“Vince, mercantilism never stopped”- Fund Manager 2022
Contents
Mercantilism Revisited
Don’t Use The M-Word
What is Mercantilism?
In Practice and Policy
What Causes Mercantilism to Manifest?
Europe's Shame and Neo-Keynesian Disdain
The mBridge Payment Chain
Previous Posts
Bonus: UBS Dollar Commentary, GS Trump Trade update
1- Mercantilism Revisited
For the past three years, nearly every government behavior and policy change has been tied to one key concept: Mercantilism. Now's a good time to revisit what Mercantilism really means.
Textbook definition: Mercantilism emphasizes the importance of a favorable balance of trade and strong government control over economic activities to boost national power and wealth.
Historically, Mercantilism emerged after Feudalism's collapse and became less prominent with the rise of global trade. However, it's now resurging as globalized economies struggle to stay cooperative while globalism wanes.
2- Don’t Use The M-Word
Mainstream media avoids the term Mercantilism because it wrongly suggests Bullionism1. But we've discussed it openly and objectively here. To that point, our January 2022 piece declaring Mercantilism's return and other articles are linked at bottom
3- What is Mercantilism?
Mercantilism is a trade philosophy allowing global trade in a less cooperative world. It arose as nation-states formed post-Rome's fall. Europe, once divided into isolated local economies under Feudalism, started changing in the 15th century.
From: How Mercantilism Brought Europe’s Fragmented Economy Together
However, beginning in the fifteenth and sixteenth centuries, forces came into play that began to reverse this. Kings and princes were determined to concentrate power in their own hands as “absolute” rulers, which meant reducing the power at the local and regional levels.
Mercantilism developed in the emerging nation-states under the kings, especially in France, Spain and Great Britain, as a set of economic tools to assist in bringing about the centralisation of political power and control.