Modern education system has taught Mercantilism was bad, but now it seems it is not true

Modern education system has taught mercantilism is bad, but now it seems it is not true
In my classes, I have been taught that Mercantilism has been really really bad. It was a policy which would make everyone worse off. The idea was based on the fact that toooooo much hording of wealth by an individual countries will only create a devastating level of increase in price....

Basically, all our modern economic knowledge comes from England soon after their great industrial revolution. Being the only country in the whole wide world that had machines providing or producing goods compared to others which was done by men, the Great Britain was able to out compete alllllll other nations.... They started exporting everything to other nations at a cheaper price and obviously, outcompeted all other nations who used men. This brought more gold into England, thus, in the long run, all that gold within England itself made everything more expensive.... as everyone was much much much wealthier....
An extreme inflation proceeded thus creating a bad bad outcome ....

Thus the idea of Mercantilism being bad as when one country starts hording too much gold, it becomes unsustainable within. Begger thy neighbor is the term used to describe this term. Export all your goods, never import anything and horde all their gold in return....but we know that creates high high unsustanable inflation.........

Thus mercantilism so far has been taught to be very bad.


But in our modern age, all countries are based on a paper currency, unlike gold. Currencies are backed by the country's economic performance/ or the perception of the country's performance. If one feels that this country will fail, then there will

But unlike the past, where everything was based on gold, we are now living in a paper currency system....

Thus the ancient idea of mercantilism no longer is valid in our modern world..... We have countries in the world like China where their economic model is only based on exports and compeltely limiting imports... If China was doing this on the past, they would have accumulated too much gold, thus increasing inflation within their own country...... But due to our modern monetary system, countries like China can artificially, hide this inflation by purposely bringing their currency down, despite the fact that it should appreciate. (by printing more money)

So basically, they are being a mercantilist without the "highly detrimental side effects"..... So I don't mind the US currency being also devalued in following the Chinese footsteps....

By devaluing the US dollar in comparison to the rest, we also can "rip off"? other countries as well........

That seems really over-generalized.

Every system of economics or policy would have pros and cons. Strengths and weaknesses.

Whether you choose Marxism or Mercantilsm it matters not. If it can fail, it will.

There are many Schools of Economic Thought, and each has it's own ups and downs.

Our modern education system also exhibits that dichotomy. There are many glaring weaknesses.

any thoughts?????

Let me name some stupid/(honest) countries in the world right now..... I can only name two...

It is Japan and Germany.

These two countries are the biggest exporters in the world. Their economic model after WWII has been to export their highly prized goods to the rest of the world... Indeed, they do make superior products which are highly prized.... But here is where I find them stupid? or Too honest? or I donno......

Considering that they are the top 3 biggest EXPORTING nations, why are their currencies one of the highest in the world???

What is the point of having an exporting based economy when your currencies are the highest/most valued in the world??????

Are these countries being stupid or are they being fair???

For instance, Japan is the second richest country in the world.... they export everything. But if you are a Japanese living in Japan, everything is oh sooooo soooo sooo expensive...

I was in Tokyo airport. I wanted Mcdonalds. Oh wow, a burger that would belong in a dollar menu in the US was 4 dollars!!!!!!!!!!!!!!!!!!!

It was so expensive that I only had the burger.

Originally posted by muzzleflash
That seems really over-generalized.

Every system of economics or policy would have pros and cons. Strengths and weaknesses.

Whether you choose Marxism or Mercantilsm it matters not. If it can fail, it will.

There are many Schools of Economic Thought, and each has it's own ups and downs.

Our modern education system also exhibits that dichotomy. There are many glaring weaknesses.

I have no clue what you are talking about...

So we live in a really new territory...
We live within a new economic model where instead of having gold as a standard of exchange, we have paper currency has a means of exchange....

Paper currency of exchange unlike gold has different dimensions... Unlike gold with may be stable due to its scarcity, paper currency is not scarce.

Paper currency is only backed by the perceived security of the nation itself.

We now see how unstable the Euro actually is.... A currency based on many many nations with different economic models and each within a different economic cycles.....

You know what, the US so far has been a strange ignorant as well.....

US dollar being much relatively lower than the Euro, it is strange that the US hasn't been able to export its good to Europe. I find it strange that despite having a lower currency, the US still manages to be the biggest importer in the world....????

reply to post by saabacura


perhpas its is because the US dollar is the worlds currency/ the worlds gold standard as of yet......