IPE Session 2 slides Mercantilism

IPE Session 2 slides Mercantilism - Session21 Mercantilism...

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Session 2        1 Mercantilism The central focus is the problem of security and the role of the state and the market in providing and maintaining a nations security in all its forms. 1. A period in history 2. A theoretical perspective to explain the world system 3. A set of policies A period in history 15 th to 18 th century Rise of the idea of nation state Territorial security considered first priority— but security is costly Weapons became instruments of power so wealth is the key to national security A Theoretical Perspective State power viewed in terms of absolute gains and losses. More power protects, less can lead to disaster (Zero sum game, like their Realist cousins). Created an economically competitive and hostile world. Dependency is a weakness Generate trade surplus through international trade, limiting imports, acquiring bullion and extraction from colonies As a state policy Colonialism , supplemented by military power Established colonies for more market access of their goods, raw materials and cheap labour. Need of a trade surplus was a government concern; so the government supported mercantilist classes (and the state sanctioned monopolistic merchant control over certain industries that profited the merchant and the state via commercial trade. England’s Mercantilist policy— Thomas Mun: England’s Treasure by Foreign Trade (1664) Importance of trade and the social position of the merchant Bring all unused land into production Fully utilize natural resources including fisheries Reduce consumption of imports, particularly luxuries Export goods with inelastic demand—can charge higher prices
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Session 2        2 Customs duties on imports to be consumed domestically Export in own ships Encourage distant trade make England a trans-shipment point Export of bullion permitted, if for purposes of trade (non-bullionist position) “Make the most we can of our own”
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Session 2        3 Mercantilism and Realism Nation-state is the primary actor in international system as it is the highest unit of sovereign authority. The international system is constantly in a state of potential anarchy and wars
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IPE Session 2 slides Mercantilism - Session21 Mercantilism...

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