It's rare to be treated to two pieces of stupidity about trade on the same day but here we are, the event has happened. And sadly the people in error are people who do have at least some modicum of power over our lives.
The error being made is to be mercantilist. To think that it is the exports which are the purpose of trade, the exports which make us rich. This is, as we all know, precisely the view which Adam Smith railed against that 240 years ago and Adam Smith was right. Both in what he said and in said railing. For it is, of course, the imports which make us rich, the reason we trade is to gain access to those imports.
Here is Liam Fox:
“If you want to share in the prosperity of our country, you have a duty to contribute to the prosperity of our country,” he is reported as saying, hinting that companies that do not take advantage of new export opportunities could face sanctions.
Clearly thinking that it is exporting which makes Britain rich:
He added: “We’ve got to change the culture in our country. People have got to stop thinking about exporting as an opportunity and start thinking about it as a duty — companies who could be contributing to our national prosperity but choose not to because it might be too difficult or too time-consuming or because they can’t play golf on a Friday afternoon.”
Again, exporting being equated with increasing the wealth of the nation. From the other side of the Channel we have M. Macron who is an odds on runner for the French Presidency:
British-based financial institutions must be prevented post-Brexit from selling their services in the eurozone, Emmanuel Macron, the likely progressive left candidate for the French presidency has told the Guardian.
This is the same mistake. It is to think that the British companies doing the exporting are the beneficiaries of such exports. When nothing is further from the truth. Those who benefit are the consumers who get to enjoy the imports. for that is why we do this trade thing - in order to gain access to those things which Johnny Foreigner does better or cheaper than we do. And that's the only reason we do trade too.
It gets worse:
But Macron insisted:
“The financial passport is part of full access to the EU market and a precondition for that is the contribution to the EU budget. That has been the case in Norway and in Switzerland. That is clear.” The proposal would be rejected outright by British Eurosceptics.
The insistence is that being able to sell to people is a privilege, one that a government must pay for so that businesses may do so. But this is incorrect - the benefit is to those who may buy the imports.
By not grasping the most basic point about trade M. Macron is threatening to hold the people of the European Union hostage unless some gelt is paid to the Brussels bureaucracy. He really is shouting that he'll make Europeans poorer unless the Brits give him some money. Such is the lunacy one is driven to by not understanding the basics of trade.
It has been 240 years now since the Wealth of Nations was published. We'd really rather hoped that people had grasped the point by now.