Saturday, February 6, 2021

Frank Knight on Those Who Are Against Foreign Trade: Stupidity in Economic Ideas

Frank H. Knight

 Frank Knight did not suffer fools.

This comes via Don Boudreaux:

[F]rom page 6 of the original 1960 Harvard University Press edition of Frank Knight’s collection of lectures, delivered in 1958 at the University of Virginia, titled Intelligence and Democratic Action:

I recall a Republican campaign speech that exploited the hoary piece of nonsense that if Americans buy from foreigners, a foreign country gets the money and America the goods, but if they buy from Americans, America has the goods and the money both. Such reasoning raises the question whether there is any use in pointing out facts, whether one merely insults one’s own intelligence by casting pearls before, let us say, beings oblivious to their value.

DBx: A bit earlier (page 5) in this lecture, Knight referred to belief in the merits of protectionism and inflation as “two perennial examples of stupidity in economic ideas and policy.”



  1. I once explained the advantages of foreign trade to a friend with "If we don't allow them to sell their goods here, how are they going to get the dollars to buy our goods?" I know, lots of objections could be made to what I said, but it was, in RW's phrase, a "land mine" for liberty, and in this case it went off immediately and he said, "Oh, of course".

  2. Scott is correct, providing they spend an equal amount on our products. But when they only return a portion, but spend locally on arms, etc or on others products, then it is our loss.