Spectators claim that Satan himself appeared on stage during the opening performance of Christopher Marlowe’s play Doctor Faustus (1588). The grizzly specter, it was said, drove men mad with fear. Some in attendance wanted to demolish the theater, while others wanted to hang Marlowe for his occult summoning. In spite of the controversy (perhaps because of it), the play was a hit. Today Faustus remains one of the greatest works of literature. Why?

Exquisite language?—lines like “the face that launch’d a thousand ships” have haunted readers for centuries. Perhaps. But time rarely preserves art for art’s sake: what survives is useful; it serves a purpose. Doctor Faustus is no exception.

The plot is simple: Faustus sells his soul to Lucifer in exchange for demon Mephistopheles’ service for 24 years. Faustus dreams of wealth: I will “wall all Germany with brass . . . fill the public schools with silk” and “live a life of all voluptuousness.” In the end, Faustus wastes his power and Satan takes his soul.

Faustus’ fate reveals two important lessons. First, avoid asymmetrical trades—never exchange souls for silk (permanent wealth for fleeting luxury). Second, always consider time-horizons: don’t trade heaven for worldly pleasure ($2 tomorrow for $1 today).

Ironically, economists recommend precisely the opposite—which is why America’s economy is so dysfunctional.

Consider the trade deficit: America has run a deficit every year for the last 40 years. Last year alone the deficit cost $796 billion. How do we pay for deficits? We sell America’s soul. Every year, America trades billions worth of land, corporate ownership, and debt for imported “voluptuousness.”

America is Faustus—and we’re running out of soul to sell.

Homo Fuge: Yet Shall Not Faustus Fly

Mephistophelian-minded economists at the Cato Institute claim that trade deficits don’t matter because they don’t really exist. Instead, international trade is best conceptualized as a balance of payments: America’s trade deficit is equalized by a surplus in capital inflows. This is true. But what does a “surplus in capital inflows” mean practically? It means we buy foreign goods, and foreigners buy our assets and debts—we get “voluptuousness,” they get soul.

Unless you’re an academic, this is not very shocking. But for argument’s sake, here’s how trade deficits work: America buys more goods from foreigners than we sell to them. This creates a trade deficit—worth $796 billion in 2017.

Now for the other side of the equation: to pay for the goods, America sells more services than it buys (think banking and tourism). This helps, but still leaves us $566 billion in the red. Thus, America must also sell assets and debt.

Assets include real estate, artifacts, corporate shares—anything of value that was produced in the past. Selling assets is not always or necessarily bad. For example, selling your mothballed Harley to buy a home gym might be wise. However, pawning your great-grandma’s wedding ring to buy groceries isn’t advisable. It’s context-dependent.

As a whole, America’s asset sales resemble pawning great-grandma’s wedding ring, not scrapping an old Harley. Consider that foreigners bought $153 billion worth of American real estate in the 2016-2017 fiscal year—everything from New York penthouses to Nebraskan ranches. This has the negative downstream effect of increasing housing prices and rents—in addition to the social problems associated with absentee landlords.

For example, housing is 73 percent more expensive today (in real terms) than it was in 1973, and many young people can no longer afford homes in their own homeland. Likewise, even highly educated professionals are being priced out of cities like San Francisco. By embracing free trade, Americans swapped “cheap goods” for high rents and big mortgages. Was it worth it? For most Americans, probably not.

The United States also sells billions in equities, that is ownership of U.S. corporations—and the associated profits. As of 2017, foreigners owned roughly 38 percent of American equities, when including foreign direct investments and foreign portfolio investments. This is up from just 12 percent in 2007, and the number is growing fast.

America pays for the rest of the deficit by selling debt. This is reflected in the endless growth of U.S. public and private debt levels. For example, foreign investors own over 44 percent of America’s national public debt, valued at more than $6.3 trillion. Foreign investors also own nearly 30 percent of all U.S. corporate bonds and a large percentage of America’s private debt.

Just as Faustus’ 24 years eventually elapsed, American will soon run out of souls to sell. Remember, our assets are finite, and there are tacit limits on our debt-carrying capacity—the 2008 crisis revealed but a taste of our economy’s structural fragility. Never deal with the Devil.

Lente, Lente Currite, Noctis Equi!

Doctor Faustus contains within it two lessons worth heeding.

First, avoid negative asymmetries. In selling his soul to Satan, Faustus committed the cardinal economic sin of trading his (only) asset for consumables—basically, he sold great-grandma’s ring for groceries. Like Faustus, America only has so much soul (assets) to exchange for imports. When we run out, we will regret having sold our homes, companies, and heritage for Chinese-fabricated Troll Dolls and Made-in-Mexico pet rocks. Guaranteed.

Adding to this asymmetry is the element of control. Foreigners are furiously buying-up our cities and control of our corporations—soon America’s economic future will be in foreign hands. Aligning our economic might with foreign entities that may not have our best interests at heart jeopardizes America’s future. Furthermore, corporate ownership provides a ready-made conduit for industrial espionage. For example, the Chinese have already leached trillions-worth of American technology and intellectual property through corporate takeovers and partnerships.

Of course, America’s Founders were aware of this problem. In fact, the second piece of legislation George Washington signed as president was the Tariff Act of 1789. Its purpose? To secure economic autarky. Washington, like Hamilton and (eventually) Jefferson, knew that political independence could not exist without economic independence. Too often economists forget that economics is not fundamentally about wealth. It’s about power. This is the real reason America needs tariffs.

Adding a layer of nuance: America runs a nearly $400 billion annual trade deficit with China. This money eventually returns to America through the account surplus—but not directly. Because America’s currency is a global reserve currency, China can spend its U.S. dollars in Southeast Asia, South America, and Africa rather than in America. This allows Beijing to buy political influence from local potentates, and to secure natural resource deposits.

In this way, America’s trade deficit is partly to blame for China’s colonial adventures in Africa. Likewise, we fund China’s “One Belt, One Road” initiative in Southern and Central Asia, which seeks to realign the region into China’s ambit.

The trade deficit should be America’s number one security concern. After all, nothing has done more to upset America’s global hegemony than China’s mercantile rise and neocolonial antics—and this includes the war in Syria and Iran’s nuclear ambitions.

Faustus’ second lesson is to always consider time-horizons. When Faustus sold his soul, he traded a temporally distant eternity of suffering for immediate pleasure. Most people are guilty of this sin, albeit on a smaller scale. How often do you snack on candy, or buy something impulsively? If you’re like me the answer is: too often. This is because the human brain instinctually loves instant gratification—especially when the downsides (bellies and credit card bills) are delayed.

Just like Faustus, America chose instant gratification. Over the last four decades, we’ve exchanged trillions in debt for foreign trinkets. These debts eventually must be repaid—with interest. This will be a Herculean task. Consider that in fiscal year 2017 America paid a net $276 billion to service the national public debt, according to Pew Research. That number will only increase, as the United States continues to borrow to feed its trade addiction, and as the structure of America’s debts shift ever-further into the debtor category.

Another asymmetry worth noting lies in the composition of America’s trade deficit. In 2017 America ran a deficit of $110 billion in advanced technology products. This indicates America’s diminishing technological edge and waning industrial base, which is a problem since advanced industries are the engines of long-run economic growth. We need to build the future—not buy it.

Stand Still, You Ever-Moving Spheres of Heaven

In the end, Faustus lamented his fate. He prayed that time would stand still, that he would dissolve into nothingness rather than face eternity—but it was too late. The demons pulled him into the black abyss, but not before he cursed his choice:

Curs’d be the parents that engender’d me!

No, Faustus, curse thyself. . .

[for thou hast] depriv’d thee of the joys of heaven.

Like Faustus, America made a regrettable choice. But the hour is not yet struck—do we abandon our devotion to the false god of “free trade,” and instead return to the time-tested wisdom of tariffs? Or do we spurn our Founders’ advice and continue down the path of import-fueled “voluptuousness?”

Either way, we know what fate awaits.