A lot of people look at increased government intervention into economies worldwide and conclude that a “spectre of communism” is once again haunting the world.

But it’s not communism on the horizon—it’s mercantilism.

We’ve lost the ability to tell the difference because for the past two hundred years the fight over political economy has been some flavor of “laissez-faire” vs. “socialism”. All “collectivist” economic motives have been associated with some form of socialism or communism. Mercantilism was so decisively demolished by what we now call “neoclassical” economics that no one even really thinks to study it anymore.

Yet mercantilism was the prevailing doctrine of political economy in early modern Europe (Renaissance until the late 18th/19th century).

The premise of mercantilism is simple: The economy exists to strengthen the state in its competition with other states. The people benefit as an indirect result of an economically strong state, because a strong state can more effectively defend them against invasion and insurrection.

The early modern period was a time of incessant, brutal warfare in Europe, both within and between states. Border wars, religious wars, dynastic wars of succession—these blighted every generation. The death toll was horrific. Elites were heavily harmed by these conflicts, because the nobility was a hereditary military class. As a result, strengthening the military power of the state became their strong preoccupation.

Our global return to a mercantilist mindset (which we can call “economic nationalism” today) thus suggests that we are once again heading into an age of war. For all its drawbacks, global free trade—championed in the early modern period by neoclassical and laissez-faith economists—does, in fact, contribute to peace.

Humanity doesn’t have to go down the mercantilist rabbit hole again, but we will unless leaders (economists, philosophers, military leaders, politicians) emerge who can guide us to better pastures.