David Hume Loves Emerging Markets

From Scottish economist David Hume, 1752:

“…advantages are compensated, in some measure, by the low price of labour in every nation which has not an extensive commerce, and does not much abound in gold and silver. Manufactures, therefore gradually shift their places, leaving those countries and provinces which they have already enriched, and flying to others, whither they are allured by the cheapness of provisions and labour; till they have enriched these also, and are again banished by the same causes. And, in general, we may observe, that the dearness of every thing, from plenty of money, is a disadvantage, which attends an established commerce, and sets bounds to it in every country, by enabling the poorer states to undersell the richer in all foreign markets.”

Developed nations don’t grow quickly because they’re disadvantaged by their lack of relative potential.  If Hume were alive today, I’m sure he’d have a lot of exposure to emerging markets, and wouldn’t touch anything headquartered in Detroit with a ten-foot pole.