Imports are a benefit, exports are a cost. Is it clear now?
Posted by WARREN MOSLER on December 24th, 2012
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December 24th, 2012 at 1:20 pm
Agree that imports of scare raw materials are a benefit. Agree that exports of scarce raw materials are a cost.
But how are knowledge-based exports a cost ? And how are knowledge-based imports a benefit, if American knowledge workers are unemployed or underemployed ?
How is export of surplus that would otherwise go to waste a cost ?
It does not seem black and white to me, except in the case of scarce natural resources.
A reminder: Neoclassical economics assumes scarcity, Keynesian economics assumes surplus.
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Nihat Reply:
December 24th, 2012 at 1:47 pm
Dan, as far as I understand, MMT teaches that more fiscal spending is always possible to keep your people, e.g., American knowledge workers, occupied –to the extent they want it– with more advanced (or not) or new/other areas of enterprising.
How is export of surplus that would otherwise go to waste a cost ?
If that surplus with finite shelf-life is of a labor-intensive sector, maybe you don’t want to produce it to begin with (unless you must, of course, for one reason or another).
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December 24th, 2012 at 1:28 pm
You need to check out the comments to see how difficult it is going to be to convince anyone of this .
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Ed Reply:
December 24th, 2012 at 3:00 pm
@WalidM, walid, you are spot on. i initially read the article and thought, oh ok, good piece. going back and looking at comments, i had to laugh a bit. oh ok, lots of people don’t get it.
if you haven’t read warrens piece on it, it’s easy to understand peoples conclusions though.
and while i have changed most of my perspective on how i see import/export now, there’s still a small piece of me that is bothered by a massive differential of import/export with certain countries. and so, the opportunities for massive exporters to not buy back general goods/services, but rather buy back strategic resources is what bothers me a bit.
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December 24th, 2012 at 2:01 pm
Stephen Gordon will be hardpressed to convince anyone of this with such a short exposition as he doesn’t explain why exports are a cost and imports are a benefit. This is clear from the unanimous view against the author in the comments. North America has a very mixed view on free trade because although it has made the continent richer as a whole, the distribution of those riches has been asymetric.
I think the average worker sees it differently. Income is a benefit, while spending (outflow of cash from their account) is a cost. They measure costs and benefits based on the flow of accounting figures, rather than the flow of real economic goods and services (labour as a cost, consumption goods as a benefit). Exports generate income (a benefit) while imports cause cash outflows (a cost). Like the debates in Washington surrounding the deficit, we’re blinded by our accounting view of the economy. So a simple idea like receiving more real stuff than we have to give up is completely lost on nearly everyone.
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MRW Reply:
December 25th, 2012 at 7:30 am
@David Wishart,
Yeah. Would someone help me out? I read the Krugman article Gordon linked to in this paragraph:
The word ‘difficult’ links to this article by Krugman:
http://web.mit.edu/krugman/www/ricardo.htm
It’s 3 AM Christmas Day and my brain isn’t firing. Is he saying that Krugman and his support of Ricardo is accurate or that Krugman’s neoclassical (I’m assuming) view is part of the problem? Krugman spends so many words on his academic version of noblesse oblige and his backhanding of non-economists off the table that I don’t know what the hell he’s saying.
Would one of you smarter economic brains lend me a hand?
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WARREN MOSLER Reply:
December 25th, 2012 at 9:53 am
If you are reading that stuff you have way too much time on your hands
;)
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golfer1john Reply:
December 25th, 2012 at 1:37 pm
@WARREN MOSLER,
Not as much time as the guy who writes it.
MRW Reply:
December 25th, 2012 at 7:35 am
@David Wishart,
Workers also understand that their work is a cost because I tried it out on a couple. It was my unscientific research. I told a few that what they did was a cost, to them. Their time. Their effort. That resonated.
For what it’s worth.
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WARREN MOSLER Reply:
December 25th, 2012 at 9:54 am
And try asking if they’d rather work or take the day off with full pay
;)
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December 24th, 2012 at 3:04 pm
It’s not even counter-intuitive. Years of brain-washing brain-washing does its trick though.
With imports you get goods, services (even knowledge based services) in exchange for bits of paper.
With exports you have to deliver goods, services (even knowledge based services) for bits of paper.
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mmt newbie Reply:
December 25th, 2012 at 2:56 am
@Andy, This works for people situated in the United States as USD is the reserve currency. For people outside, say in asia, imports means losing valuable bits of paper and exports the other way around. And make no mistake, a lack of USD reserves can spell anarchy for an economy as evidenced in Asia, in 1997.
So while I do understand the MMT viewpoint, I think it works better if your country is the currency hegemon aka reserve currency status. For others, mere mortals, its good to have a stash of currency reserves for which a trade surplus is a necessary requirement.
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WARREN MOSLER Reply:
December 25th, 2012 at 9:50 am
It needn’t spell any kind of trouble if you know how it all works and you sustain full employment policy
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Tom Hickey Reply:
December 25th, 2012 at 1:49 pm
@WARREN MOSLER,
To add to that, it’s a whole lot easier to acquire the USD reserves needed to purchase, say, oil, if you have a functional economy rather than a dysfunctional one. The international monetary institutions get this much, but as far as how to manage it effectively, not so much. The neoliberal doctrine of “free markets, trade, and capital flows” is also implemented to exploit. Institutional reform is needed in these areas, too.
Neil Wilson Reply:
December 25th, 2012 at 3:53 pm
@mmt newbie,
You might want to think how that import surplus occurs in the first place!
It occurs because foreign countries want to export to your country, ie they are running an export policy.
And if your currency goes down theirs will go up in equal and opposite measure – cutting off that export mechanism and leaving them with an unemployment problem.
So given that they have a central bank with infinite capacity as well why do you believe they would bring disaster on their export mechanism by allowing their currency to go sky high?
The Japanese haven’t and neither have the Swiss. And the Chinese certainly haven’t.
The biggest problem people have with grasping how MMT interacts with the external sector seems to be that they see the external sector as some Deus Ex Machina – rather than a set of countries with precisely the same problems and choices that you do.
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mmt newbie Reply:
December 26th, 2012 at 1:46 pm
@Neil Wilson, Point taken. My limited point is that for a non reserve currency issuing country exports are a net benefit upto a certain point and vice versa for imports.
Another way of looking at it would be that MMT would operate on two levels for such a country. Within the country people would work for the local currency to pay taxes,save etc. On a global level, the USD is the fiat currency for such a country. And the country has a whole needs to provide goods and services to the US, to get the USD it needs for satisfying its saving desires (to prevent a speculative attack on its local currency) and to import essential goods (like crude) and services.
So IMO its not totally right to look at imports as a net benefit and exports as net cost.
So I feel that just as the US has to run a fiscal deficit to maintain full employment within its boundaries; as the world’s custodian of fiat currency it would also always have to run a current account deficit, to satisfy the needs of all countries desirous of USD. In that sense the other countries are not really competing against each other. If the US is not willing to run a current account deficit, then some other currency would have to arise as the world’s reserve currency, else the fiat currency framework would cause depression in the global economy; in a manner similar to that caused during the gold standard era.
WARREN MOSLER Reply:
December 26th, 2012 at 3:59 pm
the point remains your trade deficit = foreign savings desires
and worst case you can always run balanced trade
December 24th, 2012 at 7:27 pm
My simple way of understanding this is to realize that it is another case where change from gold standard to fiat turns thinking upside down.
Under gold, net exports bring in gold that allows investment in and expansion of the economy.
Under fiat, net imports are both a real gain and a demand leakage. Government deficits can make up for the demand leakage to allow investment in and expansion of the economy. Because this is not generally understood most people think net imports are a loss because they cause unemployment, which is a result of the decreased demand.
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December 25th, 2012 at 5:29 am
Warren would do well to write more articles focussing on the Difference between gold standard thinking and fiat thinking
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MRW Reply:
December 25th, 2012 at 7:23 am
@WalidM,
I agree, Warren. Use a two-column table, with a third column for extra notes (your famous one-liners that others use a chapter or book to explain :-)).
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Tom Hickey Reply:
December 25th, 2012 at 1:41 pm
@WalidM,
Agree. This is big stumbling block in most people’s minds. Even the top economists have not made the shift post-1971. It’s also as the basis of the false govt-as-big-household analogy, i.e., that the govt as to “get money.”
The way I would suggest attacking it is wrt the hierarchy of money, with gold at the apex in one column and cb reserves in the other, showing what happens when gold is removed and cb reserves move to the apex instead, i.e., convertible fixed rate v. non-convertible floating rate system.
It would be nice to have an animated video presentation. Probably more effective than a post or a paper, not that spelling it out in simple to understand terms in not needed, too.
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December 25th, 2012 at 2:46 pm
Is exporting garbage a cost and importing cigarettes a benefit?
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Andy Reply:
December 25th, 2012 at 3:11 pm
@MamMoTh, Isn’t exporting garbage importing a service ? and (maybe) importing ciggies the same as importing … say coal? ok I’m reaching.
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WARREN MOSLER Reply:
December 26th, 2012 at 8:12 am
yes, if you pay to export your garbage
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December 25th, 2012 at 3:21 pm
I wish it were written a little differently: “Imports are a real benefit and a nominal cost. Exports are a real cost and a nominal benefit.”
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WARREN MOSLER Reply:
December 26th, 2012 at 8:11 am
agreed
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December 26th, 2012 at 2:40 am
Unless the imports cost the jobs of almost your entire middle class, both blue and white color.
Printing money to buy imports from slave labor nations is not the same as purchasing imports with the product of your labor wages from other free market countries.
Exports are NOT a cost to those that believe in the value of the protestant work ethic and value of productive labor – a hard days work for good pay.
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WARREN MOSLER Reply:
December 26th, 2012 at 8:10 am
start by reading ‘the 7dif’ on this website and then go on to the ‘mandatory readings’ thanks
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December 26th, 2012 at 2:55 am
Would like to hear how the MMT crowd explains away the facts in the real world. Specifically the fact that imposing capital controls and telling the banking creditors – central bank money printing cartel to take a hike has been proven by far to provide the best result for average citizens.
Why Iceland is killing it:
http://www.independent.ie/business/irish/dan-white-the-economic-return-of-iceland-has-proved-that-the-joke-was-on-us-3327164.html
Facts do not lie unless you are an economist.
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WARREN MOSLER Reply:
December 26th, 2012 at 8:09 am
are you an economist?
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December 26th, 2012 at 6:04 am
import are benefit if foreigner accept “your” currency: they work for you..
if they don’t accept it first you have to gain “their” currency (export) and then you can buy import..
Happy Cristmass to all
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Fin Reply:
December 26th, 2012 at 9:42 am
@Piero from Italy,
Good point.
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Neil Wilson Reply:
December 26th, 2012 at 9:48 am
@Piero from Italy,
Generally people want to sell their output. That means that exporters bend over backwards to accommodate a sale – including accepting payment in all sorts of things. And they do that as long as they can hedge that to somebody and get the underlying currency they require.
Don’t forget that foreign trade not only requires that a purchasing chain is set up, but that the equal and opposite funding chain is setup. If either of those sides fail then the transaction simply doesn’t happen.
So what tends to happen is that the central banks of export led nations ease the path by providing the appropriate liquidity. That then widens the types of tender that will get the deal done.
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December 26th, 2012 at 7:41 am
Cost/benefit calculations are fine, if the same entity is experiencing both. However, most often, the benefits accrue to one party and the costs are borne by another and, in the case of public/private relations, it usually means that public assets are transfered into private pockets until the public cupboard is bare. The depletion of natural resources (and the consequent impoverishment of dependent populations) is not a happenstance. It is coerced, most often in the modern day, by legally depriving people of their access to sustenance under the umbrella of “property rights.” At the same time, the privatization of natural resources represents a bargain to strip people of their human rights. Some people’s property rights are secured by other people’s right to starve — the longer version of “no free lunch.”
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December 26th, 2012 at 11:39 am
I get the whole imports are benefits/exports are cost thing, but when we are considering this altogether with a JG program.. it seems like the trend (as we see in the US) for trade deficit countries is to lose jobs in decent paying sectors (IT, manufacturing, etc.) and then you would end up replacing them with $8-$10/hr government jobs.
While I agree the JG is a great idea, having people losing jobs where they made 50k/year to replace them with under 20k a year doesn’t sound all that great over the long run. Yes, they would gain skills over time and maybe could be trained for higher paying work, but the private sector is simply not going to need that many people to work. This is troubling when we look at the level of inequality we already have.
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WARREN MOSLER Reply:
December 26th, 2012 at 12:07 pm
the trick is for a given size govt to keep taxes low enough so the jg pool remains minimal
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jerry Reply:
December 26th, 2012 at 1:19 pm
@WARREN MOSLER, Right, but if foreign countries are taking more and more of the demand away from the domestic sector, your businesses won’t want or need to hire anyone from the JG pool, it will just fill up with all the people who lost their jobs overseas.
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Nihat Reply:
December 26th, 2012 at 2:37 pm
@jerry, yeah, you must be talking about our finite capacity to consume: after a certain point, demand leakage may become hard to repair by tax cuts or stimulative spending (the ideal world in the article?). Then, I speculate, either it’s become a national security issue demanding beyond-fiscal counter-measures, or more of us populate the jg pool and be happy (doing art, literature, heck even blogging…)
WARREN MOSLER Reply:
December 26th, 2012 at 4:00 pm
no limit to the amount of services/public goods that can be consumed. like holding hands at the nursing homes, etc.
we wake up every day with a gaping labor shortage.
WARREN MOSLER Reply:
December 26th, 2012 at 3:58 pm
not if, for the given size govt, taxes are low enough for enough spending to be high enough to buy all that can be produced domestically at full employment plus whatever the rest of the world wants to net sell us
Nihat Reply:
December 26th, 2012 at 7:17 pm
Warren, I hear you. I’d also taken note of these:
if people want to work and produce but not consume private goods they can produce and sustain public goods
no such thing as ‘over saving’ when the output choice is public and private goods and services
December 26th, 2012 at 12:11 pm
The framework of this discussion is transactions between states. In the case of the US, theoretically trade is between a US company or individual and some foreign entity which could be a state-owned firm. Nevertheless, imports and exports are not made between the states themselves. Why should some arbitrary, artificial, invisible border between two individuals who wish to make a voluntary exchange be regulated by the states? Private property rights fly out the window if the state can regulate to what extent a citizen can bring his own property into or out of the country. But then we know that private property rights are circumscribed into meaninglessness by the state.
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WARREN MOSLER Reply:
December 26th, 2012 at 3:55 pm
think macro
;)
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January 1st, 2013 at 12:10 pm
“Imports are a benefit, exports are a cost. Is it clear now?”
Sometimes this is true, sometimes this is not true. If you buy food from the savages against the beads, the statement is absolutely true. If you buy food for guns, absolutely untrue. Tomorrow these guns will be taken against you. Nowadays, if you are replacing papers (subject to depreciation) against Chinese goods, claim is true. Not true, if you provide technology to China. Import and export can be seen only in mutual respect. It can be appreciated benefit of them if treated separately.
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WARREN MOSLER Reply:
January 2nd, 2013 at 9:58 am
different point
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January 2nd, 2013 at 4:58 am
I think which It doesn’t matter what you actually import or export.
For real life you need real goods and services, so if you produce it internally it is enough for you. May be you will need of oil or other primary goods for your industry, so if you have to import it your export will pay for it.The USD is actually the currency reserve (so far), so other countries want to stock it and send you goods in place of it, with out spending… so the US could probably has more import than export, but as Dr Mosler says, it works same way for all other currencies: we will have trade balanced at worst. Export is a real cost, so why have you to spend? only for pay your real goods imported.
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January 4th, 2013 at 2:58 am
This is the truth of the accountant. It is extremely dangerous to think we can continue forever situation, we consume and produce others. We will lose the skills of producers and others will acquire these skills. At the moment they have nothing to learn from us, they will lose interest in the U.S. dollar and the U.S. Securities . Such a philosophy is a sure way to regression.
Let’s look at things from a different perspective. Import from China is not always a benefit, given poisonous, harmful to health, lower quality, less durable and disposable goods. The whole life of an American is based on Chinese goods are of inferior quality. Exaggeration to claim that the foreign trade deficit increases our standard of living. Chinese goods pop off our standard of living, as it is difficult to imagine a lower quality. Consumption of such goods is equal to the low standard of living. High standard of living is providing high quality goods.
Exaggeration to claim, and that China would not receive anything in exchange for their goods. Acquire knowledge, skills and technologies. And this is the path to world leadership.
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WARREN MOSLER Reply:
January 4th, 2013 at 9:00 am
what does ‘world leadership’ mean benefit wise apart from being able to net import?
so you actually agree imports are benefits, particularly over the long term
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Ivan Ivanoff Reply:
January 6th, 2013 at 6:46 pm
@WARREN MOSLER, In the long term imports in today’s trade deficit ( benefits), reduce the nation’s ability to produce, weaken the economic strength of the nation, to the loss of manufacturing skills and traditions of the population. All this is called regression and decline of the nation.
The benefits to society of free lunch are smaller than the losses which it suffers. Human nature is associated with creativity, with creativity rather than consumerism. Moving production abroad deprives people of opportunities for education, training and creative realization, jf does not enable them to be directly involved in technical progress.
Even though I fully accept your point that imports from China is a benefit provided / and / that we do not give anything in return, I disagree with your conclusions that we should not be pressured to produce and to consume as many of the free products. Or that we should not worry about its trade deficit with China.
And since I see many good things in your theory to me a lot I’d like to be refined. That is not just a recession. America is at a crossroads. America is at the end of an era. To survive as a superpower, America should jump into the next stage of progressive development in tackling global problems and changes in the way we produce, as well as changes in the way we consume. Your theory is facing the future and trying to recover prior states. Even reinforce outmoded model of production and consumption, with all of nature and human consequences.
Deficiencies in theory, I think, come mainly from the delusion that financial leverage sufficient to drive economic and social development. Misunderstanding comes from lessons of the Great Depression. Followers of Keynes argue too much financial measures of the time, but do not notice other processes that are outside the realm of finance. So now the state poured money into the bottomless barrel, and almost no effect. For today’s followers of Keynes question is to give the state money and more money. While the biggest problem is where and what to spend money. Once the state gives money for infrastructure, and now let’s give the state money for infrastructure! For what? It does not matter. There is no sense to the future to help the new.
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WARREN MOSLER Reply:
January 7th, 2013 at 9:01 am
first, I’m not ‘a follower of Keynes’
second, you are using a lot of empty rhetoric as most everyone does, like ‘economic strength of the nation’
and other statements are entirely unsupported as well, rendering those statements ‘opinion’ which is fine, but
recognize that’s all it is.
Likewise, productivity increases results in losses of skills, like cutting lawns with clippers, crafting buggy whips, etc. etc.
Nor does moving abroad deprive anyone one of education, training, etc. Instead, it opens new opportunities for same, just like
productivity in general.
Hopefully we are at the end of an era, an era where thinking we can be the next Greece we’re turning ourselves into Japan.
January 4th, 2013 at 3:22 am
you have to decide what is strategic to produce and what to be imported
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January 4th, 2013 at 10:52 am
“Imports are a benefit, exports are a cost. Is it clear now?”
If France buys one Porsche for 100.000 EURO, and Germany buys 5 Renault for 20.000 Euro.
Who is the winner in real, nominal and (or?) financial terms?
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WARREN MOSLER Reply:
January 4th, 2013 at 11:07 am
reads like an even trade to me?
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Ben Reply:
January 4th, 2013 at 11:38 am
@WARREN MOSLER, I am not sure. If Germany buys 4 Renault for 20.0000 EURO, and France buys one Porsche for 100.000 EURO, can one really say, that France is winning the real game, and Germany is only winning the nominal game?
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Nihat Reply:
January 4th, 2013 at 11:43 am
@Ben, it might be worth noting that Warren probably has an above-average capacity to appreciate a Porsche. Just sayin’ :)
WARREN MOSLER Reply:
January 4th, 2013 at 1:47 pm
that’s what ‘the market’ is saying, no?
Ben Reply:
January 5th, 2013 at 8:30 am
@WARREN,
or another example: Deutsche Bank is paying Bill Clinton 200.000 Dollar for making a speech about this and about that. On the other side, 10 young German women are working as au-pair girls for one year in the US. Each woman earns 200 Dollar a week, so they earn about 100.000 Dollar for the whole year.
Here, Germany is winning the real game and the US is only winning the nominal game.
Yes, the market is saying that. But the market is also saying that the Chinese are happy with their dollar assets and the US are happy with Chinese goods. So the French are proud of driving a Porsche, the Germans are proud of listening to Bill Clinton and the Chinese are proud of hoarding dollar assets and everybody is happy.
I think it is not easy to accept, that imports are a real benefit and exports are a real cost, as long as it is not clear what the real game is all about.
January 5th, 2013 at 2:13 pm
It’s hard to deny that when someone gives you something and does not want anything in return, this is not a benefit. Each gift is a benefit. Today the Chinese are working for us and Chinese imports is a benefit for us. Tomorrow Chinese will become more powerful than us because become productive force, we will become the African country with people who can only consume but can not produce and will turn the pancake. We will start working on them. And again confirm the thesis that import is a benefit. The difference that this time will be a benefit for the Chinese. The big question is not whether imports are a benefit or gift, and net profit, it is obvious this is a trivial truth. The question is how to preserve a benefit only for America?
I personally have reservations even to this banal truth that free lunch is always a benefit. If you get diarrhea, is it a benefit?
Even larger reserves have to claim that foreign trade deficit raises the standard of life. This is uncritical attitude to what we consume. Standard of living can be increased by eating harmful foods that people get sick and degenerate nation. It is not a benefit lead that we get from a Chinese toys and what made our kids sick. America has reached historic levels of development, when we have to reassess the whole production and consumption model. What is needed is a new production and consumption patterns that will be required as a result of the awareness and growth of the Americans as a users with their own ideas, their own goals and their own or will.
Another argument which I do not agree that China receives nothing in exchange for their goods. Too naive to think that the Chinese did not take account what they get in return. It is naive to think that the Japanese did not take better account what they get in return after the Second World War. They get something that is very valuable to them. And probably the only way to get it to work for some time in America’s favor. The question is, what do we do when the time runs out?
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January 6th, 2013 at 1:14 am
No dispute in the fact that while China sends “real goods and services,” and we send nothing to China, China emerged as an economic and military power rapidly. At the same time, the U.S. weakens as an economic power, because you can not have a strong economy that produces nothing. A decline in the economy will inevitably lead to the decline of the U.S. as a military power. Economic and military power can not be based on consumption as we are strong in consumption.
What happens if China want to exchange their dollars for “real goods and services?” There are two options. One is China to buy whatever we let it. But this means that America should be much stronger than China economically, militarily and politically. The second option is China dictate what they want to buy from us. They will dictate if they feel strong enough. And then China will not buy cars, boats, real estate, and will purchase high-tech companies, technologies and resources. And the buyer will be the Chinese state. I do not want to imagine what will happen at the second option.
In this sense, the theory should be considered accurate only under certain conditions. True to some extent, not completely.
U.S. free lunch can continue only if that America remain a superpower. But America can not remain a superpower if only consumes without producing. I.e. You should seek some balance.
In MMT noticed contradiction. According to the theory after 30 years American workers have to be productive enough to allow them to produce enough goods and services to support pensioners. And why no mention of Chinese imports, which currently is a benefit to America? Perhaps the author is not sure that after 30 years a benefit that America still has it. But more important is another. How not produce offspring will rely on workers after 30 years to be very productive?
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January 9th, 2013 at 11:15 am
The wealth of nation A is 1000 Dollar. The wealth of nation B is also 1000 Dollar.
You are President of nation A and have to choose between 3 alternatives which influence the future wealth of the two nations as follows:
1. Nation A: 1200 Dollar and Nation B 1400 Dollar
2. Nation A: 1200 Dollar and Nation B 1200 Dollar
3. Nation A: 1200 Dollar and Nation B 800 Dollar
Which alternative would you choose and why?
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Nihat Reply:
January 9th, 2013 at 11:40 am
@Ben,
I’ll take the easy answer: option 2 ’cause there is karma.
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WARREN MOSLER Reply:
January 9th, 2013 at 1:29 pm
3. less competition for resources.
but of course your whole prop is problematic as expressed.
i’m only guessing at what those numbers might actually represent.
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Nihat Reply:
January 9th, 2013 at 1:32 pm
@WARREN MOSLER,
Exactly. Hence my cop out :)
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Ben Reply:
January 9th, 2013 at 2:41 pm
@Nihat, instead of wealth, lets call it GDP,and don’t care about the unrealistic numbers.
the point is, would you choose a policy (if you are able to do so, even if this would be fanciful), that would enrich another nation more than your own nation, a policy that would both nations equally enrich, or a policy that enriches your country and impoverishes the other nation.
I try to clarify, what the ‘real’ game is all about.
Nihat Reply:
January 9th, 2013 at 3:31 pm
Ben, when you put it that way, dodging it is harder.
I think, the ‘real’ game varies with time and space (countries). So long as different but mutual needs are met and parties are fully informed and not coerced, I wouldn’t be concerned with karma (hey, maybe I do believe it).
Maybe an exception [c/sh]ould be made about non-renewable resources (i.e., treat them to strict Moslerian logic :).
I try to think of ‘real’ as anything non-financial, non-money, and its accounting is always gonna be subjective (I guess).