Mercantilism in IPE: The Case of Britain’s Adoption of the Imperial Preference in 1932
Britain's abandonment of free trade and shift to protectionism in the early 1930s is one of the most studied international political economy (IPE) puzzles of particular relevance to understanding why international trade regimes change. None of the IPE accounts has explained the timing and, crucially, the form of the trade policy shift through a resurgence of mercantilist ideas. This paper argues that Britain’s adoption of the Imperial Preference in 1932 can be explained through Schmoller's reformulation of mercantilism as “nation-building” which became “empire-preserving” in the British context at the turn of the 20th century. It offers novel insights suggesting that mercantilism is not the caricature we often assume it to be. It then fits this finding to the empirical material, specifically on Britain's return to mercantilism in the interwar period seen as a way to save the empire from decline and dismantlement. This new interpretation changes the way we think about the demise of empires as inevitable and has important implications for IPE theory. We are “post-colonial” in both our academic and our practical thinking about IPE. Yet, this is ahistorical from the standpoint of the first half of the twentieth century. The major emphasis is on the evolving systemic conditions and leading individuals’ reactions to it. Drawing from archival material spanning dozens of collections, this paper is in the enviable position of having the real, local data required to get a handle on this puzzle.
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Keywords: mercantilism, international trade, changing systemic conditions, role of individuals
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