Perhaps this is an Austrian held view, and perhaps not. I was listening to Adam Smith, an undertaking I quite enjoy, when I randomly began contemplating the import/export "trade imbalances". I have often heard it said, in neo-classical circles, and some in Austrian and classical economics, that the import and export numbers tend to balance out.
It has stood in my mind without close scrutiny until this point, but it does deserve analysis.
It is said that the money we are paying to China, for example, must find it's way home to the United States… eventually. While this can be held to be true in the monetary sense, I believe it is a mistake to analyze such issues in monetary terms.
There is no a priori reason to assume that a nation that supplies goods in trade for other goods would be under any pressure to return the favor.
The continuation of the trade cycle relies on market forces, and not some imagined equilibrium level that importing and exporting countries must achieve.
For example. If China trades us one million IPods for one million IPods worth of gold, then we have the IPods and they have the gold. Next year, whether they see fit to trade the gold, keep the gold, or trade it to Saudi Arabia for oil is a market question. It does not depend on where the resources were acquired last year in making the decisions on where to apply those resources this year.
I believe there is evidence to support the idea that equilibrium should be addressed as a tendency which is the expression of the mutual benefits of free trade. The equilibrium is sought, but one side may win out more than the other in any transaction or set of transactions.
Import/Export equilibrium may be a needless complexity in the analysis. It may not exist as an independent force. If it is contended that it DOES exist, I would like an analysis that draws one to that conclusion. I'm looking :)
Enough for thought, at least.
I would sample countries to see if such a natural relationship exists. It would not prove my hypothesis if no cases were found where non-market related equilibrium was reached. However, my theory could be smashed pretty adequately by a day or so of studied research. I just don't have the time right now. :(
From Truth, Happiness