The Interplay of Sovereignty and Economic Policy

Balancing Security and Trade

Mercantilism is an economic theory. Mercantilists believed that national wealth was best increased through a positive balance of trade, where exports exceed imports. The idea was that precious metals like gold and silver, which were the primary means of international payment at the time, should be accumulated.

To achieve trade surpluses, governments implemented policies such as high tariffs on imports to protect domestic industries, subsidies for exports, and monopolistic trading companies.

Industrial Regulation: Governments often regulated industries to ensure they produced high-quality goods for export and restricted the outflow of skilled labor or technology to competitors.

There was an emphasis on accumulating gold and silver, as these were seen as the measure of wealth. This led to policies like the prohibition of exporting gold or silver.

Liberal Adam Smith's "The Wealth of Nations" (1776) critiqued mercantilism, advocating for free trade and the idea that wealth comes from productivity and the division of labor, not just from accumulating precious metals.

While mercantilism as a formal policy has largely been abandoned, some of its principles (like protectionism) re-emerge in various forms during economic nationalism or in response to global economic crises.

Modern economics, particularly in the form of Keynesian policies, sometimes echoes mercantilist ideas by focusing on managing trade balances, though in a more nuanced and less zero-sum manner.

The debate over mercantilism's effectiveness continues, with some historians and economists arguing that it wasn't as detrimental as traditionally thought, at least for the leading mercantilist nations in their time.

Economic nationalism is an ideology that prioritizes domestic economic interests over global economic integration.

Advocates for tariffs, trade barriers, and other measures to protect local industries from foreign competition. The idea is to promote local businesses, preserve jobs, and maintain national economic sovereignty.

Emphasizes reducing dependency on foreign goods by encouraging domestic production. This might include policies aimed at boosting local manufacturing, agriculture, or technology sectors.

Policies are often designed to favor the national economy, sometimes at the expense of international cooperation. This can manifest in scenarios like currency manipulation or subsidies to national companies.

There's often an underlying goal to maintain or revive traditional industries which are seen as part of the national identity.

Supporters believe it strengthens national security, preserves jobs, and can lead to a more balanced trade situation. They argue it allows for economic policies tailored specifically to the needs of the country rather than following a one-size-fits-all global economic model.

Examples of economic nationalism include the U.S. in the 19th century with its high tariffs to protect fledgling industries, or more recently, Brexit in the UK, where part of the argument was to regain control over economic policy.

Various countries employ aspects of economic nationalism. China's "Made in China 2025" initiative or the U.S. under certain administrations focusing on "America First" policies are contemporary examples.

Economic nationalism often sparks debate about its effectiveness and morality in an increasingly interconnected world. It's a concept that sits in contrast to globalization, where the removal of trade barriers is seen as beneficial for all participating countries.