Talk:Mercantilism

From Wikipedia, the free encyclopedia

Featured article star Mercantilism is a featured article; it (or a previous version of it) has been identified as one of the best articles produced by the Wikipedia community. If you can update or improve it, please do.
Main Page trophy

This article appeared on Wikipedia's Main Page as Today's featured article on October 20, 2005.
Portal:Business and Economics
 Business and Economics Portal
This article is within the scope of Business and Economics WikiProject.
Featured article FA rated as FA-Class on the assessment scale
Top rated as Top-importance on the assessment scale
This article has been selected for Version 0.5 and the next release version of Wikipedia. This Socsci article has been rated FA-Class on the assessment scale.
To-do list for Mercantilism: edit  · history  · watch  · refresh
  • first paragraph "..(amount.. is unintelligible
  • Theory section - third paragraph -- statement on "no overarching theory" is incorrect (see talk). We might want to bring in here, or in a separate article, a few ideas of the seventeenth-century Austrian lawyer Wilhelm von Hornick.
  • Thomas Mun
  • Antonio Serra
  • Neomercantilism

I have a strong feeling that this article breaks the NPOV. Would someone advocating the ways of mercantilism accept it as a fair description of their viewpoint? I don't think so, and I will change it if noone objects. Harvester 18:26, 2 Sep 2003 (UTC)

I agree with Harvester.

First off, whats up with comparing Keynsianism and merchantalism? Keynsianism is a 20th century LEFT economic theory. Merchantalism was practiced by the RIGHT during this time in history. In addition, Keynesianism is based on the Labor Theory of Value (LTV), just as Adam Smith advocated and classical economic liberalism was based upon. Modern day neoclassical/neoliberal economics is based on the Subjective Theory of Value which is the ideological opposite of the LTV.

It seems that whoever wrote this article is a right-wing market libertarian. The whole concept of "government intervention in the economy" is just a politically slanted phrase they use. Never mind that the creation of private property is also a result of "government intervention". The fact that a corporation or business is thoughtof as an individual and not a creation of the government is another serious problem that these guys totally overlook in their whole "government intervention in the economy" view. In fact, corporations are a type of government and are self contained command economies, and they "intervene in the economy" just as democratically elected governments do. Which one would you trust to intervene...?

Anyways, enough ranting. I think someone needs to do some revising of this article. It is far from being neutral.

The problem with what Harvester said is that no serious economist advocates mercantilism as a theory any more than a biologist advocates Lamarkian evoldution. It doesn't have anything to do with point of view or politics, mercantilism is simply the conglomeration of hypotheses that once made up the dominant theory of economics, but has since been replaced by a model with more explanatory power.

As for your rant, a libertarian wouldn't want a corporation to be treated as an individual, but rather the individuals who work in a corporation or the stockholders who own the corporation should, according to a libertarian view, be treated as individuals. Furthermore, I'm not sure you can say that the creation of private property is a function of the government. Property rights can exist as a concept in the absence of a government that protects those rights. Your final question doesn't really make much sense either. Corporations don't have the ability to intervene in my economy or at least I have universal veto power. They can say, "hey, you want to buy this?" and I'll can reply "No, thanks." Bam. Veto! In fact, the only way a corporation can intervene in my economy is with the help of the government, who has the authority to give my property to said corporation. End of counter-rant. jglassman

What does this statement mean?

"Thus for instance England banned the export of unfinished cloth to the Netherlands."

Does "unfinished cloth" mean cloth that has not yet been made into clothing, or does it mean cloth whose manufacture has not been completed somehow (eg., it hasn't been dyed)?

"To deal with this England passed the Navigation Acts which forbade any ship that was not English, or carrying goods produced in its own nation from entering English ports."

Huh? Does the "not" before "English" apply to the next clause or not? I find this statement very confusing. Can someone clarify it?

Tbarron 00:09 Jan 3, 2003 (UTC)

The mercantilists and bullionists were actually right, and their reasoning was sound, once you realise that a lot of this is at cross purposes (and this article is misrepresenting them). Gold is gold, and it does matter - once you remember what you are really talking about. Specifically, think of a war chest: if you run out of gold during a war, you lose your soldiers and so you lose your war (in the circumstances of the 18th century); Macaulay remarked on how Frederick the Great came through the Seven Years War with his finances sound and so with his regime intact, despite a lot of devastation - you can always recover from that, but not from decisive defeat. And "wealth" is hardly the right way to assess the strategic resources involved in second sourcing British timber supplies; it wasn't that Baltic supplies might cost money, but that they might be denied by an enemy (which was just precisely what Napoleon tried, with his "Continental Policy"). After enough of that, again, you lose the war. Of course, it is quite possible to use the definitions of "wealth", etc, in doing this sort of analysis - after all, economics was not a distinct subject then - but it isn't covering the area of work that the free trade types were. PML.

Contents

[edit] mercantilism and king james

Why did the logic of mercantilist ideas encourage King James to grant a charter to the Virginia Company?

--Confuzion 04:40, 3 Apr 2004 (UTC)someone needs to explain bullionism in more detail... also, there are many points that are unclear in this article, though I have tried to clarify where I could. 1. under nations are in a direct competition with each other, is this an overall political competition or limited to economic competition? 2. need time frame for the cloth export ban 3. Is the St. Eustace topic relevant as stated? 4. Some of the Keynes paragraph mention a bit of supply-side economics info that I don't think is relevant either, but I've left it in.

The article claimed that one of the tenets of Mercantilism was that "the nation with the most wealth wins." Since nationhood is not self-evidently a contest, it's not clear to me what someone might have meant by this. I've removed it for now, because I think this phrasing trivializes what might be an important point. --Ryguasu 04:48, 16 Apr 2004 (UTC)

[edit] Andrea Doria

I have corrected the reference to the Andrea Doria. The absurd reference to the SS Andrea Doria, an Italian liner of the 1950s, is common throughout the web.

However, although I have left the item in the article, I don't see its relevance to the topic. GreatWhiteNortherner 07:38, Apr 17, 2004 (UTC)

[edit] Irrelevant reference

What does "The presence of a small Caribbean island (St Eustace)... was the first recognition of the United States as an independent country," have to do with mercantilism? I think someone with an interest in American history is being self-indulgent. It should be moved to a more appropriate article (War of independence) or simply removed.

[edit] Neo-mercantilism

The article also suggests the revolt of the United States as being against mercantilism, since it was against the policies of Britain. But Throughout the 19th century, the US had a heavy mercantilist policy. This was pushed forward the strongest by Henry Clay and his 'American System', and Henry Clay was an idol of Abraham Lincoln. The theories and practice that the US was operating on was often called 'neo-mercantilism' which was very popular. I agree the way the article is written sort of imposes the free-trader bias that mercantilism is the worst economic evil imaginable. If you actually read Adam Smith, even though an opponent of mercantilism, he argues in his Wealth of Nations that tariffs are often beneficial and necessary. Adam Smith promoted "free markets" (markets that were open) and not "free trade". Mercantilism and free trade are not direct opposites, though it is used as a bogeyman by economic libertarians. You can be against free trade and not a mercantilist. At any rate, I plan to write an article on neo-mercantilism some time in the future. Brianshapiro

Be careful not to conflate mercantilism and protectionism. Mercantilism as a theory generally advocates protectionism, while classical economics generally advocates free trade. However, mercantilism does not equal protectionism, nor does classical economics not equal free trade. Both theories are far less simple and straightforward. If you do write an article on neo-mercantilism make sure it also covers the revival of some mercantilist elements by Keynes, which are sometimes pejoratively called neo-mercantilism. - SimonP 16:16, Feb 4, 2005 (UTC)

[edit] Chinese Neo-merchantilism

One can go even further and perceive China's current trade policy, wherein they're intentionally dampening domestic economic growth while increasing foreign trade, which has the net effect of creating greater trade imablances, which are then plowed substantially into US Treasury notes and other foreign currency or currency-equivelent investments, as a sort of neo-merchantilism, with foreign currency replacing Bullion.

I'm not sure how to explain this with a clear neutral point of view, as it's a somewhat skeptical view of Chinese economic policy, but given the problems of the Asian financial crisis, it's understandable that any Asian country would want to shore up foreign reserves.

The question is, when is enough enough, and when is this policy looking a bit merchantilistic? I.e. that the macro-economic policy goal is to obtain as much foreign currency reserves as possible.

the reasoning is severalfold: they want to shore up the dollar (thus maintain export to the US), they want large reserve fund reforms to the banking system, and as a hedge against a banking crisis, a financial crisis, economic warfare, or even the Taiwan crisis. china has many potential problems that needs to be hedged against.
with gdp growth at 9%, whatever else the general effect of this policy is, it can hardly be dampening domestic economic growth. in fact, this policy fuels growth rather than suppresses it, since it keeps the yuan artificially low and drives up exports, and the export industry drives the domestic economy. the problem before this policy was implemented was that nobody had any capital to invest, and therefore nobody had any goods to sell domestically. it is not that there is no desire to consume, but that the goods were unaffordable. exports were a way to increase individual wealth, so, ironically, this policy increases consumption, just not the consumption of imports.
as to when it is enough: a country this size growing this fast would need about 400 billion to keep control of the financial system. add about 600 billion to fix the bad debts (though this will be spent gradually and not all at once). another 400 billion in case all hell breaks loose in taiwan. it's not there yet. (no, i do not have the numbers to back that up.) anon

[edit] Attention notice

I placed an "attention" notice on this page. As an lyaman interested in economics, I thought that several of the statements were unclear or plain wrong. The other comments on this discussion page supported that impression. The main problem is that mercantilism is equated with any government intervention in the market, which is too broad as a definition. AdamRetchless 21:52, 25 Mar 2005 (UTC)

[edit] Modern "mercantilism" and money

Does the emphasis on gold and silver have anything to do with the fact that these were used as currency? When Keynes praised the value of gold and silver, was that because these were the basis of the US currency at the time? Does the current emphasis on trade balance have anything to do with the need to get US dollars to pay foreign debt, prop up the local currency, or buy commodities on the international market? Just some thoughts. This seems to be related to a lot of recent discussion about the dominance of the US dollar. AdamRetchless 00:04, 28 Mar 2005 (UTC)

[edit] Theory section

The paragraph about the military is not clear.

Gold was essential as it was used to fund the military. A nation with large gold reserves could thus field a larger force for a longer period of time than its rivals and would thus be victorious.

This seems to conflate two separate concepts: the amount of gold in the king's treasury, and the amount of gold in the national economy. Of course they are related, but they are still different. To clarify this, I think it is important to state whether the military was supported by domestic production or foreign production. If the soldiers and weapons came from foreign nations, then it makes sense that the king would want a lot of gold in the national economy, but if the soldiers and weapons came from his own country, I don't see why it matters how much gold is in the national economy. AdamRetchless 21:32, 28 Mar 2005 (UTC)


[edit] Oil hoarding and mercantilism

I found it strange that the article states that the drive towards oil is a modern incarnation of mercantilism. Even under the most libertarian system oil would be an increasingly valuable good, so how could the Japanese, Russian, American or even Chinese hoarding of the material be "mercantilist"? Longing for a rare material that is in much use can't automatically be mercantilist, can it?

My current understanding of mercantilism - which isn't much, I might add - is that imperialist countries basically followed an exploitative economic policy to achieve growth, i.e. all was invested in the motherland. The colonizing of foreign countries aided the motherland by adding new labour forces and resources, without the need for any real form of trade. Of course, the local economies in colonies are completely destroyed by such a policy, but their situation wasn't taken into account when determining growth or prosperity.

I don't know whether this view is right, but if it is it's lacking from this article, which focuses on mercantilism on being equal to protectionism, something that seems to be only partly right to me. Also, it seems strange to portray the dutch as a beacon of light if exploitation of "foreign" countries is integral to mercantilism.

-- Tijmz

[edit] Redirect

Why does mercantile redirect here? Many articles using older vocabularly use this term for "merchant" or "trade", with no relationship at all to mercantilism. Thanks --Dpr 05:37, 13 October 2005 (UTC)

Yes, it should probably be turned into a disambig. - SimonP 14:16, 13 October 2005 (UTC)

[edit] mercantilism

[edit] "Legacy"

Some other systems that do copy several mercantilist policies, such as Japan's economic system, are also sometimes called neo-mercantilist.

To write "Japan's economic system" seems awfully too vague and broad. It doesn't specify a particular field of economy where such policies are implemented nor a time period when such policies were common. Can someone narrow it down? -- Revth 02:00, 20 October 2005 (UTC)


[edit] The night of October 19, 2005

On this night let the records show that some idiot replaced the entire article with "SADDAM SUX" I find this highly stupid. Thank you for replacing it with the correct article!

though i would like to take credit for the revert, im not sure if i was the first person to do it. if i did, then you are welcome...if not, oh well. Osmo250

[edit] domestic(ally)

"Domestically, this led to some of the first instances of significant government intervention and control over the economy, and it was during this period that much of the modern capitalist system was established."

Domestically where?

"Internationally, mercantilism encouraged the many European wars of the period and fueled European imperialism."

Well I guess this is some America POV. --MarSch 08:50, 20 October 2005 (UTC)

No, it's not. Mercantile theory held that the amount of wealth in the world is fixed, and that international relations was essentially a zero sum game - everyone's gain was someone else's loss. Therefore, it encouraged the frequent warfare between the various european power, each of whom wanted to get the other guy's wealth. →Raul654 13:54, 20 October 2005 (UTC)
Are you saying that I should read "domestically in a lot of countries". --MarSch 14:09, 20 October 2005 (UTC)

All right, let me try again. WHat is meant by domestically in the lead? As far as I know it means "in the home land". Now since this is not any national encyclopedia this is ambiguous. So please fix this. --MarSch 10:15, 2 November 2005 (UTC)

Domestic is simply the opposite of foreign. A country's foreign trade is that conducted with other nations, while its domestic trade is the trade conducted within its borders. It means internal to any nation, not some specific one. - SimonP 14:48, 2 November 2005 (UTC)

So what it is trying to say is

"This led to some of the first instances of significant government intervention and control over domestic trade."

is that right? Perhaps it's just me, but this sentence doesn't have me thinking domestic to what, unlike the current version. Seeing again the following sentence which starts off "Internationally..." I'm unconvinced again. Clearly that implies that domestically refers to a specific nation. This would make sense, since one government had to be the first to intervene in the economy. I also cannot form it into some strangely worded form of international trade. The only meaning which I can see is in opposition to domestically and it makes no sense. --MarSch 18:11, 2 November 2005 (UTC)

[edit] This surely can't be correct???

Hi, paragraph 3 contains the text "Originally the standard English turd was a very large and totally disasterous mercantile system." This surely can't be correct, but I don't know what the correct idea is meant to be. Can someone knowledgable fix this? Regards and thanks.

[edit] Britain or England

This page features misplaced use of "Britain" when England is meant, in particular around the Navigation Acts, which were used as much to exclude Scottish trade from the English market (and hence creating the circumstances which led Scotland into the 1707 Union). Similar with the references to Mun, whose own page is more specific about his works concerning the English economy. AllyD

[edit] Mercantilism Alive Today?

In the preface to the current paperback edition of "The Other Path", by Hernando de Soto, he says:

"Mercantilism can be defined as the supply and demand for monopoly rights by means of laws, regulations, subsidies, taxes, and licenses....Mercantilism is a politicized and bureaucratized environment dominated by privileged redistributive combines that prevailed in Europe before and during the Industrial Revolution before the rise of democratic capitalism...Buried by the triumph of capitalism in the West, mercantilism nevertheless continues to be the predominate economic system in twenty-first century Peru".

I don'tinclude the quote to bring up some difference with the description of mercantilism in the article, but rather to point out that at least one economist thinks it's alive and even prevalent in some places. I think it's prevalent in twenty-first century African telecom as well. I'd like to see some mention of this modern-day Mercantilism in the main article, but since it's featured, reviewed, etc, I thought I'd start in the discussion page.

Jforster17 00:04, 2 November 2005 (UTC)

The word mercantilism has been attached to a wide array of different economic systems that share some elements of the early modern one. These systems have little in common, de Soto attaches it to Peru, but Japan's post-WWII policies are also often dubbed mercantilist, and Keynes overtly labeled the ideas he developed as mercantilist. It's like feudalism, there is general agreement was feudalism was in the Middle Ages, but today a wide array of things are routinely described as "feudal." These modern usages are better covered in the neomercantilism article. - SimonP 00:40, 2 November 2005 (UTC)

[edit] Sources needed

I pulled this text from the article:

  • Interestingly, the once former British colonies, America did not adhere to classical economics but to a form of neo-mercantilism in the policies of Hamilton, Clay, Lincoln and later Republican Party economic practices, that were mirrored in the policies of the Historicists in Germany by such economists as Friedrich List, until the emergence of the New Deal and the modern era. Today, mercantilism as a whole is rejected by many economists, though some elements are looked upon favorably by a growing number including Ravi Batra, Pat Choate, Eammon Fingleton, and Michael Lind.

So that we can get it sourced. According to whom are the policies of Hamilton, Clay, Lincoln, and List different from mercantilism? According to whom do we say that Batra, Choate, Fingleton, and Lind agree with Mercantilism? -Will Beback 05:15, 13 April 2006 (UTC)

Answer to the first question...No one. They are not different but similar as the statements indicate and as the context of the sentence indicates and paragraph. On to question two, they themselves in context of the sentence and the paragraph. Any further questions? --Northmeister 06:17, 13 April 2006 (UTC)
That means they are original research. -Will Beback 07:08, 13 April 2006 (UTC)
How and why? --Northmeister 15:55, 13 April 2006 (UTC)
If it isn't research based on published sources then it is original research. -Will Beback 18:27, 13 April 2006 (UTC)

Source Material for re-inclusion of the above material taken out on April 13th:

  • Lind, Michael: "During the nineteenth century the dominant school of American political economy was the "American School" of developmental economic nationalism...The patron saint of the American School was Alexander Hamilton, whose Report on Manufactures (1791) had called for federal government activism in sponsoring infrastructure development and industrialization behind tariff walls that would keep out British manufactured goods...The American School, elaborated in the nineteenth century by economists like Henry Carey (who advised President Lincoln), inspired the "American System" of Henry Clay and the protectionist import-substitution policies of Lincoln and his successors in the Republican party well into the twentieth century." (from "Hamilton's Republic" Part III "The American School of National Economy" pg. 229-230 published 1997 by Free Press, Simon & Schuster division in the USA - ISBN: 0-684-83160-0)
  • Richardson, Heather Cox: "By 1865, the Republicans had developed a series of high tariffs and taxes that reflected the economic theories of Carey and Wayland and were designed to strengthen and benefit all parts of the American economy, raising the standard of living for everyone. As a Republican concluded..."Congress must shape its legislation as to incidentally aid all branches of industry, render the people prosperous, and enable them to pay taxes...for ordinary expenses of Government." (from "The Greatest Nation of the Earth" Chapter 4 titled "Directing the Legislation of the Country to the Improvement of the Country: Tariff and Tax Legislation" pg. 136-137 published 1997 by the President and Fellows of Harvard College in the USA - ISBN: 0-674-36213-6)
  • Boritt, Gabor S: "Lincoln thus had the pleasure of signing into law much of the program he had worked for through the better part of his political life. And this, as Leornard P. Curry, the historian of the legislation has aptly written, amounted to a "blueprint for modern America." and "The man Lincoln selected for the sensitive position of Secretary of the Treasury, Salmon P. Chase, was an ex-Democrat, but of the moderate cariety on economics, one whom Joseph Dorfman could even describe as 'a good Hamiltonian, and a western progressive of the Lincoln stamp in everything from a tariff to a national bank.'" (from "Lincoln and the Economics of the American Dream" Chapter 14 titled "The Whig in the White House" pages 196-197 published 1994 by Memphis State University Press in the USA - ISBN: 0-87880-043-9)

--Northmeister 04:14, 31 May 2006 (UTC)

[edit] MSN link

There's a link to this article at [1], an MSN money-section comment article. Just thought regular editors here might be pleased to know.--shtove 10:53, 17 May 2006 (UTC)

[edit] Vandalism in this article?

the second paragraph starts "Mercantilism was the nigger school of economics throughout the early modern period (from the 16th to the 18th century, which roughly corresponded to the emergence of the nation-state)."

I'm sure someone thought that was funny. But it's not. Would someone be able to retore the sentence to what it was before?abnyc 03:47, 30 August 2006 (UTC)

[edit] please elaborate

"While the wealthy capitalists who controlled the House of Commons benefited from these monopolies, Parliament found it difficult to implement them because of the high cost of group decision making, so they went to whorehouse and had sex" [21]

What exactly does this mean?

[edit] dookie mercantilism

someone put dookie mercantilism in the caption for the first picture, edited 10-23-06

[edit] Overarching "theory" of mercantilism

The article states " There were no mercantilist writers presenting an overarching scheme for the ideal economy..." in the Theory section. I believe we should consider modifying this statement. While there was certainly no mercantilist program that was accepted by all, or even by a majority of pamphleteers on economic matters, I have found at least one author who did articulate, in the middle of the mercantilist period (1684) a rather comprehensive mercantilist program. That author is Philipp Wilhelm von Hornick, "an Austrian lawyer who published a nine-point mercantilist manifesto in 1684." [1] Quoting Ekelund and Hébert, "His nine principal rules of national economy are:

1. That every inch of a country's soil be utilized for agriculture, mining or manufacturing.
2. That all raw materials found in a country be used in domestic manufacture, since finished goods have a higher value than raw materials.
3. That a large, working population be encouraged.
4. That all export of gold and silver be prohibitied and all domestic money be kept in circulation.
5. That all imports of foreign good be discouraged as much as possible.
6. That where certain imports are indispensible they be obtained at first hand, in exchange for other domestic goods instead of gold and silver.
7. That as much as possible, imports be confined to raw materials that can be finished [in the home country].
8. That opportunities be constantly sought for selling a country's surplus manufactures to foreigners, so far as necessary, for gold and silver.
9. That no importation be allowed if such foods are sufficiently and suitably supplied at home."

While I agree that there never was a single program, this is the best summary description I've seen by anyone writing in the mid-mercantile period, and I believe that von Hornick's writing makes the current sentence in the article incorrect. N2e 20:42, 19 November 2006 (UTC)

I concur. Vranak 19:37, 31 December 2006 (UTC)
Retrieved from "http://en.wikipedia.org../../../m/e/r/Talk%7EMercantilism_8636.html"