International Trading Post

Accounting 101: The books always balance.

   The fuss over an imbalance of trade payments is at root over a temporary delay in paying bills.
   On an international level, which is better? Being a creditor or being a debtor? Being a creditor means they owe us money. Being a debtor means we own them money -- but meanwhile, we have more stuff.
   As a creditor nation, America sold more stuff to others, and they agreed to pay as they grew and prospered. As a debtor, America bought more stuff than we sold, partly because U.S. residents had more money. So we get the stuff, and by buying we help them prosper so they in turn will be able to buy more services and stuff from us.
   Result: Both sides prosper. (See Adam Smith, The Wealth of Nations, founding textbook of Economics 101.)

   To insist that one nation always be the supplier and thus the creditor assumes that the buyer will never run out of cash. This is an 18th Century mercantilist attitude -- whoever gets all the money wins. But if one side is broke, neither can play anymore, so both sides lose. Or if one buyer nation does go broke, we simply find another buyer.

   In fact, mercantilism can only function in a colonialist setting. And colonialism is a form of theft, because the dominant nation takes more from the colony than it returns.
   Too many people had, and still have, the notion that the goal is to win everything, no matter how or what or who gets hurt. And by impoverishing a colony and putting it into beggary, they win because the winner has all the stuff.
   If the neighbor or colony falls into poverty, that's just tough luck, they lost and we win, the dominant merchants say. However, this is a shortsighted attitude, because poverty breeds resentment. And resentment breeds anger, which can lead to a move for independence and to take back by force what was really theirs all along.

   Far better that all sides trade fairly, and in doing so all sides prosper. As everyone prospers, all bills are paid. Otherwise, collection agents in the guise of military units get in the act and war results.