A Suicidal Country

Here's what your website had to say, and it does look like a fair definition of mercantilism. But unfortunately it doesn't look like colonies quite play an indispensible role, rating but one mention out of 10 and that qualified with a "could provide".

I. Definition of Mercantilism
The following ideas, then, lumped together, may be called mercantilism.

(1) Bullionism was the belief that the economic health of a nation could be measured by the amount of precious metal, gold, or silver, which it possessed. The rise of a money economy, the stimulation produced by the influx of bullion from America, the fact that taxes were collected in money, all seemed to support the view that hard money was the source of prosperity, prestige, and strength.

(2) Bullionism dictated a favorable balance of trade. That is, for a nation to have gold on hand at he end oft he year, it must export more than it imports. Exports were later defined to include money spent on freight, or insurance, or travel.

(3) Each nation tried to achieve economic self-sufficiency. Those who founded new industries should be rewarded by the state.

(4) Thriving agriculture should be carefully encouraged. Domestic production not only precluded imports of food, but farmers also provided a base for taxation.

(5) Regulated commerce could produce a favorable balance of trade. In general, tariffs should be high on imported manufactured goods and low on imported raw material.

(6) Sea power was necessary to control foreign markets. A powerful merchant fleet would obviate the necessity of using the ships of another nation and becoming dependent on foreign assistance. In addition, a fleet in being could add to a nation's prestige and military power.

(7) Colonies could provide captive markets for manufactured goods and sources of raw material.

(8) A large population was needed to provide a domestic labor force to people colonies.

(9) Luxury items were to be avoided because they took money out of the economy unnecessarily.

(10) state action was needed to regulate and enforce the above policies. One might add that there was nothing logical or consistent about mercantilism, and that it displayed, in fact, enormous variation.

But as Britain watched first the U.S. and then one country after another turn their backs on world trade, it decided it could no longer manage the world's money. In September 1931, it abandoned the gold standard.

Britain's problem with gold had little to do with trade and a whole lot to do with their mistaken attempt to return to pre-War parity, a decision that forced Britain into a monetary deflation. They had issued too many Pounds to finance World War I, and that excess credit would have to be withrawn from circulation. Had they revalued the Pound against specie they wouldn't have put themselves on the deflationary course they were eventually forced to abandon.

Agreed with your expressed criticism of globalism and the resultant dismantlement of domestic manufacturing infrastructure and good paying jobs.Altho Americans seemingly benefit so far because we can purchase "stuff" no longer manufactured here for chump change thru our local "Chinamart".

Dollar dominance which allows us this priveledge is in the process of unraveling.Dollar as reserve currency which dates from when USA had positive trade balances,gold backing,diverse manufacturing infrastructure and skills,plus the world's greatest creditor--- is now being increasingly resented by the rest of the planet.Witness rising euro,gold and oil price,and a gold backed dinar.

The ability to trade increasing amounts of essentially green ink and paper for world's real goods unfortunately will become increasingly difficult.

The dollar has been a strong currency for a lot longer than we've had a positive trade balance. I think that ended in the 1970's. Gold prices are going up because of uncertainy about war, which always causes gold to go up in price. I think oil prices might also have something to do with the possibility of war in Iraq. And just because the Euro is rising in value doesn't mean we're all going to lose our jobs and explode. In fact, if the dollar loses some value, we'll probably be able to sell more American goods to overseas consumers, which means more manufacturing jobs in America. If the Euro can buy more dollars, it means it can buy more American jet engines or cars.

I'm confused by your statements? What exactly is your point? Did Britain and Germany have free trade? That is all I'm asking. I don't think they did, largely due to their attempts at mercantilism and their high tariffs.

Germany was Britain's largest non-Commonwealth trading partner in the years prior to WWI. Germany was at the cutting edge of some industrial fields, chemicals and dyes for example.

Actually, Britain was the pre-eminent free trading nation of the 1800s, with Prussia/Germany close behind. Tooke, Cobden and Bright, and the Anti-Corn-Law League was a driving force in British free trade. France and America were far more protectionist. Schumpeter's History of Economic Analysis has a good discussion of all this.

This sounds like Marx rising from the grave, but we can put him back if we act in time. The trouble is that hardly anyone except Marxists are even talking about this.

............The distribution of the proceeds of machine labor is going to be a big deal. The socialists have an answer to this problem, and if we don't want socialism we are going to have to come up with a different answer. What we won't have is a society that looks like Venezuela, where a half-dozen families do very well and everyone else lives in a tree.

I believe you have it pegged. It'll be presented as a choice between socialism and chaos. Combine that with racial and ethnic tensions which will likely be on the rise due to identity politics and economic dislocations, and people will choose socialism rather than see their country turned into a mega-Brazil, or worse, a mega-Yugoslavia with nukes.

BTW, have you read this? It's about a process for literally "printing" electronic circuits. If they get that process off the ground, electronic assembly work will be greatly reduced. Makes you wonder what happens when nanotech gets going. I think we're gonna be in for a rough ride for the next century or two.

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