14 Questions
What is the primary goal of mercantilist policy?
To achieve national economic self-sufficiency
According to mercantilists, what role should the state play in the economy?
A disciplinary role, ensuring adequate competition
What is a key feature of neo-mercantilism in the 21st century?
Identification and development of strategic industries
What term did East Asian economies use to describe their national political economy system?
Developmental state approach
Which of the following is an example of a means used by mercantilist states to promote strategic industries?
Tax policy
What is the ultimate goal of mercantilist policy in international trade and investment?
To achieve a trade surplus and build foreign exchange reserves
What is the main critique of capitalism according to Marxism?
It creates categories of rich and poor people and rich and poor nations.
According to Marx and Engels, what is the predicted outcome of the exploitation of workers in an advanced capitalist society?
A workers' revolution to overthrow the owners' control of society.
What is the role of the government in a capitalist society according to Marxism?
To enforce owner control of society.
What is the primary critique of Marxism following the collapse of the Soviet Union?
It is a discredited doctrine of how to manage an economy.
What is one of the key differences among national systems of political economy?
The primary purpose of economic activity.
Which of the following is an example of a market economy?
A laissez-faire economy.
What is the role of the state in the Japanese economy?
A central role in the overall management of the economy.
What is the main objective of economic activity in a market economy?
To promote consumer welfare.
Study Notes
Mercantilism/Nationalism
- Mercantilism defends a strong and pervasive role of the state in the economy, promoting national economic self-sufficiency.
- It advocates for an extreme policy of autarky, controlling domestic and international trade, investment, and finance.
- Neo-mercantilism supports a sophisticated and interventionist role of the state, identifying and developing strategic industries through tax policy, subsidization, and more.
- States should play a disciplinary role to ensure adequate competition.
- Examples of mercantilist economies include Japan, South Korea, Taiwan, and China, which fulfilled the above roles almost perfectly.
Marxism
- Marxism rejects capitalism completely, seeing it as unfair and creating rich and poor categories.
- According to Marx and Engels, advanced capitalism divides people into classes: owners and workers, or rich and poor.
- Owners have all the power and money, while workers do all the work and have no power or money.
- Marx and Engels hypothesized that workers would eventually realize they are being exploited and rise up to overthrow the owners' control.
- The theory predicts a natural phenomenon of a workers' revolution, overthrowing the government, which is seen as enforcing owner control.
Differences among National Political Economy Systems
- National political economy systems differ in primary purposes, role of the state, and corporate sector structure.
- Different societies emphasize distinct objectives, such as promoting consumer welfare or pursuing national power.
- Examples of varying state roles in the economy include the laissez-faire stance of the United States and the Japanese state's central role in economic management.
Learn about mercantilism, a theoretical perspective that advocates for a strong state role in economy, promoting national economic self-sufficiency. This quiz covers its development and evolution in the 21st century.
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