We are all mercantilists now

For example, if trade imbalances were so bad, we should sink any ship that comes into the US as this reduces trade imbalances (absurd example from Bastiat btw).

We all understand that for most of human history, everyone lived at a subsistence level because we all had to farm our food, bake our bread, sew our clothes, build our own houses, etc.

Specialization is what makes the luxury and wealth of the modern world possible: you do one thing all day long and convert it to cash, then exchange value with people who do other stuff to get what you want. And since they're operating at scale, they can build more houses, make more stuff, etc. that you ever can if you did it yourself. So, you pay less for more stuff.

International trade simply takes it to the next level. For instance, the average American will not bend over to pick cocoa beans for chocolate for even $100k/yr. Many of you will argue, but all I'll say to you is that there's a reason agricultural work is referred to as back-breaking work. There's also a reason why farmers have the highest rate of suicides. Even if the American eventually agrees to do it, the cost will be so prohibitive that buying chocolate will be out-of-reach for everyone but the rich. Abundance ended; the end.

Now, using tariffs, the US gov. wants to take money away from customers and use it to prop up inefficient businesses that should be outsourced to other places that can do it well.

If the CCP wants to subsidize solar panels and sell them to you, why not accept free panels funded by diluting the wealth of Chinese workers and savers?

The main argument mercantilists use against free trade is that after establishing a monopoly, incumbents can raise prices. They forget that there's competition, even among solar manufacturers in China and anyone trying to bait and switch would be driven out of business by smaller, hungrier players.

And in this example, PV lasts 40-50 years and once you buy it, they can't gouge you.

No country has benefited from free trade like America; no bloc has benefitted like the West. You're mad at China for lifting hundreds of millions from grinding poverty, without realizing that Chinese mass production has cushioned the effect of all the money-printing by Western economies for decades now. Hundreds of millions of Chinese workers going into cities to work in manufacturing are the reason why many middle class workers across the West can afford cheap consumer goods, despite their government's dumb financial decisions.

But, it's okay: we'll see how it plays out.

This is not research; it's an opinion piece by a Bridgewater employee that may prove right in the years to come.

Plus, the rhetoric of differentiating China from the "free world" paints a Big Red Flag over the article's face.

The reality is much more stupid though. Recent policies have been made without any plan to begin with. There is no driving philosophy of "we must create modern mercantilism" and the resulting policies being a coherent plan to bring about that change. Instead actions are being made based on the split second decision making of a moron would lacks the most basic understanding of economics much less mercantilism.

This is a decidedly worse world than one in which the plan is simply a bad one. A bad plan would at least be coherent and something that our allies could predict and make their own plans around. Nevertheless, I think the thesis is broadly correct as being the outcome of recent actions.

China's rise can be attributed to taking advantage of the neoliberal order. Many of their nationalistic successes come through things like currency manipulation, hiding illegal subsidies, intellectual property theft, and using state monopolies to bully other nations and their corporations.

It's a prisoner's dilemma. If everyone copies China's playbook, there is nothing left to take advantage of. We will all be poorer for it.

It cannot be understated that we are getting front row seats to the end of Pax Americana. In a world where countries can no longer enjoy reliable trade for commodities, we are going to revert to a world of imperialist land grabs and violence.

This trade war isn't about righting trade imbalances. It's about the USA exerting leverage over countries that it can get away with. Just like a Mafia Don.

Or to quote a crude summary from Peaky Blinders: "Big $ucks small".

That's the philosophy of the Trump Administration in a nutshell.

This is just a prisoner's dilemma.

> But as countries defected and adopted mercantilist policies, the global system lacked sufficient authority to stop them.

It's not the future. It's now.

There's consequences to mercantilism. For starters, the best products may no longer win. Justifying anything by "best product won due to consumer choice" will be a laughable reason. Justifying respect for founders and CEOs as intelligent or better isn't possible. A successful founder or CEO is just better at sucking up or whatever it takes to be blessed by authority.

There's some consequences to this reversal to conservatism as well. How can any thinking man believe a justification from principles now? They're reversible. Conservatives lose any kind of intellectual high ground, even in retrospect. Are they reasoning from principles now or were they doing it then? Can't tell.

- National corporate champions are protected."

A lot of this is enabled in part by all these capitalists rolling over and submitting.

The WTO was entirely built on the idea that "if you insist on hitting your face that hard, I'll hit my face and then you will see it!"