For the past three years, nearly every government behavior and policy change has been tied to one key concept: Mercantilism. Now's a good time to revisit what Mercantilism really means.
Textbook definition: Mercantilism emphasizes the importance of a favorable balance of trade and strong government control over economic activities to boost national power and wealth.
Feudalism…
Historically, Mercantilism emerged after Feudalism's collapse and became less prominent with the rise of global trade. However, it's now resurging as globalized economies struggle to stay cooperative while globalism wanes.
2- Don’t Use The M-Word
Mainstream media avoids the term Mercantilism because it wrongly suggests Bullionism1. But we've discussed it openly and objectively here. To that point, our January 2022 piece declaring Mercantilism's return and other articles are linked at bottom
3- What is Mercantilism?
Mercantilism is a trade philosophy allowing global trade in a less cooperative world. It arose as nation-states formed post-Rome's fall. Europe, once divided into isolated local economies under Feudalism, started changing in the 15th century.
However, beginning in the fifteenth and sixteenth centuries, forces came into play that began to reverse this. Kings and princes were determined to concentrate power in their own hands as “absolute” rulers, which meant reducing the power at the local and regional levels.
Mercantilism developed in the emerging nation-states under the kings, especially in France, Spain and Great Britain, as a set of economic tools to assist in bringing about the centralisation of political power and control.
Thus, Mercantilism is the name given to a system of trade where trust between trade partners is greater than what Feudalism’s collapse (little trust) was, but less than under Globalism.
As such it is considered a transitional economic ideology2.
Mercantilism…
Mercantilism is an approach to commerce that, as a result of the above, understands by necessity sometimes the whole is not greater than the sum of the parts.
Mercantilism and gold are often demonized due to Europe's colonial past. However, blaming gold for historical mistakes by humanity is misguided. Gold is a pet rock, as many are fond of referring to it. The problem isn't Gold or Trump- tariffs of protectionism. The problem is the people who break the promises that necessitate protectionist policies.
Neokeyensians dislike Mercantilism and view it as shortsighted and a regression from Globalism. They are wrong. Mercantilism was a manifestation of trust growing as Feudal times ended. Mercantilism was a step up after the collapse of another globalized economy and ended in feudalism.. Mercantilism is currently a fall-back as Globalism recedes again.
Specifically, Mercantilism in its current resurgence, is a response to shrinking globalism now. In the past, it was Capitalism’s training wheels out of Feudalism’s collapse (no trust) and into globalism (complete trust)
Back then, it was a stepping stone to Globalism. Right now it is all that stands between the world risking World War and a possible neo-feudalistic state. It is an economic line in the sand for nations who wish to exist while hopefully working problems out with unhappy global neighbors.
7- The mBridge Payment Chain
The collapse of global trust has led to closer-to-home supply chains, known as on-shoring and friend-shoring. However, payment chains, like SWIFT and mBridge, are also crucial. mBridge, built by the BRICS, serves as a regional alternative to SWIFT, essential under mercantilist economics.
Recall that payment chains mirror supply chains. The world is retooling supply chains and payment chains simultaneously.
Lacking their own independent payment chains, the BRICS would not be able to execute regional commodity trade without involving the West and the dollar. Thus mBridge was created. The mBridge platform is simply a friendshored payment chain needed for mercantile economics.
Gold remains the preferred payment chain money, universally accepted across both platforms. Gold keeps the peace, even if the press will not admit it.
