Hello everyone, my name is Martin Blyth and I am the Director of the Rhodes Centre for International Economics and Finance at the Watson Institute at Brown University. And today I'm very happy to welcome a great scholar and dear friend, Eric Holliner, who is a Professor of Political Science at the University of Waterloo in Canada. to come and talk to us about his wonderful new book, his big book, but really great read, The Neo-Mercantilus, A Global Intellectual History. A couple of words about Eric. I've known his work and Eric himself for a very long time.
I still assign his first book, States and the Reemergence of Global Finance, almost every other year. He's also written on states and national money. He wrote a great book about the financial crisis and how nothing really changes.
And now he's... taking his interest in intellectual history in new directions. The Near McCandless is actually a kind of a side project to another main project as well, which perhaps Eric will talk about when we get to the Q&A.
Now, speaking of that, the housekeeping on this, everyone knows how this works out. If you're inside this on Zoom at Brown, then please put your questions into the Q&A and or the chat. And then when we get to that, I'll be able to call on you and you can unmute and ask questions, which is always good.
If you're watching this outside the round community on YouTube Live, put your questions in the comments box. We've got someone scraping from there. They'll put them into the chat and I can ask those questions that way.
And without further ado, I think I've covered the basis. Eric is going to take over. Welcome, Eric.
Great. Thanks so much, Mark. And thanks so much for the invitation.
I'm sorry I can't be there in person to see you, but great that the technology lets this happen. Let me just share my screen here and make sure this is working. So, Marcus, yes, I take about 30 minutes or so to provide an overview of the book. I'm very happy to do that.
And so this is what I'm going to try to cover is I'm going to, first of all, address the question of why we need to study the history of neomercantilist thought, which I'm going to make a case there. I think it's particularly relevant at the current moment. And yet we lack good histories of this ideology.
Then a very brief moment about what exactly I'm talking about with neomercantilist. phrase that has a lot of different meanings to different people. I'll try to clarify my understanding of it.
And then say briefly what the common view of the history of this ideology is, although it hasn't received extensive treatment, there is treatment in almost every international political economy textbook. And I'm going to then go on to explain the limitations of that view. I really think that view, which I should emphasize right away, is a view that I used to have a common view, but which I now think is quite...
inadequate. And then I'm going to try to highlight the importance of this in the case of China and finish up with why the Chinese case matters and then sum up with five key takeaways. So let me just go with this first question about why to study the history of Neomarchangelist science. So it's long recognized in textbooks in IPE or GPE to be one of the most prominent ideologies.
So usually alongside Marxism and economic liberalism. So just to take the example here of Gilpin's famous book from 1987 that many people used for a long time. His chapter two is called Three Ideologies of Political Economy. And it was laying those out, Marxism, economic liberalism, and what I'm calling neomercantilism. Now, this word neomercantilism is given different labels by different people.
So Gilpin himself called it economic nationalism. Some other people call it statism. Sometimes it's called developmentalism. Sometimes it's called developmental statism. Sometimes status developmentalism.
Lots of different labels. I think neomercantilism is the is the best label for reasons I don't have time to go into, but you can read my discussion of that right at the start of the book. So the point is that this ideology is becoming increasingly prominent in the current age. We're living in an age where free trade ideology is increasingly criticized. It's criticized from a number of angles, but the neomercantilist angle is, I think, one of the more prominent angles by which free trade is being criticized today.
And really, I'm We see this, in fact, I would argue, in the two dominant powers of the system. So on the American side, Trump, of course, was very much in a neomercantilist mindset. And I think the Biden administration has continued on with some of that. And on the Chinese side, Xi Jinping is very much pursuing a neomercantilist policies, but also a neomercantilist mindset, I would say. And it's not just in the US and China.
It's elsewhere as well. In the country where I work, in Canada, there's growing interest in ideas of industrial policy, state-led industrial policy. And this is true in Europe, it's true in Latin America, true in many parts of the world. Now, what's striking is that we have a very poor understanding of the history of this ideology.
If you go into a library, you can find an enormous number of books about the history of economic liberalism, free trade thought. The same is true of Marxist theories of IPE, all kinds of books about Marxist theories of imperialism, for example. But if you try to find a book on the history of pre-1945, kind of the origins of neomercantilist thought in the same way that you'd find one about classical liberalism or classical Marxist theories of imperialism, it's very difficult to find. You can find books on specific individuals, and I'll come to that in the second list in particular, but kind of an overview of this ideology is absolutely absent.
And I don't know why this is. Like, I actually think it's a very curious thing, as Mark mentioned in his introductory comments, I didn't set out to write this particular book. I'm writing a wider history of ideologies of international political economy and their origins in deep history.
But when it came to understanding Neomar Canisist thought, I suddenly realized there was a big hole and I began to write about it in the way that it's conventionally written about and quickly realized as I read more and more of the original text that that was quite a misleading way of thinking about it. And so I've tried to fill this hole. I have to admit, I found myself thinking about why, you know, why is this a hole in the literature?
Why had nobody written the book, which I've ended up writing? And I don't have a good answer. I think it might be, I speculate about this at the start of the book, it might be that the Cold War, in a sense, encouraged more of a binary debate within political economy, a sense of capitalism versus communism or economic liberalism versus Marxism. And then, you know, and so there just wasn't, it was actually hard to fit.
the numeral cantaloupes into that framing. And then I think when the Cold War ends, you know, we're kind of into this triumph of neoliberalism and the idea that you would go back and try to understand the origins of protectionist, more protectionist ideas just seem kind of, you know, why would you do that? And so those are some possible reasons I don't really know, but that's not my point to try to explain why it hasn't been done, but rather to explain what I have found in trying to do this. So I've set out to try to...
fill this hole. And as I mentioned, it's really been a kind of an unexpected story for me. My own understanding of this ideology was similar to that that's presented in IPE textbooks and in, I would say, most secondary literature.
But I soon realized that this was quite problematic. And I'll argue it's problematic not just historically, but I think for interpreting the current age, including the Trumpian-style neomercantilism and neomercantilism in China. But before describing those arguments, I've got to quickly discuss what I mean by neomercantilism.
So here's the definition I present in the book, which is a belief in the need for strategic trade protectionism and other forms of government economic activism to promote state wealth and power in the post-Smithian age. Now, that definition, if you take the last four words in the post-Smithian age out of it, it's very similar to definitions of mercantilism, the original European mercantilist ideology that Adam Smith criticizes in The Wealth of Nations associated with... people like Colbert, who I have a picture of here on the slide. And that's really the point I'm trying to make is that Smith, you know, is the person who criticizes the mercantilist worldview. And yet, many people, you know, read The Wealth of Nations, and they say, you know, I find it very compelling text.
But I still think that the case for strategic trade predictionism and other forms of government economic activism, with the goal of promoting state power and wealth is a valid goal. And so those become what I describe as the neomercantilists. In other words, they're familiar with the Smithian critique.
In fact, they admire much of the Smithian critique. They just are not fully convinced by it. And they retain their mercantilist commitment to these other goals and policies that I've just outlined above there. So why not call them something else?
Like, for example, some people have asked me, why not just call them protectionists? And that's because, you know, you could be a protectionist of an autarkic. kind, you know, someone who doesn't really want trade at all. And that's not what these people were. The neomercantilists believe in an open world economy.
They just want their state to participate in that open world economy on the basis of much more state management, protectionism, other forms of government economic activism. If you want to contrast this with economic liberalism and Marxism, I think it's important to recognize, first of all, and I've had this comment come up in talks when I'm discussing this, is, you know, aren't there people who are, we describe sometimes as economic liberals, who endorsed ideas of strategic trade protectionism? And that's true.
John Stuart Mill, for example, has one famous passage in his Principles of a Political Economy where he endorses an infant industry kind of case. And similarly with Marxists, you can find some Marxists who believe in the need for strategic trade protections and other forms of government economic activism. My point is not that there's not some overlap, there's all kinds of overlap, but that the key priority for each of these ideologies is distinctive. So the key priority I identify for economic liberals is a belief in free trade and generally free markets with the goal of promoting individual freedom and global prosperity and international peace, I would argue. That's at the core of the classical liberal worldview.
And from the Marxist side, you know, it's a kind of an attempt to challenge and overthrow capitalism with a focus on eliminating class exploitation, you know. And we'll see that some neomercantilists, for example, will embrace different aspects of that, their interest in distributional issues, some of them, for example. It's just not their key priority.
Their key priority is the promotion of state power and wealth with these policies in mind. So that's the kind of definition of music. Now, what's the common view of the history of this ideology? Common view that you find in any IP textbook is a focus on Frederick List, the German thinker, whose famous 1841 book, The National System of the Political Economy, was one of the more sophisticated critiques of what he called the Smithian school as a defense of strategic trade or protectionism. And, you know, I'm not saying people shouldn't focus on List.
List was a very important thinker. and his ideas also diffused around the world. You know, we're used to talking about the diffusion of classical liberal thought, for example, or neoliberal thought in the current area, or Keynesian thought, or Marxist thought in the 19th, early 20th century.
But what's striking is neomuchangelist thought also diffused internationally. I'll provide some other examples in a second. But Listian thought was certainly of that kind. His book is translated into many European languages, translated into Japanese, Chinese, Bengali.
You know, it really has a global kind of... audience. And by the way, I think that is one of the features of the current age too, is the diffusion of neo-mercantilist ideas from across the world.
The more they grow in popularity, the more they are diffusing as well. So the attraction of his idea, I think, List's idea in some ways is that he provided this very sophisticated defense of strategic protectionism. And I think the case is familiar to most of you probably here, but just in case it isn't.
I just wanted to outline very quickly, he's got two core arguments. One is that industrialization is absolutely central for the cultivation of the wealth and power of a state. He describes this as kind of cultivating the productive powers of a country.
And he argues it's very important to be prioritizing the wealth and power of a state because international relations is inherently conflictual for him. And he thinks liberals are naive about that. And so you've got to focus on the power and wealth of your own state to protect your interests. And then the second key argument is that you can't industrialize in a free trade world in which Britain is the dominant economic power. Competing with England, he says, is like a child or a boy in wrestling with a strong man.
You know, Britain is so far ahead. It's got so many advantages as the first industrializer that other countries are going to find their own manufacturing efforts to have manufacturing being wiped out. And so the point of the tariff is to protect yourself against that dominant power, in this case, Britain. And interestingly, I just want to emphasize here, because I think people often don't understand the side of List, is that he wanted to cultivate not just local businesses, but also to encourage foreign investment to jump over the tariff wall and set up industry behind the tariff wall. So it's not just local firms.
It's also trying to attract investment to set up industry in your own country. And, you know, what's interesting about List is he does admire Smith's work. And so this is why he's a nice example of a neo-mercantilist. like he says many positive things about Smith. And he also acknowledges, you know, Smith highlighted the short term economic costs of introducing protectionist policies.
He doesn't deny that. But his point is that you've got to undergo the short term costs to have some long term gains. And those long term gains will certainly outweigh the short term costs.
And that's the cultivation of this deeper productive power. And I think one of the things that's really interesting about List is he sees nationalism as playing the key role. in that temporal sense. You know, so he says, I'll just give you a quote here.
He says, we must have enough national spirit at once to plant and protect the tree, which will yield its first richest fruit only to future. generations. In other words, you know, this generation may bear some cost, but future generations will reap the gains of the cultivation of this kind of productive power.
And it's nationalism that allows you to have that temporal focus. And then, of course, Liszt, as a final point I just want to make within that second argument, is he says, you know, this is what Britain itself did. And so this is the famous quote, which I'm sure many of you know, and where he says the British are being hypocritical, they themselves used recantilist policies against the Dutch. And it's only once they became powerful that they wanted everyone to be free traders. So the famous quote is, it is a very common device that when anyone has attained a summit of greatness, meaning the British, he kicks away the ladder by which he's climbed up in order to deprive others of the means of climbing up after him.
In other words, free trade is an ideology of British domination. It's preventing other countries from industrializing and giving England a kind of monopoly of the manufacturing power of the whole world. Okay, what's the limitations of that common list-centric view of the history of neomercantilism? So you pick up a textbook and they always say list is the central figure. And it's equated in the same way as kind of Adam Smith is for classical economic liberalism or Marx is for Marxism.
And I think the problem with this is that it's really a very incomplete story of the history of neomercantilism. I think you need to see that neomercantilism had two other key dimensions which fall out when you tell the story in that way. One, and I'm not going to talk about this today, is that... many of List's followers, and there were many around the world, adapted his ideas often in quite profound ways.
And I'm not going to say too much about that, but I'll just give like two quick examples. One is that like List had a pretty limited sense of government economic activism. He wants some trade protectionism, but it's actually pretty limited in his view.
And he doesn't say very much about domestic government economic activism. And later followers of his have much more ambitious ideas about what the state can do to promote power and wealth. And one other thing I just want to mention that gets adjusted is List has these really very pro-imperialist views.
He's a big supporter of European imperialism, especially in tropical regions of the world, which he thinks should be destined to be commodity exporters. He doesn't think they should industrialize. It's only Europe and North America that he thinks should be industrializing. And that gets challenged by followers of Liszt in many parts of the world, especially those in tropical regions, who often are very critical of that view and also of Liszt's broader support for imperialism. So, you know, there's lots of ways in which Liszt gets adapted as the ideas move around the world, just as the way Keynesian ideas are adapted or neoliberal ideas are adapted.
But what I want to focus on is the second reason in which the story is incomplete, which is there were lots of neomechanicalist thinkers who were not influenced by Liszt. Either they weren't familiar with Liszt or they were familiar and they didn't think much of Liszt. And they were developing their ideas independently with very little engagement with Liszt's key ideas.
In other words, the history, and this is really the fundamental point I want to get across, is that the history of neomercantilism needs to be seen differently than the history of economic liberalism or Marxism. Those two, you can identify these central figures, Smith and Marx. In the case of neomercantilism, it's a more diffuse origins, it's a kind of diverse origins of this ideology. in a way that we need to understand better.
And the role of list is being vastly overstated in textbooks. And you might think, well, this is just a historical point. Why is that relevant?
It's relevant because the legacies of these other forms of de-Omercantilism that were non-Listian, if you like, that had different origins, are some of the most powerful ones today. The Chinese one, as I'll explain in a second, but I think it's even true of the American one. And that's what I want to turn to as a first example. I don't have time to discuss all these thinkers.
who are kind of non-Listian, if you like. But let me just give you some examples. And this is, I think, the most interesting one in the Western context.
And that's Henry Carey. Now, Carey is sometimes discussed as a Listian. I just think this is a misreading of Carey's views.
And I go through quite a bit of discussion about this. Now, who is Carey? Carey is an American thinker who's writing, he writes his book, Principles of Social Science in the late 1850s.
And his ideas were known. almost as much as lists were around the world. They're central for explaining American protectionism in the second half of the 19th century as the Republican Party's protectionism.
You can see here I've got a poster from the 1860 platform of the new National Republican Party that's been created in the 1850s. And Kerry is a central figure in designing the protectionist side of that platform, which then remains for well into the early 20th century as a key Republican position. platform. He's drawing his ideas not from lists, but his inspiration is more from figures like Alexander Hamilton, and also his own father, who was a follower of Hamilton. But Kerry does this interesting thing where Kerry adds a kind of a populism to the protectionist ideas of Alexander Hamilton, saying that we're not just trying to cultivate wealth and power, you know, American wealth and power, but also trying to challenge the power of what he calls the traitors of the world.
or exploiting workers and farmers within the United States. It's a kind of a populist case for protectionist policies, not just the power and wealth, but also combining that with a kind of social dimension of neomercantilism, a populist version. This is the tradition that Trump and his supporters are pointing to when they say, you know, we're carrying on a Republican protectionist tradition. It does have this populist origin.
And that's very different than List. List says almost nothing about just domestic distributional issues. And that's at the core of some of Kerry's interests, this kind of against the traders in favor of the workers and the farmers.
So that's the first kind of example. And by the way, I should mention that it's not just American protectionism that was strongly influenced by Kerry's ideas. I mentioned that Kerry's ideas are spread across the world. And they're also like really important in some central cases for our understanding of the politics of the world economy in the late 19th century. So Bismarck's tariff, for example, in 1879, that was more influenced by Kerry's ideas than it was by Elissa's ideas.
And many people, I think, have misinterpreted that. But the historians are very clear about this point. It's true in the country where I work, in Canada, with Kerry's ideas that influenced the Canadian national policy, which comes in the same year as Bismarck's.
And this is true in many other countries. And it's important to understand the influence of Kerry and his distinctive version of neomercantilism. Now, then I go through in the book a number of other examples.
I'm not going to describe them all here at all, but they come from different continents. So in Latin America, I've just put up a picture here of Lucas Alamán, who's a Mexican figure in the 1830s, who's promoting not just protectionist policies, but also the need for a state bank to be financing. textile industrialization in Mexico. And the ideas are not Listian.
He's doing this before List is writing his main work. List has done some stuff in the 1820s, but as far as I can see, Alamant is not aware of them. He's drawing his ideas more from two sources.
One is kind of the late Borbon Spanish mercantilism, which had a lot of influence in Mexico. And also, I think, from local ideas from Puebla, which was a big textile manufacturing region in the colonial period. They're trying to figure out how to deal with British free trade, push for British free trade.
And they come up with all kinds of neo-mercantilist ideas. And so he's a very central figure there. If you look in Africa, the most interesting figure by far, I cite a number of African thinkers who are interesting neo-mercantilist thinkers.
But certainly the most ambitious of them was Muhammad Ali in Egypt, who is the ruler of Egypt in the first half of the 19th century. And Ali's ideas are so much more ambitious than this. Like this is a figure who.
wants to transform Egypt into an industrial power. And he does it by setting up state-owned factories and taking control of the land and extracting surplus from the farmers and having a state-controlled trading system. And it's just an extremely ambitious form of state activism to promote industrialization. And again, there's no engagement with List.
Ali is very familiar with economic liberal ideas because he's engaging with... European liberals who are often visiting Egypt and saying, why are you doing this? You should be just exporting cotton as a free trader.
And he's defending his positions in ways that are very interesting, their neo-mercantilist positions, but with no reference to Liszt's ideas. I think his influence comes more from an Ottoman mercantilist tradition. And then finally, I just want to say something quickly about the Japanese case, because it's such a prominent case in the literature.
People often argue that the Meiji era, you know, post 1868, the Meiji economic transformation, which is a state-led industrialization project led initially by Okubo Toshimichi, who's the one who originally is proposing the idea of state-led industrialization in the 1870s. And people say, you know, people like Okubo were influenced by Liszt. Liszt was imported into Japan.
And it's true that Liszt's ideas were introduced into Japan, as, by the way, were Kerry's. Kerry's were, in fact, more influential than Liszt's. This is yet another case where Kerry is more important than list initially in the 1870s. But I think what's really striking, I spent a lot of time in the book about this, is to recognize the extent to which Japanese neo-mercantilists were drawing on their own endogenous mercantilist history.
And it's a history I don't have time to discuss here, but it's a fascinating history where within Japan, the kind of inter-daimyo competition between local authorities increasingly took on mercantilist. tones. And there were all kinds of thinkers in the 1700s and 1800s in Japan before the opening to the West, who are developing mercantilist ideas for promoting the state power and wealth of their local authority.
And then when Japan is forcibly opened up to the world, those mercantilist ideas come to be extended to Japan as a whole. And that's the origin of a lot of the Japanese neomercantilist thought in the Meiji period, including Okubo's. So Okubo makes his own stuff, read. a thinker from the 1830s, not to read List or to read Carey.
So it's an endogenous kind of story is what I'm trying to focus on. Now, what I just want to highlight is the importance of the Chinese side of this, which is, I think, a similar story of an independent, endogenously generated New Mercantilist tradition, which I argue still has influence in Japan in the current period. And so we often describe Chinese policy since the late 1970s, since the Deng period.
as kind of Listia and they're pursuing a kind of state industrial policy. I think it's quite misleading to do that. I think it's better to refer to China's own intellectual history and trying to think of a label for this. So let me just describe what that history is.
You know, the New McCandless thought in China really begins after the Opium War. especially the second opium war. I just have a picture there from a painting from the first opium war.
And essentially, you know, the opium wars are opening up China. Free trade is being pushed on China. Many Chinese intellectuals are beginning to become acquainted with British economic liberalism because it's being promoted very actively by the British at that period of time.
But they reject it, you know, but they reject it not by drawing on Lister Carey. As far as I can... I've been able to determine, listen, carry are really not read in China until the turn of the century. So it's much later. It's a very insular intellectual environment in 19th century China.
And instead, there's a set of thinkers who are developing their own distinctive version of whom the most important is Zheng Guanying, who's a figure who is writing in the 1870s, 1880s, then a very important book in 1893 called Words of Warning in a Flourishing Age, which by the way, According to Zheng Guanying's biographer, this book has more editions than any other book in the history of Chinese publishing. I haven't been able to verify that. But anyway, it's a very popular book and read by Mao and all kinds of people. So Zheng Guanying is a very interesting figure because he essentially says China is now involved in what he calls a commercial war.
And he says it's a little bit like the Warring States period in China, you know, way, way back in China's ancient history. And he says, you know, what we need to do is win this war. And you do that by fighting, by accumulating wealth.
And so he calls for very large scale economic reforms in the Chinese context in order to promote a more, you know, more industrialized and more modernized economic situation in China. So this is with higher tariffs he wants. So, in other words, he's challenging the Western treaties, which are preventing that from being done.
He wants the state to help support local firms. He wants the state to modernize infrastructure, the financial monetary system, education, you know, diplomacy, even merchants kind of social position. He's even got these fascinating ideas about the need for what he calls multinational public business zones in the border regions of China, where foreign investors could support China's economic modernization while under Chinese jurisdiction.
Like it's like the export processing zone. It's extraordinary. When I read that, I was just amazed by the extent to which Zeng Guanyin's ideas were being. you know, had kind of foreshadowing things that China subsequently does.
Now, where is he getting inspiration? As I said, it's not from Western thinkers. Instead, he's going back to one figure from the period of the Warring States, which is Lord Shang, his famous Book of Lord Shang, which Chinese intellectuals at the time were very familiar with, which was a kind of a legalist text, which focused on the importance of cultivating wealth and power of the state.
Now, Shang himself was not interested in promoting commerce. And so the specific policy orientation of Lord Chang was different than Zhengguan Ying's, but the idea that it's legitimate to focus on power and wealth, the maximization of power and wealth, that's what he draws from Lord Chang, and especially the phrase in Lord Chang about the need to be cultivating a strong, you know, wealth and power in the context of the state. And then the other figure is a kind of a state kind of tradition, which is becoming increasingly prominent. in the early 19th century in Japan as the Chinese emperor is encountering growing problems. And Wei Yang is a key figure here, who is again within the Confucian tradition this time, not within the legalist tradition, but within the Confucian tradition, is saying it is legitimate to pursue the wealth and power of a state.
Whereas many Confucian thinkers thought that was a kind of an immoral goal, he's legitimizing it. And he is in fact writes one of the most interesting books after the first Opium Wars, which is a book which kind of analyzes the West and says, you know, we need to emulate some of their practices and import some of their technologies. And he's beginning to open a space that Zheng Guanying then fills with his very important work.
Now, as I mentioned, there's no reference to list or to carry. The references are to these Chinese thinkers. OK, now, Zheng Guanying's ideas are not very influential within China. Like there's some establishment of state on.
or state-sponsored firms. And in fact, Zheng Guanying works in one of these briefly, but it's not the dominant Chinese response to the opium wars. Instead, I think Zheng Guanying's influence comes through Sun Yat-sen. who the two were very close.
Sun Yat-sen probably contributed even some of the text to Zheng's famous 1893 book. And so there's a very close relationship between these two. And Zheng's ideas are really important because he becomes the central advocate of neomicrocentrist strategies in the early 20th century, especially after World War I through a couple of books.
I think the most interesting of which is the International Development of China, but you can also find in his three principles. of the people, a lot of these ideas. What's at the core of Sun's ideas? So Sun is, by the way, you know, it's really striking to me that Sun Yat-sen is known by IP scholars, I think, more for his politics. Like he's, you know, the first provisional president of the Republic of China after the 1911 revolution, but almost never mentioned as a thinker of political economy.
And yet Sun wrote a lot about political economy. He's very interested in political economy, and especially from this neo-mercantilist standpoint. So he's essentially saying to the Chinese people, we need to cultivate the economic foundations of national power. China is weak because it has a weak economy.
It suffers from what he calls economic oppression. And you need rapid economic development. And he says the way to do that is with the state and really ambitious ideas.
So it's not just tariffs and it's also state on enterprises, national planning, massive infrastructure programs. He has a huge emphasis on infrastructure and all of this done. with the help of foreign capital, but foreign capital that is very carefully managed. And so you're going to manage it both by the state, but he even has a proposal in 1920, and in his 1920 book, International Development of China, for a kind of a World Bank like structure that could lend to China, a public lending in a way that would avoid the exploitation that he and others associated with private lending to China in the past. So it's quite extraordinary.
He's one of the very first, if not the first proposals for kind of international development. institution. It comes out of his neo-mercantilist concern to maintain the autonomy and the sovereignty of China while needing foreign capital. Now, Sun is more familiar with Western political economy than Jiang Guanying was, but he doesn't cite List.
He doesn't cite Kerry. He's citing some other figures like he's interested in Henry George's ideas about land, for example. The key influences on Sun are endogenous ones.
They are the self-strengthening movement that Jiang Guanying had been part of and deeper traditions of Chinese thought going back. to even to the warring states period. Now, I'm almost finished. I just want to say a couple more things, which is just to compare, you know, if we're going to describe post, you know, post 1978, Chinese state led development strategies as Listian, I think it's much better to describe it as Sunnian.
Let's just compare the two just as an example. You know, List, it doesn't have ambitious ideas about what the state should do beyond. the protection of state is he says very little about domestic economic activism. He is supportive of it, he's just not that interested in it.
This is at the core of Sun's views, is the need for a very strong state domestically to be doing all kinds of things. So much more ambitious ideas about the role for the state. Sun also is much more interested in social distributional issues.
So about the need for the people's livelihood, he calls it to be maintained. And again, I've already mentioned that List is not interested in domestic distributional issues. Sun is combining his neomercantilism with socialist kind of left-wing ideas in a way that List is not.
Sun is also very focused on export promotion. And List was not all that focused on export promotion. He's interested in it, but it's not his main focus.
In fact, just to read you a quote here, List says, the internal market of a nation is 10 times more important to it than its external one. And Sun is much more focused on China's need to be exporting. And then I just want to emphasize one final point, which is that You know, List did not think that China, or indeed all of Asia, should be industrializing.
Remember, he has this very Eurocentric view that only Europe and North America should be the ones industrializing. And if I can just read you a quick quote here, just to emphasize the Eurocentrism in List. And here's the phrase where he says, Europe will sooner or later find herself under the necessity of taking the whole of Asia under her care and tutelage, as already India has been so taken in charge by England.
In this utter chaos of countries and peoples, there exists no single nationality which is either worthy or capable of maintenance and regeneration. Hence, the entire dissolution of the Asiatic nationalities appears to be inevitable, and a regeneration of Asia is only possible by the means of an infusion of European vital power, by the general introduction of the Christian religion, and of European moral laws and order, by European immigration, by the introduction of European systems of government. I mean, it's an extraordinary statement of Eurocentrism. which you find in other texts in 19th century European political economy. But to say that China is Listian after you hear that passage just seems a difficult position to sustain.
Now, let me just say something about why the Chinese case matters, and then I'll conclude. I think in Chinese case matters, you know, this history is important to understand because when Sun dies in 1925, but Chiang Kai-shek picks up the Sunnian economic program, and Mao himself is in fact very interested in Sun's economic ideas before 1949. Of course, when Mao takes power, he follows a more Stalinist path. But when Deng comes around in 1978, lots of evidence that Sun's ideas were being discussed, and Deng himself is certainly very familiar with them. Now, I don't want to suggest that Deng is only influenced by Sun Yat-sen. There's all kinds of influences on Deng and the people around him in the late 1970s into the 1980s.
But one of the influences is clearly Sun Yat-sen's ideas. And I just want to emphasize here how these continue to be cited. So at the 150th anniversary of Sun's birth in 2016, Xi Jinping gave the keynote speech and argued that the Chinese Communist Party was carrying on the political economy vision. that Sun had outlined in his 1920 book.
And yet you go through an IP text and you find no discussion of this book or discussion of Sun as a political economy thinker. And I think, you know, it's just a disservice to our students. We're trying to understand references that are being made.
The references are being made to figures by, you know, a dominant figure like Xi Jinping, but they're being made to figures who we're not discussing in our textbooks. Now, one final reason is that when Xi Jinping made that speech in 2016, he also referred to what he called China's responsibilities for the world, which is a phrase he took directly from Sun Yat-sen's work. And Sun, you know, had this fascinating argument where he said, we're going to get rich and powerful, you know, and here's his strategy to do that.
But he also said, once we become rich and powerful, we will have responsibilities for the world. Now, the way Xi Jinping talked about that was in terms of development policies and some other things. In Sun Yat-sen's work, and this is a passage that Xi did not quote, He says, we must aid the weaker and smaller peoples and oppose the great powers of the world. Let us today, before China's development begins, pledge ourselves to lift the fallen and to aid the weak.
Then when we become strong and look back upon our sufferings under the politically economic domination of the powers, and we see weaker and smaller peoples undergoing similar treatment, we will rise up and smite that imperialism. That's what he meant by China's responsibilities for the world. And so I think when Xi Jinping is invoking this, it's very important for people to understand the context. And in Sun's case, he's drawing this from a deeper kind of tributary tradition where he's saying, you know, China has certain responsibilities.
He calls this a rule by right. And so I've got a picture here from the tributary era. OK, so, again, very different than List, right?
There's nothing like that in List's work. OK, let me sum up. I've taken a little bit too long.
Sorry, Mark. But let me just highlight five quick key takeaways. One is that, you know, the history of neomercantilism is much richer than Liszt.
Like this is not an ideology that you can trace back to the single figure in the way we do with Smith or Marx for those ideologies. Second, there's many varieties of neomercantilism and they're quite distinctive. The Chinese variety is very distinctive from a Lisztian one, for example.
I've also emphasized in a couple of different moments in this talk that neomercantilist ideas are very cause and problem. They're spreading around the world. I think it's an important feature of this history that also has contemporary resonances.
And fourthly, that they're often building on diverse mercantilist pasts. So we tend to teach students that, you know, European mercantilism is what we mean by mercantilism. But the Chinese had their own mercantilist past dating back to the era of the Warring States, where someone like Lord Chang is sort of developing early ideas of this.
It's also true in other contexts that are described in the work. Indian neomercantilists were drawing on the Arthashastra, which is a kind of ancient mercantilist. text and I've mentioned the Ottoman mercantilist ideas that probably influenced Ali.
And then finally, what are the broader benefits of this wider history? Well, I think, you know, it helps us to, on the one hand, transcend kind of Eurocentric conceptions of economic thought. We need to study, you know, more in the history of European ideas. We need to understand these different intellectual traditions, not all ideas of a political economy came of European history. But more generally to do that in order to explain the current world.
So to understand Chinese thinking, you need to understand the references that are being made by someone like Xi Jinping. But I think it's even true in the West where, you know, Trump is invoking Republican protectionist tradition, which was pioneered by Henry Carey, not by a list. And there's other examples of this. Modi, for example, in India is often invoking the Swadeshi, people around Modi are invoking Swadeshi ideas, which again, go back to Indian neomercantilist thought. So that's all I wanted to say.
I've taken too long. I apologize for that, but I hope the history is interesting and useful for you, and I look forward to your questions. So I'll stop sharing here if I can get the cursor to do that just a second. Excellent. Thank you very much, Eric.
So I'd like to bring people in. Alice Lepici has three questions. I'm not sure we can go to all of those, but I'd like to see some other people come in with some questions.
But Alice, can you come off mute and ask your first question and we'll go from there? Yes. Hi.
Can you hear me? Yep. Okay. Hi.
Thanks so much, Eric. This was absolutely fascinating. So I have a bunch of questions, but some of them are related to the development aspect. of neo-mercantilism in this sort of global cosmopolitan view of solidarity, right?
And so another way of viewing neo-mercantilism is in a sort of Marxist view where the rich countries have kicked away the ladder that they used to get to the top. And so they're hampering the prospects for development in poor countries. So that's the argument by Ha-Joon Chang. And so I'm I wonder, do we think about neo-mercantilism as building up the state and building up wealth in this sort of liberal global order?
Or do we lean towards a heterodox critique that says, well, hey, we should also think about developing countries now. And that strategic trade protectionism has a place in the discussion on global development issues. Yeah, so this is very interesting.
question and it makes me want to say a couple of things. Well, first of all, this book is not advocating neomercantilist ideas, so I should make that clear. It's an intellectual history. It's trying to say we need to understand this. These are very powerful ideas historically and in the current period.
But leaving that aside for a second, I think when I think of a dominant power promoting free trade ideology over less powerful countries, that to me is not neomercantilist behavior. That's a kind of a liberal nationalism, if you like. And I've described this in other work where you're pushing free trade, that's a liberal policy, but you're not pushing for a cosmopolitan reason like a Cobden kind of position. You're pushing it for nationalist reasons. To be a neomercantilist, you have to be endorsing the idea of strategic trade predictions and government economic activism.
That's the definition that I'm trying to use. The other key thing that, another thing that your question makes me think about is that it came from the first part of your question. question, which I find really fascinating. Like, it's important to recognize that these neoliberalist thinkers are focused on the power and wealth of their own state, but a number of them have a more cosmopolitan conception of how that might fit into a broader ordering of the world. And so, for example, this is even true of List, where List says, you know, I want Germany and the United States and France, those are his main audiences.
He's lived in all three of those countries, and he's really writing for people in those three countries. And he's saying to them, you've got to industrialize and you've got to do it through these protectionist policies. But once you catch up to Britain, you should be considering a kind of a global federation in which, in fact, free trade would exist. And so it's he's a strange feature of this. He's the best known Neomercantilist thinker, but is actually his long term view as a liberal cosmopolitan one of kind of a world federation based on free trade.
And so it. And this is true of some of the East Asian thinkers, true, where they, you know, they're often confronting Confucian thinkers in their own country who are saying it's very immoral what you're calling for, you know, the aggressive pursuit of state power and wealth. And so they'd often say, well, we're just saying that as a temporary thing, you know, and once we can catch up, then we can go back to the kind of cosmopolitanism of Confucian thought about the need for benevolence and these kinds of things.
And so. And there are other thinkers like this, too. I think Sun Yat-sen is really interesting in this case where, you know, he's proposing this World Bank, you know, it's a kind of a very internationalist version, if you like, of neomercantilism, which is, in the end, really endorsed at the Bretton Woods Conference, you know, where they set up an institution which is supporting state-led industrialization.
We don't think of the World Bank that way today, but that was the original conception. I've written another book about that. And so it's kind of... of embracing a liberal multilateralism with these Neomercantilist ideas. If I can just say one more thing about that, too.
One of the really weird things that I found reading all this history is the extent to which Neomercantilists were the pioneers of multilateral economic institutions. So Sun has one of the first ideas for the World Bank. List himself proposes a World Trade Congress in 1837 in an unpublished manuscript, which I had never seen before. And so it's kind of I always associated the origin of. multilateral thought with the liberal tradition, but it actually was the New York-Microsoft tradition, which is often pioneering these ideas.
I think it's because they were confronted with the fact that they wanted state management. And then you have to think about how is that going to interact with other countries doing state management? And then you come to ideas of multilateralism, how are you going to cooperate in doing that?
I don't know, that probably didn't answer your question, but that's what it made me think. I want to bring Alice back into the second question, because it brings us up to the question of neomercantilism and a kind of green economy. But we also have Tony here.
Tony, can you, concerned about the United States'version of mercantilism, can you condense what you've got there into a question? Yeah, I mean, I think the real key to understanding mercantilism and neomercantilism and the whole fight in different trends of support. political economy is to understand republicanism as a development of the political idea that economic development has to benefit everybody you know you get rid of the idea that you've got a monarchy and a small group of elites that all the the mercantilist policies help them and hardly anybody else so i think uh what what i'm wondering is you know to what degree or to what extent do you believe that that But that is a major consideration that you have to look at when you're looking at, you know, mercantilism versus the other types of political economic ideology.
Yeah, that is such a great question, a very interesting question. You will find in some textbooks people distinguish mercantilism and neomercantilism on the basis that mercantilists were focused on kind of the monarch. And neomercantilism is more democratic in a sense, as you're suggesting, it has a broader concern for the people. I became increasingly skeptical about the more I read that there are many mercantilists, especially English mercantilists, for example, who really did have more modern conceptions of nationalism, for example. And this is brought up very well in Leo Greenfeld's work as one example.
And similarly, when you get into the neomercantilist period. which, you know, for me is people who'd read Smith and understood economic liberalism, but are still reacting against it. Some of them were still, you know, very focused on the monarch or, and so it's not a clear, I increasingly move away from that as a distinction, a distinction between mercantilism and neomercantilism.
But I certainly get the point you're making that the view of the concern for the people becomes much more prominent in the 19th and 20th century. And by the 20th century. there's very few neo-mercantilists who aren't at least rhetorically appealing to that broader constituency in a way that was less common in the mercantilist period. So, you know, it's a really important point. Alice, do you want to come back in with the carbon border adjustment mechanism question, how this fits into that type of policy framework?
Sure. Thanks so much. And thanks for your earlier answer about the global order. So, do you think that we are perhaps at a juncture?
in how we think of neo-mercantilist thought with a recent worry about environmental degradation and a race to the bottom between countries, right? So up until recently, the idea of, so it's the most favored nation principle, right? And so the idea of discriminating between your trading partners would be absolute heresy at the WTO.
But now there are serious discussions in countries who are environmental leaders that they are going to impose some tariffs on the environmental laggards so that- that they can, number one, promote the development of their domestic green industries, so that classic infant industry thing, but also not get, you know, competed on this sort of race to the bottom through low environmental standards. So I wonder if this has changed the way people think about it. Yeah, I really like that question too.
I think you've really identified a key issue, which is that the content of neomarginalism does change over time. And so increasingly, like if I think of the current era, it's not all about industry even, right? Like a lot of it's about intangibles. Think of the Made in China 2025 program. Like a lot of that's not about industry.
Some of it's about industry, robotic manufacturing, whatever. But a lot of it's about non-industrial things. And as you're suggesting, the green side. of industrial policy is a big deal right now. And it's probably how you can mobilize political support behind the green transition is to cast it in neomercantilist terms.
And many countries are doing that around the world today. The only thing I wanted to add to that is I've actually been in quite a bit of work lately trying to trace the origins of environmentalist thought about IPE issues, which generally in a textbook is sort of seen as a fairly modern thing last couple of decades. But actually, there's a lot of thought back in the 19th century about the link between the world economy and foreign economic policy and environmentalist thought. And interestingly, neo-Americanicalists were involved in those debates, even that period. And again, Kerry here is the central figure.
One of Kerry's key cases for protectionism is an environmentalist one. It's an issue about soil erosion being generated by export-oriented monocrop. you know, production. And he's saying, you know, one of the reasons to introduce production is to move away from that. And he's drawing on, you know, Justus von Liebig's ideas about chemistry and agriculture, which, I mean, was really fascinating to me, because if you've read the Marxist literature about the origins of Marx's ideas about environment, he was also drawing on Justus von Liebig's ideas.
But Kerry does it before, like he does it about a decade before Marx. does. And so again, you know, the neomercantilists were very innovative in their incorporation of issues that we think of as modern ones. Another one, by the way, is on gender equality, where Kerry was very interested in the relationship between neomercantilism and gender equality. He felt like free trade was detrimental, not just to workers, and to farmers and to the environment, but also to women.
He thought it was something that generated gender inequality. And so he thought there was actually a compatibility between a kind of promotion of gender equality in the United States and neomercantilist policies. So, you know, again, this is like 1850s, you know, but quite innovative. Gary, do you want to come in and ask your question?
You can respond. I'm on mute. Okay, great.
Let's do it that way then. Eric, you can read and report. Yeah, so the question for other people is, I was surprised and pleased to find an analysis of Ashanti neomercantilism in West Africa and of the Pan-African figure Marcus Garvey. in economic history not conventionally taught, to say the least, even in comparative international economics.
Can you say what led you to explore this optic? I can't quite remember what led me to explore this optic, but I will say I think it's a very important part of the story that Marcus, well, first of all, in the West African case, that the, you know, essentially there's a case where the British are penetrating the interior of West Africa. And the Shantyamvir is a very powerful empire which resists it, but is engaging increasingly with British classical economic liberal ideas.
And there's a debate by the 1870s, which historians depict as a debate between kind of people importing free trade ideas from the coast and a kind of endogenous, neomercantilist set of ideas about the need to defend the trading control. It's a pretty interesting example of neomercantilism because it wasn't so focused on industry, at least initially. It was kind of a commercial form of neomercantilism, trying to protect trade. And this is also true in other parts of the world, but particularly true in that part of the world. But then the Marcus Garvey side of that story is interesting because Garvey is in a situation where he doesn't have a state to protect.
He's trying to cultivate a Pan-African community, a kind of diasporic community with the goal of building a future state in Africa. And he does this, I think, highly innovative ideas around political economy, how you might do that, which is to build up a shipping line, the Black Star line, but also a kind of manufacturing firms, which are all going to be financed and staffed by the African diaspora in a way that will build up the power and wealth of that community, which can eventually then form as a basis or a foundation for a future. African independent state.
And so I described this as a kind of highly innovative, I think, diasporic form of neomechanicalism. It's certainly very different than many of the other ones that are described in the book because of the context in which Garvey finds himself. But he's drawing on, you know, very similar ideas of power and wealth through state activism, just in this very distinctive political context.
Gary, do you want to come back in on that? No, just thank you very much. It's refreshing. to see the idea of global comparative economics extended in the way that you've done in the book. It's great.
I'll use it for teaching. Thank you. I'll just say, by the way, this other book that Mark mentioned that I'm finishing up right now is an attempt to tell the global history of kind of the world, the ideas about the world economy. And I have a whole section there on the Pan-African movement, a whole chapter on the Pan-African movement.
to highlight the extent to which Garvey's ideas were disputed within the Pan-African community by other Pan-African thinkers. And so there's some fascinating debates within the Pan-African community about how best to conceptualize and to deal with global economic issues. We are pretty much at time.
The good news is that Eric and I are going to continue this conversation in an hour's time when we record a podcast. which two weeks from now or thereabout will be available on the Rhodes website and also at all good podcast locations. So I want to thank Eric for being here today and sharing his book with us. And for everyone who's been on the call, asking questions, listening in and generally being part of the Rhodes community. So thank you all very much.
And thank you to everybody for some great questions.