Neomercantilism (also spelled neo-mercantilism) is a policy regime that encourages
exports
An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is an ...
, discourages
imports
An importer is the receiving country in an export from the sending country. Importation and exportation are the defining financial transactions of international trade. Import is part of the International Trade which involves buying and receivin ...
, controls
capital movement
In international economics, the balance of payments (also known as balance of international payments and abbreviated BOP or BoP) of a country is the difference between all money flowing into the country in a particular period of time (e.g., ...
, and centralizes currency decisions in the hands of a
central government
A central government is the government that is a controlling power over a unitary state. Another distinct but sovereign political entity is a federal government, which may have distinct powers at various levels of government, authorized or deleg ...
. The objective of neomercantilist policies is to increase the level of
foreign reserves held by the government, allowing more effective
monetary policy
Monetary policy is the policy adopted by the monetary authority of a nation to affect monetary and other financial conditions to accomplish broader objectives like high employment and price stability (normally interpreted as a low and stable rat ...
and
fiscal policy
In economics and political science, fiscal policy is the use of government revenue collection ( taxes or tax cuts) and expenditure to influence a country's economy. The use of government revenue expenditures to influence macroeconomic variab ...
.
Background
Neomercantilism is considered the oldest school of thought in
international political economy (IPE).
It is rooted in
mercantilism
Mercantilism is a economic nationalism, nationalist economic policy that is designed to maximize the exports and minimize the imports of an economy. It seeks to maximize the accumulation of resources within the country and use those resources ...
, a preindustrial doctrine, and gained ground during the
Industrial Revolution
The Industrial Revolution, sometimes divided into the First Industrial Revolution and Second Industrial Revolution, was a transitional period of the global economy toward more widespread, efficient and stable manufacturing processes, succee ...
.
It is also considered the IPE counterpart of realism in the sense that both hold that power is central in global relations.
This regime is also associated with
corporatocracy
Corporatocracy or corpocracy is an economic, political and judicial system controlled or influenced by business corporations or corporate Interest group, interests.
The concept has been used in explanations of bank bailouts, excessive pay for ...
particularly during the 1970s when both were treated as components of a functional system and policy goals. In the
United States
The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
, neomercantilism was embraced in the late 20th century amidst the move to buttress American industries from Japanese competition.
American thinkers who subscribed to the doctrine, however, include
Alexander Hamilton
Alexander Hamilton (January 11, 1755 or 1757July 12, 1804) was an American military officer, statesman, and Founding Fathers of the United States, Founding Father who served as the first U.S. secretary of the treasury from 1789 to 1795 dur ...
, one of the
Founding Fathers of the United States
The Founding Fathers of the United States, often simply referred to as the Founding Fathers or the Founders, were a group of late-18th-century American Revolution, American revolutionary leaders who United Colonies, united the Thirteen Colon ...
and the first U.S. secretary of the treasury.
See also
*
Developmentalism
Developmentalism is an economic theory which states that the best way for less developed economies to develop is through fostering a strong and varied internal market and imposing high tariffs on imported goods.
Developmentalism is a cross-disci ...
*
Mercantilism
Mercantilism is a economic nationalism, nationalist economic policy that is designed to maximize the exports and minimize the imports of an economy. It seeks to maximize the accumulation of resources within the country and use those resources ...
*
Mundell–Fleming model
The Mundell–Fleming model, also known as the IS-LM-BoP model (or IS-LM-BP model), is an economic model first set forth (independently) by Robert Mundell and Marcus Fleming. Reprinted in Reprinted in The model is an extension of the IS–LM ...
*
New classical macroeconomics
New classical macroeconomics, sometimes simply called new classical economics, is a school of thought in macroeconomics that builds its analysis entirely on a neoclassical framework. Specifically, it emphasizes the importance of foundations bas ...
References
*
*Mueller, Milton. “Regulation of platform market access by the United States and China: Neo‐mercantilism in digital services.” Wiley, Policy & Internet (2021).
{{Authority control
Mercantilism
International trade theory
Late modern economic history
Political theories