The New Mercantilism


Peter F. Drucker argues that the German 19thC mercantilists Friedrich List and Prince Otto von Bismarck have won the war of ideas over the free trader Adam Smith. Smith in the Wealth of Nations (1776) made a series of devastating arguments against the policy of mercantilism and it was his followers in the 19thC who succeeded in introducing in Britain and her colonies the closest approximation to the ideal of free trade the world had ever seen. Smith's followers in France came a close second. Under the influence of Hamilton and his followers the U.S. has always leaned towards protectionism and mercantilism, notwithstanding official protestations to the contrary. The ideal of Hamilton in the US and List in Germany was to create vast "national" blocks of territory (the expanded US and Germany which came about through wars in the 1860s) within which there would be nearly free trade and outside of which would be heavy protection and mercantilism. Drucker convincingly argues that the world is moving towards the Listian-Bismarckian model with vast national trade blocks like NAFTA, Euroland, MERCOSUR, ASEAN, India, and China, with semi-free trade within and tightly managed, mercantilist trade outside.

Peter F. Drucker argues that the German 19thC mercantilists Friedrich List and Prince Otto von Bismarck have won the war of ideas over the free trader Adam Smith. Smith in the Wealth of Nations (1776) made a series of devastating arguments against the policy of mercantilism and it was his followers in the 19thC who succeeded in introducing in Britain and her colonies the closest approximation to the ideal of free trade the world had ever seen. Smith's followers in France came a close second. Under the influence of Hamilton and his followers the U.S. has always leaned towards protectionism and mercantilism, notwithstanding official protestations to the contrary. The ideal of Hamilton in the US and List in Germany was to create vast "national" blocks of territory (the expanded US and Germany which came about through wars in the 1860s) within which there would be nearly free trade and outside of which would be heavy protection and mercantilism. Drucker convincingly argues that the world is moving towards the Listian-Bismarckian model with vast national trade blocks like NAFTA, Euroland, MERCOSUR, ASEAN, India, and China, with semi-free trade within and tightly managed, mercantilist trade outside.

Posted: Fri - March 25, 2005 at 10:36 PM        

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