History Of Economic Thought Research Paper Sample

Type of paper: Research Paper

Topic: Politics, Policy, Government, Colony, Business, Mercantilism, Oxford, Trade

Pages: 3

Words: 825

Published: 2020/11/09

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Mercantilists believe that economics should be subsidiary to the emergence of strong states, with political elites spearheading the establishment of modern states3. Mercantilism included the national economic policy aimed at accumulating monetary reserves on a positive balance of trade, mostly of finished goods1. Such policies historical motivated the colonial expansion and even caused war. Mercantilist policies ranged from growth and expansion of the good working environments between the government and the nation-state and the classes (mercantile). The policy was geared towards the achievement of a favorable trade balance which would lead to the existence of gold and silver in the state and increase the rates of domestic employment. The mercantilism system took into account the interest of producers and merchants whose various activities were under state protection3.
The major economic logic of mercantilism during the 16th century period was to consolidate the power centers regional mainly during the feudal era by the large and highly competitive nation states. Other factors included the allocation of the colonies outside Europe; expansion of European commerce and industry in relation to agriculture. Expansion in margins of trade there lead to the increase in the use of metallic systems of money, especially gold and silver2. The conflicts (military in nature), between states was frequent during the mercantilist era and extensive compared to another era.
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3 R. Jackson & G. Sorenson, Introduction to International Relations Theories and Approaches, Oxford University Press, 2002, p.178
The navies and army of the key protagonist were not main forces raised with the aim of addressing a particular objective, but they were professionally full-time forces. The primary economic aim of each government was to take control of sufficient currency aimed at supporting a military that could react to the attacks from other states1.
Mercantilist policies included the growth and expansion of the good working environments between the government and the nation-state and the classes (mercantile). The mercantile made governments to formulate and enact policies merely aimed at protect their interests in business against foreign, because of paying levies and taxes to support the armies of the nation-states2.
The policies acted in various forms. Domestically, there were provision of capital to the new industries by the government. Additionally, it aimed to exempt the industries from draconic rules and high rates of taxation, establishment of monopolies in both the local and colonial markets, give titles and pension to approved producers2. Local industries received assistance from the government in imposing tariffs based on the trade policy, quotas, and prohibition on import of goods that competed with local manufacturers. Their government curtailed the capital equipment and export of the tools; it also restricted the immigration of labor (skilled) that would enable the foreign countries to compete with even the home colonies in manufacture of goods. The foreign manufacturers were also encouraged by the diplomats to proceed to diplomats' countries. They regarded shipping activity important, particularly in the period (mercantile)1.
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Heckscher, Eli F, Mercantilism (Hoboken: Taylor and Francis, 2013), 38.

Heywood, Andrew, Politics (Basingstoke: Palgrave Macmillan, 2013), 122.
With the expansion of colonies coupled with the sailing of gold coming out of the new world across Portugal and Spain, the oceans’ control was regarded as vital to the power of the nation. It is because; ships would be utilized for merchant and also military duties. Similarly, the government by then established a strong merchant marines2. In France, the minister for finance increased duties at the port on vessels of foreign origin that entered the French ports and also made bounties available to French shipbuilders in 1661 to1683. The same policy implied in England, where the navigation act of 1651 did not allow foreign vessel from participating in the trade at the coast. It required that strictly all importations of goods from Europe be transported on the country’s registered vessel, where the good originated. Finally, all trade involving England and its colonies had to be transported on either the colonial vessels or English ones. The navigation act was extended by the staple act that required all colonial export to Europe is landed in a port in England before re-exportation to Europe2. The navigation policy of England, France, as well as most powers were directly primarily against the Dutch, who were dominant commercially in the marine activity during the seventeen century. They believed that, the major benefit of trade with other nations was the acquisition of silver and gold. Regarding this point of view, the accrued benefits to a single nation was matched by the cost incurred by the other countries who exported the two commodities (gold and silver) and there was nonexistence of net gain from the trade2.
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Heywood, Andrew, Politics (Basingstoke: Palgrave Macmillan, 2013), 122.

For nations that were almost consistently engaged in war, they drained each other of important and valuable silver and gold referred to be nearly as desirable as the directly obtained benefits of trade1. Despite mercantilist being associated with these policies and wars, the period was characterized with rapid growth, especially in England. It is because the governments in power were not so keen at effective enforcement of the policies they brought into place. Instead, they could restrict imports for instance the government had few resources in order to stop the smuggling effect that could come up due to the prohibition4. Most of the new varieties of products formulated in the industrial revolution caused a complication in enforcing policies (industrial) that were in association with mercantilist doctrine. Today, of the false tenets of mercantilist that remain the most pernicious is the idea that imports reduce domestic employment2.
The argument had been used by the labor movements, in justifying protection from imports resulting from low-wage countries. It has even caused a lot of political and media debate on the implication of offshoring of service sector for employment.
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2 Heywood, Andrew, Politics (Basingstoke: Palgrave Macmillan, 2013), 122.
4 Stern, Philip J, and Carl Wennerlind, Mercantilism Reimagined (Oxford: Oxford University Press, 2014), 45.

Bibliography

Heckscher, Eli F. 2013. Mercantilism. Hoboken: Taylor and Francis.
Heywood, Andrew. 2013. Politics. Basingstoke: Palgrave Macmillan.
R. Jackson & G. Sorenson. 2002. Introduction to International Relations Theories and Approaches, Oxford: Oxford University Press.
Stern, Philip J, and Carl Wennerlind. 2014. Mercantilism Reimagined. Oxford: Oxford University Press.

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History Of Economic Thought Research Paper Sample. Free Essay Examples - WePapers.com. https://www.wepapers.com/samples/history-of-economic-thought-research-paper-sample/. Published Nov 09, 2020. Accessed August 03, 2021.
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