Reuben James
The mercenary attitude is a design of the economy which prevails between the 16th century and the middle of the 18th century in Europe. The thinkers mercantilists preach economic development by the enrichment of the nations thanks to the foreign trade which makes it possible to release a surplus of the commercial Balance thanks to the investment in economic activities with output growing, like had identified it the Italian economist Antonio Serra since 1613. The State has a central role in the development of the national wealth, by adopting protectionist policies establishing tariff barriers in particular and encouraging exports.
The mercenary attitude is not current of thought as tel. It marks the end of the preeminence of the economic designs of the Church (which denounced the Chrématistique), inspired by Aristote and Plato and condemning the accumulation of the richnesses and the loan. The design of traditional and the Scolastique was that the economic activity was a play with null sum and that what was gained by one it was at the expense of the different one. The mercenary attitude appears at one time when the kings wish to obtain a maximum of Or, but especially in a intellectual context where the man, with Copernic and Galileo, passes " world closed with the universe infini" , according to the expression of Alexandre Koyré, that is to say the world of the Rebirth where the human creativity is released from a predetermined cosmic order. The theories mercantilists underlie this objective and develop problems based on enrichment by identifying the activities having an output growing, that is to say the manufactured goods in opposition to the gross products. Within this framework, one can consider that the emergence of ideas mercantilists is the expression of rise to power States nations vis-a-vis, on a side the universalism of the capacity of the Church, and, other, the localism of the structures of the feudal capacity.
During this period during which the assumptions evolved/moved, a burst literature appears, returning the idea of a rather vague unified current. At the 17th century, it will be spread in the majority of the European nations while adapting to national specificities. One distinguishes among the currents mercantilists: the Bullionisme (or “Spanish mercenary attitude”) which recommends the accumulation of noble metals; the Colbertisme (or “French mercenary attitude”) which is turned for its part towards the Industrialization; and the Commercialisme (or British mercenary attitude ) which sees in the foreign trade the source of the richness of a country, this trade being in addition founded on a solid bases industrial which is the construction of the ships for Royal Navy, which itself will be the base of the military power of England which will found its commercial power.
As from this time, the economic questions escape the theologists, some of them becoming them-also therocians of the mercenary attitude like Giovanni Botero. The modern Time mark a turning with the autonomisation incipient from the economy with respect to morals and the religion as well as policy. This major rupture will be carried out by the advisers of the princes and the commercial . This new discipline in becoming will become truly an economic scene with the Physiocratie. Among the many mercantilists authors, one can quote Jean Bodin in particular (1530 - 1596), Antoine de Montchrétien (1576 - 1621), William Petty (1623 - 1687).
Adam Smith, which makes of it a strong criticism in book IV of the Richness of the Nations , qualifies the mercenary attitude of economy with the service of the Prince . He is the first to make a systematic description of the “mercantile system”, term which appears in the " philosophy rurale" of the Marquis de Mirabeau in 1763, in connection with the Economic policy carried out at that time.
Theory mercantilist
About all the European economists who wrote between 1500 and 1750, nowadays, are labelled like mercantilists, although they did not consider to contribute to a single ideology. The marquis de Mirabeau is the first to be used this term in 1763, but it is Adam Smith which popularized it in 1776 before the historians do not adopt it. The term comes from Latin mercari , who means to make trade, and merx , goods.
The mercenary attitude is not current of thought strictly speaking, because it is not a unified economic Théorie. No mercantilist author proposed a system presenting the ideal operation of an economy, such as Adam Smith will do it thereafter within the framework of the classical economics. Each mercantilist author rather was interested in a particular field of the economy. It is only thereafter that researchers gathered this various work in a theoretical corpus which formed the mercenary attitude, as for example Eli F. Heckscher which sees in the writings of the time at the same time a system of political power, a system of regulation of the economic activity, a protectionist system and also a monetary system with the theory of the balance commercial. However other authors reject the idea of a system mercantilist based on a fictitious unit of disparate work. The historian of the economic thinking, Blaug Mark, points out that the mercenary attitude was qualified during the time of “cumbersome bag”, of “diversion of historiography”, and “giant theoretical goldbeater's skin”.
However, one can find parameters common in the various authors. Thus, certain mercantilists conceive the Economic system like a Jeu with null sum, the profit carried out by a Agent results in the loss of another agent or according to the famous maxim of Jean Bodin “there is nobody who gains that another does not lose there” (Six books of the Republic). So any economic policy profiting with a group from individuals being by harmful definition with another, the economy does not fulfill any role to maximize the social wellbeing. It is on the basis of these interpretation that the priority given to the foreign trade was justified, since the domestic trade did not increase the national wealth. However, at the beginning of the XVIII° century, these theories are abandoned with the profit of the thesis of the mutual advantage of the countries taking part in the international business. It seems that the writings mercantilists were generally created to justify a posteriori policies, rather than to evaluate the impact of it and thus to determine the best to implement.
The first theories mercantilists developed at the beginning of the 16th century were marked by the Bullionisme (of English bullion : however in ingots). See on this subject what Adam Smith wrote:
During this period, important quantities of Gold and money flowed of the Spanish colonies of the Nouveau World towards the Europe. For the writers bullionists, such as Jean Bodin or Thomas Gresham, the richness and the capacity of the State are measured by the quantity of gold which it has. Each nation must thus increase its gold reserves at the expense them other nations to increase its capacity. The prosperity of a State is measured, according to the bullionists, by the richness accumulated by the government, without reference to the National revenue. This interest for the money and gold reserves is explained partly by the importance of these raw materials in time of war. The armies, which included/understood number of Mercenaire S, were paid out of gold. With share for the few European countries controlling the money and gold mines, the international business was the principal method of acquisition of these raw materials. If a State exported more than it did not import, then its “balance commercial” (what corresponds, nowadays, with the trade balance) was surplus, which resulted in a clear money entry. That led the mercantilists to prescribe like objective economic to have a Trade surplus. The gold export was strictly prohibited. The bullionists were also favorable to the installation of high Interest rates to encourage the investors to invest their money in the country.
At the 17th century a more elaborate version of the ideas mercantilists was developed, which rejected the simplistic vision of the bullionism. These writers, such Thomas Mun, placed increase in national wealth like main objective, and if they still considered that gold was the main wealth, they admitted that other sources of richnesses also existed, such as the Marchandise S.
The objective of an active trade balance was always required but he was consequently seen like advantageous n the other hand to import goods of Asia of gold for then reselling these goods on the European market by making important profits. For Antonio Serra (1613), the surplus of the trade balance is only one “indicator” of the richness of a country and not a finality, sight that will divide authors like Mun and Montchrestien.
And to make the thing even clearer, when we say that: 100000 pounds exported in cash can make import the equivalent of approximately 500 000 pounds sterling in goods of the Eastern Indies, it should be understood that the part of this sum which can be properly called our importation, being consumed in the kingdom, is of a value of approximately: 120000 pounds sterling per annum. So that the remainder, is: 380000 pounds, is matter exported abroad in the form of our cloths, our lead, our tin, or all other produced of our country, with the great increase in the inheritance of the kingdom and this in treasure, so that one is in right to conclude that the trade of the Indies Orientales provides for this purpose.
This new vision henceforth rejected the export of raw materials, which once transformed into final goods was an important source of richness. Whereas the Bullionisme had supported export in mass of Laine of Great Britain, the new generation of mercantilists supported the total ban of the raw material export and was favorable to the development of manufacturing Industrie S servants. Industries requiring of important capital, the 17th century saw a general lightening of the restrictions installation against the wear. As extremely well showed it William Petty, interest rate is seen as a compensation for the embarrassment caused with the lender when it strips his Liquidité. A result of these theories is the installation of the Navigation Acts starting from 1651, which gave to the English ships the exclusiveness in the relations between the motherland and her colonies, prohibiting with the foreign boats transporting other goods that English to enter the English ports, the original intention being prohibit to the Dutchmen the access to certain ports in order to restrict the expansion of the Netherlands.
The consequences as regards interior policy of the theories mercantilists were much more fragmented than their aspects of Marketing policy. Whereas Adam Smith - and especially his interpreters posterior, as Nassau Senior - described the mercenary attitude like calling very strict controls of the economy, the mercantilists were not agreement between them. Some supported the creation of monopolies and others letters patent. But of others criticized the risk of corruption and the inefficiency of such systems. Many mercantilists also recognized that the installation of quotas and the levelling off of the prices caused black-markets. On the other hand, the majority of the theorists mercantilists agreed on the economic oppression of the Travailleur S and the Agriculteur S which were to be able to live of an income close to the level of subsistence, in order to maximize the production. An income, spare Time additional or better a education of these populations were to result only in creating idleness and would harm the economy. These thinkers saw a double advantage in the fact of having an abundant labor: industries which developed at this period required an important labor and in addition, that reinforced the military potential of the country. The wages are thus maintained on a bottom grade for to encourage to work . The Lois on the poor ( Poor Laws ) in England pursue the vagrants while making compulsory work. The minister Colbert will make work of the six year old older children in manufactures of State.
Origins
The researchers are divided on the real place of the ideas mercantilists during these 250 years. Some, represented by Jacob To fortify, consider that the ideas mercantilists which seemed of good sense had an important place and lasted only because at the time the researchers did not have the analytical tools allowing them to blame these theories. One second school, counting in particular Robert B. Ekelund, supports that the mercenary attitude is not an historical error, but rather the best system than the researchers were able to work out at the time. This school advances the idea that the policies mercantilists were developed and implemented by merchants and senior officials in the search of Rente S. the merchants largely profited from the Monopole S, of prohibitions of foreign competition and the maintenance deliberated with the threshold on subsistence on the workers. The governments profited from the high customs duties and the purchases carried out by the merchants. If the later economic ideas were developed by researchers and philosophers, practically all the mercantilists authors were merchants or civils servant.
The mercenary attitude developed in full transition from the European economy. The old feudal capacities were seen to replace by State-nation S centralized. Technological advances in the navigation and the development of the urban centres led to a rapid growth of the international business. The mercenary attitude was interested in the conditions making it possible the trade to be most beneficial in the States. Another material change was the introduction of the principle of partly double accountancy and modern accountancy. This accountancy made it possible to present in a clear way flows of trade, contributing to the attentive study of the trade balance.
Before the emergence of the ideas mercantilists, most important economic work in Europe was completed by the theorists Scolastique S. the objective of these thinkers was to find an economic system compatible with the Doctrine S Christian women of piety and justice. They were interested mainly in the exchanges at the local level between individuals. The mercenary attitude was in phase with the other theories of the time. This period saw the adoption of the Realpolitik preached by Nicolas Machiavel and the primacy of the reason of State - whose Giovanni Botero will be the theorist - in the international relations. The idea mercantilist is that certain economic activities are preferable with others when the outputs are increasing (one often employed the " term; more than proportionnel"). Thus, since 1485, the King of England Henri VII formulated what will be the English industrial policy which ensured its prosperity: to export manufactured goods and to import gross products. On the other hand, the traditional idea of the Scolastique according to which the trade is a play with nonnull nap in which each agent tries to find her advantage, was integrated into work of Thomas Hobbes. This pessimistic vision of the human nature also finds in the puritan vision of the world. It is thanks to the legislations mercantilists, such as the laws on navigation (Act Navigation, 1651) installation by the government of Oliver Cromwell that England, supported on the power of the Royal Navy, will ensure its preeminence on the international business, after the elimination of Holland by the four wars anglo-Dutchwomen of the 18th century.
Policies mercantilists
The ideas mercantilists were the dominant economic ideology in all Europe at the beginning of the modern period, with more or less large degrees. France and England largely contributed to convey these theses, which ensured the economic growth of these countries.
In France
In France, the mercenary attitude would have been born at the beginning of the 16th century, little time after the strengthening of monarchy. In 1539, a royal decree prohibited the importation of goods containing wool of Spain and part of the Flandres. The following year, of the restrictions were imposed on the gold export. Protectionist measurements multiplied throughout the century. Jean-Baptiste Colbert, Minister for Finance during twenty-two years, was the principal instigator of the ideas mercantilists in France, which led some to speak about Colbertisme by indicating the French mercenary attitude. Under Colbert, the French government implied in an important way in the economy in order to increase exports. Colbert lowered the obstacles to the trade by reducing the interior customs duties and by building an important network of roads and channels. The policies followed by Colbert were as a whole effective, and allowed industry and the economy Frenchwomen to grow considerably during this period, making France one of the more European great powers. In spite of these effective policies, England and Holland always preceded France.
In England
In England, the mercenary attitude reached its apogee during the period known as of the Long Parliament (1640 - 1660). The policies mercantilists were also applied during the periods Tudor and Stuart, with in particular Robert Walpole like principal partisan. The control of the government on the economy domesticates was less important than in the remainder of the unintermitting , because of the tradition of the Common law and the power growing of the Parliament.
The monopolies controlled by the State widespread, in particular before the First English revolution, although were often discussed. English the mercantilists authors themselves were divided on the need for a control of the interior economy. The English mercenary attitude took especially the form of a control of the international business. A broad range of regulations was installation to encourage exports and to discourage the imports. Customs duties were founded on the imports and of the export subsidies were installation. The export of certain raw materials was prohibited. The Navigation Acts prohibited to the foreign merchants to make domestic trade in England. England increased its colonies and, once under control, of the rules were installation there only authorizing them to produce raw materials and to make trade only with England. That led to increasing tensions with the inhabitants of these colonies which were for example one of the major causes of the Guerre of independence of the United States of America.
These policies largely contributed so that England becomes most important trading in the world, and an international economic power being pressed on its fleet of war, the Royal Navy, made up thanks to the engine rating of the State, as shows it Patrick O' Brien. On the internal plan, the conversion of the grounds not cultivated into arable lands had a durable effect. The mercantilists thought that to maximize the capacity of a nation, all the grounds and the resources were to be used to the maximum, which resulted in launching major projects like the drainage of the area of Fens.
In other countries
The other nations married the theses mercantilists to differing degree. The Netherlands, which had become the financial center of Europe thanks to their very developed marketing activity, saw only little interest to restrict the trade and have with the final adoptee only some policies mercantilists.The mercenary attitude developed in Central Europe and Scandinavia after the Guerre Thirty Year old (1618 - 1648), where Christine of Sweden and Christian IV of Denmark became notable partisans about it. The emperors of Austria-Hungary Habsbourg were interested a long time by the ideas mercantilists, but the extent and the relative decentralization of this empire returned the application of such difficult measurements. Certains States of the empire embraced the theses mercantilists, in particular the Prussia, which under Frederic Large the perhaps knew the most rigid saving in Europe. Germany was going thus to give, on this doctrinal basis, birth at a school known as of the “cameralists” which was going to keep an influence until the 19th century.
During the economic crisis which touched it at the 17th century, the Spain set up many economic policies without too much coherence, but the adoption by Philippe V of Spain of measurements mercantilists Frenchwomen was crowned success.
The Russia under Pierre Ier of Russia (Pierre the Large one) tried to continue the mercenary attitude without too much success because of the absence of a significant class of tradesmen or an industrial base.
The ideas mercantilists also fed the periods of armed conflicts of 18th and 18th century. Since the dominant idea regards the stock of richnesses as fixed, the only way of increasing the richness of a country was to be done with the detriment of an other. Many wars, whose wars anglo-Dutchwoman, free-Dutchwoman, and Franco-English have in their starting factors the ideas which preached economic nationalism. The mercenary attitude also contributed to the development of the imperialism, since any nation which could it sought to seize territories to obtain raw materials. During the period, the capacity of the European nations extended all around the sphere. Following the example interior economy, this expansion was often the fact of monopolies, such as the Compagnie of the Indies or the Compagnie of Hudson Bay.
Criticisms and disappearance
Many economists or philosophers, like John Locke or David Hume, criticized the ideas mercantilists well before Adam Smith develops an economic analysis intended to replace them. Criticisms underlined the failure of the mercantilists to include/understand concepts as the comparative Avantage which David Ricardo with his famous example will develop on international specialization: the Portugal was a wine producer much more effective than England, whereas the latter was relatively more effective in the production of clothing. Thus, if Portugal had specialized in the wine and England in clothing, the two countries would have gained with the International business. In modern economic theory, the trade is not seen any more like a Jeu with null sum, but like a Jeu with positive sum. By imposing the installation of restrictions on the imports and customs duties, the mercantilists contributed to an impoverishment of the countries.
The importance attached to the Or was also the object of criticism, even if many mercantilists tried to reduce the importance given to the accumulation of noble metals. Adam Smith showed that gold was a Marchandise like the others, and thus did not deserve a special treatment; gold is anything else only a yellow Métal which has a Valeur only raised because of its Rareté.
The first current of thought to be called completely into question the mercenary attitude is the school of the Physiocrates in France. Their theories however also suffered from many defects and it was necessary to await the publication of the Recherche on the nature and the causes of the richness of the nations by Adam Smith in 1776 for truly rejecting what it called it mercantile system . This book provides the foundations of what is called today the classical economics. Smith endeavoured to call into question the ideas mercantilists to which it devoted many pages. However the presentation made by Smith of the ideas mercantilists proves often simplistic.
The historians of the economic thinking reconsidered the total questioning of the ideas mercantilists, in particular by replaçant these theories in their historical context. The economists remain divided on the true nature of the mercenary attitude and the causes which led at the end of the mercenary attitude. For Schumpeter, Adam Smith developed one critical inintelligente mercenary attitude, in which he sees the first steps of the industrial policy. For those which saw in the mercenary attitude the defense of personal interests, the end of this current intervenes during an important change to be able. In Great Britain, the mercenary attitude lost ground as soon as the Parliament obtained the capacity to subsidize the monopolies, to be able hitherto held with the monarch.
The laws mercantilists were removed throughout the 18th century in the United Kingdom, and during the 19th century the British government chooses the Libre-échange and it Leave-to make out of economic material, proposed by work of Adam Smith. On the continent, the process was different. In France, economic control remained between the hands of the royal capacity and the mercenary attitude continued until the Révolution. In Germany, the mercenary attitude remained an important ideology during the 19th century in particular because of work of the economist Friedrich List until the beginning of the 20th century, period during which the German historical École profited from an important place. But in the facts, of the historians as Patrick O' Brien showed that the English customs duties were much higher in England than in France. It will be necessary to await the free English treaty of 1860, negotiated by the saint simonien Michel Chevalier, to go towards a progressive equalization of the English customs duties, before a return to protectionism with the recession of the end of the 19th century.
A semi-rehabilitation
At the 20th century, much from economists reconsidered criticisms made against the mercenary attitude and recognized the exactitude of certain points of their theory. Inter alia, John Maynard Keynes supported certain principles mercantilists. Adam Smith rejected the importance given to the offer of currency, because according to him, the goods, the population and the institutions were the true causes of prosperity. Keynes showed that the offer of currency, the trade balance and interest rates are important in an economy:
However, the efforts of Keynes to rehabilitate the word mercenary attitude did not succeed. This word remains pejorative, often used to criticize various forms of protectionism.
An element by the way whose Smith was not followed in his criticisms was the importance of the data. The mercantilists, who were generally experts, gathered a considerable number of data and used them for their research. William Petty is generally credited to have been the first to use empirical analyzes to study the economy. Smith rejected that, asserting that the deductive reasoning starting from the basic principles was the adequate method to update economic truths.
Lastly, in certain cases, it was recognized that the protectionist policies mercantilists had an positive impact on the States. Adam Smith, itself, rented the Actes of Navigation to have largely contributed to the expansion of the British merchant fleet, which played an important role in the transformation of England into the naval and economic super power which it became for more two centuries.
Political legacies
The posterity of the mercenary attitude undoubtedly remains larger in practice political than in the economic theory. If the economic thinking of the 19th century is dominated by the schools traditional then neo-classic, rather favorable to the Libre-échange, the practical policy remains largely influenced by the ideas mercantilists. Like the historian Paul Bairoch notes it, although “the men started with more reasoning in terms of level of development to be reached more or less quickly that in terms of appropriation of a greater part of richness”, in 1815 as in 1913, the western world is “an ocean of protectionism encircling some liberal small islands”.
Since the end of the Second world war, one witnessed a continuous liberalization of the world commerce under the impulse of the great institutions free-traders such as the World Trade organization (OMC), the the World Bank or the Fonds international currency (the IMF). However certain economists as Paul Krugman described these institutions as guided by a “lit mercenary attitude”, which does not seek to promote the principles of free trade, but to support the mutually advantageous commercial concessions. Other radical economists go until affirming that these organizations, under the pretext of free-trade, impose the form of international business wished by the economic great powers which control them.
According to Daniel Cohen, the recent failures of the negotiations within OMC are revealing of this “enlightened mercenary attitude”. If the negotiations of the former rounds had been able to succeed, it is thanks to compromises, with reciprocal concessions and equitable. The rich countries agreed for example to liberalize the textile sector in exchange of advantages as regards finance departments conceded by the Pays in the process of development. On the contrary, at the time of the top of Cancun in 2003, the negotiations between rich and poor countries changed nature. The debates were focused on the agricultural question where the mutually advantageous exchange appropriatenesses appeared non-existent. Far from being a “play with positive sum”, the international business consequently seemed a “play with null sum”, the stake of the top having become: “our farmers or yours”, as if the profits of a nation meant losses for another.
The neomercantilism term is used to indicate, generally in pejorative manner, the contemporary policies pointing out those of the mercantilists of the 18th century. They generally consist of protectionist measurements or aggressive marketing policies where the State is implied in order to increase the Compétitivité national companies.
In the context of the Universalization, the neomercantilism is based on the concept of “world competition”, even of “economic war” between the nations. He preaches that the protection of the national companies and the support for their competitiveness on the worldwide markets are advantageous with the nation's economy. Thus, certain great powers are taxed neomercantilists when they support their national industry by subsidies or government orders, when they impose quotas, taxes or standards with the importation, in order to protect their interior market. The conflict Boeing - Airbus, related to the subsidies allotted to each one of its companies by the governments American (in the form of orders) and Europeans, can for example be seen like a demonstration of neomercantilism.
The concept of “economic Guerre” comes to feed the political campaigns of the economic great powers: it is necessary “to make Europe to make the weight” said a poster of the Socialist party French, presenting Europe vis-a-vis a Japanese sumo and obese American at the time of the electoral campaign preceding the referendum on the Traité by Maastricht in 1992. According to some, such policies come to counterbalance the effects supposed negative of the economic globalisation on social justice, while the economists free-traders think that they come to support the private interests of some industries while harming the general interest. However, the concept preferably Community is not a legal or even economic reality. If it were devoted by the Court of justice of the European Communities on March 13rd, 1968 as regards common agricultural policy (according to a customs duty on the products coming from third country), it quickly ran up against the objectives of GATT. At present a common external tariff remains often causing rough discussions between the Member States of the European Union and the World Trade organization.
A minority of economists, such as Jean-Luc Gréau or Jacques Sapir in France, preach the installation of an educational protectionism " with the Friedrich List " at the European and national level to ensure the growth of the continental economy of the beachcomber of cheap products coming from Asia, fascinating like counterexample socio-economic consequences related to the end of the multifibre agreements for the European textile. Failing this, they envisage the entry in a process of “latinamericanisation” of Europe, according to the expression of Erik Reinert which explains very clearly in what the principle ricardien of specialization in the natural ones, locks up the countries in activities with.
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