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Neomercantilism


Neomercantilism is an economically nationalist trade policy regime based on classical mercantilism. It is predicated on the notion that what naturally evolves, and survives the test of time, is inherently robust and practically beneficial: what has worked, will work. It is observed that mercantile policies have been employed since at least the 1300s in England under King Edward III, and 1250s in Venice, and continued in various forms until the era of decolonization in the middle of the twentieth century. During this time they were the policy choices that were active, and likely contributed to the Dutch Golden Age and Britain's Industrial Revolution.

As in classical mercantilism, neomercantilism is concerned with enriching and empowering the nation, and the state, to the maximum possible degree. This is done by acquiring and retaining as much economic activity within the nation's borders as possible. Of particular importance are ensuring economic independence in manufacturing and advanced industries, or those with military or national security applications (such as food or energy supplies). Achieving economic autarky is an element of neomercantilism.

This is done through encouraging exports of technologically advanced or manufactured products, while encouraging the import of raw materials. This is designed to artificially elevate the nation's production by producing both for their own, and their trading partner's consumption. This maintains artificially high employment and economic activity, which reduces the welfare burden on government. Theoretically, it aims to provide high economic growth with a small government and low tax obligations.

As feudalism became incapable of regulating the new methods of production and distribution, mercantilism emerged as a system for managing economic growth through international trade. It was a form of merchant capitalism relying on protectionism. It was developed in the sixteenth century by the European nation-states to enrich their own countries by encouraging exports and limiting imports. In modern terms, the intention was to achieve a "favorable" balance of trade.


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