Principles of Political Economy: Abridged with Critical, Bibliographical, and Explanatory Notes, and a Sketch of the History of Political Economy — John Stuart Mill — John Shaqi
Principles of Political Economy: Abridged with Critical, Bibliographical, and Explanatory Notes, and a Sketch of the History of Political Economy
John Stuart Mill · en
The prohibition of the export of coin was embarrassing to the East India
Company and to merchants; and Mun tried to show that freedom of
exportation would increase the amount of gold and silver in a country,
since the profits in foreign trade would bring back more than went out. It
probably was not clear to them, however, that the export of bullion to the
East was advantageous, because the commodities brought back in return were
more valuable in England than the precious metals. The purpose of the
mercantilists was to increase the amount of gold and silver in the
country. Mun, with some penetration, had even pointed out that too much
money was an evil; but in 1663 the English Parliament removed the
restriction on the exportation of coin. The balance-of-trade heresy, that
exports should always exceed imports (as if merchants would send out goods
which, when paid for in commodities, should be returned in a form of less
value than those sent out!), was the outcome of the mercantile system, and
it has continued in the minds of many men to this day. The policy which
aimed at securing a favorable balance of trade, and the plan of protecting
home industries, had the same origin. If all consumable goods were
produced at home, and none imported, that would increase exports, and
bring more gold and silver into the country. As all the countries of
Europe had adopted the mercantile theory after 1664, retaliatory and
prohibitory tariffs were set up against each other by England, France,
Holland, and Germany. Then, because it was seen that large sums were paid
for carrying goods, in order that no coin should be required to pay
foreigners in any branch of industry, navigation laws were enacted, which
required goods to be imported only in ships belonging to the importing
nation. These remnants of the mercantile system continue to this day in
the shipping laws of this and other countries.(12)
A natural consequence of the navigation acts, and of the mercantile
system, was the so-called colonial policy, by which the colonies were
excluded from all trade except with the mother-country. A plantation like
New England, which produced commodities in competition with England, was
looked upon with disfavor for her enterprise; and all this because of the
fallacy, at the foundation of the mercantile system, that the gain in
international trade is not mutual, but that what one country gains another
must lose.(13)