X damn Case Study 1 (1).pdf X on Case Study 2.pdf X + G File | C:/Users/Savani/Downloads/Case%20Study%202.pdf Erase 1 of 1 Q + | [ Page view | A Read aloud | Add text| Draw Highlight Case Study Mercantilism: Older Than Smith-and Alive Today Mercantilism was the philosophy that guided fewer imports turns social priorities upside down. European thinking about international trade in the Here are the key points that refute mercantilist several centuries before Adam Smith published his thinking: Wealth of Nations in 1776. Mer antilists viewed inter- national trade as a source of major benefits to a na- National well-being is based on the ability to con- tion, Merchants engaged in trade, especi y those sume products (and other "goods" such as leisure selling exports. were good-her and a clean environment) now and in the future. Mism, But mercantilists also m ained that govern- Imports are part of the expanding national con- ment regulation of trade was necessary to provide sumption that a nation seeks, not an evil to be the largest national benefits. Trade merchants would suppressed. serve their own interests and not the national interest, The importance of national production and in the absence of government guidance, exports is only Indirect: They provide the A central belief of mercantilism was that national income to buy products to consume. Exports are well-being or wealth was based on national holdings not desirable on their own; rather, exports are of gold and silver (specie or bullion). Given this view useful because they pay for imports of national wealth, exports were viewed as good and Trade freely transacted between countries goner- Imports (except for raw materials duced at ally leads to gains for all countries-trade is a home) were seen as bad. If a country sells (exports) positive-sum activity. more to foreign buyers than the foreigners sell to the country (the country's imports). then the foreigners In addition, even the goal of acquiring gold and silver have to pay for the excess of their purchases by ship- can be self-defeating if this acquisition expands the ping gold and silver to the country. The gain in gold domestic money supply and leads to domestic infly- and silver increases the country's -being, accord- cion of product prices-an argument first expounded ing to the mercantilist belief. Imp sirable by David Hume even be fore Smith did his writing. because they reduce the country's ability to accumu Although the propositions of the mercantilists late these precious metals. Imp ors were also feared have been refuted, and countries no longer focus on because they might not be available to the country in piling up gold and sliver, mercantilist thinking is very time of war. In addition, gold and silver accruing to much alive today. It now has a sharp focus on the national rulers could be especially valuable in employment. Neo-mercantilists belleve that exports helping to maintain a large military for the country. are good because they create jobs in the country Based on mercantilist thinking. governments (1) Imports are bad because they take jobs from imposed an array of taxes and prohibitions designed the country and give them to foreigners. Neo- to limit Imports and (2) subsidized and encouraged mercantilists continue to depict trade as a zero-sum exports. activity. There is no recognition that trade can bring Because of its peculiar emphasis on gold and gains to all countries (including mutual gains in silver, mercantilism viewed trade as a zero-sum employment as prosperity rises throughout the activity-one country's gains come at the expense of world). Mercantilist thinking, though misguided, still some other countries, since a surplus in international pervades discussions of international trade In coun- trade for one country must be a deficit for some tries all over the world, other(s). The focus on promoting exports and limiting imports also provided major benefits for domestic DISCUSSION QUESTION producer interests (in both exporting and import. Proponents of national competitiveness focus on competing industries) whether our country is winning the battle for global Adam Smith and economists after him pointed market share in an industry. Is this a kind of mercan- but that the mercantilists' push for more exports and tilist thinking? Why or why not? 11:12 AM 8 ~ TO ENG 10/9/2022 O Type here to search 799+