Mercantalism, Protectionism, Promotionism

James writes that “(2) being in favor of markets does not mean that one favors everything that businesses engage in to enhance their profitability.”  This is clearly right.  Adam Smith, famously, argued against mercantilist policies that enhanced profits for (some) businesses.  Today, of course, we talk a lot about protectionist policies that do the same.  There are, in fact, a variety of regulatory policies that do this.  Current states engage in what we can call promotionist acts—acts meant to promote the interests of some subset of those within the system (usually business interests).  So, here is a list of types of promotionist policies.  What do people think of the list?  In particular, do I leave anything out that I shouldn’t?

  1. protectionism: domestically promoting domestic interests against foreign competitors (e.g., import tariffs)
  2. internal promotionism: domestically promoting the interests of particular domestic business interests against others (e.g., municipal support for sports teams and monopoly grants to cable companies)
  3. mercantalism: promoting the interests of domestic business interests non-domestically (e.g., agricultural subsidies for exports)
  4. reverse mercantalism: domestically promoting the interests of foreign business interests (e.g., grants to foreign companies to open factories locally; think of municipalities helping foreign companies to open factories and hire local workers)
  5. internationalism: using international governance structures (like the IMF and WTO) to promote the interests of international business interests (no current example available, but during the 2002-2003 steel tariff debacle, the idea was floated to have the WTO collect revenues on U.S. tariffs on European steel as well as on the retaliatory European tariffs on American goods that would have resulted and then to use those proceeds to help rebuild the international steel industry).
  • Dan

    Domestic protectionism? For example, occcupational licensing.

  • Hey Andrew, I wonder if promotionism is necessarily a force-backed activity. For instance, what about mind-sets, unwritten rules, social pressures, etc. that urge acceptance of the internal businesses as if they were necessities. Maybe even an, “or else” body language.

  • 6) War, whether for lucre, resources, Keynesian stimulus or other competitive advantage.

  • John V

    I think your list is pretty good.

    For any modern liberals that thought support of freedom of exchange was so obvious to all as to be a non-factor in these discussions, consider the list above.

  • John V
  • Just curious: the facebook ‘like’ button was pressed by over 500 unique fans yesterday. Now it’s around 20. Was that an intentional reset? Is BHL going for some kind of stealth operation?

  • Dan, I think that “Domestic protectionism” would be an example of Andrew’s (2)–“internal promotionism”.

  • Nathan P.

    I believe that many forms of regulation not apparently based on economic concerns are also internal promotionism. Onerous health and safety regulations advantage big and/or established producers over small and/or young producers, due to the barrier to entry thereby created. Since the regulations are often not future-proof, they also advantage businesses using outdated methods over businesses using more modern methods. It is difficult to explain these things to people.

  • Dan-I think James is right, what you call “domestic protectionism” would be an example my “internal promotionism”

    DrSwaraj-I think I’d limit my own discussion to government policies, but I would want to take that pretty broadly. Tax policies would certainly count. Probably also government endorsed advertising campaigns would count. So, no, I don’t think it needs to be force-backed.
    (By the way, I don’t know enough about the “like” button or Facebook to take a guess about why there was such a difference over the 2 days.)

    TheOtherChuckD-War is definitely often promotionist, but I would guess its at least often promotionist in one of the ways I’ve already specified: “internally promotionalist”–an attempt to help those companies that sell planes, weapons, and such (or any Keynesian stimulus). But there may be another category. Say the war is really about helping a domestic company gain a market to sell its goods in. Or to maintain a domestic company’s ability to buy a product in the foreign territory (gas!). What would that be? I’d prefer not to just call it war. Maybe “external promotionism?” (That would be “promoting the interests of particular domestic business interests against others on non-domestic fronts” or some such.) I’m open to a better way to flesh that one out. Or for reasons to think it can be subsumed under one of the other categories (which I currently doubt). Thanks!

    John V.- Thanks for the first comment and the link! (I am assuming that you think Rand is wrong to worry about “shipping jobs overseas.”)

    Nathan P.-Absolutely agreed! Thanks!

  • Dr – The facebook likes reset when we moved from the URL to our own domain – I didn’t realize that was going to happen but, ah well.

  • I am reading a peice by Kevin Carson right now, “Austrian and Marxist theories of monopoly capital” and he seems to provide at least one good example of 5) internationalism. The IMF opposes public health care in other countries because it means US businesses, which often have to pay for employee health care, will face extra costs and have to pay for a factor of productiont that is subsidized in other countries.

  • I think that some advantageous aspects of corporate law and other laws governing business associations (in particular things like limited liability and partnership taxation) are promotionist towards certain sorts of enterprise, at the expense of self-employed entrepreneurs and NGOs.

  • John V


    Actually I barely notice that part about shipping jobs. It was mainly for the restriction of choice.

  • John V-Fair enough!

    Andrewlevine-Agreed. Completely.

    mstob-Thanks; I will have to look at that!

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