|Posted on August 11, 2018 at 5:35 PM|
Politically Weaponized Economics
Mercantilsim is written into the United States Constitution and the political weaponization of economics is nothing new. Negative talk of trade wars, economic wars, and the collapse of the Post WWII Liberal Order, reveals how committed they’ve become to the idealistic global free trade paradigm.
Reasonable people should be able to agree that the Post WWII Liberal Economic Order established as an alternative to Soviet Communism was successful and that upon the collapse of the Soviet Union the United States became the sole superpower in a unipolar world and doubled down on that order.
Globalization and global free trade experienced major diminishing returns between 9/11 and the Financial Crisis of 2008. Yet globalization and global free were doubled down on again and again by the United States who failed to see reality, probably blinded by unipolarity and exceptionalism. By 2014 it was clear to me that the days of American unipolarity propping up the decayed Post WWII Liberal Order were numbered.
It is hard to tell who is worse in this whole thing, is it the IR crowd who cannot identify the transition to multipolarity, or is it the economists who can’t identify the diminishing returns associated with global free trade, and reflexively condemn every tariff as bad without mentioning elasticity and the adjustment period associated with it?
As we transition into the multipolar regional realignment, it is necessary to understand that mercantilsim and multipolarity have always gone hand in hand. It is useful to identify the tools and weapons of mercantilsm. If the United States can use the tools and weapons of mercantilism in a competitive way, it would be possible to begin competing with regional powers in the sphere of geoeconomics. Any list of politically weaponsized economic activties would not be complete without mention of sanctions and embargos.
Balance of Trade
“High risk research & development
market penetration investments
production over investment for market share forcing ”*
“Tariffs & quotas,
regulatory & covert impediments to imports,
discounted export financing,
national technology programs,
economic & technical intelligence”*
^ I think an argument can be made Protectionist Policies are actually competitive policies
*From Edward Luttwak’s Turbo Capitalism
This post is an adapted version of things written in Chapter 4 The Utilization of Mercantilsm & Geoeconomics from the not yet finished, Market Failure, Terrorist War, & Social Issues By Cory Newton