posted on Jan, 3 2011 @ 03:45 AM
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
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
edit on 3-1-2011 by saabacura because: (no