Physical Balance of Trade
Monetary balance of trade is different from physical balance of trade (which is expressed in amount of raw materials, known also as Total Material Consumption). Developed countries usually import a lot of primary raw materials from developing countries at low prices. Often, these materials are then converted into finished products, and a significant amount of value is added. Although for instance the EU (as well as many other developed countries) has a balanced monetary balance of trade, its physical trade balance (especially with developing countries) is negative, meaning that a lot less material is exported than imported. For this reason, activists talk about the issue of ecological debt which implies a sort of predatory economic system. The nature of the trade balance statistics is such that it conceals distorted material flow.
Read more about this topic: Balance Of Trade
Famous quotes containing the words physical, balance and/or trade:
“Adam and Eve, according to the fable, wore the bower before other clothes. Man wanted a home, a place of warmth, or comfort, first of physical warmth, then the warmth of the affections.”
—Henry David Thoreau (1817–1862)
“Bourgeois society is infected by monomania: the monomania of accounting. For it, the only thing that has value is what can be counted in francs and centimes. It never hesitates to sacrifice human life to figures which look well on paper, such as national budgets or industrial balance sheets.”
—Simone Weil (1909–1943)
“Experience has shown that the trade of the East is the key to national wealth and influence.”
—Chester A. Arthur (1829–1886)