Mercantilism Is a Bankrupt Theory

1. Mercantilism is a bankrupt theory that has no place in the modern world. Discuss. A. In its purest sense, mercantilism is a bankrupt theory that has no place in the modern world. The principle tenant of mercantilism is that a country should maintain a trade surplus, even if that means that imports are limited by government intervention. This policy is bankrupt for at least two reasons. First, it is inconsistent with the general notion of globalization, which is becoming more and more prevalent in the world. A policy of mercantilism will anger potential trade partners because it will exclude their goods from free access to the mercantilist country's markets. Eventually, a country will find it difficult to export if it imposes oppressive quotas and tariffs on its imports. Second, mercantilism is bankrupt because it hurts the consumers in the mercantilist country. 2. Is free trade fair? Discuss A. Statistically, free trade is the best choice if you want to increase your countries GDP (gross domestic product). By opening up your markets, you can increase the amount of trade and investment, and according to the official statistics, you can cause massive economic growth to occur in your country. 3. Unions in developed nations often oppose imports from low-wage countries and advocate trade barriers to protect jobs from what they often characterize as “unfair” import competition. Is such competition “unfair”? Do you think that this argument is in the best interests of (a) the unions, (b) the people they represent, and/or (c) the country as a whole?