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> He raised a point that we might at least consider: is our globalization just a new mercantilism? No, and it’s interesting that the article doesn’t actually s

by simonh 5y ago

> He raised a point that we might at least consider: is our globalization just a new mercantilism? No, and it’s interesting that the article doesn’t actually say what Mercantilism was, to avoid making it obvious that it isn’t. Actually much of what the article says about Smith is accurate and yes he is often misrepresented in the way they described, but their attempt to paint globalisation as mercantilist is bogus. The primary concern of Mercantilism was to maximise exports and minimise imports, because mercantilists believed that trade was a zero sum game. If one side of a trade is benefiting, the other side must be losing. Interestingly Marx thought in exactly the same way, which is why he came to such ludicrously misconceived conclusions about the nature of value. Globalisation is simply about goods and services being provided by the nations best positioned to provide them. Some countries excel at financial services, others at manufacturing, still others at providing natural resources. Yes of course you can put any layer of economic policy you like on top of that, and many countries go. Some apply mercantilist policies, others are more free market, etc. so Mexico is pretty Mercantilist, but the UK isn’t at all because our main deal is services (with a side order of North Sea Oil). Although there was a Mercantilist streak in the Brexit agenda, we’ll see how that plays out. Trumps trade policy was heavily Mercantilist, and anti globalisation.

deleted 5y ago
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b112 5y ago
People always cite global national trade, but there are even trade barriers, organizations, and economic zones which are provincial/state based, and in some places, even city based! An example in Canada is a province with differing legislation for, say, farmers, which may aid the farmer in some way. Then said product is essentially more competitive, so another province may restrict trade in some way. An alternate, is where it becomes more difficult for a farmer, thus local pricing is higher. Lastly, even minimum wage laws, which are provincially controlled, and access to temporary immigrants, which can be eased, makes a difference on the bottom line. Just look at the cost of living in, say, Utah vs California. May as well be entirely different countries, economically. These are the same issues with international trade, yet all people seem to discuss is just that. International. Globization seems to have been a semi-falied policy due to all its baggage, and maybe some manufacturing will return home, so national trade issues may re-express themselves....
netcan 5y ago
The primary concern of Mercantilism was to maximise exports and minimise imports.. I disagree. Rather, I think this is a common but bad reduction. Mercantilism as Smith described it isn't just protectionism. Protectionism is just a feature. There are as many parallels between modern globalisation and mercantilism as there are with 20th century protectionist economic regimes or schools of thought. Modern conservative economic rhetoric worries about trade balances and the debt. The first is explicitly a mercantilist trait. The latter is arguably one, considering that public debt is the basis of our money like gold was in Smith's day.
- simonh 5y ago
  Many on both the left and the right fret about trade balances, and much of the concern about debt is performative. A glance at a graph of public debt in the USA alongside presidential terms is illuminating. Of course there is protectionism and there are subsidies in the modern economic landscape. All the political parties in every country have their special interests and exceptions. Globalisation is the general trend towards reducing and eventually eliminating these through institutions like the WTO and treaties or associations such as NAFTA/USMCA and the European Union.
zozbot234 5y ago
Correct. Arguably, Smith shows his remarkable understanding of globalization when he talks about the manufacturing of a woollen coat. He rightly observes that a huge number of people must have worked jointly on the production of even such a simple item, and some of the materials made use of, such as dyes, might have come from the remotest corners of the world. This is in the very first book and chapter of WoN.
Ekaros 5y ago
>Some countries excel at financial services, others at manufacturing, still others at providing natural resources. I think this could reasonably be considered as a racist take. There is nothing inherently in financial services that should make any country better at it. Reasonably it is all about first mover advantage, incupetentcy and lower regulatory environment allowing possibly harmful actions. I wonder if we see the model failing eventually in future, or will the current winners focus even harder to keep anyone new down just so they can extract wealth in an other way than imperialism...
- lanternfish 5y ago
  You can make a serious of arguments about how the nature of industry in a country ultimately derives from historical and geological factors which can be causally divorced from genetic traits. I don't think any critical theorists would consider the statement 'industrial comparative advantages exist across countries' to be racist - or even something like neo-imperialist. You could claim that capitalism is flawed due to the way it distributes labor against these historical differences (many of which were propogated along racial lines due to colonialism), but I don't think the analytical claim _under_ capitalism holds any normative merit.
  - stormbrew 5y ago
    Capitalism was built on these racist systems like colonialism and chattel slavery. You can try to separate them, but fundamentally the GP is entirely right that the reason financial services are "suited" to britain is because of centuries of brutal exploitation of countries that are "suited" to resource extraction. Neither of these things are inherently true of the people or the places, they are direct consequences of particular political structures and violent intervention. In the end, it's extremely profitable under capitalism for some people to be considered sub-human. That's not an accident, it's the game. Capitalism has never existed independent of this premise.
    - zozbot234 5y ago
      > Capitalism was built on these racist systems like colonialism and chattel slavery ... centuries of brutal exploitation of countries that are "suited" to resource extraction. Daron Acemoglu's Why Nations Fail handily disproves that argument. Latin America, and Spanish colonization in general, was built on those exact same things to a far greater extent and for a longer span of time; and today it is, by and large, a thoroughly anti-capitalist economic basket-case. The two are only loosely related to each other, and the correlation might easily be in the negative.

by simonh 5y ago

deleted 5y ago

[deleted]

b112 5y ago

People always cite global national trade, but there are even trade barriers, organizations, and economic zones which are provincial/state based, and in some places, even city based! An example in Canada is a province with differing legislation for, say, farmers, which may aid the farmer in some way. Then said product is essentially more competitive, so another province may restrict trade in some way. An alternate, is where it becomes more difficult for a farmer, thus local pricing is higher. Lastly, even minimum wage laws, which are provincially controlled, and access to temporary immigrants, which can be eased, makes a difference on the bottom line. Just look at the cost of living in, say, Utah vs California. May as well be entirely different countries, economically. These are the same issues with international trade, yet all people seem to discuss is just that. International. Globization seems to have been a semi-falied policy due to all its baggage, and maybe some manufacturing will return home, so national trade issues may re-express themselves....

netcan 5y ago

The primary concern of Mercantilism was to maximise exports and minimise imports.. I disagree. Rather, I think this is a common but bad reduction. Mercantilism as Smith described it isn't just protectionism. Protectionism is just a feature. There are as many parallels between modern globalisation and mercantilism as there are with 20th century protectionist economic regimes or schools of thought. Modern conservative economic rhetoric worries about trade balances and the debt. The first is explicitly a mercantilist trait. The latter is arguably one, considering that public debt is the basis of our money like gold was in Smith's day.

simonh 5y ago
Many on both the left and the right fret about trade balances, and much of the concern about debt is performative. A glance at a graph of public debt in the USA alongside presidential terms is illuminating. Of course there is protectionism and there are subsidies in the modern economic landscape. All the political parties in every country have their special interests and exceptions. Globalisation is the general trend towards reducing and eventually eliminating these through institutions like the WTO and treaties or associations such as NAFTA/USMCA and the European Union.

zozbot234 5y ago

Correct. Arguably, Smith shows his remarkable understanding of globalization when he talks about the manufacturing of a woollen coat. He rightly observes that a huge number of people must have worked jointly on the production of even such a simple item, and some of the materials made use of, such as dyes, might have come from the remotest corners of the world. This is in the very first book and chapter of WoN.

Ekaros 5y ago

>Some countries excel at financial services, others at manufacturing, still others at providing natural resources. I think this could reasonably be considered as a racist take. There is nothing inherently in financial services that should make any country better at it. Reasonably it is all about first mover advantage, incupetentcy and lower regulatory environment allowing possibly harmful actions. I wonder if we see the model failing eventually in future, or will the current winners focus even harder to keep anyone new down just so they can extract wealth in an other way than imperialism...

lanternfish 5y ago
You can make a serious of arguments about how the nature of industry in a country ultimately derives from historical and geological factors which can be causally divorced from genetic traits. I don't think any critical theorists would consider the statement 'industrial comparative advantages exist across countries' to be racist - or even something like neo-imperialist. You could claim that capitalism is flawed due to the way it distributes labor against these historical differences (many of which were propogated along racial lines due to colonialism), but I don't think the analytical claim _under_ capitalism holds any normative merit.
- stormbrew 5y ago
  Capitalism was built on these racist systems like colonialism and chattel slavery. You can try to separate them, but fundamentally the GP is entirely right that the reason financial services are "suited" to britain is because of centuries of brutal exploitation of countries that are "suited" to resource extraction. Neither of these things are inherently true of the people or the places, they are direct consequences of particular political structures and violent intervention. In the end, it's extremely profitable under capitalism for some people to be considered sub-human. That's not an accident, it's the game. Capitalism has never existed independent of this premise.
  - zozbot234 5y ago
    > Capitalism was built on these racist systems like colonialism and chattel slavery ... centuries of brutal exploitation of countries that are "suited" to resource extraction. Daron Acemoglu's Why Nations Fail handily disproves that argument. Latin America, and Spanish colonization in general, was built on those exact same things to a far greater extent and for a longer span of time; and today it is, by and large, a thoroughly anti-capitalist economic basket-case. The two are only loosely related to each other, and the correlation might easily be in the negative.