Dani Rodrik: Is China really a mercantilist economic power? Let’s not jump to conclusions

It made its first appearance in economics in Adam Smith’s portrayal of mercantilist thought in Wealth of Nations. Mercantilists mistakenly taught nations, wrote Smith, “that their interest consisted in beggaring all their neighbours.” But it was Joan Robinson, the Cambridge economist and contemporary of John Maynard Keynes, who popularized the term in an essay written in the 1930s. Robinson wrote at a time of generalized unemployment caused by a collapse of aggregate demand—what we would subsequently call Keynesian unemployment. Many governments deployed mercantilist policies, such as import tariffs or currency depreciations, that they hoped would improve the country’s trade balance….