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The Eurozone's export-oriented policy regime and pursuit of trade surpluses remains thoroughly puzzling. Rooted in overly strict fiscal policies, inequality and underinvestment; undermining growth and contributing to trade tensions– it defies economic self-interest. This paper develops an analytical framework to confront this puzzle. It argues that these policies are self-harming, but are nonetheless pursued, because of three fallacies that obscure the cost-benefit calculus attached to them. These fallacies are rooted in the empirical problem of observational equivalence: the same observed surplus can be driven by different underlying processes, and its net benefit will depend on our assumptions about these drivers. The first fallacy is mistaking external enablers for domestic competitiveness—interpreting export success to be linked to domestic reform, when it was largely explained by better links to faster growing trading partners. The second fallacy is mistaking weak imports for strong exports—interpreting surpluses as 'winning', even when they are not driven by superior exports but sluggish imports. The third fallacy is mismeasuring multinational firms' contributions to national exports—interpreting profit shifting and assets stashed in low tax jurisdictions as export performance. Germany and Ireland, as paradigmatic 'success cases of austerity', are used to expand the argument. [ABSTRACT FROM AUTHOR]

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Nations' human and material resources are unevenly endowed, distributed and developed. This allows flow of labor, raw materials, capital and finished products across national boundaries and markets; thus resulting in "mercantilism" as the earliest international economic system that proposes massive and aggressive export over import to accumulate wealth, to have favorable balance of payment and trade and to be still relevant in today's economy. Game theory and Global Strategic Rivalry theory were used in analyzing various innovations and discoveries (industrial, technological, colonial, imperial, liberalism and globalization) as the economic strategies are offshoots of mercantilist evolvement. Hence, mercantilism never died nor was it buried as claimed by many scholars. [ABSTRACT FROM AUTHOR]

Though contemporaries, Adam Smith and Sir James Steuart are commonly portrayed as if they belonged to different eras. Whereas Smith went down in history as both founder of the science of political economy and patron saint of economic liberalism, Steuart became known as the last, outdated advocate for mercantilist policies in Britain. Smith himself was responsible for popularizing the notion of the "system of commerce" as an approach to political economy that dominated the early modern period. As a historiographical concept, the mercantile system became a misguided international trade theory grounded upon the Midas fallacy and the favorable balance of trade doctrine. Smith's treatment of international trade in the Wealth of Nations, however, was criticized for its inconsistencies and lack of analytical clarity even by some among his own followers. Given Smith's doubtful credentials as an international trade theorist, the chapter investigates the reasons that led him and Steuart to be placed on opposite sides of the mercantilist divide. The authors analyze the works of both authors in depth, showing that their disagreements had chiefly to do with different views on money and monetary policy. Additionally, the authors explore how early nineteenth-century writers such as Jean-Baptiste Say and J. R. McCulloch helped forge the intellectual profiles of both Steuart and Smith. [ABSTRACT FROM AUTHOR]

The aim of this paper is to offer a glimpse into the Baha⁠ʾi mercantile community in Iran during the second half of the nineteenth century and its reformist and modernist attitudes through the accounts of one of its leading merchants, Hājī Mīrzā Sayyīd Muhammad-Taqī Shīrāzī (Afnān). [ABSTRACT FROM AUTHOR]

The article discusses the reconstruction of mercantilism in history by studying the political economy of the British empire in the 17th and 18th centuries. Topics discussed include the role of mercantilism as an important imperial philosophy, economic nationalism through the state's role in trade management, and the displacement of bullionism. Also mentioned are mercantilists' focus on balance of trade and the emergence of industrial-capital mercantilism.

China has taken the world with a different angle; an angle that kept China mostly behind its conservative mercantilist restrictions and access to foreign investors largely remained actively initiated. Even though China was admitted to the World Trade Organization (WTO) in 2001, and remained an observer to the General Agreement to Tariff and Trade (GATT), cost of receiving membership meant extreme modifications to Chinese system of economy. Modifications that required China to allow access and tariff concessions to global community and demanded Chinese nationalist mercantilist designs to be affable to international standards. This however, never meant that China would stop expanding, or at least take a recess from its economic augmentation. WTO quickly saw China rise to a point where even though it remained compliant to international economic norms, it still remained a formidable rebel to set patterns, tacitly compelling WTO and other international economic forums to feel impractical, if not impotent. Chinese economic investments, together with its dominance on international relations, has often raised questions on its intentions into becoming a member of WTO. It is often miscalculated that China intends to implode WTO from within by introducing a change in the international economic system through sheer pressure or somehow, China is strategizing to manipulate WTO as a nascent member in order to introduce another form of global competition against members that are already in antagonism towards China. [ABSTRACT FROM AUTHOR]

The article focuses on the neomercantilist policies that were adopted by China and Russia to make asymmetric economic gains at the expense of competitors. He examines the neomercantilist strategies of both countries in which both of them have exercised state control in terms of security energy resources. The author also outlines the concept of neomercantlism, as well as the success and limitations of the policy.

Although the importance of country stores to the economy of the post—Civil War South has long been widely acknowledged, by far the most careful and influential analysis of rural merchants is Ransom and Sutch's One Kind of Freedom (1977), which used mostly region-wide data for its estimates of the numbers, capital, and spatial density of stores in the Cotton South. While paralleling the categories, methods, and evidentiary sources of One Kind of Freedom, this article instead takes a micro-level approach, comparing store development in two Reconstruction-era Louisiana parishes—one devoted to cotton production, the other to sugar. Data from these parishes and elsewhere in Louisiana suggests several problems with Ransom and Sutch's conclusions, especially their famous "territorial monopoly" thesis. Moreover, the superior performance of sugar parish stores underscores the significance of differences between the credit-dependent sharecropping system prevalent in cotton regions and the cash wages paid to sugar workers—distinctions that have often been intentionally blurred in recent historiography. [ABSTRACT FROM AUTHOR]

Abstract: Offshore labor outsourcing (“offshoring”) is a process in which US companies set up overseas production facilities, employing local workers, simultaneously curtailing their production on US soil and laying off part of their US workforce. This is followed by (is intertwined with) rehiring a part of the laid-off workers, usually by other companies, to boost production for domestic consumption and/or export. We present a mathematical analysis of the effects of these processes, on such measures as the personal, corporate, government and foreign balances (income minus expenditures). We use an input–output model of the US economy, calibrated to data from government databases, as a reference, and investigate the effects of offshoring and rehiring by mathematical extrapolation. Various rehiring strategies are explored. The analysis is then extended to the effect of cheaper goods and services, arising from splitting the offshoring-generated savings between profit and price reduction. In the latter framework, equilibrium pricing is also investigated. The essence of our findings has been: [1.] Primary offshoring results in decreasing (negative) government, personal and foreign balances, and leads to a shifting of private income from payrolls to corporate assets and dividends. [2.] Any rehiring is advantageous to the government balance. [3.] Rehiring to boost domestic consumption, without profit split, is further decreasing the foreign balance. It also erodes the personal balance because part of the incremental income is offset by taxes and lost social income, and because the growth of personal income is outpaced by the growth of personal consumption. [4.] Rehiring to boost exports is advantageous to all three balances but just to break even (pay for the foreign cost of offshoring), the export increment has to exceed, by far, the total foreign payroll. [5.] A coordinated expansion to keep the foreign balance in check would be very desirable but requires strong government incentives. [6.] Price reduction by profit split obviously improves the personal balance and decreases the corporate profit and balance. The foreign balance may improve, due to a growth of export. [7.] When production is increased by rehiring, while maintaining the present ratio between manufacturing and services outputs, equilibrium pricing may only be achieved by decreasing corporate profit and balance as the volume of production grows. More work is needed to introduce dynamics into the model. An extension of this study would then aim at the analysis of how various taxation and regulatory strategies would affect the offshoring and rehiring process. [Copyright &y& Elsevier]

This article focuses on the historical experience with U.S. external adjustment, that is, narrowings of the trade deficit. Using data from the past 35 years, we compare economic performance in episodes during which the U.S. trade balance declined against episodes during which it rose. We find that trade balance adjustment has been generally benign: U.S. real gross domestic product growth tended to fall but not to a statistically significant extent; housing construction slumped; inflation generally rose modestly; and although nominal interest rates tended to rise, real interest rates fell. The article then compares these outcomes to those in foreign industrial economies. We find that the economic performance of the United States during periods of external adjustment is remarkably similar to the foreign experience. Finally we also examine the performance of the foreign industrial economies during the periods when the U.S. trade deficit widened and narrowed Contrary to concerns that U.S. adjustment will prove injurious to foreign economies, our analysis suggests that the foreign economies fared reasonably well during past periods when the U.S. trade deficit narrowed. [ABSTRACT FROM AUTHOR]

This paper compares the importance of precautionary and mercantilist motives in the hoarding of international reserves by developing countries. Overall, empirical results support precautionary motives; in particular, a more liberal capital account regime increases international reserves. Theoretically, large precautionary demand for international reserves arises as a self-insurance to avoid costly liquidation of long-term projects when the economy is susceptible to sudden stops. The welfare gain from the optimal management of international reserves is of a first-order magnitude, reducing the welfare cost of liquidity shocks from a first-order to a second-order magnitude. [ABSTRACT FROM AUTHOR]

Smith uses his analysis of bounties to form one aspect of his overall critique of the mercantile system. He stresses the fact that the system of bounties has not promoted the development of the English economy. However, Smith also stresses that, as destructive as the system of export bounties is to public welfare, these bounties are not significant enough to greatly retard the growth of the English economy, which has more to do with secure property rights and securing investors their return on their investments. [ABSTRACT FROM AUTHOR]

Focuses on specific political and economic structures in the U.S. and Brazil that promoted or restricted the establishment of domestic mercantilism in those economies. Economic history of the nations; Relative factor endowments; Role of institutions in economic conditions.

Presents information on a study on water mercantilism in Spain. Definition of mercantilism; Factors which contributed to the emergence of mercantilism; Justification for mercantilism; Shift in the expansion and allocation of water resources.

The article examines the ideology of the estates' absolutism and proto-bureaucratic thought in the 17th century Dutch Republic. The study of proto-bureaucratic thought restricts itself to research on German cameralism. One explanation for this narrow spatial focus could be that proto-bureaucratic thinking was actually limited to the German-speaking parts only during the early modern period. Theories stressing the Dutch estates' right to sovereignty came about almost at once. Francois Vrancken, town lawyer of Gouda, has defended it against the English Queen Elisabeth's governor Leicester's claims in 1587 after the estates themselves had taken similar action.

Discusses the relationship that mercantilists established between growth of foreign trade and growth of domestic production. Basis of the criticisms of mercantilism from Adam Smith; Summary of the evidence that mercantilists attached importance to domestic production and productivity; Different interpretations of the thesis of the favorable balance.

The article presents a discussion on mercantilism and Chief Justice John Marshall of the U.S. Mercantilism was the bridge between feudalism and modern capitalism. It reflects a society which after a thousand years had tamed the barbarian invaders and was safe for widespread commercial intercourse. By the close of the eighteenth century the businessman, leader of the middle class, had replaced feudal lord and ecclesiastic at the center of social gravity. Early American history is but a special instance in the general progress of the middle class; its concepts of nationalism, contract and property--its defenses against threatening unrest from below. The problem of the restful agrarian lower classes had been neatly, if temporarily, solved in the Constitutional Convention by creating a popular government hamstrung with checks and balances. That Justice Marshall was a nationalist is familiar, but the mercantile quality of his nationalism is commonly overlooked. Marshall recognizes broad national legislative power not to govern, but to patronize commercial interests.

The purpose of this article to show that low wages and a resultant competitive price level are not accurate generalizations for what professor Edgar Furniss has called the "later English mercantilists." Some writers who have treated the role of labor and wages in later English mercantilism have found widespread agreement that high wages are not harmful to trade or the economy in general. They have, however, usually maintained that this change in viewpoint appears in later English mercantile literature at about the middle of the eighteenth century. As early as 1894 Lujo Brentano isolated what he called a "transformation" in wage theory among the mercantilists. The conclusion that high-wage proponents appeared throughout the period in question argues against the opinions, cited in the article, that the change in viewpoint is to be explained by the socio-economic context of later eighteenth-century England. The findings favor the position that there was a body of doctrine among the later English mercantilists, which was a result both of the economic development that had been achieved during the period and of the desire to suggest theoretical foundations for policies to continue that development in the future.

This article focuses on liberal elements that was present in the period of mercantile system of England, during the period 1500 to 1750. By reasoning from the actual practices of the mercantilist states, economists and historians usually have supposed that the doctrines of the period of mercantilism were a justification of its institutions. None of these impressions about mercantilist doctrine, as distinct from mercantilist practice, is correct. Yet they are unavoidable if the doctrine and the practice are thought to be parts of a unified system. It is the purpose of this essay to re-examine the ideas expressed by the mercantilist writers of England between about 1550 and 1750 in order to show that the mercantilists anticipated many important elements of classical economic doctrine, including the classical conception of self-interest, the price mechanism, the mutual advantage in exchange, and the place of the state in the economic organization. It is not in an obvious way that mercantilist and liberal economic policy are related. What indeed is obvious is the great difference between the measures which each proposed to advance its policy.

The article examines the usage of the term, favorable balance of trade, by American economists in light of the origin and development of the expressions favorable and unfavorable balance of trade. It asserts that the impression of mercantilists about the term, such that it implies the advantage of excess commodity exports over commodity exports, is merely conventional and is not a true index of the economic well-being of a country. Several works dealing with the commercial or mercantile system and the balance of trade were analyzed like "The Wealth of Nations," by economist Adam Smith, and the Bullion Report, which identified the balance of trade with the movement of exchange rates.

This article presents information regarding the British mercantilist theories of profit. Mercantilist theories of profit were based on the premise that if the nation grew richer, the merchant class would automatically grow richer in the process. This was so because a nation could increase its wealth only through active, favorable foreign trade, and they were the people who did the trading. Mercantilists were, therefore, constantly spreading the gospel of a "favorable balance of trade." Practically all the mercantilists accepted the validity of this idea, for they believed profits could be realized by most firms only when exports exceeded imports. Consequently, their real problem was to determine how this favorable balance could be promoted, and this was their point of divergence. It is thus beyond doubt that mercantilists possessed a fundamentally right idea of production. But that being so, it is also evident that the numerous passages where home trade was expressly stigmatized as sterile and foreign trade alone thought productive, must not be taken at their face value.

The article reports on the textile and apparel trade deficit for the first six months of the year 1985 in the United States. It is said that the deficit totaled 8.5 billion U.S. dollars or an increase of 15 percent over the same period in 1984. A total of 10 billion dollars or an increase of 10 percent were recorded on imports as compared to the same period of the previous year. On the other hand, the import rate is said to drop by eight percent to 1.49 billion dollars. It is inferred that the figures show that for the month of June, the textile and apparel deficit amounted to 1.4 billion dollars.

This article discusses the book "Origins of Modern Economics: A Paradigmatic Approach," by L.E. Johnson and Robert D. Ley. Johnson and Ley argue convincingly that mercantilism does not represent the beginnings of economics as a science. Primarily mercantilist thought looked to political analyses and political solutions rather than economic ones. Since the basis of economic science is economic philosophy, with its fallacies as well as truths, this is worth debating. Eli Hechscher, they note, argued that mercantilism represents a coherent, interrelated body of economic doctrine, which defines a system of economic and political controls designed to maximize the welfare of the nation-State. Of special interest in this regard is the final chapter by Professors Johnson and Ley. The present confusion in economic thought has caused disagreement and debate. Historically, they note, this is the prelude to progress.

The article offers information on the improvement of chemical industry's trade deficit. It states that the products and services of chemistry are converted into numerous consumer and industrial products. Relative to this, the American Chemistry Council has projected the amount of chemical inputs into agricultural, mining, and manufactured goods. It is also mentioned that the net trade deficit in apparel makes up the largest lost-chemistry position among major downstream industries. Moreover, the deficit in net chemistry content has increased to $32.0 billion since 1997.