On Mercantilist Explanation For Global Inequality And Poverty

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Mercantilist explanation for global inequality and poverty is that trade liberalization doesn’t benefit all people and nations. Free trade only works if a nation has: a strong financial sector, medium to high education levels, and strong governance. Strong financial sectors allow investors to identify new and promising sectors and redirect credit to them. A more educated population is able to develop new skills by growing sectors and adjust quicker to the constant changing labor market. Trade liberalization only benefits developing nations that are able to take advantage of free trade to its fullest ability. These nations industries have something to sell which foreign trade barriers are currently keeping out. Developing nations have the resources
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