[Dani] Rodrik claims that "The liberal model has become severely tarnished, owing to the rise in inequality and the plight of the middle class in the West, together with the financial crisis that deregulation spawned." But the reason for this is precisely because for the past 6 decades it hasn't only been the Asian countries that have pursued Mercantlist policies (as Rothbard explained 50 years ago).One may have thought that Adam Smith killed off mercantilism more than two hundred years ago, but no. As Boettke notes the struggle between liberalism and mercantilism has be long and if Rodrik is anything to go by has yet to be won. One thing people like Rodrik are good at is to blame recent, and not so recent, economic problems on liberalisation and deregulation despite the fact that there has been little serious attempts at either. As Boettke adds,
So while Rodrik is basically right when he says: "The history of economics is largely a struggle between two opposing schools of thought, liberalism' and 'mercantilism.'" He is off the mark when he states that: "Economic liberalism, with its emphasis on private entrepreneurship and free markets, is today’s dominant doctrine." This is true only in rhetoric, but not in the reality of economic policy practice.
Every where we turn in our economic lives we can see the grabbing hand of the state. Throughout the western world we have bloated public budgets, the manipulation of money and credit, obstructionist regulations, and numerous measures to weaken the discipline of profit and loss. In short, we have state controlled market economies.This look more like a mercantilist world than a economically liberal one.