“Exports Are Real Costs, Imports Are Real Benefits” as Pedagogy in MMT
Beyond the so-called Slogan
Debates around Modern Monetary Theory (MMT) and its approach to international trade often circle back to a single, provocative phrase:
“Exports are costs, imports are benefits.”
A recent critique (RelearningEcon on X) portrays this as a dogmatic slogan, wielded to shut down nuance or context. But this reading misses both the spirit and the intent behind the phrase. As many MMT scholars have emphasised, this formulation is not an unyielding policy rule. Rather, it is a pedagogical tool—a starting point designed to break through deeply entrenched assumptions about the nature of trade.
Why This Phrase? Challenging Mercantilist Intuition
Popular economic discourse is saturated with the belief that a “strong” economy exports more than it imports. Trade surpluses are framed as victories; deficits as weaknesses.
MMT’s phrase is a deliberate inversion of this intuition. It’s meant to prompt a reconsideration of what trade actually means in real resource terms:
Exports are goods and services created with domestic resources—labour, raw materials, energy—sent abroad and unavailable to one’s own population.
Imports are real resources and goods received from other countries, available for domestic use.
This reframing is not about being contrarian for its own sake. It’s a way to restore clarity about why nations trade in the first place: to acquire what they do not have, not to accumulate foreign currency or maximise exports at all costs.
Analytical Starting Point, Not Policy Prescription
The phrase “exports are costs, imports are benefits” is not a policy demand. It is not a blueprint for maximising imports or minimising exports. Rather, it is an analytical lens—an entry point to understanding trade from the perspective of real resources and public purpose.
Not a Reduction to Absurdity
Not anti-export: MMT does not advocate for autarky or oppose exporting. Exports can be valuable, especially when they enable the import of goods that a nation cannot produce efficiently.
Not context-blind: The real world is complex. Issues of capacity utilisation, employment, external constraints, and the utility of specific goods all matter.
Not dogmatic: This phrase is not meant to replace context or policy analysis. As MMT’s multi-level trade framework (see our upcoming blog series) shows, trade must be examined at several levels: real resources, financial flows, employment, and sectoral balances.
Why the Misunderstanding?
Why does this phrase provoke such strong reactions or accusations of dogmatism?
Pedagogical Shortcuts Are Misread: In debates—especially fast-moving ones online—concise statements are often mistaken for rigid dogma, especially when repeated for clarity.
Confusion Between Analysis and Policy: Critics may conflate an analytical tool for clarifying assumptions with a prescriptive policy recommendation.
Reframing the Conversation
To move the conversation forward, it’s helpful for both advocates and critics to recognise the phrase’s intended role:
It is a corrective lens, not a rigid rule.
It is a starting point for discussion, not the end of analysis.
It is about real resources and public purpose, not about denying the importance of context, utility, or dynamic policy needs.
Summary Table: Purpose and Limits of the Phrase
A Call for Constructive Engagement
In light of ongoing debates—including thoughtful critiques like RelearningEcon’s article—we invite critics and supporters alike to keep in mind the distinction between pedagogical simplification and actual policy advice. MMT’s analytical approach is far richer—and more nuanced—than any single phrase can convey.
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Thank you for this post. Unfortunately I clicked the link to RelearningEconomics and read their article - yikes.
I think RE just doesn’t know/understand accounting very well. They describe exports as being the cost for China to import capital goods, then just declare that, actually, those exports aren’t a cost because they were used for “strategic necessities.” Huh?!
If I buy a house for $1 million, that $1 million is my “cost basis.” In real terms, I needed to sell something, e.g. my labor, to accumulate the $1 million that was needed to purchase the house. I think a house qualifies as a strategic necessity; according to their logic, the $1 million worth of labor I sold to buy the house is somehow my benefit, and the house is my cost?!
Keep up the good work!
Cringe! 🤣 (title that is, though I sympathize with your basic point). At least please change the slogan to "real costs" and "real benefits" — don't use the language of the enemy (it is, "Do not think of an elephant" stuff) — the proper wording changes the complexion entirely. Like reversing the poles of a magnet.
I never use that slogan in your title, and I think most people regard me as an extremist MMT'er (as in: uses the base case model for purposes of education). So anyone saying, "MMT says 'exports are a cost, imports a benefit'," is intellectually dishonest and misrepresenting basic MMT, in a fundamentally silly manner, reversing the semantics entirely, making "MMT" seem clownish. ...
... since obviously to the export firm the sales are their $ benefit. Imports are the household's $ cost. While obvious, I think making this EXPLICIT matters a great deal in discourse, because most people's heads are so full of macroeconomics garbage. It takes an MMT firehose to clean it all out.
So shame on "RelearningEconomics on X". He is so wrong, and not doing anyone any service here. He is using the reverse magnetic polarity to MMT and calling it MMT. Strawman tactic at the very least. Shameful.
"Exports are our real cost, imports our real benefit" is proper MMT framing and the cleansing firehose — absent complete lunacy like importing toxic waste and our politicians, or complete goodness like exporting psychopathic oligarchs. It has the opposite semantics of, "exports are a ($) cost, imports are a ($) benefit" which when said this way, making the semantics explicit, is clearly false, avoiding charges of being seen as clowns.