Commercial Liberalism, Mercantilism, and Transcending the Nation State

Commercial Liberalism, Mercantilism, and Transcending the Nation State

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I. Commercial Liberalism vs. Mercantilism: a. Liberalism: a. All states have a comparative advantage in something. If states specialize and trade freely, everyone wins. b. Mercantilism: a. It’s in the national interest of a country to build its wealth relative to others. As opposed to the win-win situation presented by liberalism, mercantilists view the world economy as a win-loss situation. b. States should increase exports to others and decrease imports from others. c. Methods of states increasing their economic standing: a. Government subsidization of domestic industry. b. Dumping: selling goods overseas at a price less than the cost of production. a. This drives out foreign competition. b. Subsidies can help dumping because it helps industry make up the loss from dumping. II. Since WWII/Bretton Woods Conference: a. Liberalism has been the prominent mode of thought, because of the promotion of free trade. a. Global trade has increased exponentially since then. b. Industrialized states (“The global north”) benefitted. c. Non-industrialized states (“The global south”) did not benefit. III.Difficulties with free trade: a. Terms of Trade:
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a. Prices of industrial products rise far faster than agricultural products. a.
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This note was uploaded on 05/07/2011 for the course POLS 231 taught by Professor Raymond during the Fall '10 term at Boise State.

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Commercial Liberalism, Mercantilism, and Transcending the Nation State

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