Neomercantilism (also spelt as neo-mercantilism) is a policy regime that encourages exports, discourages imports, controls capital movement, and centralizes currency decisions in the hands of a central government. The objective of neomercantilist policies is to increase the level of

foreign reserves Foreign exchange reserves (also called forex reserves or FX reserves) are cash and other reserve assets such as gold held by a central bank or other monetary authority that are primarily available to balance payments of the country, influence ...

held by the government, allowing more effective

monetary policy Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often a ...

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, a preindustrial doctrine, and gained ground during the

Industrial Revolution The Industrial Revolution was the transition to new manufacturing processes in Great Britain, continental Europe, and the United States, that occurred during the period from around 1760 to about 1820–1840. This transition included going f ...

. 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 (, from corporate and el, -κρατία, translit=-kratía, lit=domination by; short form corpocracy) is an economic, political and judicial system controlled by corporations or corporate interests. The concept has been used ...

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 (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...

, 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, one of the

Founding Fathers of the United States The Founding Fathers of the United States, known simply as the Founding Fathers or Founders, were a group of late-18th-century American Revolution, American revolutionary leaders who United Colonies, united the Thirteen Colonies, oversaw the Am ...

and the first U.S. secretary of the treasury.

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

Background

See also

References