The following excerpts are from THE WESTERN PRODUCER, one of Canada's most respected and widely-read farm papers.
Everyone is familiar with the term "favourable balance of trade". Its designation — "favourable" — marks it as being highly acceptable — a desirable goal to aim at. When a nation announces at the end of a year that it has enjoyed a favourable balance of trade, it means that it has exportered a larger amount of goods than it has imported. The wider the disparity — the greater the excess of exports over imports — the more "favourable" the trading position.
As Mr. Howe points out, all exports and no imports won't work out. But neither will, say, 100 parts export to 50 parts import. And yet the latter condition is generally regarded as highly satisfactory for the exporting nation. The truth is that as between the two against nothing relationship, dismissed as ridiculous by Mr. Howe; and the two to one or any other preponderance, there is only a difference of degree. They are both mortal sins and in the trading world will both lead to damnation.
We are not there raising merely a debating point. As a matter of fact the emphasis on exports rather than imports is the root cause of serious misunderstanding concerning world trade. While it is not in itself a prime cause, it is a symptom which indicates pretty clearly where the main cause of the collapse of world trade should be sought. The jargon in use in discussing these serious matters is indicative of the topsy-turvy, muddled thingking that is prevalent in relation to world trade. For instance when a nation, like an individual in a business transaction, gives more than it receives, it is making a very unsatisfactory exchange, in fact, a bad bargain. Yet this is what is called "a favourable balance of trade." Likewise no sane community should stand to suffer grave hardship because it cannot export a surplus which it does not need. But it is possible that a nation might suffer grievously if it were unable to import commodities essential to its existence. Yet the slogan we hear is always, "We must export or die", never "'We must import or die".
The western democracies have to rethink their way to, and establish a system for the exchange of goods and services radically reconstructed to fit the realities of these critical times. An essential preliminary to this is to expose the anomalies, the shams, the outright chicaneries of the present outmoded system which fails to work; which is in fact dead, but hasn't quite lain down.