In Chapter 12 “The Drive for Exports,” Hazlitt talks about the exceeding need of countries for countries to export their goods to facilitate equal distribution of expenditures and earnings. This means the higher are exports, the greater the should be imports to achieve balance (Hazlitt 69). The principle is not much different from what is occurring in domestic trade, as every business must sell something to have the purchasing power to buy.
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The issue of lending is raised in this context as it is concerned with establishing relations between sellers and buyers. The solution that the author proposes implies increasing the number of loans made to foreign countries because even though not all of them get repaid, nations are still better off for having made them because they enhance the export abilities. However, it is essential to note that one should consider both the advantages and disadvantages of giving a loan because it is impossible to prosper by making bad ones.
One can agree with the fact that countries can prosper when they give loans that result in being outright gifts to foreign countries, which means that it is insufficient to give away resources that could have been used for other purposes. Both export subsidies and bad loans are examples of the error of lowing only at the immediate effect of a policy on exports (Hazlitt 71). The author’s proposal to have patience and intelligence to consider the long-term impact of policy. These effects are imperative to review not only in terms of the implications for foreign but also domestic affairs. It is essential to understand that foreign loans affect local businesses, which is why bad loans should be approached with caution.
Hazlitt, Henry. Economic in One Lesson. Ludwig von Mises Institute, 2008.