Buy American, Hire American, Balance the Budget
Mercantilism was popular from the 16 th to 18 th centuries. It is the belief that a government policy which encouraged and promoted exports while simultaneously restricting imports had a positive effect on the economy. This trade imbalance would result in an accumulation of gold by the exporting country making it wealthier. Today, we could call it “Trumponomics” or perhaps “alt-econ”, as this is what the US President seems to be promoting. The key assumption underlying Mercantilism is that the world’s wealth is static. The implication is that domestic growth comes at the cost of a country’s trading partners. That assumption may have been valid prior to the Industrial Revolution but certainly not now. A trade surplus is no longer a viable source of growth because the assumption that wealth is static is no longer valid. With the exception of a few hiccups along the way, the economies of the industrialized countries have been growing since the late 19 th century. In addition,