How do economists measure the import and export process for their nation? The answer lies in macroeconomics, under what we call foreign trade policy.
Every country faces a fundamental question, should it import more or export more? The answer is neither simple nor fixed; it has changed with time, shaped by political ambitions, economic theories, and global realities.
History tells us that exporting more was once seen as the true sign of prosperity. During the seventeenth century, when the term “mercantilism” defined economic wisdom, nations believed that wealth meant the possession of gold and silver, and the road to power was through export surpluses and trade control.
The roots of this thinking go back to an older theory known as bullionism. It emerged in Europe during the sixteenth century, when wealth was measured by how much gold and silver a country owned. Spain, Portugal, and England competed fiercely to acquire precious metals from their colonies.
Gold was not merely a symbol of wealth; it was wealth itself. Bullionism gave rise to the idea that the more treasure a nation stored, the stronger it became. Imports were discouraged, as they drained the gold reserves, while exports were celebrated because they brought bullion into the country. This idea was the seed that grew into Mercantilism — an economic doctrine that dominated Europe for nearly two centuries.
Mercantilism expanded bullionism by focusing not only on gold but also on goods. It taught that a country must export more and import less to maintain a favorable balance of trade.
The logic was clear and nationalistic, exporting goods brings in money, while importing sends money out. Governments imposed tariffs on foreign goods, gave privileges to domestic producers, and encouraged colonies to supply raw materials cheaply while buying manufactured goods at higher prices. Wealth was seen as limited, and trade was viewed as a competition — one nation’s gain was another’s loss. Under this view, the state was the guardian of economic fortune.
But this policy could not last forever. By the late eighteenth century, a new kind of economist began to question these assumptions. Adam Smith, in his famous book The Wealth of Nations (1776), argued that wealth was not in gold or silver but in the productive capacity of a country — in its people, skills, and industries.
He introduced the idea of absolute advantage, saying that if countries specialise in producing what they do best and trade freely, all will benefit. Later, David Ricardo refined this into the theory of comparative advantage, showing mathematically that even when one country is less efficient in producing everything, trade can still make both countries better off if each focuses on what it can produce relatively more efficiently.
This thinking transformed the world economy. Trade was no longer a battle for gold but a bridge for mutual prosperity. The nineteenth and twentieth centuries saw nations open their borders, develop industries, and form international markets. Globalisation in the modern age has taken this further, creating deep interdependence. No country today can live in isolation. A nation may export oil but import technology, or export textiles while importing machinery. The import and export process is no longer about treasure but about value creation, innovation, and cooperation.
Modern economists use the balance of payments to measure trade health, dividing it into current and capital accounts. Exports bring foreign currency and jobs; imports bring technology, ideas, and competition that improve quality and efficiency. While mercantilists feared imports as a loss, today’s economists see them as a sign of growth — because importing modern machines or software can make industries more productive, leading to stronger exports later.
The argument of whether it is better to import more or export more now depends on how balanced and purposeful the trade is. A country that only imports risks losing production and employment, but a country that only exports without reinvesting in innovation risks stagnation. Both extremes can hurt. The real economic wisdom lies in maintaining a sustainable balance, where exports generate income and imports improve productivity. Successful economies such as Germany, China, and South Korea have achieved this balance, combining export strength with technological advancement.
Today, the world’s richest countries are not those with vaults full of gold but those with dynamic industries, strong education systems, and creative economies. In the twenty-first century, wealth is not measured by bullion but by ideas and skills.
Economists now agree that a healthy trade system must reflect fairness, innovation, and sustainability. The goal is not to hoard gold but to improve the standard of living and ensure long-term economic resilience.
So, should a nation import more or export more? The best answer is; it should trade wisely. Both imports and exports are essential parts of the same economic engine. The history of Bullionism and Mercantilism reminds us that greed for surpluses once divided nations, while modern economics teaches us that cooperation and balance unite them.
In the end, a country’s real strength lies not in how much gold it keeps, but in how intelligently it participates in the world’s economy — through fair trade, innovation, and the prosperity of its people.
Mohammed Anwar Al Balushi
The author works at Middle East College
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