Is Mercantilism Still Relevant Today?

Mercantilism is an economic politic system which is adopted in 16-18^th centuries. This system focuses in increasing a state’s assets and capitals. When the country getting wealth, their richness will be transferred to their military power and they use their army to find another resource in other country and sell it to increase their economic power and so on. With this system the government also wants to protect their societies (Balaam & Dillman, 2014). Classical mercantilism stressed the minimization of the import and improvement of the export and government play a big role in here.

But, in 19^th century, occurred critics to mercantilism from Adam Smith and David Ricardo who said that government should not took part in the economic sector which we know as “invisible hands”. This led to the Great Depression because of the greed of the people who tried to enrich themselves. Keynes finally proposed that there must be a government intervention in economy to regulate and his thought about economic stability become the pioneer of the emergence of Bretton Woods system. Keynes’ idea had to be ruled out when the oil price increase crazily in 1973. Neomercantilism emerged as the savior. A state made a policy which is still commit with free trade under GATT but it also didn’t make their national industry unsafe such as, subsidies (Balaam & Dillman, 2014).

We live in interdependence world now and without importing goods from other country we can’t suffice our needs. But, the idea of enrich our self is still relevant because we want to live prosperously, don’t we? And a state will always protect anything inside and we are all already know that to maintain our security it takes a lot of money. However, the market has not could rule the world yet. Because without a state there would be no market and economic liberal idea until now just provide the needs of few country (Balaam & Dillman, 2014).

But, mercantilism also could make a bad impact when it is adopted unwisely. For example, U.S. is one of the countries which is try to use mercantilism in 2010. They made a policy which is admitted to slow the rate of consumption growth but the reality is it makes other country have difficulty to sell their product to U.S. This policy can give bad impact when the Americans against each other because there are some people who support the government and there are some people who care about the cheapest price. 

Source : Balaam, D. N., & Dillman, B. (2014). Wealth and Power: The Mercantilist Perspective. In Introduction to International Political Economy (pp. 27-50). Harlow: Pearson Education Limited. ; http://blog.heritage.org/2010/03/03/obama%E2%80%99s-mercantilist-approach-to-trade/

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