Re: neomercantilism, trade

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

Keynes realized, certainly by the early 1940s, that propping an economy up
would be far more difficult to the extent that the economy is open.
Certainly by the mid-1920s, because of his involvement with the Manchester
textile industry, Keynes was more than familiar with the declining
industry.  I doubt that he thought of himself as a protectionist.

Let me propose an idea.  The United States was becoming a mature economy by
the 1920's.  The introduction of consumer credit created a large expansion
in demand, but not enough to stave off the Depression.  The war, followed by
the rebuilding of the war-foreign world, created a further boost in demand.
The golden age petered out by the late 1960s.

My own particular theme of late is that intellectual property protection
gave the United States some more breathing room.  For example, the Asians
were creaming us in computer chips until Texas Instruments began suing.

Maybe militarization of space will create the boost demand that is required.

In any case, it seems that some extra-market force is required it keep the
economy from running down.  Might it be that the run-up in debt, not just
from domestic business and households, but Third World debt too -- might it
be the rule rather than the exception, if the economy is to avoid going into
a decline.



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Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx