The Neomercantilists: A Global Intellectual History
Eric Helleiner
Cornell University Press, $49.95 (cloth)

On or around 1939 debates about international political economy changed. Over the course of the Cold War, economic nationalism—the attempt to use the state to advance a country’s economic interests—was crowded out of official discourse by two competing universalisms, communism on one side and liberalism on the other. Over the last few decades, however, this opposition has been scrambled. First Marxist universalism failed; the Sino-Soviet split fractured the communist project before the USSR collapsed altogether. Then, after a brief period in the sun on the international stage, liberal universalism too began to falter in a declining arc from Iraq and the Global Financial Crisis to Donald Trump’s victory on an “America First” platform.

Both sides of the so-called “new Cold War” appear to be converging on a largely forgotten third tradition of political economy.

In the wake of these declensions, two political economic developments have muddied the earlier Cold War waters. In October last year the Biden administration announced that it would leave tariffs on two-thirds of Chinese exports intact. This came as a surprise for those who were hoping that Trump administration policies were pathological aberrations. Trade wars, it seems, have come to enjoy bipartisan support, in the unlikeliest of places—the ostensible headquarters of neoliberal globalization.

The other side of the increasing obsolescence of Cold War categories has been the rise of the People’s Republic of China (PRC). Following Mao Zedong’s break with Nikita Khrushchev beginning in the 1950s, Deng Xiaoping’s reconfiguration of the Maoist control system solidified into a powerful, export-driven modernization project under Jiang Zemin by the early 2000s. The Chinese Communist Party’s mercantilist orientation only deepened after the 1997 Asian Financial Crisis, when the PRC began building up a precautionary buffer stock of U.S. dollar reserves, accelerated by 2001 admission into the World Trade Organization. Those holdings helped blow bubbles in the U.S. financial system and financed the war on terror, while the successful export-drive hit American factories hard. Internationally, the PRC’s rapid industrialization sucked in raw materials from all over the world. Meanwhile, a global commodity supercycle lifted the prices of primary products, infusing peripheral states with enough revenue that it became possible to resist Western-dominated international institutions like the International Monetary Fund (IMF) and World Bank, traditional bulwarks of liberal universalism.

Both sides of the so-called “new Cold War” between China and the West thus appear to be converging on a distinct but largely forgotten third tradition of political economy. This return of economic nationalism has troubled acolytes of the old religions. Though free trade is the one area where the more black-and-white canons of historical materialism and liberalism have traditionally been able to meet in agreement, today’s commentators have no widely accepted playbook or established intellectual tradition with which to make sense of the new shades of mercantilist gray. Beyond gestures to Friedrich List and Alexander Hamilton, Cold War historiography has vitiated our understanding of political economy’s past—and with it, the analytic resources for grasping our times.

Political scientist Eric Helleiner’s new book, The Neomercantilists: A Global Intellectual History, is perfectly timed to fill this void. A sweeping account of the men and women who argued for strategic protectionism and other forms of government economic activism to promote state wealth and power—an ideology he calls “neomercantilism”—between the publication of the Wealth of Nations in 1776 and World War II, it offers the first comprehensive global study of this discourse’s diverse origins and political valences.

One reason “neomercantilism” has proven so susceptible to historical erasure is that, unlike liberalism or Marxism, there is no Wealth of Nations or Das Kapital anchoring the tradition in a world-historical canonical text. (As Karl Polanyi once said, “laissez faire was planned, planning was not.”) Instead, as Helleiner shows in a painstaking synthesis of earlier local or regional histories and original close reading of primary and secondary sources across a remarkable number of languages, geographies, and periods, neomercantilist ideas have developed more diffusely, often emerging in political debates about uneven industrialization and increasing geopolitical rivalry between states. This broad tent has proven compatible with a wide range of political ideologies. Though today’s commentators are quick to associate nationalism with right-wing authoritarianism, this view largely stems from twentieth-century liberal historiography, which condemned economic nationalism as the cause of world war and the Great Depression.

Helleiner is perhaps the most distinguished scholar in his generation of international political economists, and he has covered similar ground before. In one sense, Helleiner’s body of work can be read as an extended rebuttal to the historiographical commonplace that Paul Volcker once described as a core American “article of faith,” namely that “the United States, as the dominant world power after World War II” had been “the driving force toward a liberal trading order and the freedom of international investment.” Helleiner’s first book, States and the Reemergence of Global Finance (1994), picked that view apart by demonstrating how restrictive the postwar Bretton Woods system in fact had been for private banking around the world. Capital controls were wholeheartedly endorsed as a legitimate policy tool at the highest levels of government in the industrialized countries, Helleiner shows. They would make it easier to pursue more robust and egalitarian growth policies at home andin the words of U.S. Treasury Secretary Henry Morgenthau—“drive . . . the usurious money lenders from the temple of international finance.”

Today’s commentators struggle to make sense of new shades of mercantilist gray.

In a later book, Forgotten Foundations of Bretton Woods (2014), Helleiner goes even further, arguing that it is wrong to see U.S. negotiators as acting unilaterally to impose an American vision at Bretton Woods. There were forty-four countries represented at the conference that created the IMF and World Bank, Helleiner emphasizes. Nearly half hailed from Latin America, undamaged by world war and flush with cash from war production, and their vision was central to the institutions that emerged after 1944. For over a decade Latin American governments had been negotiating with the United States over the creation of an Inter-American Bank for long-term development lending. Building an international system that permitted developmental states to thrive was a core demand, partially met, of peripheral countries at Bretton Woods.

Helleiner’s approach to understanding the origins and trajectory of the postwar settlement, which looks beyond Western diplomatic archives to the political and economic forces shaping policy, has already done much to globalize our understanding of that moment. In his latest monograph, Helleiner turns this same impulse to intellectual history, with similar effects.

Helleiner takes the Wealth of Nations as his first temporal bookend because Adam Smith, in his “very violent attack upon” mercantilism, was the first to identify it as a doctrine, name it, and suggest that it had a unified (if fallacious) character. Responding to Smith’s systematic arguments, Helleiner shows, gave “neomercantilism” its specific intellectual identity. As the discipline of political economy underwent professionalization in England in the wake of Smith’s conceptual revolution, opponents of emergent British imperial liberalism had their path cutout for them. They had a name, though many refused to identify with it, since it had been coined as an insult. They had a powerful set of prestigious arguments set against their project: Smith’s valorization of the division of labor quickly became David Ricardo’s theory of “comparative advantage,” according to which countries and not just individuals gain from trade and specialization. And as the long nineteenth century wore on, they increasingly had material facts set against them as well, as trade patterns were shoehorned into Ricardian logic.

There is a terminological objection to be leveled at Helleiner’s historical excavation right from the start: the word “mercantilist” was coined by Smith as a putdown, to refer to an absurdly large group of people who would have been surprised to be lumped together, and even today it retains this negative connotation. Why adopt a Smithian framing?

Helleiner offers a few justifications. “Mercantilism” is more accurate than alternatives like “economic nationalism,” he argues, since many neomercantilist thinkers were not nationalists. Further, it allows for a succinct analytical definition: “belief in the need for strategic trade protectionism and other forms of government economic activism to promote state wealth and power in the post-Smithian age.” But in practice, those “other forms” turned out to be fairly capacious, and the writers Helleiner discusses often went beyond tariffs in developing an array of development strategies. Moreover, talk of “mercantilism” elevates a term from European intellectual history for what was in fact a spontaneous, global process with multiple cultural origins and endpoints—a concern about which Helleiner is otherwise quite sensitive. For these reasons, “developmental statism” arguably cuts a more precise figure. Helleiner demurs because many developmental statists advocated for free trade as a development strategy. This is true, but so did many of the early modern thinkers later called “mercantilists.” Indeed, the original argument in favor of free trade—the one that dominated policy discussions prior to Smith—was the one put forward by mercantilists. In short, Helleiner is right that “developmental statism” is a messier historical category, but if anything, that makes it a more appropriate companion to liberalism and Marxism in his tripartite schema—neither of which is reducible to narrower formations such as Keynesianism or Stalinism.

Though it is not discussed in the book, the economic backdrop against which Helleiner’s intellectual epic unfolds is a process that economic historians since the Great Depression have called the “Great Specialization,” the sorting out of global economic geography into core and periphery. Europe was industrializing while the rest of the world, increasingly knit together into a world market, exported raw materials and primary products. It was possible to prosper as an agrarian export society, as the example of early twentieth-century Argentina shows. But in general, industrial societies proved stronger militarily and more robust to external shocks economically. This division of labor, often constructed and maintained by force, both reflected and produced stark hierarchies within the capitalist world-system—the constellation of countries connected by trade—in terms of power, prestige, and comfort.

It was in a world of uneven and combined imperial development that neomercantilist dreams took shape.

Technologically, the process was driven by a transportation revolution that reduced the costs and uncertainty associated with long-distance trade. Railroads and canals joined previously isolated hinterlands to newly constructed coastal ports, often right up to the waterfront to avoid costly bottlenecks. From there, steamships could ferry commodities across oceans in days rather than weeks. In 1888 the British merchant marine constituted half of the world’s carrying capacity, while the United States possessed another quarter—justifying the name one journalist gave to the nineteenth century as one of “Anglobalization.” The Suez Canal cut the time it took to travel from London to Mumbai in half; Panama did the same for travel times in the Americas. Complex global commodity chains emerged for the first time. Their network structure was amazingly hierarchical: by the end of the nineteenth century, every part of the world was connected to Europe, if not necessarily to adjacent countries or even neighboring provinces. In the Western Hemisphere, the only international rail links were in North America; they were meant to carry lumber, grain, and hides out of Canada and silver, gold, copper, and nickel from Mexico in exchange for finished goods from the United States.

Politically, imperial expansion supercharged this process. Some countries were colonized and forcibly deindustrialized. Textiles constituted half of the East India Company’s exports in 1750 but only 3 percent a century later, and by 1913 over three quarters of India’s exports were in primary products. Others were subjected to what historians John Gallagher and Ronald Robinson called an “imperialism of free trade.” After Britain’s victory over China in the (first) Opium War, the Treaty of Nanking capped Chinese tariffs at 5 percent, opening the middle kingdom to competition from advanced European manufacturers. The same was forced on Japan in an unequal treaty of 1858. By contrast, the United States saw a “Morrill Tariff“ of 27 percent in 1861, and the McKinley Tariff of 1890 nearly doubled that.

Economically, countries on all sides followed the paths that maximized their own profits given their constraints and class structure. Even where peripheral nations maintained the autonomy to enforce high tariffs, as in Latin America, the technological imperatives of decreased transportation costs combined with European productivity advantages meant it was usually more profitable to remain agrarian. As export ratios boomed, peripheral countries specialized in sending primary products to the European core rather than laterally to one another. In 1913 some two-thirds of international trade was in primary products: food (29 percent), agricultural raw materials (e.g. cotton; 21 percent), and minerals (14 percent). For the developing world, 50 percent of exports were food and drink, 35 percent raw materials, and 6.5 percent for tobacco, opium, and precious metals. A staggering 85 percent of peripheral primary products exports went to the core. The periphery was totally dependent on the center for sales, while the core was dependent on the periphery for food and raw materials.

The machinery of domination was complex and hard to reach from farms and mines in the hinterland, but peripheral subjects understood exactly what was happening to them. The British Foreign Office reports one conversation with a man, Pir Ibrahim, in Iraq from 1909 who correctly predicted the impending imperial debt trap:

We know better. It is the same old story. . . . First comes the irrigation scheme. . . . Then, all of a sudden, it will be discovered that it will be no good to make the soil productive unless there are the means of exporting the superabundant produce to profitable markets. . . . The loan is raised, irrigation and railway schemes are completed. New schemes crop up and the loan is never repaid. Military intervention becomes imperative.

Resisting the peripheralizing tendencies that emanated from competitive commercial empires was an existential problem for people everywhere. It was in this world of uneven and combined imperial development that neomercantilist dreams took shape.

Helleiner shows that there were as many flavors of neomercantilism as there were national, imperial, and postcolonial traditions. From Meiji Japan to Sun Yat-sen’s China, from Muhammad Ali’s Egypt to Marcus Garvey’s African diaspora and the Swadeshi movement in India, neomercantilist ideas flourished throughout the long nineteenth century. They took form in political speeches, racist diatribes, bureaucratic memos, parliamentary debate, religious sermons, polemical pamphlets, and popular journalism as often as in philosophical monographs associated with the enlightened genre of political economy. Many spatial scales were imagined as the locus of power for neomercantilist ideals, from feudal domains to nations and empires to racial diasporas. Neomercantilist strategies were deemed relevant over different time periods, from emergency responses to security threats to temporary catch-up measures to permanent foundations for cultural enclaves. Finally, the nature of political economy itself was at stake for the neomercantilists. Was it a universalist discipline, capable of providing unambiguous advice for all times and places? Or were its truths always circumscribed by the particularities of culture, geography, and history? Uncovering the kaleidoscopic variety and diverse origins of the various neomercantilisms is Helleiner’s central contribution.

There were as many flavors of neomercantilism as there were national, imperial, and postcolonial traditions.

Perhaps the most compelling example of developmental statism’s spontaneous global origins is Tokugawa-era Japan (1603–1867). The Shogun controlled Japan’s external relations with the outside world and kept it culturally secluded. But local lords had vast powers to police the internal space of their own domains, up to and including the right to issue paper money and collect taxes. In the context of that small quasi-state system, merchants allied with their rulers to enhance the wealth and power of their domains. Lords set up monopolies in trade and in certain sectors like silk in order to promote exports to other domains and attract gold to their own. So-called kokueki (国益, literally “national profit”) literature was the advice genre in which these policies were discussed and promoted.

These early modern Japanese writers drew on Chinese classics written during the Warring States period (453–221 BC) and relied mainly on the hard-nosed realist writers known as the Legalists. In particular, they were fond of quoting the slogan fukoku kyōhei (富国強兵, “rich state, strong army”) from the ancient Book of Lord Shang for legitimation: since the first duty of the state was to provide order, which required a military, the production of an economic surplus was also a duty. Such appeals to authority were required in the face of a hegemonic neo-Confucian ideology that for the most part held merchants in contempt and more often than not viewed the pursuit of state wealth and power as immoral. Kokueki writers’ rebuttal was that state monopolies would leverage political authority to supplant merchants, not protect them. Through informal networks of advice and patronage, kokueki formed one particularly influential school within the wider field of early modern Japanese keisei saimin (経世済民, “order the realm and save the people,” a field analogous to “political economy”). By the early nineteenth century, independent of any Western intellectual influence, kokueki writers were already arguing that to achieve this goal, Japan as a whole would have to acquire colonies, promote export-oriented local manufactures, and expand state trading monopolies.

The Satsuma Domain on the southern island of Kyushu deserves special attention in this history for its substantial contributions to kokueki thought, as it demonstrates how core-periphery dynamics replicate themselves fractally—at the level of the world-system as well as the nation state—and how uneven development gives rise to catch-up ideologies. In the highly commercialized and urbanized economy of early modern Japan, Satsuma had become an economic backwater by 1830; local advisors pioneered the most ambitious forms of state planning as a remedial strategy. One advisor, Satō Nobuhiro, went so far as to detail a comprehensive planning apparatus that would oversee a society divided into eight occupation groups, each with its own ministry supervising and directing activities to promote the wealth and power of Satsuma. Under his influence, Satsuma rapidly grew rich and powerful—so much so that it eventually supported the largest samurai cadre on the island, which proved pivotal when they helped lead the modernizing Meiji revolution of 1868. Fukoku kyōhei indeed.

When Japan was opened to the world by Commodore Perry in 1854 and exposed to post-Smithian liberal political economy, kokueki thinkers had a long and deep legacy on which to draw in arguing against Britain’s free trade empire. In the new Meiji government, the most powerful politician was Ōkubo Toshimichi, also from Satsuma. Prior to his assassination, he had assumed quasi-dictatorial powers as the head of Meiji’s relentless neomercantilist drive to modernize Japan, which he used to set the island nation on its revolutionary path of state-led development, taking it from autarky and isolation to second most powerful capitalist state less than a century later.

Helleiner shows that neomercantilism prospered in China and Korea as well. But events external to the intellectual history precluded the same outcome. The latter was soon colonized by Japan—though not before future-president Syngman Rhee made his mark as his nation’s leading neomercantilist as a part of the “Gaehwa group”—while the former’s “self-strengthening movement” was not up to the task of quelling internal rebellion and fending off other empires at the same time. Perhaps the most remarkable upshot of this set of forces and constraints was the quiet radicalism of Sun Yat-Sen, the republican revolutionary whose tireless organizing financed multiple failed revolutions against the Qing dynasty between 1895 and 1911. Sun endorsed a wide range of state interventions, from the setting up of model factories to tariff protection for infant industries to massive infrastructure projects. He also realized that the Chinese state lacked the administrative and financial capacity to pull it all off, though, and thus proposed the creation of an International Development Organization that would take deposits from what Sun called “capital-supplying powers” (the European, American, and Japanese core) and make loans to support a wide range of modernization projects in China.

Again and again neomercantilists concluded that “mercantilism in one country” was inadequate.

This is one of the characteristic leitmotifs of Helleiner’s book: the multiple and overlapping origins of multilateral development lending and international economic cooperation more generally. Such schemes were proposed again and again, from the ferment of warlord-era China to the revolutionary Mexican state’s finance minister José Manuel Puig Casauranc and interwar Romania’s central banker Mihail Manoilescu (arguably the most famous neomercantilist in the interwar period), neither of whom could imagine fighting the Great Depression without some kind of global governance mechanism to direct capital. Again and again neomercantilists came to the conclusion that it would take more than tariffs or public investment to achieve their vision of state-led development: “mercantilism in one country” would hit hard upper limits on what was possible. Fervent economic nationalists thus became some of the most powerful voices in favor of international economic governance.

Perhaps most important was the planned cooperation of global capital in promoting long-term development. Often conceived in relative isolation from one another, such schemes were provoked more by the nature of the problem at hand than any pre-given ideological commitment to world government. Many of the authors were committed nationalists or imperialists attempting to recover sovereignty for their preferred state forms from the world market.

Not all of Helleiner’s neomercantilists had a preferred state form, however, as not all of them had a state of their own. In India the swadeshi (“own country”) movement aimed to mimic the effects of tariff protection for Indian goods through the cultivation of a uniquely Indian consumption aesthetic. Its premier economic theorist, Mahadev Govind Ranade, was a founding member of the Indian National Congress and “the chief exponent of List” in the subcontinent. A proud member of the British empire, Ranade focused on building the wealth and power of the colony in ways that didn’t necessarily require control of imperial policy, since Britain was unlikely to allow tariffs. By consuming only Indian manufactures, participants in the swadeshi movement would simultaneously be producing the Indian economy and a new Indian national identity.

An even more radical version of non-state neomercantilism can be found in the life and career of Marcus Garvey, a Jamaican-born Pan-Africanist who found popular support in West Africa, the Caribbean, and the United States in the early twentieth century. What Helleiner calls Garvey’s “diasporic neomercantilism” centered on the efforts of his “Universal Negro Improvement Association” to act as a proto-state-capitalist institution. In particular, the Black Star Line, UNIA’s shipping company, raised capital from all over the world and was, in Garvey’s words, “the property of the Negro race,” whose purpose was to provide Africans and the African diaspora with their own shipping services, and serve as a launching pad for building the wealth and power of a future African state. Garvey made frequent references to the Japan’s successful neomercantilist drive, praised their military defeat of Russia in 1905, and members of his movement forged links with Sun Yat-sen’s Guomindang party. Garvey and his movement proved vulnerable to the U.S. legal apparatus, however, which jailed him on charges of fraud before deporting him, handicapping his ability to organize. Without a state of one’s own, neomercantilism was a challenge to maintain in the face of antagonistic commercial empires.

The North Atlantic had its own indigenous forms of neo-kokueki thought that carried on the intellectual traditions of those Smith dubbed “mercantilists.” The most vibrant, Helleiner shows, took their inspiration from American abundance. Alexander Hamilton was the first proper neomercantilist, in the sense of advocating for tariffs and government activism in a post-Smithian intellectual environment. Helleiner’s Hamilton emerges as something of a transitional figure, more ambivalent than popularizations of “Hamiltonianism” have portrayed. He advocated for protection principally on the grounds that it would induce British investors to move their capital over the tariff wall and onto American soil, literally domesticating the threat posed by foreign competition. The “infant industry” argument, so often associated with his name, can indeed be found in his writings, but it is counterbalanced by the argument that competition and the spirit of rivalry animated commerce and made enterprise robust. Excessive doses of protection, Hamilton was well aware, meant only sloth; subsidies, by contrast, were both a spur to industry and could be directed towards virtuous elites. The interventions he did advocate were fairly “tentative” by later standards: a national armory for defense, a national bank, targeted export subsidies.

Until the 1980s, it was the neomercantilism of Alexander Hamilton, Friedrich List, and above all Henry Carey that was seen as America’s distinct contribution to the intellectual history of capitalism.

The drama of the first half of Helleiner’s book revolves around the contrast he draws between two economists, German-born Friedrich List and American Henry Carey, as they theorize and propagandize on behalf of what was known then as the “American System” of tariffs, export subsidies, and internal improvements. List is the much better-known figure today: to the extent that any memory of neomercantilism survived the Cold War, it is generally List’s National System of Political Economy (1841), published after List had emigrated to the United States in 1825, that shows up in classrooms and citations. The security of his legacy is partly the result of his limpid German prose. The National System is a fierce polemic against British liberalism, arguing that “free trade” was nothing more than Britain’s attempt to “kick away the ladder” by which she herself had become rich. List accurately saw the Great Specialization for what it was.

But as Helleiner shows, List’s thought was a rather idiosyncratic synthesis of ideas that had been circulating in French-German-American intellectual circuits for some time. He argued that the nation’s wealth had much more complex sources than merely the amount of commodities produced by labor, as the Smithian theory implied. Instead, “productive powers” inhered in the nation as a whole—in its language, in its culture, in its arts and sciences, and in its unity and collective capacity for self-regulation. In List’s formulation, nations became wealthy, not individuals. The trick to developing these capacities, he argued, lay in allowing nations’ productive powers to mature behind tariff walls until they had caught up to those of the English.

List was, moreover, a temperate-zone chauvinist; he believed in a version of climatic determinism, inherited from Montesquieu and the Enlightenment, according to which tropical peoples—which for List meant all of Latin America and most of Asia—were forever doomed to laziness and stupidity, in contrast to bloodlines acclimated to European conditions.

List’s diatribe against the Great Specialization thus had severe limits. He encouraged white empires to take up the burden of organizing global production into cores and peripheries, even as he thought all nations capable of civilization should aspire to enter the core, ignoring Smithian political economy until that milestone was achieved. In the long run, List prophesied a cosmopolitan confederation of temperate-zone nations that could come together under the conditions of industrial equality.

There is a popular folk history that draws a straight line from Hamilton to List, and from there to Otto von Bismarck’s Germany, which industrialized behind Listian tariffs. From there the Listian idea is supposed to have spread to Japan, which took Germany as the model political economy for successful catch-up growth, and from there to the East Asian developmental states of the postwar period. (The most readable and popular version of this story can be found in Joe Studwell’s How Asia Works (2014), otherwise a compelling book.) Helleiner’s book makes clear what this version of history gets wrong. Not only were Legalist and kokueki discourses already widely available in the East, but to the extent that Western ideas were popular in Germany and Japan, they came more from Carey’s influence, not List’s. A good deal of space in The Neomercantilists is dedicated to documenting and debunking these myths in detail.

Where List was a methodological nationalist, racial imperialist, and long-term cosmopolitan who wanted civilized countries to imitate the British industrial revolution, Carey framed his own neomercantilism as an anti-imperialist, feminist, environmentalist discourse that would save America—indeed the world—from the worst depredations of British capitalism. For Carey, whose mammoth Principles of Social Science (1858) was difficult reading even by contemporary standards, neomercantilist policies would create greater equality within countries even as they also balanced the economic relations between them. Free trade tended to benefit large, monopolistic trading companies that could afford to operate on an international scale, at the expense of the local merchants and traditional community businesses networks that were the associational heart of economic democracy.

Carey framed neomercantilism as an anti-imperialist, feminist, environmentalist discourse that would save the world from the worst depredations of capitalism.

Unlike List, Carey was not enamored of Britain’s achievements: he spent a great deal of time describing the terrible conditions of the working classes in the United Kingdom that resulted from their global financiers’ monopolization. Free trade was leading to “barbarism,” he argued, because it tended to erode the social institutions that fulfilled human’s “greatest need,” their desire and ability for “association” with other humans. Like Tocqueville, Carey valorized the rich civil society of the early republic; unlike Tocqueville, he worried about disintermediation of the social sphere in commercial societies without tariffs. The “increasing dependence of the laborer, and making of her that mere instrument to be used by trade” was fueling class conflict in the form of riots and strikes, ultimately threatening political stability even in the UK.

In Carey’s eyes, it was therefore not a coincidence that Britain was simultaneously at the forefront of both free trade and “the power for oppression” of the domestic workforce. Since free trade benefited only the traders, impoverishing producers and consumers alike, implementing protectionist policies could achieve an internal “harmony of interests” within each country, aligning the incentives facing farmers, manufacturers, and consumers, allowing each to prosper without impoverishing the others. Carey also emphasized how protectionist policies could improve gender relations and protect the environment. “The world presents to view nothing that is more sad, than the condition of the female portion of the British population,” he wrote in 1859. Protectionism was the anti-imperialist policy par excellence. Contrary to liberal expectation, it was free trade that ushered in militarism and violence: “look where we may, throughout history the trader and the soldier are found marching by each other’s side.”

The political actor Carey thought would be the main vehicle for his social neomercantilism was the average farmer, who was at risk from excessive free trade, too. All around the world—not just in the white “temperate” zones List favored—protectionism was the answer to the immiseration and alienation wrought by global capitalism. “The men of India and of Ireland, of Turkey and of Portugal, of Jamaica and of Brazil—though claiming to be free—have no power to determine how they will employ their land or their labor,” Carey wrote. “The price of all their commodities is fixed in the great central market, filled, as it is, by men who desire” nothing but cheap commodities:

They are thus kept so poor as to be unable to help themselves, and to be forced to rely upon advances made to them by the trader, who extracts, of course, a lion’s share of the product of their efforts; and the larger his share, the greater is his power to compel them to remain dependent upon his favor.

Carey aspired to provide as universally relevant the American model of developmental statism by way of tariffs and free association; in making his case—unlike List, who only drew from European, and mainly Anglo-American, experience—Carey wove a complex narrative of global economic history, in which he saw time and again the truth of his views confirmed. At the end of history, Carey envisioned a world of democratic nation-states, each sufficiently self-contained and equal in power that external intercourse among them would be low-stakes and non-conflictual. He encouraged everyone from colonial India to the troubled Qing state to adopt this strategy for national democratic development.

Many around the world did heed Carey’s call, from the white dominions of the British empire, themselves looking for more autonomy from England, to Bismarckian Germany—which drew more directly from Carey than List in designing its developmental strategy—and Meiji Japan to Ethiopia. Thinkers all around the world found some inspiration in Carey’s writing, including both John Stuart Mill and Karl Marx. Until Ronald Reagan and Milton Friedman, it was the neomercantilism of Hamilton, List, and above all Carey that was seen as America’s distinct contribution to the intellectual history of capitalism.

Most consequential of all was Carey’s impact at home. In the course of the 1850s, as we have noted elsewhere in these pages, Carey became the premier economic theorist of Lincoln’s Republican Party. Wealthy industrialists like Joseph Wharton, a friend of Carey’s, bought into his paradigm and put their money where their mouth was: the University of Pennsylvania’s famous business school was founded as a project to inculcate aspiring young princelings in the Careyite school of political economy. During and after the Civil War, these elites and that party did in fact raise tariffs as an industrial development strategy.

While certainly wildly over-optimistic about the capacity of one instrument in the toolbox of developmental statism to secure peace and inclusive prosperity in the face of deep and violent cleavages along the lines of race, gender, and region, a circumscribed harmony of interests was achieved in the durable political coalition between white farmers and Northern cities forged by the nineteenth-century Republican Party, centered on a “developmental synthesis” of protective tariffs, agricultural reform, and internal improvements. The industrialization project succeeded: it was in these years that the American industrial revolution really took off.

Helleiner’s work comprehensively demonstrates the politically promiscuous character of neomercantilism: it was a plastic discourse, amenable to a wide spectrum of ideological projects, and hardly intrinsically affiliated, as liberals came to assume, with war, depression, and empire. Its return today should not immediately conjure images of the early twentieth-century European bloodlands anymore than it might call to mind prairie populist bucolics from the nineteenth-century Midwest.

Helleiner’s work demonstrates that neomercantilism was hardly intrinsically affiliated—as liberals came to assume—with war, depression, and empire.

Within this diversity the most serious and profound strains of work took on the question of global sovereignty. While neomercantilism typically entailed substantial commitments to the nation, or to some other intermediate formation between individuals and humanity as a whole, this orientation did not preclude advocating for multilateral institutions for international economic cooperation. In fact, it often required it. If economies were to continue trading, some mechanism would have to be found to negotiate treaties, enforce sanctions, and monitor performance. Small countries, especially in the Global South, would have to work together—possibly in the form of a federated state—to compete in the same weight class as the rest of the global economy. Above all, effectively grasping global capital and channeling it into productive investment would require international cooperation: the poor countries with the rich, and the rich with each other. Attempts at mercantilism in one country generate dangerous imbalances in the global economy.

Twentieth-century neomercantilists from the developing world understood this, which is why they championed the intellectual efforts that ultimately created the IMF, World Bank, and other multilateral institutions. Here, Helleiner adds comprehensive, global intellectual context to a spate of recent historical works rediscovering the legacy of Latin American contributions to developmentalist thought, including Christy Thornton’s Revolution in Development (2021), which chronicles the contributions of revolutionary Mexico to the postwar economic order, and Margarita Fajardo’s The World Latin America Created (2022), which tracks how Latin American economists at the UN Economic Commission for Latin America came to set the agenda for development policy in that region. As Paul Mason of the British Foreign office put it after the World Monetary and Economic Conference of 1933, while other countries “have the resources, Mexico has the theories.”

During the Great Specialization, integration into the world economy was premised on financial adherence to the bimetallic standard, or, increasingly, to the gold standard. But weak economies struggled to maintain any standard, so cosmopolitan liberal elites in the core funded the governments of local landlords in the periphery, who were only too happy to receive an imperial backstop for their power and assets. In return, they suppressed their rural working classes (as with Cuba’s sugar plantations) so they could produce for the metropole. As Pir Ibrahim knew, the core-periphery dynamics in production mapped onto creditor-debtor dynamics in a process of imperial and transnational class-formation. The Bank of England, the Fed, and the Bank of France collaborated with one another to support their financiers’ deals with local landlords the world over; cooperation among the monetary authorities was essential for systemic order. Any adequate counter-project that was serious about taking power knew it had to propose an alternative method of global integration or else forgo international commerce altogether. The long nineteenth century did have its champions of autarky, but neomercantilism was a strategy for contending with the world.

The challenge for developmental statists, then and now, was finding the right coalition to advance and sustain their politics, domestically and internationally. Historically, the Northern farmers, workers, and industrialists that backed Carey’s protectionist vision couldn’t overcome the free trading slaveholders in the South until the latter were removed as a political obstacle by the Civil War. Similarly, the forces for developmental statism in the third world only achieved some modicum of success after world war and the Great Depression had broken the imperial financer-landlord coalition.

The challenge for developmental statists, then and now, was finding the right coalition to advance and sustain their politics, domestically and internationally.

Hegemonic transitions in the world-system reorder class relations, breaking up historic blocs and providing new opportunities for coalition formation. After the Civil War, America’s cyclopean growth contributed to both passive and active revolutions the world over. Oceans of midwestern grain washed across the globe, increasing supply so fast that prices tumbled, crushing farmers, peasants, and rural workers under a deflationary regime that lasted from the 1870s to World War II. The financier-landlord coalition that underpinned the world-system came under severe pressure, ultimately cracking up in the course of the Great Depression, when finance retreated back within national and imperial perimeters, tariff walls went up in the European core and destroyed the global market for commodities, and peripheral countries had no choice but to turn inwards, to developmental statism. The political forces behind those transformations solidified after the war, as the empires were liquidated and the Bretton Woods order made space for developing countries to pursue their national catch-up plans.

How are the trade wars of today to be assessed in light of this history? They are certainly an index of the PRC’s increasing weight within the world-system and a reconfiguration of global class relations. But they hardly seem an adequate response to that new situation, reviving the least mature and informative strains of nineteenth-century developmental statism that Helleiner tracks. As Latin America learned in the nineteenth century, tariffs alone are no match for internationally mobile capital or the very real challenges of technology transfer and continuous innovation necessary for growth. They had their uses for industrializing societies, but tariffs were always the weakest tool in the box compared with, say, a national development bank or public corporations like the Tennessee Valley Authority.

As with the explosive entry of U.S. capitalism onto the world stage over a century ago, the global transformation of class relations in the wake of the PRC’s growth calls for a more expansive political vision to deal with the resulting tensions and imbalances. The most prominent voices arguing against unrestricted free trade and neoliberal globalization today do so in terms of grand strategy and unitary national interests. The Biden administration’s recently announced Indo-Pacific Economic Framework, for instance, is explicitly targeted at containing China as well as retreating from neoliberalism. This approach is a modern incarnation of List’s one-dimensional world of temperate zone empires, shorn of its long-term cosmopolitan intent. What is needed is the present-day equivalent of Carey’s universalist democratic developmentalism, at once more nuanced in its diagnosis of economic problems and more idealistic in its ultimate goals.

As it did for Carey in the nineteenth century, domestic inequality—within both surplus and deficit countries—must play a role in any adequate diagnosis of the challenges facing the world-system today. Matthew Klein and Michael Pettis take an important first step in this direction with their indispensable book Trade Wars Are Class Wars (2020). In their view, the key source of imbalance in the international economy is that workers in Germany and China are not paid enough to consume the products of their labor. To stay profitable despite insufficient domestic demand, firms in those countries must export. But the profits these firms earn amount to more than can be gainfully invested at home and are thus sent abroad in search of a yield. They inevitably find their way into the dollar system, appreciating the U.S. currency and rendering U.S. exports uncompetitive. Thus the foreign demand for safe dollar-denominated assets contributes to the devastation of the U.S. industrial base—the “exorbitant burden” that comes from being one of the world’s key currencies.

Tariffs are the unworkable conservative alternative to controlling capital, organizing labor, and socializing investment.

American workers do get some benefits from this system. Most notably, while American workers are also not paid enough to consume as much as they produce, they are offered credit from the  richest 1 percent. But they use this credit to purchase, among other things, goods and services from Germany and China—perpetuating the vicious cycle and creating ever greater imbalance. The U.S. trade war will do nothing to solve these problems, since the issue ultimately stems from the combination of global inequality, free capital flows, and global dollar dominance.

Only coalitions willing to take on those issues will be able to regain some democratic control over the chaotic process of globalization. Tariffs are the unworkable conservative alternative to controlling capital, organizing labor, and socializing investment. As Eric Levitz put it in a recent conversation with historian Jake Werner, only the left can save globalization now. The intellectual history of developmental statism offers a way of thinking through some of the politics and shows how these ascending approaches can inspire hope as well as fear.

In particular, those seeking to create a better world-system must take intermediate political-economic units like the nation seriously. Although in theory the “workers of the world” have an interest in fighting inequality and the dollar system, in practice no such subject of history yet exists. For the foreseeable future, even as we work to build internationalisms, workers will be struggling to create more just and sustainable economies through their respective states. But as the experiences of the neomercantilists demonstrate, centering the nation need not result in either isolation or international conflict. Indeed, as Helleiner’s extensive body of work demonstrates, the economic limits of national politics eventually provoke visions of more just global orders.