Dhananjayarao Gadgil Library 111111111111111111111111111111111111 liD GIPE-PUNE-08S247 _ _ -(>"'8F'.,..: • . SERVANTs OF iNOI.\.:$QCIEn'S LIBRARY, . ~ .. ~:': ·fdoN~·. .. Cl. N 0.1(~;:; • 5. t'4: . Date ofrelease for loan Ac. No. ~ls.2.41 . .GtS;JS.~ SEP1S0j This book should be returned OD or bdore the date last meDtio~ed below • • Failure to comply will involvB cancellation 'oj the Bom)wer's Card andjor/eiture oj deposit • . ~~------------------------~ . 21l ~197r 'J AVtiI9J~1 (f -AUG.t979 l3 S'EP1~19 ,,2JAN \9~~ . 2 7 AUG l~ bl \ 9 - t,.-8.3 (Ill I&'1) -~, AUG t~9 ..: B. P.P.] * MERQAN'l'ILISM MERCANTILISM by ELI F. HECKSCHER Authorized Translation by MENDEL SHAPIRO Revised. Edition Edited b..., E. F. SODERLUND VOLUME TWO LONDON: GEORGE ALLEN & UNWIN LTD NEW YORK: THE MACMILLAN COMPANY First publish.d in Sw.dish in 1931 "The"English /ranslation, pr.par.dfrom the GmtI4n .dition and revised by the author, published in 1935 Revised lind Edition 1955 This book is copyright under th. Berne Convention. Apart from any fair dealing for lhe purposes of prWa" study, research, criticism or review, as per­ mit"d under the Copyright Act 1911, no portion may be reproduced by any process without writUn per­ mission. E"'luiry should b. made 10 the publisher. © George Allm and Unwin Ltd.• 1935 X5.5·M GS. J J5·!J- ca 5247 PRINTED IN GREAT BRITAIN BY BRADFORD AND DICKENS LONDON W.C.I CONTENTS VOLUME II PART II Mercantilism as a System oj Power ."GB I: THE ESSENCE OF THE SYSTEM OF POWER Nationalism and the interests ofthe state 13~-The state as an end in itself 16.-8tatic conception 23.-Eclectic point of view 29. II: METHODS OF THE POLICY OF POWER Two methods 31.-Defence on land 32.-8hipping and the colonies M.-8elf-sufficiency 40.-Population 44.­ Money 46.-Relationship to the general economic policy 49· PART III Mercantilism as a System oj Protection I: DIFFERENT ATTITUDES TOWARDS COMMODITIES 53 II: STAPLE POLICY 60 I. INTRODUcnoN 60 2. J4VELOPMENT 62 North Italy 62.-Germany 65.-Other countries 68.- The Old Colonial System 7o.-Interpretation 71. 3. CoNNECTION WITH OTIIER TENDENCIES. THE TREATMENT OP IIt'MERCHANT_STR.ANGERS" 73 III: THE POLICY OF PROVISION 80 I. In PORMATION AND DEVELOPMENT 80 Statistical analysis 81.-General characteristics 84-­ Types of goods 88.-Chronology of the policy go.-Its persistence: as regards food-stuffs 91, in general 94. 2. CAUSES 96 Fiscalism g6.-Military considerations gS.-8carcity of goods 101.-Uncertainty 101.-Monopoly interests 102- Natural economy 103. 8 CONTENTS P.08 3. ITS 'DECLINE AND THE TRANSITION TO PROTECTIONISM 104 Criticism of the policy of provision 104.-Its connection with protectionist policy, the precious metals 107.-Luxury imports, non-durable articles 107.-Means of production 110. IV: THE POLICY OF PROTECTION 112 I. ITS NATuRE AND ITS CONNECTION WITH THE ATTEMPTS TO CREATE EMPLOYMENT 112 Long-term' policy 112.-"Fear of goods" 114--The meaning ofselling 118.-Creation of employment 121.­ Relationship to the colonies 124, export of coin 125, labour-saving methods I 26.-Production as an end 130. 2. HISTORICAL ANTECEDENTS 130 Ancient forerunners: the idea of autarchy 130, "to sell, not to buy" 131.-Municipal policy 132: the "Bonn­ meile" 133, Gild compulsion 133.-General principles I 36.-Change of opinion I 36.-Main explanation: money economy 138. 3. ITS RISE AND EARLIEST HISTORY 139 North Italy 139: "Balance of bargains" 141.-The Netherlands 142 ....,..England 142.-France 145. 4. ATTITUDE TO THE FACTORS OF PRODUCTION: RAw MATERIALS AND LABOUR 145 Raw materials, machines 146.-System of solidarity 151. -Labour 152.-The interconnection and general out- look 153.-Conception of idleness 154.-Child labour 155.-Population policy 157.-Its relation to low wages 163.-Support for high wages 168. PART IV Mercantilism as a Monetary System I: THE CONNECTION BE1WEEN MONETARY AND GOODS POLICY 175 II: THE IMPORTANCE OF THE PRECIOUS METALS OUT- SIDE THE MECHANISM OF EXCHANGE 185 I. INTRODUCTION 185 2. IDENTIFICATION OF WEALTH AND MONEY 186 3. DISREGARD OF CONSUMPTION 191 CONTENTS .....9 4· THE WEA OF SURPLUS 196 s· MONEY AS CAPITAL AND REVEHUB 199 6. ACCUMULATION OF TREASURE 209 III: THE MECHANISM OF EXCHANGE 21 7 I. THE IMPORTANCE OF CIRCULATION. NATURAL AND MONEY ECONOMY 21 7 2. SCARCITY OF MONEY 221 3. THE Q.UANT!TY THEORY. RISING PRICES 224 4. INPLATION. PAPER MONEY MERCANTILISM 23 1 IV: THE EXCHANGE RELATIONSHIP WITH OTHER COUNTRIES I. "SELLING CHEAP AND BUYING DEAR" 2. THE FOREIGN EXCHANGES 3. PaoHIBmoN OF THE EXPORT OF SILVER AND THE BALANCE OF TRADE THEORY 4. THE CONVENTIONAL NATURE OF MONEY ApPENDIX: MERCANTILIST LITERATURE IN MODERN WORKS 262 PART V Mercantilism as a Conception of Society I: THE CONCORD BETWEEN MERCANTILISM AND LAISSEZ-FAIRE 269 II: THE NATURE OF THE MERCANTILIST CONCEPTION OF SOCIETY 273 I. FREEDOM AND TRADE 273 Industrial liberty as a programme 273.-Causes 277.­ General ideas 277. the blessings of trade 277. merchant influences 281. aversion from state undertakings 282 trade war 28S. 2. Ennes AND RELIGION 285 Amoral ends 286: the taking ofinterest 286, luxury 289 tobacco 292.-Amoral means 293 : industrial efforts 293. duties instead of prohibitions 294. commercializing of the administration ofjustice 297. GaUey slaves 298.­ .Irreligion 302: Celibacy and Almsgiving 302, the spirit . trade 303. heresy 303. Jews 305 CONTENTS PAO. lI. SOCIAL CAUSATION 308 "Nature" 308.-Impotence of interference 3Io.-The sense of causation 314. III: THE CONTRAST BETWEEN MERCANTILISM AND LAISSEZ-FAIRE Inconsistencies 317.-CaUsation, not Iumnonia praestahilita lila-Inadequacy of the merchan~ interests 320.-Ten­ dencies to pure liberalism 322.-Relation between the component parts of mercantilism 323. CONCLUSION AFTER MERCANTILISM The nature of liberalism 325.-Effects of mercantilism on the monetary system 331.-The protectionist system in relation to conservatism or the historical approach 334.­ Humanitarianism in relation to later tendencies 337.­ Similarity and dissimilarity of the non-liberal tendencies 338• KEYNES AND MERCANTILISM 340 ADDENDA 359 INDEX TO BOTH VOLUMES 369 PAR T II MERCANTILISM AS A SYSTEM OF POWER ERRATA 11,13. Insert footnote number 1 after Chaptet title. Delete row of asterisks. Substitute footnote:- I. The present chapter has been largely re-written on the basis of a criticism of the original chapter by Professor Jacob Viner in his essay "Power versus Plenty as Objectives of Foreign Policy in the Seventeenth and Eighteenth Centuries". (World Politics I, 1948, 1-29). This article will be discussed in detail later. See below II, 359 If., Addendum, para. 1. 11,450. , 'Entry under Viner, 1. After 18th centuries delete 25. INDEX TO BOTH VOLUMES IND.EX All page numbers without volume indication refer to Volume I of the present work. Where they refer to Volume II they are preceded' by the Roman numeral "Ir'. References to two consecutive pages are followed. as a rule. by the letter" f .... while" 0:: denotts three consecutive pages. For more than three. the first and last pages are given. An asterisk after a; number indicates a footnote. but where something is mentioned both in the text and in a footnote. only the former is indicated. ,Names of people are printed i~ small capitals. titles of books; pamphlets and articles in italics. Works flf known or presumptive authars are to be found under the authors' names; collections of documents. collective works and writings of unknown authors are to be found under their respective titles. Names of anonymous authors are in square brackets. Under the name of the publisher or editor reference is made to the particular work. Abbeville: van Robais' cloth factory, Agrarian protection: combined with 188, n 304 , industrial protection, 225 f. ; com­ Abo; monopoly in foreign trade, 135 parison between England 'and Absolutism, 296, 456, 474, n 277 continental countries, 300; Den­ Academie de peinture et de sculpture. ,mark and Brandenburg, II 93; 177, 185 'Li~t's attitude towards, II 335 Acta Borussica. 59*, 71*, II 92* f. ; cf. Agriculture: France: supply of SCHMOLLEll, G. ' labour, 156; industry favoured in Act of Union: between England and' preference to agriculture, 211; Scotland (1707), 53; between unique example in favour of Great Britain and Ireland (1800), agriculture, 212* ; England: 54. peculiar position in the English Acts and Ordinances of the Eastland system of industrial regulation, Company, 374*,379*,381*,383*, 224-232, 238, 239, 250, 272; con-· 414*, 424*, 450* nection with quantity of money Acts and Ordinances of the Interreg­ according to Hume, n 236; num, n 37* according to Locke, 11 240 Acts of the Privy Council, 268*, 269*, Aides: connection with the tolls, 94, 328· 97, 124 Admission fee: in the regulated Aix, II 306 companies, 386 f.;' in the joint ALBION,II.. G.: Forests and Sea Power. stock-companies, 396, 411 f. II 40*, II 43· Aerarium, II 211. ALBRECHT of Hapsburg, 62 AOaires extraordinaires: French lis- Aldcaldamentos. II 141 calism, 180 , Alen~on: its cloth industry, reglement, AFFO: Storia della cittd di Parma, II 159; warden with gild orBaniza­ 140- tion in the neighbourhood of the Africa Company: 11. Trading com­ town, 207; child-labour, II 156 panies Algiers: piracy, II 314 African trade: Portugal, 341f.; Eng­ Alingsas manufactures (Sweden), 191·, land: partnerships, 390 II 147 Agents (factors), II 76 ALMQUIST, B.: Goteborgs historia, 37· 342 INDEX A1sace, 68: Alsatian wine, 60; posi­ 103, 108; weights and measures, tion in French toll system, 98; 113 cleaning-up of the tolls, 108 Ansbach-Bayreuth: road tolls, 58; ALSTROMBR, I., II 147 toU war with Wiirzburg-Bamberg, A1tmark, 75 76. Alum: French toll, 93; as check on ANSIAux, M.B Prosperiti et decadence dyeing, 163 ; English toll. II 87 de l'Espagne, II 180· .\MARK, L: Spannmalshandel och Anti-capitalist tendencies: under the spannmalspolitik i Sverige, II 81·, Stuarts and Tudors, 257 II 93·, II 95·, II 352 f.