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News -> Gari-News

Old empires find an old way to assert new power

03/31/05

Times Online, UK

MERCANTILISM is back. More than 200 years ago, Adam Smith exposed the cost of running an economy to increase the power of the State, as France’s Louis XIV and his minister Colbert had done. Living standards suffer and progress can be stifled. Yet the nationalistic approach to trade has never entirely lost its appeal, especially in France. Exports and the accumulation of reserves are widely seen as good, imports as bad. Industry should be harnessed and markets managed “for the good of the people” and nations should have their own industries so that they do not rely on others.
In the 20th century, Russia and China lost the power they believed that the world’s biggest country and its most populous were entitled to, because of economic failure. The collective economic model was pragmatically abandoned.

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