A “science of trade”?
What Schumpeter alluded to was the possibility of a science of trade or commerce. If we now read the more recent assessment by Lars Magnusson (1994), we find a similar view. Two moments are outlined, characterised by two discussions: the 1620s discussion on the causes of the English trade crisis, whose protagonists were Gerard de Malynes (fl.
15861641), Edward Misselden (fl. 1616-54), Thomas Mun (1571-41) and Thomas Culpepper (1578-1642); and that of the 1690s on the recoinage project, the creation of the Bank of England and the funding of the war with France, which involved Josiah Child (1630-99), John Locke (1632-1704), Nicholas Barbon (c. 1640-98), Dudley North (1641-91), John Cary (c. 1649-1717-22), Charles Davenant (1656-1714) and Henry Martyn (c.1665-1721) among others. This second debate gave rise to what Magnusson (1994: 116) calls a “science of trade”. He defines it as a reflection (1) on the creation and distribution of wealth; (2) endowed with some elements of the “Baconian scientific programme”; (3) based upon a materialist conception of man and society; (4) considering the economy as a system regulated by its own laws; (5) which focuses on the supply and demand in markets and their connection with economic progress or decline. Magnusson (2008, I: xii-xiv) adds that it would be wrong to consider the proponents of that discourse as practical men incapable of formulating analytical principles on a number of economic issues - the coherence of their writings is rooted in the same political thinking which examines the links between economic means and political ends and praises patriotism, the reason of state and the commercial strength of nations.As opposed to “mercantilism”, the term “science of trade” can be found in the writings of the authors of the time. Magnusson (1994: 116) refers to the association of the words “trade”, “science”, and “principles” in John Cary (1717: 1): “In order to discover whether a Nation gets or loses by its Trade, 'tis necessary first to inquire into the Principles whereon it is built; for Trade hath its Principles as other Sciences have, and as difficult to understand”.
Well before Cary, Misselden (1623 [1973]: epistle, 130) also used the word “science” when analysing the decline in English foreign trade. While frequently used, these words were rarely placed side by side in a single phrase during the seventeenth century. An exception seems to be the scientific populariser Edward Hatton (c.1664-after 1733), who used “science of trade and commerce” in the introduction to his work on quantification and measurement (Hatton 1728: vi). At the end of the preceding century, Child (1693 [1698]: 108) spoke of the “art or science of merchandizing”. Slightly later, Isaac Gervaise (1680-1739) referred to a “system or theory of trade” (1720 [1995]: 1).“Science of commerce” was also used later and became widespread in the second half of the eighteenth century. The phrase is used for example by Josiah Tucker (1753: 153) who focused on the following elements: (1) a definition of commerce or trade as a means of satisfying various needs; (2) a distinction between domestic and foreign trade; (3) a definition of the balance between nations by comparing the flows of precious metals; (4) the assertion “that labour (not money) is the riches of a People” (ibid.: iv); and, finally, (5) the idea that commerce follows principles that are “clear and certain in themselves”, on which traders are however divided. The French expression “science du commerce”, however, is older. It is already to be found in the mid-sixteenth century in Sully (1745: 444), and refers to a “method by which a state is rendered flourishing”. However, as in Britain, the expression was more widely used in the second half of the eighteenth century.
Eli Heckscher (1931 [1955]) and Magnusson (1994, 1995, 2008) provide accounts of who were the alleged “mercantilists” and which questions they tackled. In the following only some main topics addressed by the commercial writers, mostly English or British, can be dealt with. The focus will be on the importance of commerce for the state, on natural and artificial wealth, freedom of trade and monopoly, “trade in general” and the doctrines of the balance of trade. Some other topics cannot be covered due to space constraint.