Evening star., 1945-10-21
Drift to MercuntiIism
Seenin Economic Trend
Commentator Says Tendency Is
Toward Colbert Doctrine.
By Raymond Moley

By Raymond Moley
While every economic conference of
nations rings with sympathy for more
free trade, the actual present trends
are not In that direction. The world,
In fact, is drifting back toward what
originally was a word of opprobrium
-"mercantilism" means national
economic unity.
The Russians have not even given lip
service to free trade, which, in view
of the hypocrisy of some of the western
powers, is commendable. But because
1t Is so true, 1t is not a good omen.
Stain has made clear to American visi-
tors to Russia that, after the war, he
expects sharp depression in capitalist
countries. When that happens, he says,
these countries will be glad to give large
credit to Russia to provide more en-
ployment for their people. And if de-
preston comes, that is probably what
we shall do.
MercantilSm arose nearly three CEN
turies ago as means of breaking down
the barriers to trade established by
petty rulers and private land owners. 1t
was one Of the steps by which the great
European nations tried to supplant
feudalism. The name "mercantilism" is
most often associated with Colbert, the
great minister of Louis XIV, whose
tariff of 1864 created sort of national
monopoly of tariffs over nearly half of
the French state. Colbert did a lot for
France, but it was in line with a firm
belief in totalitarian government
Adam Smith devoted his life to an
attack on the mercantilism which after
Colbert, spread over Europe.
One of the characteristics of mercan-
tilism is the fostering of a merchant
marine by means of restricting a ma
tion's trade to that nations ships. At
this moment Swedish enterprises which
get Swedish import licenses are required
to patronize Swedish ships. There is a
definite trend to link up American
credits to a requirement that American
ships be used. All this is a clear rever-
sion to the old British Navigation Acts.
One of the chief reasons for this ten
dency is the fact that exports will be
husbanded to the utmost through state
purchasing. Germany, Austria and Ja-
pan will be put under quotas by the
Allies.
| The countries thus restricted COM
| prise more than half of non-Russian
| Europe. Holland and France, which
| have considerable credit balances
! abroad, will nevertheless hardly return
/ to free economy. They have devas-
/ systems to restore.
Thus, there remains as areas of par
TALLY free trade, Switzerland, Spain,
Portugal, Denmark and Norway.
The major question in postwar trad
ing prospects hinges on the Keynes
Halifax negotiations in Washington.
Keynes, at Breton WOODS, argued
persuasively that the plans adopted
there were avenues to free trade. On
that supposition, we adopted those plans.
The arguments in Congress for their
passage were almost wholly on the basis
Of the trade advantages which we might
gain under the Breton Woods plan. We
now find that Breton Woods is not
enough.
! The new mercantilism in the British
/ Empire is still held as a quid pro quo.
The projected naturalization program
/ of the British Labor party will work as
certainly toward state-controlled trade
as did the New Deal reforms of 1888.
Those reforms, Mr.. Roosevelt explained
to the London Conference that year.
prevented us from opening our economy
to the world. The naturalization of
British coal mines would create a state
monopoly. which would put foreign
trade in coal in the hands of state au-
thority The naturalization of iron
and steel would do the same.
British businessmen are convinced
that the Ottawa agreement of 1882
rescued Britain from the depression.
sheltered markets" are still held to be
a desirable aid to recovery from war.
A proposal that we give up so per
cent of our present rates, in return for
the termination of empire preferences,
would be hard for democratic admin
istration to face. The greatest outcry
would probably come from organized
labor.
The way back from the new mercantll-
ism will be long and difficult We may
well hope that it will not be as long as
the century or so from Colbert to Adam
Smith.