Here’s a letter to the Huffington Post:
Ian Fletcher – seeking respectable intellectual provenance for the protectionism that he champions – writes that mercantilism “was, in fact, a remarkably sophisticated attempt, given the limited conceptual apparatus of the time, to advance national economic development” (“In Praise of Mercantilism (or Why Economic History Isn’t Boring),” Feb. 25).
He’s half-correct. Mercantilism was indeed focused on “national economic development” – and in being so focused mercantilism gave no credence at all to the idea that a successful economy is one that increasingly better satisfies ordinary consumer demands. As UCLA economist William Allen wrote about mercantilist doctrines, “Economic well-being and betterment were not defined in terms of or measured by the satisfying of revealed community consumption preferences…. Selling – both at home and abroad – was something of a mercantilist end in itself.”*
Not surprisingly, then, mercantilism was anything but “remarkably sophisticated.” The great economic historian Jacob Viner called mercantilism “essentially a folk doctrine.”** And William Allen properly notes about the mercantlists that “in neither the large nor the small, in neither the abstract nor the concrete did they provide an explanation of societal arrangement and procedure – a vital omission not merely illustrated by, but largely consisting in, their failure to provide an adequate price theory” [i.e., microeconomic theory].
Any modern-day economist who praises the ‘sophistication’ of mercantilism is as uninformed as a modern-day geneticist who praises the ‘sophistication’ of Lysenkoism.
Donald J. Boudreaux
* William R. Allen, “Mercantilism,” in John Eatwell, Murray Milgate, & Peter Newman, eds., The World of Economics (New York: W.W. Norton, 1987), pp. 440-448; the quotations in the letter are from pages 441, 443, and 447.
** Jacob Viner, “Mercantilist Thought,” in International Encyclopedia of the Social Sciences (New York: Macmillan, 1968), p. 436.