One of the things that keeps people thinking of international trade as some kind of contest between nations, with winners and losers, is the practice of regarding "deficits" and "surpluses" in the international balance of trade as if they represented a major problem or benefit. The trade itself can be very beneficial, as a means of adding to the total supply of goods and services available to the countries which engage in it, but these benefits do not depend on whether a given country has more exports than imports or vice-versa.
The great Supreme Court Justice Oliver Wendell Holmes said: "Think things, not words." Nowhere is that more important than when discussing international trade, where there are so many misleading and emotional words used to describe and confuse things that are not difficult to understand in themselves. The terminology used to describe an export surplus as a "favorable" balance of trade and an import surplus as an "unfavorable" balance of trade goes back for centuries.
At one time, it was widely believed that an import surplus impoverished a nation because the difference between imports and exports had to be paid in gold, and the loss of gold was seen as a loss of national wealth. However, as early as 1776, Adam Smith's classic The Wealth of Nations argued that the real wealth of a nation consists of its goods and services, not its gold supply. Too many people have yet to grasp this, even at the beginning of the twenty-first century. If the goods and services available to the American people are greater as a result of international trade,