Mercantilist Theory

One can understand the commercialism as a set of political or economic ideas developed during the sixteenth, seventeenth and eighteenth centuries the first half in Europe. It is characterized by a strong interference in the economy. It consisted of a series of measures to unify the domestic market and was aimed at the formation of nation states as strong as possible.

History

Almost all European economists between 1500 and 1750 are considered today as mercantilist. However, these authors did not see themselves as participants in a single economic ideology, but the term was coined by Victor Riquetti, Marquis de Mirabeau in 1763, and was popularized by Adam Smith in 1776. In fact, Adam Smith was the first person to formally organize many of the contributions of the mercantilist in his book The Wealth of Nations. The word comes from the Latin word mercari, that makes sense as the Castilian trade in the sense of conducting a business, and that comes from the root meaning merx merchandise. It was initially only used by critics to this theory, such as Mirabeau and Smith, but was soon adopted by historians.

Mercantilism itself can not be considered a unified theory of economics. In fact there was no mercantilist writers to submit a general outline of what would be an ideal economy, as Adam Smith would later to classical economics. Instead, the mercantilist writer tended to focus their attention on a specific area of the economy. would be after the mercantilist period when scholars who came later integrate the various ideas on what you would call mercantilism, such as Eli F. Heckscher who sees in the writings of the time both a political power system, a system of regulation of economic activity, a protective system and a monetary system with the theory of the trade balance. However, some theorists reject completely the idea of a mercantilist theory, arguing that it gives "a false unity to disparate events." The historian of economic thought Mark Blaug notes that mercantilism was rated over time as "annoying baggage", "fun of historiography" and "giant balloon theory."

Theory

The mercantilist thinking can be synthesized through the nine rules of Von Hornick:

1. Containing every inch of the soil of a country is used for agriculture, mining or manufacturing.
2. What all raw materials which are in one country are used in domestic manufacturing, for finished goods have a value greater than the raw materials
3. What are promoting a large and industrious population.
4. What prohibit all exports of gold and silver and that all domestic money remains in circulation.
5. What is no interference as much as possible all imports of foreign goods
6. Where some imports are necessary to be obtained first-hand, in exchange for national assets, and gold and silver.
7. as far as possible be confined to import the raw materials which can be completed in the country.
8. They are constantly looking for opportunities to sell the surplus of manufactured goods from one country to foreigners, to the extent necessary, in exchange for gold and silver.
9. Not allow any importation if the goods are imported to a sufficient and suitable in the country.

However, domestic economic policy that defends the commercialism was still more fragmented than international. While Adam Smith presented a mercantilism that supported the strict control of the economy, many mercantilist did not identify with these ideas. During the early modern era was the order of the day the actual use of patents and government imposed monopolies. Mercantilist Some were supportive, but others saw the corruption and inefficiency of those systems.

One of the elements in which they agreed was mercantilist economic oppression of workers. Employees and farmers had to live in the "margins of subsistence." The objective was to maximize production, without any attention to the consumer. The fact that the lower classes had more money, leisure, or education was seen as a problem to degenerate into little desire to work, damaging the country's economy.

Furthermore, scholars do not agree on why mercantilism was the dominant ideology or economic theory for two centuries and a half. One group, represented by Jacob Viner, argues that mercantilism was simply a straightforward system that had enough common sense. However, it was based on a series of logical fallacies that could not be discovered by people at the time, since they had the necessary analytical tools. Another school, supported by economists such as Robert B. Ekelund, understands that mercantilism was not a mistake, but the best possible system for those who developed it. This school argues that mercantilist policies were developed and implemented by retailers and governments, aimed at maximizing corporate profits. Employers will benefit greatly, and without them posed an effort by the imposition of monopolies, import bans and working poverty. Governments, meanwhile, benefited from the recovery of fees and payments for merchants. While the later economic ideas were often developed by academics and philosophers, almost all mercantilist writers were merchants or people in positions in government.