Contrast liberal and mercantilist theories of international political economy and consider which approach is most apparent in the contemporary world.

The following seeks to contrast liberal and mercantilist theories that have developed to describe and analyze the international political economy. Once the contrasts have been made conclusions as to which theory is the most apt or apparent in the contemporary world will be drawn. Both liberal and mercantilist theories have advantages and disadvantages when used to understand the international political economy in the present global system. Perhaps it would be more apt to describe the liberal theory as being neo-liberal as it has undergone a recent revival in popularity.

It must be remembered that whether a state is most influenced by liberal or mercantilists theories that trade will never be completely free of duty and tariffs, as they are useful sources of revenue for governments. Governments also have to have relationships with other governments and non-state actors that may or may not share their worldview.

Liberalism itself can be dated back to the English, American and French revolutions of the seventeenth and eighteenth centuries, when the mercantilist economic system evolved into capitalism. Liberals were originally regarded as being politically centrist or left wing in outlook but favoring little or no state intervention in the economy. In its original form liberal economic theory strongly advocated a free market approach with states not using tariffs to prevent competition from other countries and not interfering in their own internal markets (Comfort, 1993, p. 345). The basis of liberal theory was the right to gain property or capital to be used however states, businesses or individuals felt appropriate combined with freedom of action and belief (Eatwell and Wright, 2003, p. 27). In classical liberal