Although the Chinese economy was growing by 8.
We at least need to defend against mercantilist aggression against us, something we are not doing. Yes, because it debunks the idea that free trade is how nations become prosperous.
Instead, it shows that nations win at international trade by playing a year-old game called mercantilism.
Let's look at England, for example. The great Adam Smith, founder of modern economics, published his epoch-making free-trade tract The Wealth of Nations, the origin of endless subsequent delusions, in But he was a hypocrite, for Britain in was not a blank slate upon which free Mercantilism and protectionism today and free trade could work their magic.
It was instead the beneficiary of several prior centuries of protectionism and industrial policy. In the words of British economist William Cunningham: For a period of two hundred years [c. Under all changes of dynasty and circumstances the object of building up national power was kept in view; and economics, though not yet admitted to the circle of the sciences, proved an excellent servant, and gave admirable suggestions as to the manner in which this aim might be accomplished.
England in this era was, in fact, a classic authoritarian this is long before English democracy developmentalist state: English industrialization must actually be traced years prior to Adam Smith, to events like Henry VII's imposition of a tariff on woolen goods in King Henry's aim was to wrest the wool weaving trade, then the most technologically advanced major industry in Europe, away from Flanders the Dutch half of present-day Belgiumwhere it had been thriving upon exports of English wool.
Flemish producers were entrenched behind huge capital investments, which gave them economies of scale sufficient to outcompete fledgling entrants into the industry. So only government action could get England a toehold.
Even in the 15th century, there was an awareness that being an exporter of agricultural raw materials was a dead end--a problem impoverished African and Latin American nations wrestle with to this day. And there was an awareness that free trade will not lift a nation out of this predicament: Henry VII created, in fact, the first national industrial policy of the modern era, long before the Industrial Revolution introduced artificial energy sources like steam power.
A whole interlocking series of now-forgotten policy moves underlay the rise of English industry; what all these measures had in common was that protectionism was essential to making them work.
Step after step in the cumulative economic rise of England was directly caused by government action or depended upon supportive government action: And then there was the prohibition of export of English wool which damaged the Flemish textile industry and stimulated that of Englandthe encouragement of production of dyed and finished cloth in England, the use of England's dominance in textile manufacture to push the Hanseatic League out of foreign markets for other products The aim of English policy was what would today be called "climbing the value chain": Henry VII's advisors got their economic ideas ultimately from the city-states of Renaissance Italy, where economics had been born as a component of Civic Humanism, their now-forgotten governing ideology.
The name for this forgotten developmentalist wisdom of early modern Europe that has stuck is "mercantilism. It was, in fact, a remarkably sophisticated attempt, given the limited conceptual apparatus of the time, to advance national economic development by means that would be familiar and congenial to the technocrats of 21st-century Tokyo, Beijing, or Seoul.The history of economics is largely a struggle between two opposing schools of thought, "liberalism" and "mercantilism." Economic liberalism, with its emphasis on private entrepreneurship and free.
Feb 25, · Today, the United States is making the same mistake, having mistaken the temporary tactical advantages of free trade for a nation at the peak of its economic power for a .
Historically, protectionism was associated with economic theories such as mercantilism (which focused on achieving positive trade balance and accumulating gold), and import substitution. In the 18th century, Adam Smith famously warned against the "interested sophistry" of industry, seeking to gain advantage at the cost of the .
The Modern World-System IV: Centrist Liberalism Triumphant, [Immanuel Wallerstein] on lausannecongress2018.com *FREE* shipping on qualifying offers. Immanuel Wallerstein’s highly influential, multi-volume opus, The Modern World-System, is one of this century’s greatest works of social science.
Tweet. Here’s a letter to a new reader of Cafe Hayek: Mr. T.J. Wayne. Mr.
Wayne: You object to my claim that foreign investment in the U.S. benefits us lausannecongress2018.com believe that we are harmed by such investment because, as . Mercantilism laid the foundation for today's nationalism and protectionism. Nations felt they lost power as a result of globalism and the interdependence of free trade.
The Great Recession aggravated a tendency toward mercantilism in capitalist countries.