Against the Whole Concept and Construction of the Balance of International Payments

The root of a great and destructive economic misunderstanding can be traced to an accounting statement known as the balance of international payments. As the name suggests, this accounting statement rests on the idea that nations (in the form of individuals, firms and other organizations, and governments) trade with other nations (similarly composed). But the aggregation of the individuals, firms and other organizations, and governments in accordance with the country in which they are located sets in motion a basic misunderstanding.
In reality, individuals, firms and other organizations, and governments trade with other such entities, some of which are located in

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