For three centuries "Mercantilism" was the economic law of the lands. But is this discredited economic model really any different than "Globalization" and are both soon to be doomed to the ash pile of history?
On October 12, 1492 Christopher Columbus myopically discovered something that he was never really looking for. Two enormous continents and a sea full of tropical islands where the rich Orient should have been.
Another thing he inadvertently discovered was Mercantilism; an economic system that captivated Europe until want and wasted, the continental powers and the British Empire, collapsed in a heaving pile after two World Wars.
Prior to the end of European Colonialism, the concept that nation states and empires had to have colonies to provide raw materials for manufacturing, and consumers to buy finished goods, predominated the economic thinking. As such-- hegemony to downright possession of colonial areas, was necessary for survival.
However after the Second World War, with only three significant world powers left (The United States, The U.S.S.R. and China) the old battle for markets and raw materials were no longer at issue. Especially for leisure minded Americans in particular-- cheap labor was seemingly the issue, especially as late Twentieth Century labor rates went prohibitively high for economically priced goods.
In 1948 George Orwell saw this very clearly-- so clearly in fact that I feel inclined to quote this section of Chapter Three from his novel "1984" at great length. It's a passage that always haunts me in it prescience...
Chapter III: War is Peace--
Between the frontiers of the super-states, and not permanently in the possession of any of them, there lies a rough quadrilateral with its corners at Tangier, Brazzaville, Darwin, and Hong Kong, containing within it about a fifth of the population of the earth. It is for the possession of these thickly-populated regions, and of the northern ice-cap, that the three powers are constantly struggling. In practice no one power ever controls the whole of the disputed area. Portions of it are constantly changing hands, and it is the chance of seizing this or that fragment by a sudden stroke of treachery that dictates the endless changes of alignment.
All of the disputed territories contain valuable minerals, and some of them yield important vegetable products such as rubber which in colder climates it is necessary to synthesize by comparatively expensive methods. But above all they contain a bottomless reserve of cheap labour. Whichever power controls equatorial Africa, or the countries of the Middle East, or Southern India, or the Indonesian Archipelago, disposes also of the bodies of scores or hundreds of millions of ill-paid and hard-working coolies. The inhabitants of these areas, reduced more or less openly to the status of slaves, pass continually from conqueror to conqueror, and are expended like so much coal or oil in the race to turn out more armaments, to capture more territory, to control more labour power, to turn out more armaments, to capture more territory, and so on indefinitely.
Now it seems the new post-World Wars/Post Cold War/Post War on Terror world is coming into its own dead-end. Rather than remain "subjugated" the people in the equatorial lands have become sprawling middle-class societies with consumption needs of their own. As if either Mercantilism or Globalism needed a last nail in its coffin-- the last significant commodity as a raw materiel of any leverage was petroleum-- but with U.S. Energy dependence accomplished, and a growing social choke on demand ever widening-- that pendulum is drawing to a slow stop.
What we will see in the future (I feel) is a retreat. We might even call it Neo-feudalism where certain technology "barons" hold sway over their various fiefdoms, and the abbreviated layers of government will be curtailed by what these barons will pay in taxes. There really will be no other alternative.
With labor equalized in price and demand-- commodities like food more localized-- and a social shaming for consumption ever escalating-- the argument for more involved government at any level will be harder to make. And the case for globalism or mercantilism-- even harder to make still.
We are blessed to live in interesting times. Let us hope we are far-seeing like Orwell and not myopic like Columbus.
Four curated pieces on this subject have been selected, that extended from this month back through the past decade. They make for interesting reading. You can check them out at The Sophist Report for Tuesday April 21, 2020.
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