Mercantilism Is Inevitable Only If Well-Informed People Remain Silent
Here’s a letter to the Wall Street Journal.
Editor:
Greg Jensen concludes that “we are all mercantilists now, and the implications are profound and unavoidable” (“We Are All Mercantilists Now,” December 13). The implications of the worldwide turn to mercantilism truly are profound, but if enough people resist the fatalism that seems to afflict Mr. Jensen, this turn isn’t unavoidable.
A good start is to recognize that many of the ‘facts’ upon which mercantilists today rest their case are, in reality, false. For example, mercantilist sympathies in the U.S. today cannot, contrary to Mr. Jensen’s claim, be explained by “lost domestic manufacturing jobs” as a result of the rise of China’s economy. As a share of total nonfarm employment, manufacturing jobs peaked during WWII and have fallen steadily ever since. Indeed, since China joined the WTO in December 2001, the average monthly decline in U.S. manufacturing jobs as a share of nonfarm employment has been slightly lower than was this monthly decline from the end of WWII until China’s membership in the WTO.*
Further, while it’s true that “each time another country adopted mercantilist policies, it pushed others to react similarly,” nothing is inevitable about such reactions; they’re chosen. And they’re unequivocally foolish. If more people understood that mercantilist policies damage all economies that adopt them – whether or not such adoption is in response to mercantilism abroad – each government would be less inclined to inflict economic harm on its own citizens simply because foreign governments inflict economic harm on their citizens.
People of good sense should – and will – continue to warn of the dangers of mercantilism rather than succumb to Mr. Jensen’s fatalism.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030* Calculated from St. Louis Fed data, dividing MANEMP (“All Employees, Manufacturing”) by PAYEMS (“All Employees, Total Nonfarm”).
The post Mercantilism Is Inevitable Only If Well-Informed People Remain Silent appeared first on Cafe Hayek.