| The Criticism ;
Mercantilism incorporate a narrow static view of IPE that is capable of registering any major changes presently occurring in the world economy. it is also made less useful because of it narrow conception of political economy based on a particular definition of the state(Sylvain 1981 in Strange 1984). Over tariff may lead to the end of trade between states as it discourages import.
Mercantilism has been criticize for short sightedness, in 1690 John Locke’s made it clear that prizes vary in proportion to the quantity of money, but in general, the mercantilists did not put this together as indicated in Locke’s Second Treatise also Locke brings out that the wealth of the world is not fixed but created by human labour represented in Locke’s labour theory of value.
The tax-cum-subsidy interventions of neo mercantilist objectives faces hurdle with multilateral agreements, such as those governing the WTO, reduces the ability of countries to deploy sector specific taxes and subsidies. According to (Charlton and Stiglitz 2006; UNCTAD 2006)27any such actions that directly or indirectly lead to expanding exports are by design subject to multilateral restrictions on trade-distorting interventions.
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