Neomercantilism in international (geo)political relations

Abstract

The development of neo-mercantilism can be linked to the emergence of economic nationalism. Neo-mercantilist practice is also connected to and can be characterized as protectionism, which relies largely on old mercantilist instruments. This connection can be traced back to historical events of the 19th century, when the USA and Germany began to apply the same protectionist practices used by the old mercantilist countries in their foreign trade policies. Contemporary economic leaders who endorse the modern neoliberal paradigm also occasionally and when necessary reach for mercantilist methods, especially when strategic resources at the global level are concerned. However, although industrialized countries (initially) developed on the principles of economic nationalism, i.e. mercantilism, the economic development plans for underdeveloped countries (set by the World Bank, International Monetary Fund and World Trade Organization) practically impose a fully market-oriented neoliberal paradigm. Therefore, the neomercantilist doctrine is primarily reserved for large economies and large (transnational) corporations that are well-adapted to global market conditions. The neomercantilist doctrine of the modern world resembles the original mercantilist practice, which insisted on profit at all costs, while modern lobbyists who advocate policies depending on the interests of the corporations they represent are very much like former traders who have influenced government policies. The neomercantilist practice is thus a privilege of global superpowers, while underdeveloped countries are caught in-between. Therefore, it seems that the so-called power-politics has sealed the development opportunities of small(er) and weak(er) economies.