The man, considered as a whole, has no particular desire to export more than he imports or to have a “favorable balance of trade.”
“In each period, some individuals decide to add to their cash balances, and others decide to reduce them, and each makes that decision which he believes will benefit him most. For centuries, however, fallacious popular usage has asserted that one whose income is greater than expenditures (exports greater than imports) has a “favorable balance of trade,” while one whose expenditures have been greater than income for a period (imports greater than exports) has suffered an “unfavorable balance of trade.” There is therefore never a need for anyone to worry about anyone else’s balance of payments. A person’s “unfavorable” balance of trade will continue so long as the individual wishes to reduce his cash balance.”
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