«looking at the cyclical nature of world capitalism in the past four centuries. We are entering, according to Orain, into one of the periodic readjustments of capitalism, from free trade to the “armed trade”, characteristic of mercantilism.»
It is good to know how things were in the real reality where that french Economist lives because in my imaginary parallel reality the USA empire and neoliberalism never actually pursued a "free trade" policy and they always sanctioned and had armed interventions against rivals, and if there were a somewhat liberal but not free trade policy it was always and only with vassal countries in the USA sphere of influence.
In my imaginary parallel reality sanctions against Iran, Libya, Iraq, Cuba, Korea-north, Venezuela happened for decades and trade with the RF and PRC was only allowed when the USA oligarch thought they were too part of their sphere of influence (the Yeltsin and Jiang/Hu periods).
However in my imaginary parallel reality there was some confusion because since 1980 and even more since 1994 the USA oligarchy policy was to export jobs as much as possible and import workers as much as possible, but those were mercantilists policies too, just different means to achieve the same outcomes.
«trade with the RF and PRC was only allowed when the USA oligarch thought they were too part of their sphere of influence (the Yeltsin and Jiang/Hu periods).»
In my imaginary parallel reality there is no switch from "free trade" to "mercantilism" but changes related to each other:
* A phase of "consolidation" instead of "expansion". People like Trump understand well the risks of imperial over-extension.
* As part of "consolidation" a re-shaping of the details of the overall terms of trade with the vassals in the USA "sphere of influence".
There is a "whig centrist globalist" faction in the USA that reckons that they can make more money now if they constantly push for expansion even if that risks a shorter era of dominance, and a "tory one nation nationalist" faction that reckons that longer term USA dominance is more desirable.
Something I found odd in histories by A.J.P. Taylor and Niall Ferguson, I would have expected them to adhere to the doctrine of free trade and the theory of comparative advantage, but their accounts dwell on absolute advantage and the gross levels of output in things like iron and steel.
I suspect this is because "free trade" has never existed anywhere; it is a lie promoted by the reigning hegemon (first the Brits, latterly the US) -- patter talk to cover existing unequal terms of trade and prevent emerging markets from using the protectionism (UK Navigation Acts; 19th Century US tariffs) the hegemon used in its own rise to power. See Ha Joon Chang's "Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism" for more detail:
«prevent emerging markets from using the protectionism (UK Navigation Acts»
Voltaire: «What has made England powerful is the fact that from the time of Elizabeth, all parties have agreed on the necessity of favoring commerce. The same parliament that had the king beheaded was busy with overseas trading posts as though nothing were happening. The blood of Charles I was still steaming when this parliament, composed almost entirely of fanatics, passed the Navigation Act of 1650»
«Adam Smith himself supported the Navigation Acts – which regulated trade and shipping between England, its colonies, and other countries – despite the fact that they mandated that goods be transported on British ships even if other options were cheaper. “Defense,” he wrote in The Wealth of Nations, is of much more importance than opulence.” Denouncing desirable security policies as “protectionist” was beside the point then and now.»
I would also puff Dale Copeland: Economic interdependence and war. Thesis, after having ploughed the history 1790-2000: when a big power finds a risk that it will be outcompeted in the economic field it is likely to turn to violence.
There is where the North-Atlantic region finds itself now, because of its self-destructive policy of "outsourcing" 1980-2020.
There's a lot of things in flux right now so it's difficult to say where we stand. The uncertainty is created by arrival of Trump.
Until few months ago, there was a degree of certainty on where world was headed under Biden administration. It was a carefully crafted industrial policy and policy of 'regionalization'. Building trading blocs with US, EU & Asia Pacific on one side and with China & BRO/BRICS/illiberal world order on the other. The world was orienting towards 'regionalization' and NOT mercantilism.
With arrival of Trump, everything has gone haywire. While China remains a foe, US is also attacking its own allies including EU/NATO & Canada & Mexico. This policy of attacking longstanding traditional allies is outside the purview of any rational motives. This is madness of Trump regime. This self demolition of US hegemonic position by lunatic policy will guarantee that China will emerge a strong player in near future.
Marxian philosopher István Mészáros had already, in the early 1990s (in 'Beyond Capital', his magnum opus), identified that capitalism was already at its descending phase. So that's the modern-day Marxian diagnosis of capitalism.
Every mode of production, according to the Marxist theory of history, goes through three phases: ascension, apex and decline. In philosophical terms, it has two phases: positive (when it contributes to the development of the productive forces) and negative (when it contributes to the undevelopment of the productive forces). Decline always falls into the negative phase, so we're talking about the same thing here.
Racism may play a cultural or flavor part to the decline, but the main thing is that capitalism is in decline. The key here is in the fact that China is not capitalist, but socialist, so the successor of the USA will not be another imperialist (capitalist) superpower, but a socialist superpower. And the Chinese know that.
«Every mode of production, according to the Marxist theory of history, goes through three phases: ascension, apex and decline.»
That is a rather simplistic reduction of marxism...
«The key here is in the fact that China is not capitalist, but socialist»
The vast majority of party and state officials are greedy rentier "petty bourgeoisie" as they own portfolios of housing and stocks, and since they are trained in marxist class thinking they understand well which class they belong to and what their class interests are. The PRC is becoming a thatcherite rentier system like the ROC-Taiwan and China-HK and Singapore; "thatcherism with chinese characteristics". No longer "one country, two systems", but "one country, one thatcherism".
My guess is that the top leadership understand that well and are not happy with it, but they cannot push against the majority of the officials of the party and state.
This was a good book review of a book I would not heard of otherwise. I am a little confused about the summary though. Does Orain argue that there ever was a truly free trade regime/"neoliberal" order? Or does he divide the last 500 years into different periods of mercantilism/finitude/rapacious capitalism? Or does the dichotomy go back and forth, first finitude, then free trade/neoliberal?
Orain discusses almost exclusively the mercantilistic episodes. But he acknowledges that the changes are cyclical and that consequently the free trade episodes were (approximately) from 1820 to 1880, and from 1945 to now.
Ok thank you. I am curious how he argues that 1880 to 1914 got more mercantilist; usually most scholars say “globalization” kept on trucking until 1914. I agree with your critique of Orain’s explanation of the end of the current free trade period, though I think it is ending for reasons different than you two provide. You are right that it does not have to do with “finitsude”; if anything, scarcity of at least energy is probably going to go down due to the advent of renewable energy and EV vehicles.
I understand that mercantilism could also be seen in other historical eras, such as perhaps the Mediterranean in the ancient world (with the Greek city-States, Egypt, Asia Minor). There's an interesting idea in which power comes from controlling trade. It's funny how the same phenomenon can be seen differently; perhaps this return to mercantilism is another imperialist 'scramble'? In the latter concept is involved the struggle to access markets (as well as raw materials and slaves/labor).
I'm confused about the idea of capitalism as a mercantilist system. Is it at all times a mercantilist system, or does it just go into and out of a mercantilist phase over time as different continental powers wax and wane?
«looking at the cyclical nature of world capitalism in the past four centuries. We are entering, according to Orain, into one of the periodic readjustments of capitalism, from free trade to the “armed trade”, characteristic of mercantilism.»
It is good to know how things were in the real reality where that french Economist lives because in my imaginary parallel reality the USA empire and neoliberalism never actually pursued a "free trade" policy and they always sanctioned and had armed interventions against rivals, and if there were a somewhat liberal but not free trade policy it was always and only with vassal countries in the USA sphere of influence.
In my imaginary parallel reality sanctions against Iran, Libya, Iraq, Cuba, Korea-north, Venezuela happened for decades and trade with the RF and PRC was only allowed when the USA oligarch thought they were too part of their sphere of influence (the Yeltsin and Jiang/Hu periods).
However in my imaginary parallel reality there was some confusion because since 1980 and even more since 1994 the USA oligarchy policy was to export jobs as much as possible and import workers as much as possible, but those were mercantilists policies too, just different means to achieve the same outcomes.
«trade with the RF and PRC was only allowed when the USA oligarch thought they were too part of their sphere of influence (the Yeltsin and Jiang/Hu periods).»
In my imaginary parallel reality there is no switch from "free trade" to "mercantilism" but changes related to each other:
* A phase of "consolidation" instead of "expansion". People like Trump understand well the risks of imperial over-extension.
* As part of "consolidation" a re-shaping of the details of the overall terms of trade with the vassals in the USA "sphere of influence".
There is a "whig centrist globalist" faction in the USA that reckons that they can make more money now if they constantly push for expansion even if that risks a shorter era of dominance, and a "tory one nation nationalist" faction that reckons that longer term USA dominance is more desirable.
Something I found odd in histories by A.J.P. Taylor and Niall Ferguson, I would have expected them to adhere to the doctrine of free trade and the theory of comparative advantage, but their accounts dwell on absolute advantage and the gross levels of output in things like iron and steel.
I suspect this is because "free trade" has never existed anywhere; it is a lie promoted by the reigning hegemon (first the Brits, latterly the US) -- patter talk to cover existing unequal terms of trade and prevent emerging markets from using the protectionism (UK Navigation Acts; 19th Century US tariffs) the hegemon used in its own rise to power. See Ha Joon Chang's "Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism" for more detail:
https://www.goodreads.com/book/show/1032019.Bad_Samaritans
«prevent emerging markets from using the protectionism (UK Navigation Acts»
Voltaire: «What has made England powerful is the fact that from the time of Elizabeth, all parties have agreed on the necessity of favoring commerce. The same parliament that had the king beheaded was busy with overseas trading posts as though nothing were happening. The blood of Charles I was still steaming when this parliament, composed almost entirely of fanatics, passed the Navigation Act of 1650»
https://www.project-syndicate.org/commentary/economist-writers-last-true-believers-in-neoliberalism-by-j-bradford-delong-2023-04
«Adam Smith himself supported the Navigation Acts – which regulated trade and shipping between England, its colonies, and other countries – despite the fact that they mandated that goods be transported on British ships even if other options were cheaper. “Defense,” he wrote in The Wealth of Nations, is of much more importance than opulence.” Denouncing desirable security policies as “protectionist” was beside the point then and now.»
I would also puff Dale Copeland: Economic interdependence and war. Thesis, after having ploughed the history 1790-2000: when a big power finds a risk that it will be outcompeted in the economic field it is likely to turn to violence.
There is where the North-Atlantic region finds itself now, because of its self-destructive policy of "outsourcing" 1980-2020.
There's a lot of things in flux right now so it's difficult to say where we stand. The uncertainty is created by arrival of Trump.
Until few months ago, there was a degree of certainty on where world was headed under Biden administration. It was a carefully crafted industrial policy and policy of 'regionalization'. Building trading blocs with US, EU & Asia Pacific on one side and with China & BRO/BRICS/illiberal world order on the other. The world was orienting towards 'regionalization' and NOT mercantilism.
With arrival of Trump, everything has gone haywire. While China remains a foe, US is also attacking its own allies including EU/NATO & Canada & Mexico. This policy of attacking longstanding traditional allies is outside the purview of any rational motives. This is madness of Trump regime. This self demolition of US hegemonic position by lunatic policy will guarantee that China will emerge a strong player in near future.
Marxian philosopher István Mészáros had already, in the early 1990s (in 'Beyond Capital', his magnum opus), identified that capitalism was already at its descending phase. So that's the modern-day Marxian diagnosis of capitalism.
Every mode of production, according to the Marxist theory of history, goes through three phases: ascension, apex and decline. In philosophical terms, it has two phases: positive (when it contributes to the development of the productive forces) and negative (when it contributes to the undevelopment of the productive forces). Decline always falls into the negative phase, so we're talking about the same thing here.
Racism may play a cultural or flavor part to the decline, but the main thing is that capitalism is in decline. The key here is in the fact that China is not capitalist, but socialist, so the successor of the USA will not be another imperialist (capitalist) superpower, but a socialist superpower. And the Chinese know that.
«Every mode of production, according to the Marxist theory of history, goes through three phases: ascension, apex and decline.»
That is a rather simplistic reduction of marxism...
«The key here is in the fact that China is not capitalist, but socialist»
The vast majority of party and state officials are greedy rentier "petty bourgeoisie" as they own portfolios of housing and stocks, and since they are trained in marxist class thinking they understand well which class they belong to and what their class interests are. The PRC is becoming a thatcherite rentier system like the ROC-Taiwan and China-HK and Singapore; "thatcherism with chinese characteristics". No longer "one country, two systems", but "one country, one thatcherism".
My guess is that the top leadership understand that well and are not happy with it, but they cannot push against the majority of the officials of the party and state.
This was a good book review of a book I would not heard of otherwise. I am a little confused about the summary though. Does Orain argue that there ever was a truly free trade regime/"neoliberal" order? Or does he divide the last 500 years into different periods of mercantilism/finitude/rapacious capitalism? Or does the dichotomy go back and forth, first finitude, then free trade/neoliberal?
Orain discusses almost exclusively the mercantilistic episodes. But he acknowledges that the changes are cyclical and that consequently the free trade episodes were (approximately) from 1820 to 1880, and from 1945 to now.
Ok thank you. I am curious how he argues that 1880 to 1914 got more mercantilist; usually most scholars say “globalization” kept on trucking until 1914. I agree with your critique of Orain’s explanation of the end of the current free trade period, though I think it is ending for reasons different than you two provide. You are right that it does not have to do with “finitsude”; if anything, scarcity of at least energy is probably going to go down due to the advent of renewable energy and EV vehicles.
Interesting!
I understand that mercantilism could also be seen in other historical eras, such as perhaps the Mediterranean in the ancient world (with the Greek city-States, Egypt, Asia Minor). There's an interesting idea in which power comes from controlling trade. It's funny how the same phenomenon can be seen differently; perhaps this return to mercantilism is another imperialist 'scramble'? In the latter concept is involved the struggle to access markets (as well as raw materials and slaves/labor).
Great review, thank you.
I'm confused about the idea of capitalism as a mercantilist system. Is it at all times a mercantilist system, or does it just go into and out of a mercantilist phase over time as different continental powers wax and wane?
I would argue it always is (see my reply above to Max B. Sawicky) -- the hegemon attempts to obscure this.
I might actually want to read this book, but I only read English. Is there a translation coming out?
I'm in the same boat with Emmanuel Todd's "La Défaite de l'Occident" ... :(
https://annas-archive.org/md5/4c9713b6cd334e013ae9f4af62571763
Shh...
much obliged!
Thank you Kouros!