IPE Session 3 Slides Mercantilism 2

IPE Session 3 Slides Mercantilism 2 -...

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 Session 3 (Revision and cases) N   1 Mercantilism (Revision) Mercantilism is an economic theory that holds the prosperity of a nation is dependent upon its supply of capital, and that the global volume of international trade is "unchangeable." Economic assets or capital, are represented by bullion (gold, silver, and trade value) held by the state, which is best increased through a positive balance of trade with other nations (exports minus imports) and assumes wealth and monetary assets are identical. Mercantilism suggests that the ruling government should advance these goals by playing a protectionist role in the economy; by encouraging exports and discouraging imports, notably through the use of tariffs and subsidies. 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
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 Session 3 (Revision and cases) N   2 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.
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 Session 3 (Revision and cases) N   3 Mercantilism and Realism— Both have the same core, mercantilism is a realist theory 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 given that conflicting national interests force states to compete with one another for limited resources. Relational power is the ultimate arbitrator of conflict.
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This note was uploaded on 05/21/2010 for the course X 110 taught by Professor Xyz during the Spring '10 term at Louisiana College.

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IPE Session 3 Slides Mercantilism 2 -...

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