Friday, 24 March 2017

Mercantilism and Fascism

Currently we see a growth in mercantilist type ideas with regard to trade policy and, some would claim, a growth in fascist ideas. Is there a connection? Just how closely related are mercantilism and fascism?

A paper published in the journal History of Economic Ideas (vol. 6, no. 2, 1998, pp. 97-122) looks at this question. Patrick J. Welch wrote on "Mercantilism and Fascism".

The abstract reads,
Parallels are drawn along several lines to support the argument that fascism is the closest 20th Century counterpart to mercantilism. The paper is divided into three sections. In the first, mercantilism and fascism are compared in terms of timing, empires, and problems of conceptualization. In the second are compared objectives relating to power and plenty, and tenets concerning trade and precious metals, wages and population mobility, and the place of the state and individual. In the final section are compared practices of mercantilism and fascism as they relate to the implementation of regulation, the role of business interests in regulation, and warfare.
Welch's conclusion includes
Such was not a concern for the 20th Century fascist regimes in Germany and Italy. Like mercantilism from the earlier time, their primary focus, without apology to the citizens, was on the wealth and power of the state.

The parallel between modern neomercantilism and mercantilism is limited largely to the place of government in, and objectives of, trade policy. Many more parallels can arguably be drawn between fascism and mercantilism. The timing of both with reference to the formation of the national state was similar. Empire was important in both mercantilism and fascism, although the short life of the fascist regimes did not offer enough time to realize territorial ambitions. The concepts of both mercantilism and fascism were criticized for being more pragmatic than founded on rigorous principles, of questionable use in describing specific situations, and carrying offensive implications. Relative power and unification were important in both mercantilism and fascism, and the relationship of power and plenty in its role in unification was in dispute in both cases. Mercantilism and fascism shared comparable tenets on trade policies and bullionism, low wage and migration policies, and the dominant role of the state and subordinated role of the individual. Finally, regulation was extensive and the business community appeared to be a beneficiary of regulation under both systems, and warfare ranked high among the priorities of both systems.
So the question is, just how close is what we see happening today to the mercantilism of old? In terms of trade policy, much of recent US policy could be considered mercantilism, or at least neomercantilism, and you could argue that the power of the state and the role of national state - "make America great again" - is important to the pragmatic policies we see being put in place. It's not clear there are any underlying principles driving policy in the US right now. And the dominant role of the state implies a subordinate role for the individual. Much of the industrial policy being put in place is more pro-business - at least for some business - than pro-market.

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