markitect-main/examples/infospace-with-history/output/entities/balance-of-trade.md

Balance of Trade

Definition

The difference between the value of a nation's exports and imports over a given period. Under the mercantile system, a favourable balance (exports exceeding imports) was believed to increase national wealth by bringing more gold and silver into the country, while an unfavourable balance was thought to drain wealth away.

Source Chapter

Book IV, Chapter 1

Context

Smith critiques the mercantile obsession with the balance of trade, showing how merchants and governments wrongly believed that a country's prosperity depended on maintaining a favourable balance. He demonstrates that this focus on precious metals rather than actual production and consumption led to misguided policies like export bounties and import restrictions.

Economic Domain

Exchange

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