As Keynes wisely remarked, “If nations can learn to provide themselves with full employment by their domestic policy…there would no longer be a pressing motive why one country need force its wares on another or repulse the offerings of its neighbor.” Trade between countries “would cease to be what it is, namely a desperate expedient to maintain employment at home by forcing sales on foreign markets and restricting purchases.” It would become, instead, “a willing and unimpeded exchange of goods and services in conditions of mutual advantage.”
In other words, today’s turmoil over currencies and trade is a direct result of our failure to solve our employment problem.