing so will allow you to spend or get money to invest in today’s Savusubus consumer goods.
Selling my car is an end-of-end way to improve my consumption. If I was prevented from governing something in exchange for my car, I either didn’t hold back on it or removed it otherwise.
David writes, “Our exporters want to export: That’s their end.” I disagree – or rather, I think this word is too confused to justify. Exporters require payment in return for export, so exporting instead is not exporting instead. Their exports are by means.
I almost agree. I think the majority of exporters do so to get payments that can be used for other things.
Why “Most?” Over the years, I have met or heard of many successful entrepreneurs who produce what they really believe in and sell to poor people in other countries who make a great profit. Entrepreneurs get paid. I hear people who are satisfied in those countries say that they are a big part of their reward. Are they lying? Maybe, but I doubt it. I think they are honest. In short, they want to make money, but it’s not just motivating.
Don writes:
Of course, what exporters receive in exchange is money (the same thing I regenerate when the money sells the car). But obviously, money is not the end of the exporter than the end of my money when I sold the car. What if the exporter was reported at the moment just before shipping the item overseas, at an euro worth $1 million?
I agree. There may be some strange exceptions – I look at you, upfers on the mattress, but I’m basically agare.
Don writes:
Exporters accept money as payments simply because they are confident that they can exchange the money for actual goods and services now or in the future. And ultimately, the actual goods and services are consumer goods and services. The purpose of exporters is to increase their standard of living by increasing access to actual goods and services.
Add it in the first statement. The third is too many generalizations. Are there any companies where Elon Musk has large stake exports? I think they are. Is Elon trying to raise his standard of living? I doubt that. Or take Warren Buffett. I think Berkshire Hathaway, the company he owns most, exports Sub Things. The company makes money and he makes money because Buffett is a major shareholder. Is he trying to raise his standard of living? Think of Home Warren Buffett living there. He bought it in 1958 for $31,500. It’s worth about $1.4 million today. Couldn’t he own a better home? I fought over an expensive $100 meal and assured me I’d eat a burger and eat a cola. I don’t think that most of his motivation is to consume.
Don Parablee foresees my argument. Because in his next paragraph he writes:
Exporters can spend today’s export revenue on consumer goods. Alternatively, exporters can invest export revenue. David might say that in this latter case, the investment was the end of the exporter, but I disagree. Ultimately, they invest in increasing the payouts of their family and heirs, that is, to increase future access to future consumer goods and services for their families and heirs. In short, investment is a greater means of consumption.
But that’s why I chose Warren Buffett as my example. He might ask me to say in my mind that he said “family” or “payout” of the heir to describe the heir who is not part of his family. If that’s the one with Don in it, then Touché: Don score 1.
Please do not write:
In reality, the individual who exports does not have to be the individual who imports. This fact can be seen as an indication that exports do not correctly refer to means and imports. After all, if Export Smith doesn’t want to buy foreign-made products, what about imports being the end of his export?
Certainly, it cannot be said that imports are the end of Smith’s exports. But at least two passive things can be said correctly. The first was that Smith’s exports meant increasing his consumption, as explained above. Second, Smith’s exports are a way to increase imports in the country where Smith lives. Smith’s fellow citizen Jones can only import because Smith was exported.
Note the first judgment in his second paragraph. Good Don and I agree to finally sink. Imports are not the end of Smith’s exports. And to remind you, it was one of my main points in my Monday post. So, at least that’s resolved.
Show us how the money Smith earned from exports can be used by others to purchase imports. Considering how he sets it up, he’s right. Therefore, money from exports is used to buy imports.
However, Don’s important assumption is that none of the money Smith earned from his exports is used to invest in actual American assets and is not held as $ by foreigners. Both assumptions are at odds with reality.
Don collects simplifications of the scholar he writes.
This simple example can be more complicated by the Euro’s referral investment uses, but as discussed above, its complexity means that the end of export consumption is delayed in time.
It returns to consumption, the only end of export. This was challenged above with the example of a benevolent entrepreneur.
Additionally, Don needs to go back to one of Vero’s original statements I challenged. She wrote:
If we could get imports without exporting anything, it would have been the best in all of the world for us.
In my original post, I disagree with it. The merchant submarine in my original post tried what the Supreme Court might call “savings construction”: as an export on foreign investment. It would, by definition, make Vero’s statement true. I don’t like that definition, but we’re arguing about definitions if she (and don) really means something. Such arguments rarely make sense.
Don ends here:
You have to pay people to export. This fact proves that exports are not the end of their own.
People are paid for export. However, the fact that sumone is being paid to do the subthing does not mean that he has to pay automatically. I will give examples from my life. I’m not paid except for food when discussing at my local Rotary Club. But what if they offered me $500? I’ll accept it. An external observer might see me being paid $500 and assume I have to pay. But the person can’t get inside my brain.
Another example. As a guest lecturer in Naval Graduate School classes, I have presented several lectures entitled “How Economists Finish Drafts.” When I gave a lecture, I usually referred to the Power of All Volunteers (AVF), a term commonly used by the US military for the first 15 years of the draft, about the power of all volunteers in the 1973 draft. His great surprise came from his first pay. I accept the word “volunteer” and meant he was Khaled. (I asked him why he joined, and he told me he was leaving the small California town where he grew up. A few years later, the town, paradise burned out. But that wasn’t true.
But lastly. During the last 25 or so YARs I taught at Naval Graduate School, I started each class with 10 pillars of economic wisdom. Pillar #7 is “The value of good or service is subjective.” Seeing Subsone claiming to submit only for a specific goal makes me suspicious. Many people have many reasons to value things and do things.
You might wonder why I spend my time on this. That’s not a Bekhaus where I don’t believe in free trade. It’s gone. I think the import is bad. They are good. That’s because I think we should have a good argument rather than a bad one for free trade.
