The right idea, but they need to think beyond just gold.
Even traditional mercantilism used gold *and* silver as its basis for determining national strength. But today, just those two are not enough either.
Now here’s the real zinger. Some years ago, an economist-historian made an extraordinary and unique discovery. That economic spheres have a single, 100% correlation with success and failure throughout all of human history.
To his credit, he refused to believe this discovery, so spent the next 20 years trying to disprove it, and couldn’t, before publishing.
The 100% correlation of success and failure was mining.
The more a country, or a group of countries that form an economic sphere mine, the more they succeed. When they mine less, they are on a descending path to failure. With no mining, they only live a generation or two.
So how does this relate to gold and silver?
Mercantilism fell out of fashion when it was realized that economic power was tenuous indeed if a nation or economic sphere just *had* specie. Just possession, or active trading of specie might create the impression of strength, but it was a shallow thing. Here today, gone tomorrow.
So the new idea was that economic power was based on economic activity. And this is how fiat currencies were born, the illusion under which we still live today. But that theory was only half true.
Mining literally stimulates every part of an economy. It is the heart of economic success, because it not only provides resources, but also economic activity, spreading outward from the industry like a pebble in a pond.
And mining goes beyond specie in its economic power, which is my point. If a nation does not have gold or silver ore to mine, it can mine other metals and non-metals.
The most blatant example of this is the oil of the Middle East, which has given primitive peoples such vast wealth that they are able to inflict their primitive ideas on the rest of the world.
Call it “expanded mercantilism”.
So what are the mining industries with the highest profit margins in America?
Copper, Nickel, Lead and Zinc have about a 52% profit margin. Oil drilling and gas extraction, 48%. Iron ore, 46%. Molybdenum and other metal ores, 42%. Gold and silver, 39%.
Yes, these profit margins need to be balanced against the overall value of what is mined, but specie alone is dwarfed compared to specie plus all the others combined.
Importantly, the US also has many renewable resources that have and create enormous economic power. Yet these are too volatile to use as backing for a currency. The mining and oil industry are inherently carefully controlled and adjust to economic conditions.
That is, the mining industry can insist on particular profit margins for their product. If the market won’t give it to them, that particular industry stops mining. And if the price of their product jumps, they mine more of it.
So what they produce is carefully controlled, something you want if it is to be used to back a currency.
Does expanded mercantilism threaten the holders and investors in specie? Not at all. In fact it solidifies their position and insulates them from uncontrollable economic fluctuations to the value of their holdings, stabilizing its value over time.
Do you have some source you can cite?
I would like to read more about this.
The only thing that bothers me about your thesis is the example of Spain. Now granted they did not originally mine most of the gold & silver that made them rich and a world power for 200 years or so. (They stole it from the Aztecs, Incas, etc!) But remember it didn't translate into wealth for Spain. I draw a distinct between riches and wealth. Wealth is richness that is self-sustaining usually comes developing a free enterprise oriented infrastructure. Think the US, 16th century Holland, Great Britain, Hong Kong, Japan. You can adopt policies that break the self-sustaining cycle of “wealth” so once accomplished its not permanent. However in Spain's case they sank fast. I think the the Middle East Oil Countries will go the way of Spain. All it will take is something that breaks the current demand for their oil. Remember take away their oil and combined the Islamic world produces less then Finland. (This is no knock on the Finns, there is what 10 million of them?)