Mercantilism as an Economic System and a School of Economic Thought Essay

Mercantilism as an Economic System and a School of Economic Thought - Essay Example While Thomas Mun is considered by the first mercantilist, James Steuart is called as the last major mercantilist. The last important work which was in pace with the mercantilists’ ideology was â€Å"Inquiry into the Principles of Political Economy† published in 1767. Both the first and last mercantilists were merchants of England, while many other writers were included in the category of public officials. Beyond understanding mercantilism as an advocacy of the power and wealth of nations, Mun was appreciated for his view points on a wide array of economic thoughts. Mun presented the earlier mercantile policies in his manuscript written in 1630 and published in 1664 by his son. To Mun, England’s treasure (national wealth) could be increased by the way of engaging trade with other countries With this aim of national wealth, many policies were advocated by Mun which include limited consumption for increasing the amount of available goods for export, increased utiliz ation of land and other internal resources to decrease the imports, cutting off the export duties of domestic goods for exports and promotion of goods with inelastic demand so that more benefits would be availed. The skilled industrial population and shipping industry were effectively created by mercantilists in England.  (Mangusson, 2003). It was argued for the historical promotion of mercantilism in Europe by the authors like Athens and Delian League during 15th century by contributing special points of trade policies. They had also made special mention of the control of value of trade in bullion as necessary fro the advancement of Greek. They had also noted the competition of ‘Medieval Monarchs’ for the supremacy of the ‘market towns’ and of the trade of the...This paper offers a comprehensive analysis of mercantilism, as an economic system, that was dominant in Europe during the period from 15th to 18th centuries. Mercantilism is also assessed as an i mportant school of economic thought. It is a common knowledge, that all the theories of classical economics and later schools have got the theoretical roots of mercantilism. The mercantilists limited themselves to analyzing the process of circulation and thus failed to disclose the inner laws of the capitalist mode of production. Mercantilists identified capital with its money form in which it operates in the sphere of circulation and did not regard capital in the form it assumed in the production process. Mercantilism was progressive for its time, since it facilitated the development of the first big capitalist enterprises-manufactories- and encouraged the development of the productive forces and the victory of capitalism over feudalism. Classical economists criticized mercantilists by pointing out that even the successful implementation of mercantilist policies would ultimately lead to the oversupply of money and inflation, hence the imbalance of the economy. Though prominent criticism was that under mercantilism, government focused attention on the development of trade and the accumulation of money instead on the creation of an abundance of the ‘fruits of the earth’, which the physiocrats called , the real wealth of the nation lay, mercantilism was of immense importance as it was the beginning of an political economy.