While everything has indeed gone global, the internet has vastly shrunken the world we live in. No matter the resources, I don't think the .01% can just vanish without a trace. After all, who's serving them?
I fail to see how mercantilism is inherently bad. Now, if it's a 1st world country suddenly opening up free trade to a developing nation, the 1st world country is definitely going to feel the economic pinch and the developing nation is going to be exploited. But in the long run everyone benefits.
It creates growth but there is long term pain. First you are producing more than you consume. You have a trade surplus. (you want neither surplus or deficit). Because currencies should float and under mercantilism they don't a problem will start to develop.
To have a trade surplus someone has to have a trade deficit. Your people are getting paid less in real terms. Even if you raise wages inflation will be forced upon the economy. Keeping the currency from floating has to be done by artificial means.
Your population cannot buy as much of what it produces because they can't afford it.
The side with the trade deficit might be producing 5 units of production and consuming 10, they feel rich at this point.
Your population is producing 10 units of production and consuming 5.
If the currency floated the trade def and surp would shift back and forth over time.
To prevent the currency from floating the government buys up the the foreign currency. This start creating debt.
(Will continue in a moment.)
Overtime the country with the trade deficit will start having unemployment but they have cheap products. The country with the trade surplus is working very hard for what they can buy and cannot consume as much as they produce but they produce a lot because of how much is being sold to export.
The mercantilistic country has a stack of foreign currency. The other country has to start taking on debt because of unemployment and underemployment so the need for social services increases. The mercantilist has to put the currency someplace or have to import with that currency but of them import it isn't mercantilism. The other country is in debt because it is selling bonds and getting it's own domestic currency back. The mercantilist is getting interest in money not in it's own country and and it cannot pay it's people with it. It then buys more bonds with future exports and the interest. It is becoming harder to strip currency out of the market.
The exporting nation has been basically giving stuff away for paper. The importer has been getting the product of the labor. The deficit nations currency should start losing value but the surplus nation keeps trying to keep the currency propped up by buying it but cannot do this for ever. The country practicing mercantilism is starting to find it harder harder to buy up the other countries currency with it's own so debt is created, the importing nations is going into debt because it has been consuming more than it produces and social services cost has at to increase due to unemployment.
If the currency is never used it means you gave all that product away to a nation that is no longer producing.
Money is just a lubricant for trade. Money's real value is the things it will buy such as food clothing, stuff.
The trade deficit company in reality does not owe the trade surplus nation money but actually owes them stuff. The money eventually has to come home for any real value to come from it. To finally get the value out of it you have to spend it someday so the country that practiced mercantilism goes shopping to the nation that is no longer producing much. Not much there to buy but you find something. You start buying, the non producing nation starts experiencing job growth but cannot afford to buy what is is producing because of inflation. The cost of goods going back to the other sides is getting more and more expensive and is starting to suffer from unemployment. The former practicer of mercantilism is now losing jobs, and is buying things at a constantly higher price and the former laze sloths are now hard workers getting almost nothing. In the end the ex mercantilistic nation didn't get back as much as it sent out and has unemployment get a lot of infrastructure and is carrying debt. The other nations is carrying debt and has the working poor until the balance of payments is cleared.
Looking at it in a different way.
A guy from the UK buys something from Germany in the pre-Euro days, the conditions are the currency is all floating. The German gets a bunch of pounds. He only accepted them because they have value and the reason they have value is they are a coupon for UK production. The German can either sell the pounds to someone that wants to buy from the UK, buy something from the UK or sell the on the currency exchange or a currency broker. It doesn't really matter because in the end it will be someone that wants to buy something from the UK that gets it. The guy in the UK gets a car from Germany and someone from Germany gets a whole bunch of crumpets.
What really happened was German production was traded for 'UK production. If the sales get one sided and a trade deficit forms the currency shifts in value making stuff from the UK seems cheaper until the balance of payments is equalized again over time. If the currency floats and not intervention takes place the trade will be balanced.over time. Ricardian functions in a non pure form will start creating efficiencies based on comparative value rather than absolute value.
It does not have to be apparent that things are trying to self equalize, the shifts in relative currency value will push to keep trade balanced between the UK and Germany. There is no incentive for the Germans to send a car to the UK if there is not something in the marketplace in the UK that someone from Germany wants.
Now the German government starts to intervene in the process and encourage you to sell the pounds to them in exchange for marks then starts to sock them away. The UK does not get the sale on the other end and Germans don't get a product from the UK. The Germans are making stuff but not getting stuff in return. The German government starts getting a trade surplus by buying up pounds and the Germans have to produce even more to have product for themselves. The guys in the UK loses his job, the German government buys bonds with the pounds. The UK takes the pounds and gives it to social services and the unemployed UK guy buys more stuff from Germany. The German people are producing more than they consume so they have to work harder to have a good standard of living. The guy in the UK does not work at all and his country is going into debt. Germany has to find artificial ways to buy up pounds and goes into dept itself or it prints currency devaluing the mark.
German labor is getting ripped off by the guy in the UK that sets on his but collecting unemployment. The guy in the UK can't find a job and his country is selling bonds to gets it's own currency back. Germany is getting paid interest in pounds which they cannot pay their workers with so they have to borrow marks from the public (debt) or print more marks (inflation). It cannot go on forever.
Germany gets a great idea, I can't pay my workers with these pounds but I can pay the guy in the UK with them. Germany goes and builds a factory in the UK (sign that things are getting harder) or builds a factory in Africa (holding off the problem for awhile and keeps prices lower but create merchanitlism elsewhere). People talk about low wages in other countries but it is the prices that are doing it not the wages, if you are sending all of what you make out you can't buy anything. If you send out half of what you produce and bring nothing in you are low wage because you are working very hard and getting only half of it and someone gets the other half.
Now there is a guy in Germany out of a job, the German company is making profits in pounds but at least is paying his worker in pounds but needs marks to pay his debts. Germany experienced high growth but over the decades and built a problem. The UK was an under producers for a very long time. The correction is costly and the fact that both sides were not productive but only one side was means there was actually less to go around for everyone than there otherwise would be.
Mercantilism means one side makes more that it gets to keep and the other side becomes less productive with consequences out in the future. There are other forces at work at the same time but this is one of them.
Japan went though this cycle. When they started opening car plants in a high wage nation it was because they had dollars built up but lacked yen. Building in the USA was actually the cheaper option for them because of accumulated dollars and interest on the dollar.
