why?

Perhaps it’s because mercantilism was for a time thought to be on the wane if not obsolete owing to the emergence and consolidation of the so-called Bretton Woods Institutions, but especially GATT/WTO, as well as the apparent global hegemony of the Neo-Liberal Washington Consensus which sought, among other things, to liberalize (global) trade and the financial system, and eliminate any barriers to foreign direct investment. In the long-term this may still hold to be true (at least any good Marxist would argue for such a scenario), but in the short-term, as we see regional reactions to the current global financial crisis and frustration with the Doha Round at the WTO, mercantilism may (or perhaps already has) assert(ed) itself once more, indeed, there’s evidence for this in some recent regional trade blocs and bilateral agreements. Why should these essentially mercantilist developments concern us? Professor Sungjoon Cho proffers the following reasons:

1. These regionalist policies “[may] dry up the political capital and other scant resources necessary for multilateral trade deals. Some negotiators seem to already have become lukewarm to the WTO negotiations. Without a serious recommitment to multilateralism, global trade discourse under the Doha Round [may] languish, as the negotiators’ dissidence on the WTO rises and public support for the WTO becomes lackluster.”
2. This would, in turn, be troubling for two reasons: “First, regionalism is inferior to multilateralism in creating global gains.” [….] Second, the developing countries would suffer net losses by these bilateral deals, while the richer countries would still realize net gains. “In sum, regionalism is not only an inferior income generation mechanism to multilateralism, but also a developmentally unsound option in that it tends to hurt poor countries.”
3. “[T]he mercantilist nature of the current competitive regionalism tends to invoke the strikingly similar phenomenon of the interwar period, which precipitated economic balkinization and led to the outbreak of the Second World War. Highly preferential regional trading blocs instituted worldwide in this period eliminated the political space needed for multilateral economic cooperation and instead nurtured the Hobbesian struggle among major economic powers. The interwar regionalist competition is a textbook example of a prisoners’ dilemma. [….] Out of this one should learn an undeniable historical lesson: that the fragmented global trading system is vulnerable to a chain of unfortunate events, such as tension, hostility and violence.” Anyway, so he argues in the article found here: http://works.bepress.com/sungjoon_cho/4/

Moreover, those that criticize current “free trade” policies are, typically, at least in this country, not against multilateralism and for mercantilism, but rather prefer to see the WTO give due recognition to human rights concerns, questions of global distributive justice or fairness, and respect for (at least), say, ILO labor standards and environmental safeguards.

Or, we might simply note, with Roger Scruton, that this doctrine’s better days are behind us for, although “favoured between the mid sixteenth and late seventeenth centuries,” “[l]ater advocates of the doctrine of free trade criticized the mercantilists, partly on the ground that their equation of prosperity simply with the difference between export and import showed an insufficient grasp of the structure of the economy and of the potential gains from trade.” Put differently, the age of “discovery and conquest” has passed, the epoch of mercantilism and primitive accumulation, what Marx called the “rosy dawn of the era of capitalist production,” has been superseded (the epoch of classical capitalism coming in its wake).

So…we’re (or at least I’m) eagerly waiting to find out: Do we need to rehabilitate mercantilist ideas? Have we missed some important economic truth privy to the mercantilists? Does mercantilist discourse have a newfound sense of urgency? Are there mercantilists lurking on the Left? What, pray tell us, motivates the question!

If the question is why the word “mercantilism” isn’t used in American politics to describe practices which might seem to be mercantilist, I would just like to note that AFAIK it’s not widely used in Western political discourse in general. I’m by no means a historian, and I’m not as familiar with the terms of US political discourse as I should be, but my spontaneous answer would be that in general, the trade policy debate in the West since the 19th century has been cast in terms of free trade vs. protectionism, not free trade vs. mercantilism. Why? Maybe because mercantilism ultimately is a theory about the wealth of nations - a theory which most economists would say has been proven wrong - whereas protectionists don’t need to cite overall economic efficiency arguments in favour of their ideas: one could be in favour of protectionism in order to alleviate the negative social consequences of structural transformations in the manufacturing industry, for instance. It might not be the most efficient, but it might be what justice requires of us (or so the argument could go).

Then there are practices which I have seen described as mercantilist, such as the import substitution policies of many Third World countries, and especially the state-driven development policies of East Asian countries such as South Korea and Japan, but I haven’t seen the word used that often in strictly political discourse. Maybe it’s considered too historical or obsolete (maybe not everyone knows what it means), or maybe the subject just doesn’t come up often enough for the term to be widely used.

It doesn’t come up because it’s rhetorically useful on multiple sides to equate mercantilism with free trade/ markets.

Because public sentiment is broadly mercantilist as a default, defenders of free trade elide the difference between the two doctrines. They justify trade-opening treaties as ways to bribe Them into taking Our exports, by reluctantly agreeing to import some of Their stuff. “Exports good, imports bad” is a pillar of mercantilism that Hume and Smith intellectually knocked down– but it’s politically immortal. Indeed the whole GATT/ WTO structure is based around this– giving trade-supporting elites a mercantilist story they can bring home to their electorates. So the free-traders can’t criticize mercantilism; they’re politically dependent on its trappings.

And to critics of trade and markets it’s even more valuable to elide the difference. Every alliance of state and corporation, every favor the state does for its domestic big businesses, can be called “capitalism” or “the market,” the better to discredit the latter categories.