INTERNATIONAL ECONOMICS

In any event, mercantilists advocated strict government control of all economic activity and preached economic nationalism because they believed that a nation could gain in trade only at the expense of other nations (i.e., trade was a zero-sum game). These views are important for two reasons. First, the ideas of Adam Smith, David Ricardo, and other classical economists can best be understood if they are regarded as reactions to the mercantilists’ views on trade and on the role of the government. Second, today there seems to be a resurgence of neo-mercantilism, as nations plagued by high levels of unemployment seek to restrict imports in an effort to stimulate domestic production and employment (this is examined in detail in Chapter 9). In fact, aside from England during the period 1815–1914, no Western nation has ever been completely free of mercantilist ideas (see Case Study 2-2).