Joseph Schumpeter’s criticism
From early on, Schumpeter (1912 [1954]: 40-41) had supported the idea that, analytically, the mercantilists did not form a school of thought, or a scientific theory, and that, consequently, the charge of incoherence raised against them was largely unfair.
Their importance could be found again, first, in their doctrine of the balance of trade, which could be considered as the “first step towards an analysis of economic factors”, and, secondly, in the “lucid definition of national interests as distinguished from private ones and the recognition of a clash between the two”. But unfortunately they did not perceive the “nature of the circular flow of economic life, even less the interaction of the various spheres of individual economies within the framework of the national economy”.In History of Economic Analysis (1954: 143), Schumpeter retained the same idea, but partly changed his comments. While he had no doubts that the economic literature of the seventeenth and eighteenth centuries had no “logical or historical unit”, he distinguished a sociological category of economic authors linked to the rise of the national states and conscious of their rivalries. They are the “consultant administrators” whose literary production - Schumpeter used the British case as a reference - reflects not the general, but the specific conditions of their nation, focusing on foreign trade rather than on agriculture, on the legitimacy of the great financial or navigation companies, and of monopolistic practices.
This category of actors is itself subdivided into three groups (Schumpeter 1954: 159-60): the “teachers and writers of more or less systematic treatises”, whose aim was to form the emerging bureaucracy of civil servants; the “public administrators”, less cultured than the previous group and also called “practitioners”; and the “businessmen”. These sociological subdivisions aim at avoiding using the word mercantilism as far as possible, allowing a distinction between systems and quasi-systems. The systems came from academic professions and public administrators. Most often they are by-products of the philosophy of natural law and political theory. The quasi-systems came from businessmen, but also from civil servants. These are less complete systematisations, in fact “programs of industrial and commercial development” (ibid.: 295). The model is the Discourse of Trade by Child, who deals with practical problems “in the light of clearly adumbrated ‘laws’ of the mechanism of capitalist markets” (ibid.: 196).
Thierry Demals
See also:
Balance of payments and exchange rates (III); Cameralism (II); Richard Cantillon (I); John Law (I); Charles-Louis de Secondat de Montesquieu (I); Money and banking (III); James Steuart [James Denham- Steuart] (I).