y accepted among us. We have usually been in
that position, and the fact has been accepted as proof that we were
doing well under a policy of protection. England, on the other hand, has
had an excess of imports over exports, and England is free trade; the
English excess of imports has been accepted as proof of the mistaken
nature of a free-trade policy.

The idea that it is a good thing to have the imports less than the
exports, to have the balance of trade "in your favor," as the phrase
goes, is a relic of that "Mercantile Theory" overturned by Adam Smith.
That theory was briefly, that wealth consists in the precious metals,
and that for a country to remain wealthy, it is necessary to keep
bullion from going out of the country. It followed from this principle
that everything should be done to discourage imports, for it was thought
that imports must, of course, be paid for by bullion. Modern political
science teaches that wealth does not consist in gold and silver, but
that these are commodities, like any other commodities, except that they
happen to possess a special fitness to be a medium of exchange. It
discards the old notion that imports are paid for by specie, and
asserts that they are paid for by commodities. It teaches that it is not
a bad thing to have the imports exceed the exports, that this excess is
not "unfavorable," and that in fact there is no such thing as "a balance
of trade." The old "Mercantile Theory," with its corollaries, has indeed
long been abandoned, but many people still consider it matter to
congratulate ourselves upon that our exports exceed our imports.

It is Bastiat who has given the most lively account of this subject. He
complains in an amusing manner that the doctrine of the "balance of
trade" should exhibit such practical vitality, when it is admitted that
it has so long been theoretically dead. He observes that the
protectionists are perfectly willing to leave him the victory in books,
provided always that their idea is paramount in practice. He finds but
one man, Lestiboudois, who has the courage of his convictions, and who
says that, because France imports 200,000,000 francs' worth of goods a
year more than she exports, she is that much in debt to foreign
countries. Others are not so candid; they accept the free-trade
principle, but their conclusion is protection. Bastiat is not content
with obtaining the theoretical victory, but wishes to meet his opponent
in the domain of busine