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Theories Of Mercantilism

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Mercantilist View of International Political Economy The theory of mercantilism is a traditional approach to the study of international political economy. Although this view was coined in the 16th and 17th century, the philosophies of mercantilism are still updating foreign economic policy around the world today. The nation state is the main priority of this perspective of international political economy (IPE) and it contains a multitude of different sets of concepts and principles. The term of mercantilism was only completed amended after Adam Smith used the word to label his academic rivals. Smith used the term to describe the common standpoints of a system of political economy. Mercantilism was the first theory of IPE to be adapted in …show more content…

This view looks at the international political economy (IPE) in terms of how dissimilar social classes are formed by the dominant economic structure. Structuralists put emphasis on the idea that markets have never existed in a social vacuum; the combination of political entities, economic and social forces preserves, regulates and established markets. The structuralist perspective believes that the state must guarantee long term economic growth rather than short term constancy. The international division of labour is the centre of analysis in this view. The developed countries outputs in all sectors are correspondingly higher, unlike the lesser developed countries, where the key export sectors are relatively exceedingly productive due to having a strong labour union, first-hand power in trade sectors and the existence of big clusters of people out of the market who live at subsistence level. The wealth is hence focused on a small group of people who mainly spend the money earned on foreign luxury goods. This dual nature leads to a structural problem; the decline of developing countries trade and division of labour benefit the developed …show more content…

The South serves as a foundation of raw materials for the North; it also lacks the correct forms of technology, is politically insecure, economies divided and are dependent on the North for prime product exports. As the South has an extreme lack of control regarding exports and imports, they have to submit to the imperialist system that the North imposes. The North hence is constantly active in terms of industrial development and economic development whilst the South symbolizes previously colonized

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