Very well written description of difficult topic. The conventional view on trade as a competition for profits is deeply engrained and that's what I think "exports are a cost" addresses. There are of course differing perspectives, whether that's a country's perspective, a firms perspective seeking sales and profits, or an individual consumers perspective, or a worker's perspective worried about employment.
I think the tendency is for all parties to simply hand wave this differing perspectives, but it is important to contextualize them.
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.
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?!
Very well written description of difficult topic. The conventional view on trade as a competition for profits is deeply engrained and that's what I think "exports are a cost" addresses. There are of course differing perspectives, whether that's a country's perspective, a firms perspective seeking sales and profits, or an individual consumers perspective, or a worker's perspective worried about employment.
I think the tendency is for all parties to simply hand wave this differing perspectives, but it is important to contextualize them.
Exactly what the next several posts addresses.
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.
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!