US Mercantilism Is Not Good For The Trade Deficit

Mercantilism is a relatively out of date economic theory which was popular in the 16^th to 18^th centuries. Mercantilism is a form of economic nationalism, and theorists believed that the amount of wealth in the world is static and trade is a zero-sum game, where one country’s gain is another country’s loss.

Mercantilists also believed that trade surpluses are a sign of strength while deficits are a sign of weakness and manufacturing output as well as jobs have a special importance in the economy, making them fundamentally more valuable than services.

This theory, while generally accepted to be out of date by economists today, is making a strong comeback in politics and can now be found across the political spectrum.

According to...