Page:Stabilizing the dollar, Fisher, 1920.djvu/233

8, D] however, by the removal of the old risks connected with their dealings within the United States.

Furthermore, since the war, there is no common gold standard anyway! Currencies are in chaos, both relatively and absolutely. A stabilized dollar could well be resorted to as a common denominator in foreign trade, just as the old "trade dollar" was resorted to. If international contracts were drawn in stabilized dollars we would be freed from all the uncertainties of roubles, marks, lire, francs, etc. These uncertainties would then fall only on the countries employing such units.

But even if foreign trade were somewhat disadvantaged by stabilization, we must remember that usually over nine tenths of American trade and doubtless a larger fraction of American contracts are within the borders of the United States so that, to the great bulk of Americans, stabilization would be an unmixed blessing.

It is unfortunately true, however, that, to most people, international trade looms up, out of its true perspective, as a far bigger factor in a nation's economic life than it ever really is. As every teacher of economics knows, the average citizen, untutored in economics, is a victim of the old mercantilistic fallacy and still imagines that the old mercantilistic phrases—"favorable balance of trade" and "unfavorable balance of trade"—which have been handed down to us are to be taken literally. Often it is even assumed, absurd though it obviously is, that the only gain which a country as a whole can get is in an excess of exports over its imports and an accumulation of money. This is not the place to consider such elementary errors. Any textbook on economics exposes the fallacy; and the lessons of our recent experience with an accumulation of gold should make it clear that an accumulation of money in a country simply debases the purchasing power of that money.

D. Spreading the Gold Points. There would then be no real international inconvenience introduced by