Mercantilism
When and where did the rise of Mercantilism as a prominent paradigm in the international economy and trade occur?
The 16th to the 18th century (included), especially in France and England.
Give the names of one or more of Economic Nationalism’s main theorists
Alexander Hamilton or Friedrich List
What does Liberalism emphasise, in comparison to Classical Mercantilism?
Individual autonomy, over the power of the state (the latter in Mercantilism).
Is it true that Mercantilism aims for states to import more than they export, and therefore reduce tariffs / duties to foreign products?
It is false. Mercantilism aims for a positive trade balance, where treasure is accumulated by exporting more goods than the country imports, and maintaining tariffs on foreign products.
Does Classical Economic Nationalism state that active state encouragement is necessary for the development of a manufacturing economy? Yes or No. Why?
Yes, as to protect and encourage certain national industries.
Who is Classic Liberalism’s most well-known scholar?
Adam Smith
What was the main goal of countries when pursuing international trade, from a mercantilist point of view?
Increasing the “treasure” of the country, in the form of gold, silver…
What traits of Classical Liberalism does Economic Nationalism critique?
Classical Economic Nationalism questions Classical Liberalism’s reliance on free trade, limited government intervention, and specialisation on industries where a country holds comparative advantage over others. Economic nationalist scholars suggest this creates dependencies and advocate for a higher degree of economic self-reliance.
When does a country hold a comparative advantage over another, and how is this different from an absolute advantage?
A country holds a comparative advantage in the production of a certain manufacture, when it can produce it at a lower opportunity cost than other countries. This is not equal to holding an absolute advantage, which refers to being able to produce a higher quantity of a specific product than others.
Country A might produce more cars than country B (absolute advantage over B). However, if the opportunity cost of producing cars and not focusing on other manufactures is lower in country B than country A, the former should focus on car production instead.
Define Mercantilism
Economic paradigm by which governments used their economies to augment state power at the expense of other countries. It is a zero-sum world in which countries are concerned with their relative wealth and position vis à vis others.
What are the core traits that distinguish Economic Nationalism from Classical Mercantilism?
Classical Mercantilism focuses on pre-industrial states, where the elites were preoccupied with augmenting state power through the relative increase of a country’s treasure (gold, silver reserves) vis à vis other states, and the introduction of trade tariffs and duties to foreign products.
State intervention in the economy is also necessary, according to Economic Nationalism. However, instead of aiming to increase the treasury of a pre-industrial state, Economic Nationalism’s main goal is nurturing certain key industries of a nation-state’s economy to make them evolve and finally become more competitive on the global scale. Moreover, EN does not identify the limiting of imports as fundamental as Mercantilism, solely advocating for the protection of certain key industries.
Adam Smith determines two cases in which states should encourage the domestic industry’s production, instead of relying in foreign trade actors. Which are these?
1) When some particular sort of industry is necessary for the defence of the country
2) When some tax is imposed at home upon the manufacture of domestic products, it seems reasonable that an equal tax (tariff) should be imposed upon the like produce of the foreign firms.
What was the name of Mercantilism’s most prominent writer in Britain during the theory’s seventeenth-century heyday?
Thomas Mun
What is Economic Nationalism’s approach to free trade?
EN scholars look at free trade with scepticism, even though they do not fully reject it. They believe that the cultivation of a self-reliant national market is of far greater significance for national wealth than the cultivation of foreign markets through free trade. Only when the domestic economy of a country is developed, can a country proceed with free trade.
What is the greatest benefit that the world gets from free trade, according to Classical Liberalism?
It promotes a more efficient employment of the productive forces of the world