Countries get rich by exporting, not importing / by kevin murray

The world has gotten appreciably smaller over the last few generations, and not only that, the trade barriers that separate countries from doing business with one another, has been relaxed or replaced with more or less the free interchange of goods from one country to another.  This does help explain why inflation has been so low over the last decade in advanced economies such as the United States, Japan, and Germany, so that despite the fact that many consumers have had stagnated wages, their purchasing power for the goods so purchased has remained strong.


As you might expect, however, whether you are a net exporter or a net importer of goods does make a material difference to that country, along with the salient fact as to what actual goods are being imported or exported.  For instance, the exportation of vital raw materials in pretty much their natural state is not going to be nearly as lucrative, as taking those raw materials and actually developing products from the usage of those materials; so that raw materials such as rubber or sugar, which while producing income from the exporting of these products, are in total, going to be far less valuable, than producing things that use rubber such as tires, or food items that use sugar such as processed foods of all sorts.


Further to the point, real money is not generated out of thin air, despite the financial shenanigans of national banks or national sponsored banks the world over, for the more goods that any given country imports, signifies the outflow of monies or its equivalency from that country to the exporter, whereas the exporter of those goods will be receiving the inflow of monies or its equivalency from that country to their people.  Those countries that are net exporters, especially of manufactured goods which take those initial raw materials that make up such a good, and by combining these with other necessary materials, processing, intellectual ingenuity, as well as their manufacturing efficiencies are able to add value to their products which thereby profits those companies so that, real wealth and value is created for those exporters, in comparison to those that import these things, of which these importers are paying the price for their lack of efficiencies as well as their inability to manufacture such at the same cost point.


This so indicates that those that are able to export manufactured products that are difficult or impossible to replicate by other countries on their own shores, are not only far more profitable and rich for having done so, but have a huge leg up on those countries that have developed a market for those products but do not have the capacity to manufacture them. 


Quite logically, countries get rich by exporting products, because the exportation of products, allows those countries to deliberately produce the products that are most profitable and unique for them, and to thereby sell them to countries throughout the world that need to utilize them, whereas those that import these products, have to spend money to receive such, and if they run a deficit in so doing, are compelled to borrow money to do so, in addition to paying the cost of such borrowing, which leaves them poorer, and far more exploitable.