… is from pages 351-352 of Joseph Schumpeter‘s monumental 1954 History of Economic Analysis; Schumpeter is here speaking of pre-Adam Smith mercantilism and mercantilists:
Whether right or wrong, those arguments were in most cases put forth on the strength of their common-sense appeal. The common man at all times believed in them as a matter of course, and the economists of that age believed in them along with him. They tried to rationalize the practice of their time, both in the sense that they tried to voice what they conceived to be the aims and needs of their times and countries, and in the sense that they tried to put some logical order into the irrational heap of actual measures and practices. But they did not probe below the surface to depths where the need for analytic technique asserts itself. They posited their arguments and hurried on to specific recommendations, for example, as to which industries were the most promising ones to foster…. But as a rule they did what our own planners mostly do: they left off where analysis begins. This is what I meant when I said that the bulk of that literature was pre-scientific, which from our point of view is much more important than whether we like or dislike ‘mercantilist’ policies and their nationalist spirit. How very pre-scientific the reasoning of most writers was can be seen most clearly where they did make attempts at analysis and nowhere better than in the way they handled the one analytic tool that hostile historiography has singled out for criticism, the balance-of-trade concept.
Or as Adam Smith summarized matters in Book IV, Chapter 3, para. 31 of An Inquiry Into the Nature and Causes of the Wealth of Nations:
Nothing, however, can be more absurd than this whole doctrine of the balance of trade.
