The political balance of trade

SSRN Electronic Journal

Though contemporaries, Adam Smith and Sir James Steuart are commonly portrayed as men belonging to different eras. Whereas Smith went down in history both as founder of Classical Political Economy and patron of economic liberalism, Steuart became known as the last, outdated advocate of mercantilist policies in Britain. Smith himself was responsible for popularizing the notion of the 'system of commerce' as an approach to political economy that dominated British thought during the early modern period. As it evolved into a historiographical concept, the mercantile system came to be seen as an international trade theory grounded upon the fallacious doctrine of the favorable balance of trade. In the Wealth of Nations, however, Smith puts limited emphasis on international trade as a theoretical concern. His analysis of the subject, moreover, was marred by lack of analytical clarity, which caused him to be chastised by some among his followers who adhered more enthusiastically to the free trade cause. Given Smith's doubtful credentials as a free trade theorist, in this paper we try to analyze the reasons that led him and Steuart to be historically placed on opposite sides of the mercantilist divide. To do so, we analyze the works of both authors in depth, showing that their disagreements in matters of economic policy have chiefly to do with different views about the role of money in the economy. Additionally, we explore how early-19 th century writers helped forge the intellectual profiles of both Steuart and Smith.

2022

Combining contextual, institutional, and global perspectives, this book evaluates the impact of international trade on eighteenth-century economic thought. It meticulously delineates how economic ideas and institutions f lowed between North and South Europe and across the Indian and Atlantic Oceans during the Age of Enlightenment. Global Commerce in the Age of Enlightenment carefully explores contemporary debates about economic institutions, which were a crucial element in the race for controlling international trade. Eighteenth-century thinkers devoted much attention to the relative merits of existing institutions, such as free ports, grasped the dangers of economic dependence, and appraised emerging conceptions of property rights. The author draws on an impressive range of sources, including pamphlets and travel accounts, and work from lesser-known figures such as Pierre Poivre and Ange Goudar. This volume will be valuable reading for advanced students and researchers of the history of economic thought, economic history, political economy, the history of ideas, and global history.

Journal of the History of Economic Thought, 2018

The catharsis produced by the early 1620’s trade crisis had a significant impact on the way economic themes were regarded by public opinion in England. As a result, those who analyze the ideas put forward in the documents written during that period – be they printed pamphlets or official memoranda – are left with the impression that an adequate supply of money was the undisputed primary concern as regards economic administration. However, as already stressed by Barry Supple, monetary administration only occupied a prominent position in the political agenda of early 17th century England during times of crisis – that is, when the kingdom was faced with a perceived threat of demonetization. This paper tries to show that, during the first two decades of the 17th century, concern with an inflow of bullion and a positive balance of trade was only of secondary importance, being normally overshadowed by a more fundamental aim: promoting a well-ordered structure for the economic relations of the kingdom, according to specific views of what constituted proper trade management. This approach encompassed both foreign and domestic activities, and found its most evident manifestation in the debates about free trade and monopolies which permeated the whole of James I’s reign.

Nova Economia, 2011

During the early 1620’s, England went through a period of intense economic disorders which sparked the interest of many in economic reasoning. The decade witnessed the emergence of the most relevant pieces of economic literature of the early Stuart era, but the debate was not restricted to the abstract confrontation of economic writers. The fundamental issue at stake in the controversies between Malynes, Misselden, and Mun – the integration of money and international trade in a coherent explanation of economic phenomena – was also the subject of much care in the political arena at large. The 1621 parliamentary session, in particular, put in evidence not only the fundamental relevance of the matter for understanding England’s economic maladies, but also the great difficulties involved in its investigation. By bringing all these elements together, the paper seeks to articulate a more dense and meaningful portrait of the prevailing state of economic ideas in early 17th century England.

History of Economic Ideas, 2016

During the early 1620’s, a wide-ranging public debate took place in England in order to investigate the causes behind a commercial crisis that severely affected the kingdom. Using a wide array of primary sources, the paper shows that the disputes among Malynes, Misselden, Mun, and others within the context of this debate led to the consolidation of two opposing parties that adhered to radical, irreconcilable views about the workings of the English economy. Another important character in this story was Lord Treasurer Lionel Cranfield, who led the investigative proceedings while openly favoring the ‘balance of trade’ party. The well-known pamphlets written by these authors thus emerge simply as the last stage in a process that saw economic doctrines emerge out of public controversy and confrontations.

History of European Ideas, 2008

History of European Ideas, 2008

Research in the History of Economic Thought and Methodology, 2020

Though contemporaries, Adam Smith and Sir James Steuart are commonly portrayed as if they belonged to different eras. Whereas Smith went down in history as both founder of the science of political economy and patron saint of economic liberalism, Steuart became known as the last, outdated advocate for mercantilist policies in Britain. Smith himself was responsible for popularizing the notion of the “system of commerce” as an approach to political economy that dominated the early modern period. As a historiographical concept, the mercantile system became a misguided international trade theory grounded upon the Midas fallacy and the favorable balance of trade doctrine. Smith’s treatment of international trade in the Wealth of Nations, however, was criticized for its inconsistencies and lack of analytical clarity even by some among his own followers. Given Smith’s doubtful credentials as an international trade theorist, the chapter investigates the reasons that led him and Steuart to be placed on opposite sides of the mercantilist divide. The authors analyze the works of both authors in depth, showing that their disagreements had chiefly to do with different views on money and monetary policy. Additionally, the authors explore how early nineteenth-century writers such as Jean-Baptiste Say and J. R. McCulloch helped forge the intellectual profiles of both Steuart and Smith.

1990