Mercantilism and the Idea of Progress

O NE OF THE COMMONLY ACCEPTED interpretations of mercantilist economic thought is the position that this school of thought viewed the economic potential of the world in terms, i.e., that economic progress as policy aim could only come about through bidding away of resources from competitor economy. In short, the mercantilists are said to have viewed the world as being composed of fixed quantum of resources and thus one nation's gain implied loss to another. This view is especially prevalent among critics treating the international aspects of the mercantilists. The latter's economic policy suggestions are said to involve beggar-my-neighbor type programs because of the absence of this static world view. Due to this interpretation in the literature, this phase of economic thought has been presented as neglecting the mutual advantages of international trade patterns. The foremost adherent of this view is Eli Heckscher. In his famous work on mercantilism, Heckscher maintained that the mercantilists accepted (in his terminology) as opposed to dynamic view of the economic process. It should be noted that Heckscher's interpretation of the terms and dynamic is different from their usual meaning in economic literature. For Heckscher they refer to the potential for economic progress. A label of static applied to an economic system, such as mercantilism, meant that, as theory, it lacked belief in economic development. Heckscher admits that the word dynamic can be used to characterize the mercantile aims within the state; however, this domestic dynamism was bound up with a static conception of the total economic resources in the world. Progress could occur internally only through acquisitions from other countries

Economics · Keynesian economics · Market economy · Mercantilism · Economic Theory and Policy

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