Mercantilism in the 1600's (background to success)
What is Mercantilism?
Using the Wikipedia.com definition and sources listed at the end of this
The following concepts taken as a whole, may be called mercantilism.
(1) Bullionism was the belief that the economic health of a nation could be measured by the amount of precious metal, gold, or silver, which it
possessed. The rise of a money economy, the stimulation produced by the influx of bullion, the fact that taxes were collected in money, all seemed to
support the view that hard money was the source of prosperity, prestige, and strength.
(2) Bullionism dictated a favorable balance of trade. A nation must export more than it imports. Exports were later defined to include money spent on
freight, or insurance, or travel.
(3) Each nation tried to achieve economic self-sufficiency. Those within a nation (state) who founded new industries should be rewarded by the
(4) Thriving agriculture should be carefully encouraged. Domestic production not only prevents imports of food, but farmers also provided a base for
(5) Regulated commerce could produce a favorable balance of trade. Tariffs should be high on imported manufactured goods and low on imported raw
(6) Sea power was necessary to control foreign markets. Armies were to be supported as needed to control and protect land trade.
(7) Colonies could provide captive markets for manufactured goods and sources of cheap raw material.
(8) A large and controlled population was needed to provide a domestic labor force to people the colonies.
(9) Importation of luxury items were to be avoided because they took money out of the economy unnecessarily.
(10) Strive for monopolistic power of markets. State action was needed to regulate and enforce the above policies. One might add that there was
nothing logical or consistent about mercantilism, and that it displayed, in fact, enormous variation.
“Virtue is more to be feared than vice,
because its excesses are not subject to
the regulation of conscience.”
Many have heard of Adam Smith and his (An Inquiry into the Nature and Causes of the) Wealth of Nations
. This groundbreaking work illucidated
principles of free-market capitalism still followed. Concepts such as the role of self-interest, the division of labor, the function of markets, and
the international implications of a laissez-faire economy (An economic doctrine that opposes governmental regulation of or interference in commerce
beyond the minimum necessary for a free-enterprise system to operate according to its own economic laws.
). He is most often recognized for the
expression "the invisible hand," which he used to demonstrate how self-interest guides the most efficient use of resources in a nation's economy,
with public welfare coming as a by-product. To underscore his laissez-faire convictions, Smith argued that state and personal efforts, to promote
social good are ineffectual compared to unbridled market forces.
In 1751 Smith was appointed professor of logic at Glasgow university, transferring in 1752 to the chair of moral philosophy. His lectures covered the
field of ethics, rhetoric, jurisprudence and political economy, or "police and revenue. Smith did not practice what he preached. Dying in 1790,
after an illness it was discovered that Smith had devoted a considerable part of his income to numerous secret acts of charity.
Mercantilistic activities drove nations to pursue the entire world as their source of wealth, including their own people. Mercantilism probably came
about after the decline of feudalism. The Hanse
was an early attempt of monopoly powers that melded into the new theories and philosophies of
Spain became the first nation that extolled mercantilism. Through luck or divine guidance Spain grabbed into the New World (Americas) first.
Portugal, Holland and England to a lesser extent along with France had pursued trade interests throughout the European world including the
Mediterranean-Africa areas and down the western coast of Africa.
By 1500, scarce 100 years prior to the founding of the British East Indies Company mercantilism was in full flower. Mercantilist policies adopted
during the reign of Queen Elizabeth were continued in the seventeenth century under the Stuarts and Oliver Cromwell. Elizabethan laws were passed as
quickly and forcefully as political expediency allowed.
The legal discouragement of idleness and rewards to industrial enterprise with monopolies along with state control of commerce provided a solid grasp
of all wealth by the state. Queen Elizabeth gave her justices of the peace the authority to fix prices, regulate hours, and compel every able-bodied
subject to work at some useful trade. Her successors enacted the Navigation Acts whereby seaborn trade was regulated and taxed.
Other European states used mercantilistic principles as well even though differing in their application.
German mercantilism was concerned primarily with increasing the economic power of the state by internal regulation. It heralded later attempts at
economic nationalism and a planned society. Because they aimed primarily at increasing national revenue, German mercantilists were known as
cameralists, from Kammer, the royal treasury.
France displayed the most thoroughgoing mercantilism and was intent on developing the welfare of the middle class. This prohibited the export of
money, levied high tariffs on foreign manufactures, and gave liberal bounties to encourage French shipping. France purchased Martinique and Guadeloupe
islands in the West Indies, encouraged settlement in Santo Domingo, Canada, and Louisiana, and established trading "factories" (armed commercial
posts) in India and Africa.
England was interested in enriching the 'elite,' Germany the state, France the middle-class and Spain the crown. England and Spain had the most
similar goals. Both nations exhibited large numbers of aristocrachy that seemingly had insatiable appetities. Spain differed considerably in one
major aspect, the desire for religious conversion. No other nation had a drive for religious goals similar to Spain.
The Dutch (Holland) were the bastards of the bunch. No nationalistic drive, no religious zealotry, no enrichment of a class or monarch drove the
Dutch. Pure and simple individual greed was their motivator. Hence they had the most successful commercial enterprises until militarily
Europe had seemed a crowed place until colonialism took hold. Then, almost miraculously there were to few people to profitably occupy the foreign
conquests. All these nations suffered a paucity of population.
Colonialism was the other end of the mercantilism funnel. Native peoples became nothing more than another commodity to feed the European appetite.
Additional sources at this point:
mercantilism. The Columbia Encyclopedia, Sixth Edition. 2001
Elizabeth I, and Oliver Cromwell conformed their policies to mercantilism. In France its chief exponent was Jean ... Horrocks, A Short History of
Mercantilism (1925); D. C. Coleman, ed ...
Laura LaHaye ...
Yahoo! Directory Economic History > Mercantilism
Columbia Encyclopedia: Mercantilism - includes a brief definition
Mercantilism on Encyclopedia.com
... Elizabeth I, and Oliver Cromwell conformed their policies to mercantilism. In France its chief exponent was Jean ... Horrocks, A Short History of
Mercantilism (1925); D. C. Coleman, ed ...
The Institute for Economic Democracy highlights sustainable development through economic democracy and democratic cooperative capitalism. The...
Mercantilism [mûr'kuntilizum] Pronunciation Key. ... Henry VIII, Elizabeth I, and Oliver Cromwell conformed their policies to mercantilism. ...
Mercantilism , economic system of the major trading nations during the 16th, 17th, and 18th cent., based on the premise that national wealth and power
were best served by increasing exports and collecting precious metals in return. ... and Oliver Cromwell
Encyclopedia.com - Results for mercantilism
Mercantilism , or the mercantile theory, was the economic theory utilized by Great Britain ... The idea behind mercantilism was to amass wealth
through a favorable balance ...
Mercantilism: The Shaping of an Economic Language - Compricer.fr , Trouver les prix les plus bas...
mercantilism -- Encyclopædia Britannica Article ... MLA style: "Mercantilism." Encyclopædia Britannica. 2004. Encyclopædia Britannica Premium
Mercantilism: The Shaping of an Economic Language
Bookchecker vergleicht Verfügbarkeit, Preise, Lieferkosten und Lieferzeit bei online Buchhändlern...
MSN Encarta - Mercantilism , economic policy prevailing in Europe during the 16th, 17th, and 18th centuries ... of exports over imports. Mercantilism
was characterized not so much by a ...