Mercantilist rumblings

From Gavin Kennedy and "Lord Keynes" (not the Lord Keynes).

Both are worth reading. I've argued here before (here and here) that mercantilism gets more criticism than it really deserves. It is treated as synonymous with protectionism, which it really wasn't. What it was was an early monetary disequilibrium theory. "Lord Keynes" doesn't go over the monetary stuff in his post, but he does frame protectionism as a boost to effective demand, with attendant second order problems (he cites Peter Temin - not a no-name - he's a very well regarded economic historian). So protectionism creeped into the mercantilist writings, but it was not the centerpiece. The first link I provide above to things I've written on mercantilism gives more detail on that. The Gavin Kennedy link is somewhat less satisfying - it make the old Ha-Joon Chang argument that protectionism is good for developing states. In a very narrow Alexander Hamilton/New Trade Theory sense this may be true. But as Paul Krugman has pointed out, that's a dangerous game to play. I would not defend mercantilists on these grounds, although I think there's probably something to a very targeted infant industry argument (particularly if you're doing a revenue tariff anyway).