Now it is true that the exporters will be receiving export income in the form of foreign exchange. However, this money can only be spent in the importing country and its territories. The exporters have to convert their export income into the domestic currency. As Ricardo and others pointed out this does not add anything to economic welfare. What this really means is that the exporting country s tariff policy has lowered its people s living standard while raising that of its trading partner.
Trade is always a two-way street.
It should now be easy to see that by not consuming his income he is really working for nothing. That exporters spend their income conceals from the layman the fundamental truth that their spending only succeeds in reducing the consumption of the rest of the community. It does not raise living standards. The Government must ignore Dr Thor s self-serving pleas for tariff protection and put the welfare of the country first. After all, that is why it was elected.