Liberalism And Mercantilism Analysis

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Register to read the introduction… There are three main differences between these two ideologies of political economy according to Goddard (2003). Firstly, Liberalism focuses on the market mechanism and believes that the economic role of government is limited. However, Mercantilism pays attention to the role of state and considers politics decide the economic activity. Secondly, Mercantilism regards world economy as a zero-sum game which means one country’s loss is as the prerequisite to another country’s gain. Moreover, Mercantilism thinks conflict between different countries is inevitable. Each country can only rely on its own resources to protect itself eventually. However, Liberalism opposes the zero-sum game. It believes the only consequence of the zero-sum game is war. Liberalism stresses the mutual benefit and a win-win situation which lead to international cooperation and interedependency. That is, dividing an existing cake is inferior to make a bigger cake (By promoting economy growth). Finally, Mercantilism focuses on the importance of military power and regards political and economic power as a way to ensure the security of state. Liberalism thinks accumulation of military power and other powers reduces the economic efficiency. Peace is more effective than war. The following table coming from Frederic shows the specific difference between Liberalism and Mercantilism …show more content…
In addition, Liberalism and Mercantilism have their own advantage and disadvantage. When begin to research them, people should have a critique view to accept their viewpoints. In summary, Liberalism and Mercantilism are two important ideologies of political

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