Posts Tagged ‘Mercantilism’

QUORA Wants To Ban Me: I Said The $6.2 T Bipartisan Bill Is Mercantilism

March 30, 2020

Mercantilist economic policies aimed to build up the state, commerce and industry, and Mercantilist theorists charged the state with looking for ways to strengthen the economy… [1]

The Internet is manipulated by the censors which its extremely wealthy owners pay. Many of these geeks have low levels of education, and see offense where there is none. Before getting on Quora today I got a warning that one of my comments violated their policy, and I had to sign an electronic document telling me I was going to be banned, should I do it again. [2]

My comment was entirely technical… and in economy. There were no attack against any member of Quora. There were no insults against people dead or alive. I just sung the praises of “Mercantilism”, an economic theory under which most powers operated for many centuries. I referred to an essay explaining the distinction between “Mercantilism” and “Colbertism”. I cannot imagine why the comment was banned. Actually the 6.2 trillion dollar package just passed is an example of Colbertism… Everybody agrees to save Boeing, that’s Colbertism. I cannot possibly imagine why such a comment would be banned. But it was. We are dealing here with people who micromanage thinking and scholarship. First comic relief:

The Anti-Trumpers are completely insane, but, you know what? It works! As Hitler said, the bigger the lie, the more plausible it sounds. NYT had an article claiming:”Trump to New York: Drop Dead!” The hatred this sort of insanity brings actually makes the anti-Trumpers even more full of righteousness and hatred…

I was answering Peter Malmutt who wrote:

This stimulus was absolutely necessary because as you highlight, no economy no money. While this is structured very differently to the TARP (lessons learned, esp not to trust desperate bankers) and equity positions in some corporates could be an outcome, doesn’t this look like quasi-socialism? Isn’t that something that is taboo for the Republican Party ideology, although they also used to hold strong views on balanced budgets and maximum national debt levels?

In a first comment, I said that, indeed, it was socialism. Then I wrote the following comment, deleted by Quora:
“People who voted Republican in the past wanted to stay wealthy. In a static world, it meant balanced budgets and absolute limits on debt, to insure the value of money. However, the world is not static anymore. Europe is balancing budgets, and getting ever more poor, relatively speaking. The US and UK have been profligate: it works.

If the USA had balanced its budget in World War Two, the completely unbalanced Nazis would have won… The USA sent, for free, absolutely gigantic quantities of planes, tanks, trucks, to the USSR… Enough to turn the tide… Similarly the UK got immensely indebted to the USA to stay in the war. At the end of the war, the USSR had no industrial capacity (it was in the USA) and the UK had to surrender to the USA…

The COVID19 is an occasion for the hard sci fi edge of the US economy to get ahead… Firms like Gilead… Republicans have come to realize that one has to stay ahead, if one wants to thrive… Ahead of the virus, but not just the virus, as governor Cuomo said today… Trump is a billionaire entrepreneur who made his fortune inside the USA, and was long an enemy of the Reagan Revolution (he prefered subsidies… ;-))… And thus a left wing Democrat, relative to say, Biden or Clinton…
Trump literally captured the Republican Party and has been able to harness this new way of creating wealth… Just like the old one, ruling all over Europe and the USA, it’s called MERCANTILISM, but one should call it in its most striking version, COLBERTISM…
Colbert Good, Keynes Not So Smart (

Why was the comment deleted?

Probably because some plutocrat saw it, and perceived that it could be viewed as complementary to Trump (in spite of the crack about subsidies… and it’s true Trump harnessed New York construction subsidies, that’s why the NY gov set up subsidies…). Then the plutocrat, or servant thereof signaled to Quora one better terrorize that author, whose entire “answer” could be interpreted as all too favorable to Trump… Never mind that I approved of a BIPARTISAN BILL…


Trump Derangement Syndrome extends even to COVID. Here is what I read among the anti-Trump enraged and deranged:

“President Trump has turned to a French virologist with a history of criticizing climate science to offer the world hope amid the novel coronavirus pandemic.” Actually Raoult criticised poor meteorological predictions… which have gone indeed pretty bad recently, because the climate is changing too fast. But the TDS crowd has no limit:

Last week, Trump tweeted that the combination of two medicines could dramatically alter the often deadly course of COVID-19.

“HYDROXYCHLOROQUINE & AZITHROMYCIN, taken together, have a real chance to be one of the biggest game changers in the history of medicine,” Trump wrote. He then cited a study published in the International Journal of Antimicrobial Agents that afforded little time for peer review.

Notice the viciousness: the paper was actually PEER REVIEWED in the most prestigious Journal. And published by said Journal. But now hacks who probably never studied calculus or biology are telling us that the peer review had “little time”. Yeah, guys, thousands of people are dying everyday.

PhD Raoult is the greatest star in his domain… And an MD, so he prescribed his drug, hydroxychloroquine, to more than 4,000 patients: it’s safer than quinine (which I got for years).

The World Wide Web is a treasure. But it’s full of parasites, vermin, viruses… How to distinguish truth from lies is difficult. Over the years I was banned from many Internet outlets, for “fantastic thinking” (the guy who accused me of this was the Harvey Weinstein of philosophy, a serial rapist), or from the European Tribune for having suggested that bankers bankrolled Hitler (they made an Internet search, they said, to prove only me in the entire world had this theory… It’s how the wealth of the Bush family was launched…), or the Daily Kos, for saying Obamacare would make the profit of the healthcare insurance industry greater (it did), or from the Guardian, for being a Jihadist… The fatwa against me from Pakistan Justice (!) Ministry for offending the famous Rophet, a proof, no doubt… Etc.

There should be a law of public utility forbidding censorship… Ah, but as a New York Times subscriber, for decades, I was censored more than 1,000 times… Sanders wanted such a law… But Sanders didn’t want to hurt Biden’s feelings… Thus demonstrating a congenital inability to become US president…

WW Web is Direct Democracy. The political system we have is Democracy through Representatives… Basically, as in China. Direct Democracy has to develop Debate Expertise. This is not a new debate: Socrates was obsessed by the notion of Direct Democracy versus Expertise. What I call “Democratic Institutions” were developed, in the Middle Ages, to answer Socrates. However they turned out to have seen their would-be Expertise been devoured by Will To Power. So now we have anonymous censors without any education telling us “Mercantilism” is an insult.

In any case, Marx, Engels, Proudhon (their inspiration) fustigated the owners of the workers. Now one should fustigate the owners, or more exactly enslavers of thoughts.

Patrice Ayme



[1] The Wikipedia entry on Mercantilism I linked to is extremely bad, and denotes an anti-Mercantilist bias. That’s because Mercantilism is nationalistic, whereas the plutocratic globalization was leveraging internationalism to avoid taxation and legislation… Servants of plutocrats probably wrote the article… I will not bother modifying it: total loss of time, I would get in a fight with arrogant poisonous mice…


[2] Quora is an Internet outfit with intellectual pretense. It covers the full spectrum from unfathomably stupid, to extremely interesting… Depending upon who wrote the article, and what it is about.

Goldman Sachs’ European Union

July 9, 2016

Goldman Sachs, one of the generous employers of the wealthy Hillary Clinton, has recruited José Manuel Barroso, the former president of the European Commission, as the chairman of its international operations, “a non-exec, advisory role”…. To handle “Brexit” Goldman-Sachs said. (An interesting case of self-dealing: Who was one of the main forces behind “Brexit”? Goldman Sachs, as it cheated on the accounting of Greece, thus enabling Greece to enter the Eurozone, when it should not have, leading to the “Grexit” crisis, which ruined further the reputation of the EU, thus enabling Europhobes to howl their xenophobia even louder, etc.…).

Goldman knows how to employ international bureaucrats and politicians: the previous holder was Peter Sutherland, a former European Commissioner and ex-boss of the World Trade Organisation (WTO). Goldman Sachs has plenty of money, because the tax structure of the US makes it so, while, if a young Afro-American wants to make it, he can always enroll to be train as a killer for the establishment… This is not just conspiracy and corruption on a local or national scale, this is corruption on a global scale.

Barroso was the 115th Prime Minister of Portugal for three years, then head of the European Commission (EC) for ten years. The EC is the executive administration of the European Union (EU). It employs 33,000 workers in charge mostly of regulating the regulations embodying European Laws (passed by the European Parliament), to rule the single market of more than 500 million people (that makes it much more efficient than the British government employing 4.5 million people). 

Meanwhile California papers announced proudly that California had the sixth economy in the world in terms of nominal GDP, having jumped ahead of France and Brazil, Italy, India… This reflects in part a surge in the dollar and the pound (which has gone down 15% since the “Brexit” vote). It also reflects the mercantilist strategy of the USA, conducted with brio under Obama.

Let's Plot All Together Now! Obama, Elon Musk, and the Military: Laughing All The Way To The Bank!

Let’s Plot All Together Now! Obama, Elon Musk, and the Military: Laughing All The Way To The Bank!

Take for example Tesla, the poster concept of present-day American mercantilism. It is flooding the world with luxury electric car of dubious ecological merit. All the way to Norway, huge government subsidies are piled up on it (and I would be very interested to know the details on the mortgages and conferences various officials involve take) . Thanks to well-organized propaganda and financing by the US government. In truth, Tesla and the other companies of Elon Musk (Solar City, Space X) are companies massively financed by the US governments (yes, the government of the US and the governments of other states, such as New York, Nevada, to California). Those subsidies on just Solar City and Tesla amounted to 5 billion dollars by 2014. Mr. Musk himself made, personally, 12 billion dollars under the Obama administration: the beauty of the (pseudo) free market.

Why? The South African born Musk, tall and lean, looks good next to Obama, tall and lean. Not that Obama knew what was going on: Chu, the Nobel Prize winning Secretary of Energy of Obama, yanked American Federal Government support for further research in fuel-cell electrics (a US technology, which served us the Moon on a plate). Now Chu is very close to those who invested in battery electrics (fuel-cells are vastly superior to battery electrics in the present state of technology)

The case of Mr. Musk is highly visible, but just the tip of the iceberg (a tip which loves to live dangerously).

Many American corporations have moved their headquarters to tax havens, thus escaping the 33% US tax, something Obama had to loudly deplore, and did loudly deplore. Meanwhile, the full might of the US government is still helping these corporations (diplomatically, through traded delegations, etc.).

Pure mercantilism. The fostering of American business is used to enrich the US by weakening the rest of the world. Just like fostering London as Europe’s financial center brought a weakening of continental Europe (most of the Euro money-changing happening in London rather than in the Eurozone). The USA uses its political and propaganda heft to get its way in business.

For example, Tesla was authorized to let drivers use its “Autopilot” function, while it would be non-imaginable to enable a non-American car maker to do the same. (A Tesla in Autopilot did not detect a tractor-trailer and went below it at full speed, killing the driver.)  

The war of the US mercantilist empire against the barely conscious European sheep is all azimuths. For example, after decades of anti-French propaganda using most American comics, it is very difficult to sell anything in the USA coming from France. Even French cheese is considered to be dangerous biological warfare. One can be arrested for sneaking a French cheese inside one’s luggage: special dogs are out there to get the French contrebandiers, and their hidden Roquefort.

All is fair in love and war? Not really. Especially when one does not know that one is at war. The Europeans love their i-phones, but they should ponder more where they come from, and how.

The USA is behaving, right now, like a traditional European power, at the time when the European powers were jostling for world control. Whereas the Europeans have opted for behaving like traditional European sheep. But even their cheese does not make it in. So what are the European sheep going to do? Die off through low birth rate, and a civil war with Muslim migrants?

The American government has a law forbidding government to buy non-American products, except if nothing else available; the EU does not have an equivalent, symmetric law, thanks to the fact European politicians know that, if they behave well during their European political “duty”, namely if they favor US interests, US oligopolies and financial conspiracies will employ them, afterwards. And “compensate” them very well.

The US behaves like a traditional, aggressive and imperialist European power, but for three caveats. First, the US is a superpower, “the one and only superpower, probably”as a chastened Russian president Vladimir Putin put it recently. That feeling of superiority brings a supplement of hubris. And hubris does not replace soul, as the Ancient Greeks knew, all too well.

The other caveat is that the US, and its institutions, arose in great part from the “West Country Men” mentality, of greed foremost. Four centuries of English North American history have shown that, the more greed, the better, overall, for the empire. What could go wrong? No appetite is large enough, if it can eat entire mountains.

The final caveat is that US mentality did not arise from thousands of years growing among, and learning to live with, disagreeable, incomprehensible, insufferable neighbors. The US is a new country which experiences  itself as a new civilization, on an island-continent.

The “Brexit vote” at first sight, weakens Europe further. The US had fostered, before it attacked, and after it attacked the Prussian Kaiser’s fascist imperial design to take over Europe in an alliance with the US. Later, as early as 1921, American plutocrats led by the maverick racist Henry Ford, and, soon enough, Wall Street’s entire might, American leaders fostered Nazism. And Stalinism too. The result was the world as we know it.

Esteemed commenter Gloucon on this site just suggested that everything American has to be expunged from the US mentality.  He called that Amexit from itself, “exorcism”. It may well be true. However, the policies of various European powers right now enfeeble Europe ever more. In what was a minor crisis (the 2008 greed crisis), the US did not hesitate to run astounding record deficits for years, up to nearly 15% of GDP, well above 10% of GDP for more than four years running. Meanwhile the servants of Goldman Sachs at the European Commission, and in various other European governments insisted, and keep on insisting on the 3% deficit limit. The french commissioner of finance is very strict on this: France has to lower its deficit to 3%. Well, I don’t know if that’s Marine le Pen’s plan, but, considering the sorry state of France, the french deficit should be brought up to 20% (investors would probably pay France for that: the French ten-year bond is basically at zero percent…)

European countries, thanks to European laws, kept their deficits extravagantly low, while their economies sunk. Except for… Britain, which ran much higher deficits that then rest of Europe (the Eurozone). Hence the surge of the British Pound, because, paradoxically, the ability, or, more exactly, effrontery of running high deficit is viewed by money manipulators, as a sign of strength (that’s in contradiction with classics economics of the obsequious type). And this is correct: it’s the friendliness to plutocracy, and the ability to enforce that, which have contributed to the clout of the US and the UK.   

Deficits Don't Count, If You Have The World's Biggest Army: Obama Is A Strategic Genius, Whereas European Leaders Are Mentally Retarded Traitors Of The Vicious Type

Deficits Don’t Count, If You Have The World’s Biggest Army: Obama Is A Strategic Genius, Whereas European Leaders Are Mentally Retarded Traitors Of The Vicious Type

But let’s contemplate the very high deficits of Obama’s first six years. Is not the only excuse for very high deficit, war? Was there a war the US was engaged in. I mean a big war, not this little weapon testing in the Middle East. Of course there is. And the enemy is doing poorly, melting like Camembert. The European Union, ladies and gentlemen, and its increasingly tiny and irrelevant corporations… is not on the winning side. And how could it be?

In 1940, the Duke of Windsor, inspector general of the British armed forces and ex-king, wrote to his friend Adolf Hitler that the weak point of the French defenses was at Sedan (where, coincidentally, the Second British armored division was assigned, but never arrived, conveniently enough, leaving just one French infantry reserve division to block the bulk of the Nazi army). That was high treason. And it served, ultimately, the “American Century”: France and Britain won, but much diminished.

All the high officials of Europe working for conspiratorial plutocratic money manipulators are also traitors, and they serve the same master. Why can’t laws be passed, outlawing such practices before (PM Mario Monti, ECB’s Draghi), or after (Barroso)? Over a lifetime? Or over entire families and acquaintances (immediately after Ted Cruz was elected Senator, Goldman Sachs, which had secretly financed his campaign, made Cruz’s souse into a Goldman Sachs director…).

This is not just an American problem. After all the Russians hired ex-Chancellor Schroeder of Germany to head, nominally, a giant gas pipe line, in an affectionate mark of appreciation to be meditated upon by present and future “leaders”. The bottom line, on this planet, is that too much power is put into too few hands. This is how World War One was launched: five persons, conspiring together, four generals and the grandson of Queen Victoria, decided to launch a world war, within 18 months. (They overruled the two aghast admirals, including Admiral Tirpitz, who knew the Kriegsmarine could not win over the Royal Navy, and thus were against war; the other admiral wrote the secret report, found, more than half a century later, hidden in an attic.)

Some people want to stop hurting animals. Nice. A new ethics is necessary for doing so. More urgently, a new ethics is needed in politics: the simple moral fact that too much power in too few hands is as immoral as it gets. After all, too much power in too few hands was the principal idea of Nazism (the “Fuerer Prinzip“).  And it is also the principal idea of… Islam (which Hitler copied to the point of parody).

A planet whose leaders are the puppets of tyrannical greedsters cannot end well. Greed, cupidity, avarice, the will to dominate others, do not correspond to mental modes of operations, and their attending neurohormones, that we can afford, when the entire biosphere is tottering on the verge of the most massive extinction. Ever.

Why? Because such neurohormonal regimes amplifying the basest instincts, do not correspond to the highest possible states of intelligence. Politicians and financiers, are, fundamentally, of the lower sort (as Jesus and Muhammad themselves convened!)

Patrice Ayme’

Carbonize Mercantilism!

January 1, 2010


Abstract: Some American economists whine about Chinese trade, but China is actually making fun of the USA being hoisted on its own petard. The best way out of it all is more enforcement of intellectual property, and a worldwide carbon tax, sparing naught…

And of course, deep down below, it’s all about the world (and American) plutocracy, anyway and China is being played, like every other state. The worldwide carbon tax will allow for some more worldwide Colbertism, just what the doctor ought to order.


Paul Krugman sees 2010 as "the year of China, but not in a good way".

Our "New Trade Theory" expert, Nobel Prize winner mostly for that, and whom I have accused of rabid globalization in the past, has changed quite a bit: "Chinese mercantilism is a growing problem, and the victims of that mercantilism have little to lose from a trade confrontation… China has become a major financial and trade power. But it doesn’t act like other big economies. Instead, it follows a mercantilist policy, keeping its trade surplus artificially high. And in today’s depressed world, that policy is, to put it bluntly, predatory."

Mercantilism is a theory that holds that the prosperity of a nation depends upon fighting other nations economically rather than anything else (see Annex 1 for the definition and related concepts, including the fact that China practices more Colbertism than Mercantilism, and the fact that Colbertism is not intrinsically bad, and just what the USA needs at this point).

Basically China engages in this "predatory policy" by, um, clinging to Uncle Sam’s cotails… How embarrassing, my dear Krugman.

Well, it is ironical that the USA, which has practiced a mercantilist policy of making the US dollar as weak as possible, would complain that China is doing the same with its own currency. How dares it? Is China stealing the USA by parroting the USA? It is even more funny than that: China has pegged its currency to the Dollar, so as the USA tried its usual mercantilist trick of debasing the Dollar, the Chinese currency went down with, well, the Dollar!

Before giving lessons to China, the USA ought to give lessons to itself. Debasing the currency does not work. It is not just a question of looking at what happened to say, Argentina.

After a sorry episode, in the 1930s, with way too strong a Franc, when everybody else left the peg with gold before her, France had decided to never been caught in that trap again. But the French politicians had slightly misunderstood the problem. The problem with the gold standard, the same that imperial Rome already experienced, is that it did not bring enough money to the economy. The other problem too was that, as all other powers debased spectacularly their currencies, after the USA introduced 50% tariffs on all goods, French trade collapsed. (This, of course, was a minor problem relative to the one of the explicit alliance between the USA, Great Britain, and Hitler, fully visible as early as 1934, and which made the French deeply distrustful of America.)

Now France was fully familiar with mercantilism, having practiced it for centuries, until the new economists known as the physiocrats came on the scene, and advised King Louis XV. The physiocrats later taught Adam Smith. They threw mercantilism through the window, arguing that more trade was better for everybody. But still the mercantilism current of thought argued back, and has always been present in the French economic debates. France has a tremendous economic history, complete with huge ecological problems in the Middle Ages, and strong measures to correct them, and deliberate massive stimulus programs, as practiced by King Henri IV by 1600 CE.

So, fresh on her sorry experience of the 1930s, France debased the Franc relative to the Deutsch Mark in the 1960s and 1970s. Alas, France discovered that did not work either. Priced out of the cheapest products, the Germans concentrated on higher added value items, and the German economy persistently outperformed the French one. So, having observed her obvious mistake, next, France switched to a Franc that would be as hard as the Mark, under Banque de France chief Trichet. The rest is history, namely the Euro, and Trichet now heads the European Central Bank based in the fort of the Franks, Frankfurt.

Meanwhile the sneaky USA had connived, over the objections of Keynes, and behind his back, to make the US Dollar into the world ("reserve") currency. Keynes headed the Bretton Woods commission in charge of monetary problems. This little reminder for all those that American imperialism and dirty tricks to play with the planet as it was its personal basket ball, were not invented by G. W. Bush.

That world currency status of the Dollar allowed Secretary of the Treasury Connelly to grandly declare to the Europeans:"The Dollar is our currency, but it is your problem." The Europeans decided to solve said problem by being serious, and going the high technology route. European high taxes on energy and carbon, doubled with incentives to sell renewable energy for profit, are part of that high technology plan.

Anyway, so what are we going to do about China? One should notice that China is not alone, but is allied with the world plutocratic class. (A whiff of what happened with Hitler.)

Of course we could try to talk and seduce the Chinese out of mercantilism, forgetting for a moment that the immense fortunes of the owners of Wall Mart, for example, depends heavily upon Chinese mercantilism.

European powers practiced mercantilism intensely for three centuries, during which they engaged in a number of ferocious wars with each other. War is a natural extension of mercantilism. So the seduction dance to the aggressively minded may not work this time either: China and its western plutocrats may make the same mistake Hitler and his Western plutocrats made, namely interpret negotiation as weakness, and democracy with lethargy. When Paul Krugman worries about American job losses to China, he does worry about European job losses to the USA.

Another approach to pound a bit more sense in the mercantile ones, is to enforce worldwide intellectual property with more severity. Indeed, mercantilism orient an economy towards cheap product and impoverished workers (since it is trying to out-produce by cheapening). This is naturally an ambiance little supportive of intellectual creativity, always an expensive art.

The problem of China is that it employs around 600 million people in cities, and has to deal with about as much impoverished peasants who want to move to the cities to find better work. So China has to find more work for dozens of millions, hence its fanatical growth policy. China is addicted to growth through exports, because the (most of them American) plutocrats come to China and take care of everything: China has just to furnish local contacts, cheap workers, and cheap currency. What China needs to do is to reorient its growth towards a bit more self sufficiency, a bit more Maoism, and get more Chinese to self develop China.

To encourage the Chinese economy to grow internally, a long term approach is to use a WORLDWIDE CARBON TAX. It will in particular strike imports, and force importers to pay for the carbon mess which is poisoning the biosphere. This can be done in a way fully compatible with republican and fair trade principles. Actually a carbon tax is exactly about fair trade.

France was supposed to introduce a carbon tax, January 1, 2010, today, but just three days before that date, the French Constitutional Court found that the tax, as proposed made too many exemptions, violating the EQUALITY PRINCIPLE of the French republic. The French Constitutional Court blocked the enactment of the Carbon Tax law (notice in passing the enormous power of French courts).

The French government is scrambling to modify the Carbon Tax law, according to the Court’s findings, and should re-present it to parliament January 20, 2010. The global point is this though: a worldwide carbon tax, if enacted according to the finding of the French Constitutional Court, would be perfectly valid as far as the World Trade Organization is concerned.

China will not be able to move out of carbon as fast as the USA and the EU can. Indeed it is heavily invested in coal, cheap and dirty, and China needs lots of cheap energy, right away. The graphs, if nothing else, show that the augmentation of the need of China for energy is much greater than that of the EU and the USA.

Hence to go carbon free, China will have to make much more of an effort, even relatively speaking, than Europe or the USA, or Japan. Thus, forcing China to reduce its carbon output will force China to develop more internally rather than flooding the world with cheap exports (American style).

Come to think of it, a worldwide carbon tax would force the USA to develop itself more, too, instead of escaping into exportism. More generally, a carbon tax would force countries to self develop, and would have many of the advantages of protectionism, without the inconvenience and the aggressive underlying theme.

I would not call the worldwide implementation of a carbon tax retaliation, but rebalancing. Which it would be. Planet first, mercantilism last.


Patrice Ayme


Annex 1: DEFINTION OF MERCANTILISM: Mercantilism is a theory that holds the prosperity of a nation to be dependent upon its capital, and that the global volume of international trade is "unchangeable" (a so called zero sum game).

Economic assets or capital, are represented by bullion (gold, silver, and trade value) held by the state, and are best increased through a positive balance of trade with other nations (exports minus imports). Strict mercantilism assumes that wealth and monetary assets are identical. Mercantilism advocates to advance these goals by protecting the national economy. Notably by encouraging exports and discouraging imports, through the use of tariffs, subsidies and other barriers to fair trade.

Plutocratic propaganda often views French mercantilism as closely associated with Jean-Baptiste Colbert, finance minister for 22 years in the 17th century. This is misleading.



French finance and economy minister Jean-Baptiste Colbert .

Sometimes French mercantilism is called "Colbertism", by deliberately confusing, or confused, Anglo-Saxon economists of the plutocracy loving type. This confusion is of some import, because Chinese policy may have more to do with Colbertism than Mercantilism, and some American economists are very biased about this. Actually the USA is an extremely mercantilist country masquerading as a free trade fanatic.

Under Colbert, the French government became deeply involved in the economy in all its aspects, in order to develop it more. Industries were organized by more than 150 edicts, and by technologies transfers guided by the government, and production was regulated by the state through a series of over a thousand directives outlining how different products should be produced. To encourage industry, foreign artisans and craftsmen were imported (something the USA has done always). Colbert also worked to decrease internal barriers to trade, reducing internal tariffs, making taxation more equitable, with indirect taxes that even the great lords could not avoid, and building an extensive network of roads and canals.

Colbert’s policies were very successful, and France’s industrial output and economy grew considerably during this period, as France regained her natural position as the dominant European power (after the ruinous seven religious wars of the end of the 16 C, and the just as ruinous war against the Spanish empire in the Netherlands, and worldwide, from roughly 1515 to 1637; unfortunately Louis XIV squandered some of this renewed, Colbert directed, economic might in wars, not all of his own making.)

To this day, though, Colbertism is controversial in France, and often derided as "dirigisme" (i.e, directing the private economy more than appropriate).


Annex 2: Here is a fuller extract of Krugman, New York Times, January 1, 2010, explaining extremely well what China is doing, currency wise: "China has become a major financial and trade power. But it doesn’t act like other big economies. Instead, it follows a mercantilist policy, keeping its trade surplus artificially high. And in today’s depressed world, that policy is, to put it bluntly, predatory.

Here’s how it works: Unlike the dollar, the euro or the yen, whose values fluctuate freely, China’s currency is pegged by official policy at about 6.8 yuan to the dollar. At this exchange rate, Chinese manufacturing has a large cost advantage over its rivals, leading to huge trade surpluses.

Under normal circumstances, the inflow of dollars from those surpluses would push up the value of China’s currency, unless it was offset by private investors heading the other way. And private investors are trying to get into China, not out of it. But China’s government restricts capital inflows, even as it buys up dollars and parks them abroad, adding to a $2 trillion-plus hoard of foreign exchange reserves."