Economic Nationalism - Mercantilism vs Free Trade

Freerepublic ^ | 10 June 2019 | Impimp

[impimp]

There seems to be a growing appreciation among some on the right for economic nationalism. If the goal is global growth then the concept of comparative advantage makes free trade a clear winner. If the goal is “America First” then there are certain situations in which one could claim Mercantilism is the best thing for the USA. I contend that the USA is currently not in one of those situations in which Mercantilism is best.

Mercantilism adherents believe that tariffs should be placed on high value imports and raw material exports, for purposes of a definition. They also dislike free trade because a prospective 1% gain to our economy is offset by let’s say a 10% gain to a foreign economy.

Mercantilism only succeeds in the long run if a nation (or reliable block of trading allies) represents more than half of the global economy and an “enemy” represents less than half. In this case the antagonist country will produce less output as their trading block should, all else being equal, be smaller than the trading block that represents more than half of the global economy. The USA represents only 20% of the global economy so protectionism will stunt the USA relative to the rest ISD the world and stunt itself relative to any larger trading block.

Secondly, the USA has the global reserve currency. The US dollar and US financial services dominate the planet. The US is also the home of many major global corporations outside of financial services. Protectionism hurts America’s strength as it cripples a major source of our economic power. An economic nationalist could argue that free trade promotes America’s interest because of the global nature of our economy.

For the aforementioned reasons an economic nationalist should reject mercantilism and embrace free trade if the goal is to maintain US global superiority.

Note that I am not economic nationalist but I wanted to present an argument to support free trade for the growing group of “America First” people on the right. I prefer global economic growth through free trade to America First growth because an economically integrated planet is a more peaceful planet - the cost of war with a trading partner is too high. I also think we have more to gain by trading with all countries than we do by demonizing economic competitors.

[Segovia]

Damn! that’s an excellent retort to ANY free trader argument.

[arthurus]

No. Mercantilism is not in the cards for the trump administration.Reverse Mercantilism- surely there is a specific name for it- is what the Social Democrats desire and will implement. That is bleeding the US for the rest of the world on the surface and for the international elites substantively. Trump is using tariff threats to try to stem the invasion through the southern border. He has no other tools because Congress is determined to promote the invasion as part of its own economic plan as well as insuring for Social Democrats their permanent ruling status.Trump is using tariffs against China to offset Chinese tariffs against our own exports and the wholesale theft of our technology/patents and to induce China to eliminate those tariffs for which we will eliminate ours. He is working always toward Free Trade with protection for intellectual property.

[silverleaf]

China is the worlds mercantilist, not America

[nathanbedford]

My view from three weeks ago. If you accept this view then every tactic, every means of defense, including tariffs, must be invoked to win. The president has been deprived by Congress of virtually every other tool with which to protect America from the existential threat represented by China.

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We have more than relative impoverishment to fear from the Chinese.

We have to fear the marriage of technology and totalitarianism.

But if we fail, then the whole world, including the United States, including all that we have known and cared for, will sink into the abyss of a new Dark Age made more sinister, and perhaps more protracted, by the lights of perverted science.

In the nearly 8 decades since Churchill exhorted his nation to its finest hour by warning of the danger of "perverted science" we face a larger, richer and far more technologically advanced potential adversary in China.

The repression visited by the Nazis on their own people and upon occupied peoples will be as nothing compared to a dark age empowered by modern technology. All that stands between that technology and our serfdom in a new dark age is our economy which funds our military. Lose that and then we have nothing left but to fall upon the mercies of a nation historically capable of horrors and murders on an inconceivable scale. The Chinese killed 60 million of their own in a great leap forward and they did it without technology. The madness of their cultural revolution exceeded even that of the French Revolution. For a quarter century we funded the stunning technological revolution of China, presuming their good intentions. Their history, their repression of their own people and their aggression both mercantilist and economic at strategic points around the globe, makes that presumption mortally dangerous.

The Chinese will not wage actual war on us until we are economically or technologically defenseless. They are waging preemptive war now, a war which if lost promises repression that will equal a sci-fi movie. To those who are inclined to discount the danger described here as gross exaggeration or cheap fear mongering, I ask only that the advantage of passivity in this war be compared to the downside of losing it.

This is not a war for economic dominance, this is a war for survival. The trade war is our 1940.

[TheNext]

Free Trade is as non existent as Keynesian economics because nobody gives back I’ll gotten money.

There is no free lunch.
Free Traders want a free lunch.

The elite want their Privilege sold as free Trade lies.

[impimp]

Free traders recognize there can be no free trade of military tech. We also recognize that Trump is not really a Mercantilist - he is trying to use trade to leverage behavior changes by other countries. We also see a value in protecting food supply, which surprisingly wasn’t mentioned by anybody in the thread.

What I disagree with in your post is the concept of protecting manufacturing capacity. This is not a legitimate security threat. It is a poor excuse for implementing protectionist actions as it hurts America and it’s consumers.

[JonPreston]

the concept of comparative advantage makes free trade a clear winner.

The concept of comparative advantage, as introduced by David Ricardo, Karl Marx's favorite economist, relies on honest partners and sovereign nations, not Chinese thieves secured by a Great Wall.

[central_va]

I-am-a-pimp. The rest of the world IS practicing mercantilism AGAINST THE USA. Talk to them and not us you loser. Go back to India....

[central_va]

Ultimately, free trade is immoral;

Why yes it is. That is why I lovingly call them Free Traitors™. That moniker fits them like a glove.

[central_va]

Greed is not complex at all.

[central_va]

I prefer global economic growth through free trade to America First growth because an economically integrated planet is a more peaceful planet

Quoting Marx again?

[wastoute]

Seems to me almost none of us realize that “War with China” can’t be engaged and certainly not won until we have first won a war against the libtards. We are at a political impasse and before we even begin to worry about the Chinese we have to deal with them. It also seems to me that we are actually in a war with the libtards, a war we are losing.

[central_va]

I guess having a disenfranchised half a billion wage slaves is a comparative advantage of sorts.

[central_va]

You’re make sense today!! BZ!!!

[JonPreston]

You don't have a very high opinion of people who disagree with you, do you?

[impimp]

It is the truth - everyone who takes university economics is taught the greatness of free trade.

[JonPreston]

It isn’t true, what is true is your arrogance toward blue collar workers. Who do you think you are?

[nathanbedford]

Today must be the second Monday in the month.

[nathanbedford]

“War with China” can’t be engaged and certainly not won until we have first won a war against the libtards.

I would peel off even one more layer of causation and observe that we cannot win the war domestically against leftists if we lose the war of immigration a war, which you have pointed out, we are losing.

A house divided against itself cannot stand much less withstand China...

[impimp]

I don’t like any class of people getting protected by the government. No group has been more inappropriately coddled by governments around the world than the blue collar worker. Sink or swim is what I say...if you can’t compete find another way to make money and stop letting government protectionist policy allow them to leach off of the American consumer. Thankfully most of their protections are gone, but not all of them.