14 July 2009

Mercantalism Revisited

Mercantalism, which involves active government involvement in trade to promote certain kinds of economic activity, is back in fashion. Having recently reviewed the history of almost every modern financial panic in the world, many pre-Great Depression, I am inclined to believe that there is merit to this position. The historical evidence that mercantalism was a positive force for economic development is quite a bit stronger than free market economic theory would suggest.

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