The Global Roots of Neomercantilism

[THEME MUSIC] MARK BLYTH: From the Rhodes Center for International Finance and Economics at Brown University, this is the Rhodes Center Podcast. I'm your host Mark Blyth. We've seen quite a few criticisms of free trade from across the political spectrum over the past few years, Trump focused on the US-China trade imbalance, while the left focused its ire on free trade agreements in general. It's, of course, not the first time that such ideas have found currency in a globalizing economy. From the late 18th century, a set of ideas known as neomercantilism began to thrive in a number of Western countries.

It was a set of ideas most famously espoused by the German thinker Friedrich List that focused on protectionism and government activism to create an industrial state. But as Eric Helleiner, our guest today, a political science professor at the University of Waterloo, explores in his new book, The Neomercantilists, this movement did not start in Europe and simply diffuse out to the rest of the world. Rather, this movement was a truly global phenomenon with intellectual roots springing up everywhere from Africa to Asia to Latin America.

Helleiner explores the neglected intellectual traditions that gave rise to new mercantilism. In doing so, his book not only helps explain the protectionist revivals of today, it also challenges Western readers assumptions about how economic theory develops and how economic ideas gain influence around the world. Here's my conversation with Eric. Hello, Eric. Welcome to the podcast.

ERIC HELLEINER: Hello, Mark. Thanks so much for having me.

MARK BLYTH: So let's start with the basics. What exactly is mercantilism?

ERIC HELLEINER: OK. So this is actually a difficult question to answer because there's a huge literature of scholars who are debating the meaning, the exact meaning of mercantilism. I take from that literature that you can distill mercantilism in a fairly straightforward way, which is someone who believes in strategic trade protectionism, meaning you don't want [INAUDIBLE]. You're not trying to cut off yourself from the world. You're strategically protecting things to cultivate certain sectors, plus other forms of government economic activism.

So say 17th, 18th century Europe, this is monopoly-- state supported monopolies and subsidies and all kinds of other things in order to cultivate the wealth and power of your state. And so it's the policy tools which are state activism, both of a protectionist kind, but other kinds too, and the goal, which is power and wealth. And I should emphasize that a lot of the literature on mercantilism highlights that the distinctiveness of that mindset was sensing that wealth and power are intricately interconnected. Wealth generates power, power generates wealth, and so you need to think of them as interlinked.

MARK BLYTH: Why is it when you read about mercantilists-- before we get to neomercantilists-- people tend to think gold in the trade balance.

ERIC HELLEINER: Right. That was part of Smith's critique of what he called the mercantile system, from which we take the word mercantilist. A key part of Smith's critique of what he called the mercantile school or mercantile system was is if people believe that specie and wealth were the same thing, and he's trying to say, this is misperception. And I know we're not talking about the neomercantilists quite yet, but a lot of the neomercantilists, these people that I'm interested in, totally accept Smith's critique of that.

They say, you know, he's absolutely right. That's not what we're arguing. And what's interesting is later historians have also-- a number of historians have argued that wasn't a central feature of a lot of mercantilist thought, like Smith was not accurate in that part of his critique. Certainly true of some of them, but not all of them.

MARK BLYTH: So let's go past Smith. Smith comes out, does the Wealth Of Nations, starts the liberal commercial revolution intellectually, is very influential, and then does the response. And the response is where we begin to pick up the first threads of what you want to talk about, who are these neomercantilists. So what is that? Where does that come from? How do we situate that conversation?

ERIC HELLEINER: Yeah. So I'm trying to say that these are people who shared many of the views of mercantilists, except that they were very aware of either Smith's work directly or more generally, 19th century classical economic liberalism. In many ways they admire much of Smith's work, but they say, we still think you need to have strategic trade protectionism and other forms of government recovery activism in order to promote the wealth and power of the state. And so they're defending the kind of traditional mercantilist priorities, but in a more sophisticated manner.

MARK BLYTH: So let's get to the man of the moment, Friedrich List. He's the one that basically appears in every textbook whenever you drop this word, and he is important, but you show that he's not nearly as important or nearly as influential as people tend to think. So how should we think about List and his contribution?

ERIC HELLEINER: Yeah, so List is certainly a very important figure. His Eighteen-Forty-One book, The National System Of Political Economy, is a really interesting read. And you can certainly see why it became popular because it essentially synthesized a lot of ideas that had already been emerging from Alexander Hamilton on through a number of other thinkers in the early part of the 19th century, and it's also a book which is read around the world. I mean, it's extraordinary, its kind of cosmopolitan reach. It's translated into many languages.

So it has a global audience eventually by the late early 20th century and intellectually, it's just a very interesting critique of Smith. Underlying the critique is an important point, several points. One is about the centrality of industrialization and its importance for the cultivation of wealth and power. And he links us to this broader idea, which is a really fascinating idea, about the productive powers of a country, by which he means a very broad set of things.

Not just the capital and the resources, but more generally its culture, its institutions, its political system, all of this stuff gets cultivated through the process of industrialization and reinforces the wealth and power of the state. So that's one of his core contributions. Then he's got this other set of contributions around why free trade is a tool of British hegemony, essentially. And he's actually not opposed to free trade in general. He's very appreciative of Smith's general case. It's just he doesn't think free trade among unequal countries is desirable.

But interestingly, he-- and this is a part of a List that people often forget is that he's really concerned only with a few countries. He lives in Germany-- he grows up in Germany, he moves to the United States at one point, and then he lives in France for a while, and those are the three countries that are at the core of his analysis.

When it comes to countries, say, in Latin America or in Asia or Africa, he's not interested in them particularly, and he doesn't think they should do what he's advocating. He wants them to be free traders because he thinks they're destined to be commodity exporting countries. And so it's a very interesting analysis, but very context specific to the countries that he was concerned with.

MARK BLYTH: But in a sense, people like List-- and I want to get into other ones like Kerry in the United States and others-- they are Gramscian organic intellectuals to the extent that they're responding to what they see in the world around them and if you're in the eighteen-twenties or eighteen-thirties or eighteen-forties, you're beginning to see the rise, not just of British mercantile capitalism, but British industrial capitalism, and the beginnings of the British empire proper. So if you're the German states and you're the United States and you're France, you're desperately worried about your relative position vis-á-vis this rising power. So is it fair to say that neomercantilism is a kind of defensive ideology in that sense?

ERIC HELLEINER: Yeah, that's a really important point. And I do want to emphasize that List himself comes to this position at the end of the Napoleonic wars initially. The Napoleonic wars end and suddenly there's this influx of British products into the continent in the United States and it's really devastating for many manufacturers, emerging manufacturers. And so you're right, he's responding to this very real condition, which then his sense of the danger and the sense of the British is only intensified in the subsequent decades, and also by his experience living in the United States where he meets many people who are equally concerned about a British economic power.

And so you're right that it's defensive, but not-- it's also got an offensive element. One of the reasons you make Germany wealthy and powerful in his vision is so that it can go and conquer other people. So there are some neomercantilists and Kerry, who sounds like you'd like to talk about in a second, Kerry is one of those. He's an anti-imperialist, and so his is very much, I think, accurate-- it's accurate to describe it as entirely defensive. In List's case, it's both defensive and offensive.

MARK BLYTH: So is that a good way to juxtapose the two of them? I mean, I'm sure there's people listening who've heard of List, but they probably haven't heard of Kerry. He's American, he's contemporaneous, and he takes this very similar set of ideas in a very different direction. Can you give us Kerry's vision and how it differs?

ERIC HELLEINER: Yeah. I think Kerry is kind of the lost figure of this period. I mean, I was really surprised. I'd always heard of Kerry, but really rarely had a thought about him seriously, and I have to admit, I'd never read his key text, which is a text in the late eighteen-fifties that he writes called The Principles of Social Science. And when I began to read it, first of all, it's a very difficult read. It's a three volume work. It's not well organized. It's repetitive and it's described by some of his contemporaries, like John Stuart Mill, as just a terrible work, and Marx is very critical of it.

But it has enormous influence, and that's what really shocked me because I was interested in looking at neomercantilist ideas as they emerged around the world and Kerry's name appears as frequently as List does in many parts of the world, so people are reading both of them. Some of the big cases that we teach about state led industrialization as latecomers are more Kerry informed than they were List informed. So this is true of the American experience. So American protectionism from the eighteen-sixties onwards is Kerry inspired.

People are aware of List, but Kerry is the dominant influence-- and this is in the [INAUDIBLE] Republican Party. It's also true-- this really shocked me-- of Bismarck, Bismarck's Eighteen-Seventy-Nine tariffs, which are kind of a classic case of the decline of the free trade era. That was actually more Kerry inspired than it was List inspired. And it's also true of the country where I live, in Canada, similar thing. Kerry is more influential. It's even true in the early Meiji Japan period, which is such an important case for people, where Kerry was translated and read much more actively and earlier than List.

And the other thing I'd like to say about Kerry is that his ideas about neomercantilism are quite different than List. And so sometimes he's described as a follower of List, and I spent a lot of time trying to figure that out and I just don't think he is. He's quite dismissive and people around him are quite dismissive of List's ideas, for a lot of reasons. But one of them is they have a much more, what I call, a social vision of neomercantilism where if you read List's famous book, there's almost nothing about distributional issues domestically within a country.

It's all state power and wealth. Whereas Kerry is very interested in distributional issues. He wants to maximize the power and wealth of the United States from kind of a nationalist way, but he combines it with this more populist vision that this will also help workers and farmers against an elite power of trading classes of the world. And just to say one final thing about that, it's even true that he applies that to England. So List's vision is England is benefiting from this whole free trade world.

In Kerry's world, the elite in England are benefiting, but the poor in England are just as exploited by the free trade system as the poor in the United States and France and Germany, so it's a really different kind of vision. And he's also very interested in non-Western countries and thinks, in contrast to List, that they should also be pursuing neomercantilist ideas. And he's even kind of anti colonial. He calls for an end to British imperialism in India, for example, so very different.

MARK BLYTH: So let's take the conversation away from Kerry and away from List and to the rest of the world at this point. So when I used to teach a class that dealt with these issues, the way I would talk about it with students was the following-- and I'm being very thumbnail sketch, but allow me to do this. So British industrial power financial might, by about Eighteen-Sixty, is overwhelming. The French are backed into a corner.

You get Cobden-Chevalier. That essentially assigns them the role of being peripheral agricultural producer in Europe and delays French industrialization. The Germans see this under Bismarck and the period of unification, and realize that they need to get industrial. And they are the first, in a sense, developmental state who use tariffs, et cetera, et cetera to do this. In the United States there's a weird version of that, certainly, particularly the tariff politics. Japan has opened up some almost simultaneously on the other side by the Commodore and the Black Ships, and they immediately go, we need to get industrial.

So there's a sort of synthesis between the need to get industrial quickly and then these ideas. Japan sends lots of people over to Germany, over to the United States. They come back with different bits of the-- come back with the British Navy, the American post office, and the German credit system, and then they build that. That then gets transferred by colonialism into South Korea, et cetera, et cetera. How would you change that story? Is that story right, wrong, or needs augmented or is fundamentally flawed?

ERIC HELLEINER: Yeah. I'm so glad you've asked me about that because a major part of my book is trying to challenge that conventional story, which is a story of diffusion. Western mercantilist ideas, like List in particular, diffusing through Meiji Japan, subsequently through to the rest of East Asia, Taiwan, Korea. And I don't want to deny that List was read in Meiji Japan and there's some prominent figures in Japan who are very interested in List, but the dominant influence in terms of neomercantilist thinking comes from their own endogenous intellectual history.

And so if I can just take a second to explain that, because it's a fascinating history. Which is in the pre-Meiji period in the Tokugawa, Japan, it's a very decentralized polity. And so there are many small local authorities who are increasingly competing with each other economically, and out of that competition emerges a set of, if you like, micro mercantilist ideas where you're trying to promote the power and wealth of your local authority by exporting more and importing less and subsidizing your local firms.

And it generates a really active discourse of political economy, which is mercantilist. And so when the Americans come in and open up Japan, there's a huge period of instability, but many people begin to translate those small micro versions of mercantilism to the national level and say, Japan as a whole can deal with this new external threat by applying the mercantilist ideas we had internally in terms of intra-Japan competition to competing with the world as a whole. And those are the influences that seem to be dominant amongst the early Meiji policymakers who are promoting state led industrialization.

So they might read Kerry, they might read List, but it's really just reinforcing a view which they have already come to. The same is true in China and Korea. And so if you think the Korean story is, oh, Korea embraces neomercantilist state led development ideas through its colonial experience with Japan, it's not an accurate story. They themselves were drawing on some earlier ideas in Korean history, which were mercantilist ideas, and the same is true in China.

Those three countries are also drawing on a common intellectual heritage that goes back to the Chinese warring states period and some key intellectual thinkers, particularly the Book of Lord Shang which is a kind of a legalist text advocating the pursuit of state power and wealth, not through commercial expansion and everything-- Lord Shang wasn't into that-- but the concept that power and wealth and the state are interconnected.

And there's a slogan in that book, which comes to be used in all three of those countries in the mid-19th century by thinkers who are saying, we are now facing the same kind of conditions as existed within the warring states period. It's just global now. It's kind of a global commercial war. It's just a very different story. It's a story about endogenous intellectual roots and also sharing between Japanese, Chinese, and Korean thinkers, all independent of Western influence.

MARK BLYTH: Can you do the same thing for Latin America? So let me lay out the standard story of Latin America. You have basically commodity exports from the founding, the colonial founding. These very powerful families control very large pieces of land. They tend to control local politics, et cetera. And it's only in the nineteen-thirties with the turndown in trade that you get an attempt to state led industrialization and import substitution type projects.

This is reinforced after World War II with Raúl Prebisch and the Economic Council for Latin America, which is very much a kind of neomercantilist policy of development with Global North approval. So that would be the standard story that you would get on Latin America. How does your understanding of Latin America and the Indigenous roots of these ideas complicate that version?

ERIC HELLEINER: Yeah. So the story in Latin America that I tell is that there were many precursors to the nineteen-thirties ISI policies. And really, it goes back to early independence years where if you're in Latin America, you're experiencing the same thing that List experienced, which is the sudden influx of British manufacturing, but also more generally, British commercial power in the region in the early 19th century.

And so many countries have just become independent and there's kind of a nationalist reaction saying, we need more than just political independence, we need economic independence as well. So there's some very early thinkers, and what's fascinating there is there are endogenous roots. They're responding to something locally and I give an example of the Mexican case because it's such an interesting situation where in Puebla, in Mexico, they had some of the largest textile manufacturing operations in Latin America at the time.

And so not surprisingly, they were very threatened by the move to free trade at independence, and so they begin to generate these neomercantilist ideas, critiquing free trade. But they're also drawing on this kind of late Bourbon Spanish mercantilism at the end of the Spanish colonial empire from second half of the seveteen-hundreds as an attempt to reform the Spanish colonial empire to be more competitive, essentially, with the British, and they're doing it through mercantilist means.

And people who are living in those colonies are reading the texts which are being generated in Spain, and so when independence comes, they go to those texts and they say, those are not bad ideas about the need to have state actors and promote industry and all these things, but we're going to apply it to our own independent state at this point. And so that's the story to tell about the 19th century, and it appears in many different countries in different ways and different moments. But it doesn't have the same intensity that we see in the East Asian context, and I think the reason is probably a lot to do with the different strategic context.

Like from the eighteen-forties to the eighteen-seventies, Korea, Japan, and China are kind of collectively responding to a major threat from the West, and Latin America is just different context and there isn't even the kind of military competition outside of the Paraguayan context-- which is a very interesting one-- in the early part of the 19th century. There's not many other contexts where a state is trying to industrialize for military might, which is what the Japanese are trying to do or the Chinese are trying to do.

MARK BLYTH: So let's go into the latter half of the 19th century and go to places we don't normally think about in these types of conversations that you bring into the book-- first of all, Egypt, secondly, the Ottomans. How do they fit into this story?

ERIC HELLEINER: Yeah. So the Egyptian story is a totally interesting one.

MARK BLYTH: It's one of my favorite parts of the book. First of all, I had no idea who Muhammad Ali really was. Just start there, right? But to be sort of this kind of-- how can I put it? Expatriate Albanian political entrepreneur who ends up running, it's like, wow, how did this go?

ERIC HELLEINER: Yeah, so that is the story. He rules Egypt for much of the first half of the 19th century and as you say, he's Albanian and he has a vision. It's certainly not a nationalist vision because he doesn't seem to think a lot of the Egyptians, as far as I can tell, but he has a vision of making Egypt a great power. And like other neomercantilists, he sees industry as crucial for doing that. He's in a difficult context because he's a part of the Ottoman Empire formally, which has signed treaties which make it very difficult for him to raise tariffs.

And so instead he creates state monopolies which block imports and allows him to build up state owned enterprises that are doing textile manufacturing, but eventually doing all kinds of different operations beyond textiles, and also massive infrastructure projects, massive movement of savings from the agricultural sector in very coercive manner to these new sectors he's trying to promote, all of which is designed to become a great power. And it's just a remarkable case.

Now it would have been wonderful if Muhammad Ali had left the treaties explaining why he was doing all this, and he didn't. But I was able to read and I read as much as I could of interviews that he gave and letters that he had written where you can piece together what is, I think, a very strong neomercantilist vision in the sense that he often engaged with European liberals who had come to Egypt and say, why are you doing this? You should be exporting cotton in our free trade world.

And he would explain to them, no, I need to build up industry with state activism, in a very neomercantilist way, and he would explain the rationale very clearly to them. So he is a really fascinating figure. I mean, it doesn't succeed, ultimately, because it's crushed by a combination of the Ottoman rulers and the British, who both are threatened by him in different ways and eventually constrain what he's done through the threat of military action.

But it is, I think, by far, the most ambitious neomercantilist experiment in the early 19th century anywhere in the world. And if I could just say one really weird thing about it from my standpoint is that List is writing his book and he published this book in Eighteen-Forty-One, which is just as Ali is having to unwind everything because of the pressure of the British and the Ottomans, and List makes no mention of this extraordinary experiment that had taken place over several decades.

He was aware of it. He wrote about Egypt in other ways, but in his main book he doesn't describe the most important and innovative-- well, ambitious-- neomercantilist experiment of the age. And I think it's part of his broader sense that only a few countries can do this and they have to be like France, United States, or German states.

MARK BLYTH: So when we think about neomercantilism today, many people probably think of China in terms of having a very state led economy, it's about building up wealth and power in the nation, et cetera, although with FDI rather than domestic savings and free trade rather than tariffs, to a certain extent. Now when you talk about China, you go back to someone that we all know but we never read particularly as a kind of political economist, and that's Sun Yat-sen. And you actually think that he's much more influential than almost any other figure in determining Chinese policy today. Can you walk us through that?

ERIC HELLEINER: Yeah. So Sun Yat-sen is a figure who is often known for having been the first provisional president of the Chinese Republic after the Nineteen-Eleven revolution and very well known political figure. But he wrote a lot about political economy, and these writings began in the eighteen-nineties and were very much informed by a school-- a kind of self strengthening school that emerged after the Second Opium wars. So why is he interesting?

He is someone who has very ambitious views about why or how China can become more wealthy and powerful in the world. And think about the context he's writing. This is turn of the century into the early nineteen-twenties where China is really at a low point in terms of its status within the global political economy and he's saying, what do we have to do? We have to become wealthier and we have to do that by state led industrialization.

And his ideas are incredibly ambitious, big scale infrastructure programs. Build dams, build ports the size of New York-- in fact, build three of them the size of New York, build railroads across the country. It's just these very ambitious ideas with the state at the center of it, but also he's very strong on this, that China can't do it without foreign capital.

And so you must import foreign capital from the West, but do it in a managed way where you are controlling the capital and you're allocating it to places where it needs to go, and you're not allowing the foreign private bankers exploit you in the way that they have in the past. So again, an example of someone drawing on Indigenous tradition rather than drawing on Western thought. He's sometimes described as a Listian thinker because he was an advocate of protectionism, but I found no reference to List in his writings, so I think he's much more informed by this deeper Chinese tradition.

And he dies in Nineteen-Twenty-Five but it's picked up by Chiang Kai-shek, but it's also picked up by Mao. This is one of the few figures who Chiang Kai-shek and Mao can agree on as a central inspiration. And Mao, up until the Nineteen-Forty-Nine revolution, is saying Sun Yat-sen's economic program is a very important one for China to consider, and then the revolution happens.

But what I show is that when Deng Xiaoping comes into power in Nineteen-Seventy-Eight and pursues this big turn, export oriented, importing foreign capital, state-led industrialization, it's a [? Sunian ?] vision. And I don't mean to suggest that there were not many other influences on Deng Xiaoping, because there were, but one of them is the ideas of Sun Yat-sen. And I show in the book also that even Xi Jinping has continued to invoke Sun Yat-sen's ideas.

I cite this speech that he gave in Twenty-Sixteen at the 150th anniversary of Sun Yat-sen's birth where Xi says basically the Chinese Communist Party is upholding the economic vision that Sun outlined in a Nineteen-Twenty book. And why I think that's important for scholars today is we just don't teach this. And so why are students learning Friedrich List's work without learning Sun Yat-sen's when one of the most powerful rising states in the system is citing that work? Students should be familiar with it.

MARK BLYTH: So it is against this kind of diffusionist model that you're really focusing the attention here to say, we're going to get not just the history wrong, we're going to get our analysis or policy wrong if we think the only thing that matters is the West thinks and then everybody else adopts, and that's a cardinal error in that regard.

ERIC HELLEINER: Yeah, and it's an error just in very practical sense that if you're watching a speech by Xi Jinping and he refers to Sun Yat-sen's Nineteen-Twenty book, you got to know that book.

MARK BLYTH: Right.

ERIC HELLEINER: That's just a basic--

MARK BLYTH: It's very straightforward.

ERIC HELLEINER: Yeah.

MARK BLYTH: The one part of the globe that we haven't covered that you cover in the book is Africa, and there's two ways that Africa show up in the book. One is a kind of diaspora based neomercantilism, which given the centrality of the state, sounds very weird, and I'll let you explain that. The other one, and the one I was really fascinated with, was the Ashanti Empire in West Africa.

Because in pretty much all of these cases, if there is a kind of external threat that's driving it-- and you've alluded to it many times, or actually you've said it many times-- it's British manufacturers, right? They're basically busting up local producers. And that's not what we see because the Ashanti, at least in your rendering of it-- and tell me if I've gotten this wrong-- is much more of a kind of David Humeish merchant society. Right?

So we got all these networks of merchants and their trading routes and who's got this particular fiefdom and who sells what where, and it's that that's coming under pressure. So these lead to two very different types of, if you will, neomercantilist response. So a diaspora based in mercantilism and a defensive merchant base. Can you tell us what those two are?

ERIC HELLEINER: So there are a number of thinkers in Africa who are interested in mercantilist ideas, but the two that you're highlighting are, as you say, particularly interesting. I think you've actually summarized the Ashanti one very well. It's an empire which is very powerful in the interior of West Africa, and threatened by the growing British and other European presence on the coast in terms of trading networks.

And so, as you say, actually one of the things that's really interesting to me is by about the eighteen-seventies, the liberal classical-- British classical liberal ideas are coming into the coast and getting into the interior, and some of the people in the Ashanti Empire are becoming familiar with them and they're saying to the leaders we should be liberalizing. Look at this modern idea. And the neomercantilists in the Ashanti Empire say no, that we need to keep control.

But as you say, it's not really to industrialize, it's to control the commercial side. And this is also true in other parts of the world where often the state control is not all about industry. It's also about trading and shipping and banking and other services like that, and that was the dominant influence there.

The Garvey story is a fascinating one. So this is a figure from the Caribbean who moves to New York, becomes very, very well known in the African-American community, and organizes a kind of a diasporic movement, which I describe as a sort of diasporic form of neomercantilism, where he's trying to cultivate the wealth and power of this diaspora community with the long term goal of building a state in Africa, an independent state in Africa.

And he sees the diaspora as playing this role as a collectivity that can accumulate wealth and power, that can even be the foundation for a future African state. And so how does he do that in practical sense? He creates an organization called the UNIA, which builds a shipping line, Black Star Line, and also manufacturing operations.

And all the things that states are doing in other contexts-- protecting themselves, building up industry, building up shipping-- he's doing through a nonstate entity. And so for example, with the shipping line, he's selling shares to anyone in the African diaspora who's willing to help finance this. And so it's a kind of a very creative and innovative form of neomercantilism because he doesn't have a state, and so he's having to think about a way to build up the power and wealth of this community, which he hopes is going to ultimately lead to an African state.

And by the way, he's not the only case like that. There are other situations where neomercantilists are subject to colonial rule and so they don't have control of their own state and they pursue nonstate forms of promoting industry, like buy locally. In the Indian context, this is the Swadeshi movement that begins in late 19th century, and it's also true in Korea in the colonial period. You see it in many different contexts, but Garvey's is the most, I think, creative version of that.

MARK BLYTH: So two questions to close us out, one looking back and one looking forward. And let's do the looking back one. If you're right-- which I think you are, for what it's worth-- and this is much, much more common than we think and much, much more heterogeneous, has domestic roots all over the globe, to what extent have we got the story of free trade wrong? That in a sense, periods of actual free trade or these weird interregnums that really do, in a [? Kindlebergen ?] sense, correspond to one super dominant power essentially doing free trade.

So let's think Eighteen-Seventy-Three to the outbreak of World War I British empire. And then after World War II we think of the Americans as free traders, but we have all these exceptions, right? We mentioned ECLA in Latin America. You have the lack of convertibility in Europe to '58.

You have lots of industrial protection going on in these economies. You have the developmental state experience in East Asia. So it's really only when you get past the GATT and into the period of the WTO that you can once again say yes this is a kind of global free trade period. Are you effectively rewriting the history of free trade by pointing out that this stuff was way more common than we thought?

ERIC HELLEINER: I'm not intending to do that, but it's an interesting inference. One thing I do point out near the start of the book is I say, I'm not really trying to explain why this emerged everywhere, but I do have some comments about that where I essentially say the common point seems to be eras or contexts in which vulnerability of a state is very high, one or the other, but usually both in an economic sense. And so this often follows a period of intensified economic integration, international economic integration, where a lot of domestic groups feel threatened by that, and a sense of geopolitical vulnerability.

And so if you're asking me, in what context can free trade flourish-- I don't know if that was underlying what you're getting at-- it would be the opposite of the situations, where you have peace and states don't feel vulnerable in a geopolitical sense, and also periods where domestic groups have not experienced great upheavals through global what we would call today globalization processes because those two conditions seem to often appear when you see these neomercantilist ideas emerge.

And so think of the period you were just describing, the post-Cold War era. I think that was a period of less intense geopolitical instability, and so not surprising that those ideas faded away a little bit. But now we're in a different era where it looks like a period of more geopolitical conflict and not surprising, I think that neomercantilist ideas are becoming more prominent in that context.

MARK BLYTH: Even in the United States in the form of Kerry's tariff coming back with Trump in that way. So here's my forward question. So much of this seems to be, as you say, a defensive reaction about vulnerability, but it's also about industrializing. If you industrialize, you become rich and powerful and people don't mess with you. This is the simplest version of the story. We need to or are moving towards post industrial societies as part of a decarbonization green transition. Can you be a neomercantilist in a green world? What would that look like? Are we seeing that now with the various attempts at sort of European Green New Deal, China moving very, very resolutely into renewables? Is there a kind of mercantilism inherent in this as well?

ERIC HELLEINER: Yeah, I think so. And the content of neomercantilism, I think, is increasingly less industrial focused in the current period. And so if you look at the big know mercantilist policies in the United States or China in the contemporary era, or many other places like the EU, as you're describing, it's a lot about other sectors that are seen as now the leading sectors, whether it's digital or AI or whatever it might be.

So I don't think neomercantilist ideas are necessarily associated with industrialization only, they just happen to be in the period that I'm describing. But the other part of your question, I think, is a really important one, which is one way in which I think you mobilize support for the green transition is by highlighting a kind of a neomercantilist logic, which is if we don't do this, someone else is going to get ahead and outcompete us.

And that's very much a neomercantilist mindset, but it does generate political momentum behind green transitions often, and so I think we're seeing that, these green oriented industrial policy strategies in many parts of the world. So ironically, the interstate competition drives green transition out of a sense of, what are the next leading sectors? And we need to be at the forefront of those.

And if I can add one thing, which it's a bit of an odd diversion, but it's just to highlight that Kerry, way back in the mid-19th century, also had an environmental dimension to his neomercantilism. So this has deep roots and it was kind of an argument about how free trade undermined soil fertility and you needed protection to try to address the environmental problems associated with [? monochrome ?] exporting. So environmentalism and neomercantilism have gone together for a very long time.

MARK BLYTH: And they seem to be doing so right now. Let's leave it there. Eric Helleiner, thank you very much.

ERIC HELLEINER: Thanks so much for having me, Mark. I really enjoyed the conversation.

MARK BLYTH: This episode was produced by Dan Richards and Kate Dario. I'm Mark Blyth. You can listen to more conversations like this by subscribing to the Rhodes Center Podcast wherever you listen to podcasts. We'll be back soon with another episode of the Rhodes Center Podcast. Thanks.

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