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A Historian's Perspective: 18th Century Colonialism is the Nightmare Fuel of Trump's Economic Policy [1]

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Date: 2025-03-15

It has been strange to watch the Republican Party over the last decade move so quickly from the Laissez Faire, Free Trade, globalist economic system of Reaganomics to what, in many respects, is its polar opposite. The party that brought us NAFTA thirty plus years ago, is now all-in on protectionist (if we can even really call them that) tariffs and waging a global trade war against our closest neighbors and largest trading partners. This transition has been so rapid, and so seemingly complete, that many Republicans don’t even realize just how far they’ve turned their backs on what was very recently a bedrock principle of conservatism and a core tenet of the Republican Party- free trade. It is not difficult at all to find Republicans still loudly decrying government economic intervention and regulation to the point that it is fairly clear they actually believe this is what their party still stands for. But make no mistake, this is exactly what their party now promotes and espouses.

On Thursday, the Wall Street Journal, of all media outlets, published a piece relaying the growing concerns of American business leaders over Trump’s economic policies and the direction they are taking the economy. Predictably, Trump threw a tantrum on social media replete with name-calling, and among the epithets hurled at the Journal was this nugget: “Their (WSJ!) thinking is antiquated and weak.” It is awfully rich to see Trump call the Wall Street Journal’s promotion of free trade economic policies as “antiquated,” especially when his own economic policies are ripped right out of the 18th century.

In the 18th century, most Western European economies were characterized by what is known as Mercantilism. Mercantilism is an economic system that was distinguished by the notion that trade and economic prosperity is a zero-sum game. Fundamentally at odds with the belief so recently held by Republicans that in a Laissez Faire economic system “all boats will rise,” Mercantilism focused on the idea that there was only so much wealth to go around, and each country or nation had to grab for itself as much as it could get. 18th century Mercantilist states frequently levied high tariffs against the importation of goods into their countries. They sought to maximize their own exports and minimize imports, obsessing over what they saw as a “favorable balance of trade,” and building monetary reserves. These Mercantilist states often hoarded gold and silver, and sought to accumulate resources, both natural and manufactured.

This sounds exactly like the system Trump seeks to establish. He obsesses over America’s balance of trade and the idea that we are importing more than we export. He recently celebrated the “amount of revenue” we are reaping through his tariffs, and claims that, if we are not extracting more value than other countries out of our foreign trade, they are “winning” and we are “losing.” These sound like reasonable economic policies, right? Sure, except for the fact that Mercantilism is a largely discredited economic system, and even if it wasn’t, Trump isn’t even following it correctly, to boot! For one, the protective tariffs of a Mercantilist system only work if the government subsidizes and provides extra support and incentive to domestic manufacturing and industries where tariffs are being levied against their foreign counterparts. I explain here how badly Trump is misusing and fundamentally misunderstands tariffs, but if all you are going to do is levy 50% tariffs on foreign imports without providing support to the domestic production of those same goods, the only thing you are doing is raising prices for consumers. Any revenue generated from those tariffs is simply being added to government reserves and hoarded by the Trump Administration and its cronies.

More concerning, though, are the many problems associated with Mercantilism. Government intervention in a Mercantilist economy was very heavy-handed in the 18th century. The many trade restrictions inevitably led to the establishment of monopolies and subsequent rise in consumer prices. Britain’s East India Company (yes, the same East India Company that played a key role in the Boston Tea Party) was the multinational mega-corporation of the 18th century. The restrictions on trade led governments to play favorites, to grant de facto monopolies. The stories of these companies in the 18th century are rife with tales of fraud and corruption. But tellingly, these monopolistic tendencies also tamped down or even eliminated competition and significantly stifled innovation. They prioritized short-term gain over long-term growth. And they also served to accumulate resources in fewer and fewer hands, and this is where many of the most chilling effects of Mercantilism lead.

If you see trade is a zero-sum game, as Trump clearly does, then the accumulation of wealth and resources is of the utmost importance. In the 18th century, the race to accumulate as much wealth and as many resources as possible helped to set off the great European race to colonization of Africa, Asia, South and Central America. These colonies and foreign territories were seen merely as resources to be mined and extracted in order to enrich the homeland. I certainly do not need to go into detail on the horrors the colonizing powers, often led by those monopolizing mega corporations like the East India Company, visited upon the peoples, societies, economies, and future development of the lands they exploited. We still see the effects of this Age of Colonization today in the stilted political development and political violence of Central and South America and the Caribbean, the suppressed economic potential of India and southeast Asia, and the racial and social tensions broiling many parts of Africa. These are direct results of the colonization efforts jump-started by the Mercantilist economic policies of the 18th century.

It is not hard to see how Trump is following in the footsteps of his Mercantilist forebears. Look at his frequent claims to territorial expansion and the American takeover of resources and lands around the world, from the Panama Canal, to Greenland’s strategic entree to the Arctic, to the American absorption of Canada, and its rich natural resources, as the “51st State.” Look closely at Trump’s dealings with Ukraine. What did he want in exchange for American support in peace talks? A mineral deal, including precious and commercially important rare-earth metals. In fact, while the Trump Administration explicitly stated that, even with the much-sought-after mineral deal in place, they would not guarantee security and American protection and support of Ukraine, Trump and Vance both publicly stated that by guaranteeing an American presence over its mineral rights in Ukraine, we would implicitly seek to protect our economic rights there. Like the 18th century Mercantilist European states that carved up the world to exploit it for economic gain, does anyone expect Trump to do anything other than exploit the resources of his new “territories,” the peoples that live there be damned?

This leads us to perhaps the most frightening lesson of 18th century Mercantilism: by seeing economic success and trade, and really the world itself, as a zero-sum game, these Mercantilist policies create a fundamentally adversarial global system, where one nation’s success is another’s failure, where countries compete against each other for resources, money, and influence. It has been argued that the 18th century saw more wars among European powers than any other century. Most of those wars were direct results of the battle for territory and resources. And it certainly wasn’t the average person who benefited from them. By seeking to establish a global economic system based on Mercantilist principles and understandings of economics and trade, Trump is not only establishing a system where the poorest are destined to be exploited, but one where conflict and war are inevitable. I used to believe that this very view of the world had itself become antiquated in the United States, consigned to the ash heap of history like slavery or religious persecution and other relics of the past. In the Age of Trump, however, it might be my ideas, like the Wall Street Journal’s, that are antiquated, and that is a frightening proposition.

--Peter Porcupine

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[1] Url: https://www.dailykos.com/stories/2025/3/15/2310328/-A-Historian-s-Perspective-18th-Century-Colonialism-is-the-Nightmare-Fuel-of-Trump-s-Economic-Policy?pm_campaign=front_page&pm_source=more_community&pm_medium=web

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