Germany, the eurozone and mercantilism

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Germany, the eurozone and mercantilism

Of all the mischievous in the world, the mercantilism of the economists is so high that the word is barely mentioned today. One reason is that mercantilism is so widely practiced that any serious discussion of the subject will expose some sort of supercritical profession.

Mercantilism is actually the abbreviation of “merchant capitalism”, which stands for “business or business system”. “Business or business principles” is the title of Adam Smith’s classic “the wealth of nations” chapter 4 of the “wealth of nations” in 1776. The fourth book, which represents the core controversy of Smith’s great work, is a criticism of “classical mercantilism”, which may be called “paradoxical”.

(for Adam Smith, the Dutchman is the mercantilist prototype, and when we see today the workings of the euro zone, any observation about German applies to the Netherlands, if not the same, later named – New Zealand represents the Dutch east India company mercantilist project.)

Mercantilism is a variation on the political economy of capitalism – perhaps better known as commercial political economy-the word “politics” is the most important word, rather than the word “economy”. It represents a major theme of political thought in the UK and Europe in the 16th to 18th century, and today this theme is most prevalent in the commercial and political relations of China.

One of the names I created for mercantilism is “golden mountain economics”, because the central theme of mercantilism is the accumulation of “treasure”, assuming that treasure is equal to wealth. (we can also note that many people today use the word “money” in the way that classical mercantilists might use the word “treasure”; We also note that today’s “investment housing” belongs to the category of “treasure”.

This was due to the mercantilist demand that the europeans looted the americas between these centuries (1500-1800). But over the years, economic growth, emphasis on manufacturing than agriculture, high level of employment (which is actually high utilization), is considered to be accumulated more wealth than other countries the main measure of nationalism. The theory that international trade imbalance is better than equilibrium trade is; Trade surplus is good, trade deficit is poor. The idea permeated the government. A successful government is a government with treasure.

The protestant German (and Dutch) princes always have a reputation for firm mercantilist principles. After the reunification of Germany 150 years ago, Germany became an economic regime strongly committed to the development of competitive mercantilism; Develop resources for the purpose of earning economic power by making money and spending as little as possible.

Mercantilism is often referred to as “economic nationalism” (even “economic imperialism”), although this description led modern economists to regard mercantilism as protectionism; In the process, they have lost much of the modern economic thought that infuses mercantilism.

The central concept of classical and modern mercantilism is that making money is the ultimate goal of economic activity, and consumer spending is considered “unproductive”. A corollary is that inequality is blessed, because the workers help to reduce poverty “non-productive expenditure”, and consumer debt is a “bad”, because it promotes the spending. (ironically, when consumer debt in the consumer, can make the vw and the construction of the golden mountains to countries like Germany, mercantilism is not a coherent prescription, widely applicable, represent a “low-level competition”).

One of the classic ways of modern mercantilism is to run an undervalued exchange rate. While this is the simplest way to distort world trade, for every country that undervalues its currency, the other is overvalued. So this is an effective strategy – for example, China has adopted this strategy – it’s a strategy that will never work. In a world where most of the country’s policymakers are arguing for the economic variant of kingsoft, it is only the mercantilist who has made the most of these undervalued exchange rates.

The eurozone has always been the ideal tool for German mercantilism. By using a single currency in much of Europe, the currency is undervalued in some euro-zone countries and overvalued in other currencies. If the eurozone did not emerge, the euro would be worth less to the dollar than today’s mark world. Similarly today (versus the dollar) the euro is worth more today than a Greek drachma or a Spanish peseta or an Irish parity today.

As a result, the German economy in Europe and in Europe is like a huge vacuum cleaners, near all money and labor to his chest, and financial impoverishment, the neighbor is forced to take deflation policy to deal with. Germany’s growing number of fake plutocrats is matched by Germany’s growing regional hinterland of debt and poor red peaks. The hongfeng, which supports jinshan, can indeed be explained as the ultimate destruction of the mountain’s magma.

In this case, we should be aware of the current Volkswagen scandal. For too many German companies, an undervalued exchange rate is not enough. (of course, German companies are, of course, dedicated to the accumulation of Taylor, which is probably the most notorious golden climber.) The public’s commitment to making money extends to cheating. In fact, vw’s antics may only represent this.

There are two ways to solve this problem. The first part is the change of attitude towards the currency, which must be guided by public debate: a more general debate about the ultimate purpose of economic activity; One is the debate about mercantilist economics, which is based on the rejection of mercantilism.

The second part of the solution – the narrower part of Europe – is the euro zone’s transformation into “Europe’s America”. Even the majority of greeks – on behalf of a country, rather than the gold part of the euro zone – are part of the euro zone. (Greek voters are in favor of withdrawing from the euro zone.) So the process must move forward.

In this regard, an interesting article reviews assembly – our European people, by the laszlo Bruszt and David stark, August 11, 2015 – today is pointed out that the similarities of the euro zone, in the past 20 years of 18 cases in the United States and how to establish the fiscal and political union to solve this problem as a whole. The United States does not stand for equality between its member states – many fiscal powers are consistent with individual countries (for example, compared to the United States and Australia). In today’s America, however, the monetary choking of the southern euro zone is not going to happen.

Mercantilism infuses our economic thinking today. And labor is at least as mercantilist as capitalism. Economics, as intellectual and academic discipline, is based on rejection of mercantilism. Economists should take the lead by re-examining the intellectual foundations of disciplines, and we need to broaden that discussion. Economics – whether it is capitalism or Labour or whatever – is at the heart of the knowledge base of market society.

At the same time, as we do this debate, we should stop treating countries like Germany as a successful economy that everyone can and should emulate. For olympians, the MPF attempt makes a lot of sense. Most of the athletes certainly failed. We should stop thinking about economic success through sports metaphors like “competitiveness”. At the Olympics, most of the participants were losers, and some of the winners were crooks. It cannot be greater than the economic vision of a prosperous and sustainable global market economy without losers.

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