Introduction
Setting the stage
Gathering under a single name the great diversity of authors who wrote on economic matters from the early seventeenth century until the second third of the eighteenth century seems to be an impossible task.
However, this is what has been done in the past. Many economists and economic historians have called these writers “mercantilists”, a generic term which gave rise to discussions but was widely adopted (see Wilson 1957; Herlitz 1964; Rashid 1980; Magnusson 1994, 1995, 2008; Pincus 2012; Stern and Wennerlind 2014).The history of mercantilism appears as a series of “disconnected still pictures” (Herlitz 1964: 101): initially considered as an inconsistent doctrine, mercantilism was later presented as a coherent system and then sometimes as an imaginary or uninfluential construction. The debate on mercantilism has been deeply entangled in the discussion on “liberty” versus “protection”. Many scholars questioned the traditional boundary delimited by Smith’s work and corrected “Smith’s caricature” of this literature (Rashid 1980: 5), adding to the picture “late” or “moderate” or “liberal mercantilists” (see Ingram 1888; Cossa 1892; Schatz and Caillemer 1906; Grampp 1952; Hutchison 1982). The fact remains that to some extent scholars accepted the designation, the description suggested by the writings of Smith, Quesnay or Mirabeau (below), and the subsequent idea of a more or less common body of doctrines beyond the particularities of national economies and commercial empires. For most of them, mercantilism was a truly modern policy, not a remnant of the Middle Ages, and a body of doctrine sufficiently homogeneous and unified to be compared to that of laissez-faire. What unified the doctrine was the great emphasis put on foreign trade as a means of national enrichment and an expression of rivalry between nations, leading to a discussion whether the wealth of a nation tended towards a limit if it came only from internal resources, namely, land and raw materials, and whether this limit could be pushed as far as possible with the deployment of labour.
Few commentators disputed the idea of the unity and coherence of mercantilism.
James Bonar (1893: 130) had serious doubts that such a school existed. This was also the conclusion reached by Arthur Judges (1939 [1969]: 35) and a few years later by David Coleman (1969: 117). During the same period, Joseph Schumpeter, while describing mercantilism as an “imaginary organon... of traditional teaching” (1954: 335) that constituted neither a school nor a scientific theory, highlighted nevertheless a main current from the 1680s onwards characterised by “analytic progress” (ibid.: 362). The progress was supposed to be threefold. First, these writers turned to an analysis of money as a quasi-ordinary commodity, capable of being exported profitably for the nation and whose importation did not add more to wealth than that of raw material. Second, they gradually accepted the idea that there is a mechanism which, under certain conditions, leads in the long run to “an equilibrium relation between the money stocks, prices, incomes and interest rates of different nations” (ibid.: 365). Third, they laid the basis for a general theory of international trade. This approach presupposed that protectionism should be abandoned and supported the idea that a nation is not necessarily a rival to its neighbours and can benefit from their prosperity.