On Thursday [13 March 2025], the Wall Street Journal, of all media outlets, published a piece relaying the growing concerns of American business leaders over Trump’s economic policies and the direction they are taking the economy. Predictably, Trump threw a tantrum on social media replete with name-calling, and among the epithets hurled at the Journal was this nugget: “Their (WSJ!) thinking is antiquated and weak.” It is awfully rich to see Trump call the Wall Street Journal’s promotion of free trade economic policies as “antiquated,” especially when his own economic policies are ripped right out of the 18th century.
In the 18th century, most Western European economies were characterized by what is known as Mercantilism. Mercantilism is an economic system that was distinguished by the notion that trade and economic prosperity is a zero-sum game. Fundamentally at odds with the belief so recently held by Republicans that in a Laissez Faire economic system “all boats will rise,” Mercantilism focused on the idea that there was only so much wealth to go around, and each country or nation had to grab for itself as much as it could get. 18th century Mercantilist states frequently levied high tariffs against the importation of goods into their countries. They sought to maximize their own exports and minimize imports, obsessing over what they saw as a “favorable balance of trade,” and building monetary reserves. These Mercantilist states often hoarded gold and silver, and sought to accumulate resources, both natural and manufactured.
This sounds exactly like the system Trump seeks to establish. He obsesses over America’s balance of trade and the idea that we are importing more than we export. He recently celebrated the “amount of revenue” we are reaping through his tariffs, and claims that, if we are not extracting more value than other countries out of our foreign trade, they are “winning” and we are “losing.” These sound like reasonable economic policies, right? Sure, except for the fact that Mercantilism is a largely discredited economic system, and even if it wasn’t, Trump isn’t even following it correctly, to boot! For one, the protective tariffs of a Mercantilist system only work if the government subsidizes and provides extra support and incentive to domestic manufacturing and industries where tariffs are being levied against their foreign counterparts. I explain here how badly Trump is misusing and fundamentally misunderstands tariffs, but if all you are going to do is levy 50% tariffs on foreign imports without providing support to the domestic production of those same goods, the only thing you are doing is raising prices for consumers. Any revenue generated from those tariffs is simply being added to government reserves and hoarded by the Trump Administration and its cronies.
More concerning, though, are the many problems associated with Mercantilism. Government intervention in a Mercantilist economy was very heavy-handed in the 18th century. The many trade restrictions inevitably led to the establishment of monopolies and subsequent rise in consumer prices. Britain’s East India Company (yes, the same East India Company that played a key role in the Boston Tea Party) was the multinational mega-corporation of the 18th century. The restrictions on trade led governments to play favorites, to grant de facto monopolies. The stories of these companies in the 18th century are rife with tales of fraud and corruption. But tellingly, these monopolistic tendencies also tamped down or even eliminated competition and significantly stifled innovation. They prioritized short-term gain over long-term growth. And they also served to accumulate resources in fewer and fewer hands, and this is where many of the most chilling effects of Mercantilism lead.
Comment: This is a short extract from an article by an unnamed historian writing under the pen name of Peter Porcupine. He’s a recent, but prolific writer for Daily Kos. Besides being a clear and concise explanation of mercantilism, this article struck me, not as much for its description of Trump’s economic and trade policies, but for the head long rush back to the age of empires. And it’s not just the US that’s heading in this direction.
Putin’s Russia has been very emphatic that her near abroad is hers and hers alone. The now independent countries of Eastern and Central Europe is an aberration. They should either return to Mother Russia or acquiesce to her influence. I viewed Russia’s foray into Syria to be appropriate and welcome at the time to counter the immediate threat of ISIS. It flew in the face of our imperialistic “Assad Must Go” policy, but it was a prudent and wise policy until Russia either got tired of it or, more likely, became unable to continue the intervention. But now she’s getting rather froggy in Africa with her now expanded Africa Corps. The Africa Corps does harken back to the days of the British East India Company.
I think China views everyone as a competitor, even her “friends without limits” relationship with Russia has serious limits. She is definitely taking advantage of Russia’s current predicament. China also has ambitions beyond just reincorporating Taiwan into a greater China. She is pursuing a military and maritime expansion in spite of internal economic strains. Her investments abroad are legendary and includes port facilities throughout the world. I think the BRI is just part of this.
I would argue that the US has always had an expansionist and imperialist streak as early as the days of manifest destiny and the Monroe Doctrine. Monroe, by the way, was especially desirous of Canada. We became an empire almost by accident with the Spanish-American War. Our forays in Central America on behalf of the United Fruit Company was blatantly imperialistic and mercantilistic as Smedley Butler spelled out in his “War is a Racket” in 1935. Then, after WWII, we were the last country standing and took the mantel of world leadership which we kept since then whether the world wanted it or not.
The old concept of competing empires gave way to peer competitors, but the meaning hasn’t change much. This was addressed in the 2023 JCS paper entitled “Joint Concept for Competing” where strategic competition is the normal state rather than deterrence and warfare. Strategic competition is defined as a persistent and long-term struggle that occurs between two or more adversaries seeking to pursue incompatible interests without necessarily engaging in armed conflict with each other. Strategic competition is an enduring condition to be managed, not a problem to be solved. That sounds very much like the age of empires to me. The only difference is that this concept calls for close cooperation with allies rather than colonies or satellites. NATO was a centerpiece of this concept.
That is now changing with what may become the Trump Doctrine. We intend to go it alone in a competitive world. NATO and the Europeans may no longer be seen as allies, but only as economic competitors. We have become expansionist in outlook seeking to claim Canada as our 51st state, Greenland as maybe the 52nd and to reclaim the Panama Canal Zone as our own. China seems to be the reason why Trump believes we have to own Greenland and the Canal Zone. The real reason he wants Canada still eludes me. Fentanyl is an absolute bullshit reason and we already dominate Canada economically.
Another sign of a return to the age of empires is the shifting alliances among the empires. In the past, empires sought temporary alliances with other empires if only to keep other empires from gaining too much power or too big an advantage. Even fairly recently our policy was to ensure that Russia and China would not become too cozy. That idea may still be lurking in Trump’s mind, but the strategy has changed. Since he no longer views NATO as an alliance worth investing in and an independent Ukraine definitely as not something worth supporting or investing in, he sees no reason not to buddy up with Putin. His desires for Canada and Greenland are fully compatible with Putin’s desires for Ukraine. Why not be buddies? they’re cut from the same avaricious cloth.
TTG
Obviously nobody wants higher prices. On the other hand, low prices on lots of goods causes other problems, mainly environmental and exploitation of people. Also the inability to repair goods at a reasonable cost. It’s by and large cheaper to just buy a new widget these days than repair it which was not always the case.
For these reasons tariffs could be a good thing by default but as you stated TTG, it can’t happen without fully supporting domestic industries and propping them up. And not monopoly ones that mainly focus on efficiency. Only industries that want to innovate and make higher quality goods.
I’m in the market for a hot water heater right now. These things use to last a long time. Not anymore. The average last about 10-12 years from what I read. Total nonsense. It’s really a breaking windows economy in that regard.
Trump is certainly using tariffs rather inelegantly, but the discomfort with Empire is a a product of sensibilities were inculcated with progressive fervor throughout the 20th century, even as informal mechanisms of empire (exploitation of emerging markets through globalization) and the use of force with liberal justifications (Yugoslavia, 1999 et. al.) proliferated.
What’s irritating is the oscillation between the actual realities of tension, conflict, and contradiction identified in the Western tradition since Heraclitus, and the the moralizing lament we kinda soughta havta do it, but our hearts aren’t in in. We need to either learn the ways of unalloyed dominance or put up and shut up. This wheedling middle ground led to the US promoting the rise of China, destroying European Empires in the third world, and promoting the demographic dissolution of Western societies. In short, the US will be the first empire in history which actively promoted the rise of its replacements. Do we want to rule this planet or not?
The answer for many Westerners is “no, I’d prefer not to. I’d rather fade out than assume moral ‘evil’ of of fighting for my own interests.” The Ukraine bandwagoners are only engaged by the prospect of defending a certain sense of the universal – force and power gain legitimacy only in the context of defending political infrastructure which facilitates the application of universal principles.
The realistic, unsentimental societies in the rising third world don’t have this malfunction. The difference between Chinese elites and US/EU elites is that the Chinese elites aren’t thrown into cognitive dissonance by the realities of strategic competition, warfare, and zero-sum interests. Since they are more integrated, more coherent, more aligned with the historical mindset of the West (which contributed to Western dominance), they are likely to prevail – unless we remove our ruling class of soft gerontocrats, cut the pensions of the old the sick, implement mass remigration, and invest in the vigor of youth.
Speaking of gerontocrats:
Trump will be 79 in June. Putin is 72.
TTG: “Putin’s Russia has been very emphatic that her near abroad is hers and hers alone.”
In my opinion that is only have right. Russia doesn’t see its “near abroad is hers” so much as it insists that its near abroad is not the playground of anyone else.
Think of it as a Russian equivalent of the Monroe Doctrine, as articulated by Monroe rather than the butchered and truncated version that everyone now thinks when they discuss it.
Because this is seldom mentioned nowadays: The Monroe Doctrine had two parts to it.
It said that foreign Great Powers would not be allowed to shit in the USA’s backyard, and in return Uncle Sam wouldn’t go abroad and crap in their backyards.
The Russia of the early 21st century is the same: don’t shit in our backyard, and we won’t drop turds in yours.
Seems a reasonable proposition to me.
Yeah, Right,
All those Central and East European countries are independent countries capable of making their own political and economic alliances. The countries of Central and South America are also independent countries capable of making their own political and economic alliances. James Monroe had no inherent right to dictate how our southern neighbors carry out their foreign policies just as Russia has no right to dictate to her neighbors. They can cut off military, political and economic ties, but neither the US nor Russia has a right to invade their neighbors. Both have done so, but they had no right to do so.
TTG,
Who created these rights and wrongs you speak of? Where are they written? In the sky? You – or the Jesuits – just made up that moral code, and it’s a weak one that no one else respects.
You like USAID type “soft power” though, which amounts to a soft invasion. Always nice to be able to fool yourself by sugar coating your actions, I guess.
All those natives, banana republics, small countries, etc would attack each other, without remorse, if they were not colonies of some empire.
John Winthrop (above) has clear vision in his comment.
“Where are they written? In the sky?”
In the Treaty of Wesphalia, Eric.
Sorry: Westphalia
I’d like to note that the “Monroe Doctrine” and its ilk are not necessarily inconsistent with the Treaty of Westphalia.
As in: the core tenant of the Monroe Doctrine is that the USA reserves the right to step in IF another great power attempts shenanigans in the western hemisphere.
Absent that foreign (and therefore decidely non-Westphanian) interference in the USA’s “near abroad” then the Monroe Doctrine says nothing about any US bullying in Central or South America.
Or, in short: “Don’t piss in my playground” is actually a very Westphanian concept, if you squint hard enough.
Eric Newhill,
I thought of you when I first read John Winthrop’s comment. And I agree it is an excellent comment and offers a clear vision. It’s a vision of Kipling’s “The White Man’s Burden,” but rather than the self-deceiving reason of civilizing the savages, we do it now to keep the savages at bay. The honesty is refreshing, but I don’t know if he’s calling for white nationalist breeding farms or not with his call to “invest in the vigor of youth.”
As Kipling describes it, Christianity is the excuse for imperialism and colonialism. Further back, even the Jesuits were instrumental to spreading the rule of empires. The new Jesuits have turned to “Woke” Jesus of the New Testament and Pope Francis. None of that is compatible with imperialism and colonialism. USAID programs of feeding the poor and caring for the sick fit into the new Jesuit paradigm. Info ops programs like VOA and RFE are probably not.
I don’t see any evidence that China views trade as a zero-sum game.
I don’t see China as the reason that Trump wants Greenland. Greenland book ends Alaska and would allow us to pen in Russia. China isn’t anywhere close to Greenland, but they are a good fodder to channel our need to go on crusades. If a Chinese businessman opens a dumpling stand, Gordon Chang and a host of other Neocons will bellow, ‘the Chinese Communist Party is taking over Greenland’.
Christian J Chuba,
I’ll defer to you as to whether China see’s world trade as a zero-sum game or not. I know very little about economics and especially economics at that level. China does seem to be extending her reach in the world through economic competition. It’s a far better approach than purely military competition.
China is pushing her Ice Silk Road through Arctic sea routes and is teaming with Russia to do so. It’s an alternate route to Europe. China has bid on constructing airports in Greenland, but has since withdrawn those bids. I thought I remember Trump mentioning China in his excuses for wanting to own Greenland, something about Chinese subs coming through the Arctic.
I have to add that building more bases in Alaska should assuage any concerns about Chinese subs coming through the Arctic Ocean without the hassle of trying to take over Greenland.
Or working “with” Canada and Denmark to lease Navy Sonar facilities (or Joint facilities) in Nunavut and Greenland. Kind of like what we did with the DEW Line and Pituffik.
TTG,,,,Came back,,saw this,,,,took a read on your comments…they cannot be denied…and it all gos back to the motivator Being IMPERIALISM,,,,,At Col Lang Had Always,,They ALL Have Imperialist Mind Sets..especially in Regards To Putins Imperial Platform,,Good Read,,Be Well
Jim
For what it matters – about a trillionth and that’s overstating it – a bombshell week for the hilltop.
Actually the hilltop’s much the same as it’s been for the past few millennia but a bombshell week for its current occupant. The week the occupant finally gave up on the foreign policy of the new US administration.
The Signal chat transcript. The Beltway hawks the same as in Biden’s time. If it moves bomb it, the motto for them as ever. The nonsensical Ukrainian “negotiations”. All that. When it comes to foreign policy the United States of America now gets filed in the same folder as the EU, HMG and the Berlin mob. It gets moved from the “Could be promising!” folder to the folder marked bleakly “Losers”. And by the looks of it will remain in that folder for the foreseeable future.
So sad times on the hilltop. My pig didn’t fly. Something of a bombshell for the world outside the hilltop too. Dr Rob Campbell kicks off with a summary of a week more event filled than normal. I liked the cats. ZH looks at the NYT article. “Simplicius” points out tartly that the NYT article tells us nothing we didn’t already know. And Arestovitch warns us the the ultras are still after nuclear catastrophe.
https://robcampbell.substack.com/p/ukraine-weekly-update-aa5
https://www.zerohedge.com/geopolitical/key-takeaways-nyts-secret-history-us-shocking-level-involvement-ukraine-war
https://simplicius76.substack.com/p/secret-history-bombshell-nyt-report
From the top item, the mention of NPP sabotage. “According to Aleksey Arestovich, advisor to Z when he was great, Kirill Budanov (Director of intelligence and terrorist) wants to blow up Ukrainian and Russian NPPs if the tide turns against Ukraine. According to Arestovich, Budanov said: ‘We all bite the dust, but so will they’.” But attacking NPP’s and then blaming it on the Russians has been in the playbook for a while now. Partly, I’m ashamed to say, Brit inspired.
The NYT article is mostly spin by the way. Taking such facts as cannot be denied, putting the best possible slant on them, and hoping that the bad stuff remains swept under the carpet. The Beltway’s good at that. It usually works.
…………………………
On tariffs, everyone is talking as if they’re something never heard of before. As if. Tariffs are one of the main tools of international trade policy. They get called different names usually. But there are any number of deliberate blocks on the unimpeded movement of goods and services from one country to another. In imposing tariffs and calling them such Trump’s just going in the front door while everyone else is slinking in through the back.
TTG,
I’ve read that both Japan and China pursue economic strategies that are a mix of mercantilism and neoliberalism. Supposedly China sends their best and brightest to study economics at Japanese universities because they think US economic departments are rubbish.
How Asia Works by Joe Studwell describes this hybrid strategy pretty well.
Off topic –
France’s Le Pen and members of her Rassemblement National party convicted of embezzling four million Euros. She’ll now be banned from running for office for five years.
Putin probably is gnashing his teeth for investing all that time and money and propaganda for her and her party.
Yes…Diplomacy,,,Has Become Brutish…and Crude ..especially in Hillarys Time At State..and now,,,The Long carry over,,,I Suggest …If the Current Administration..Wants A Better Road Ahead….Not a Chinese One…..They Are Capable of Following The Example…Of The IMPERIALIST Themselfs..Historically..
With Dinners..World Leaders..and Staff..Negotations..and Peaceful Resolution..
The Current Administration Is More Qualified For Such Type Events That Usual..
Jim
jim ticehurst,
The diplomacy of the imperialists has always been brutish and crude. It usually came about on the point of the bayonet.