Mercantilism
A very small scale of economic activity
Generally speaking, the range of effective economic interaction was about 20 miles
Primary emphasis on agricultural production
Five Primary groups: kings, nobles, merchants, priests, and serfs
Kings controlled money and security
Nobles controlled agriculture
Merchants controlled trade
Priests controlled behavior
Serfs controlled nothing but served as the labor force
Feudal economy characterized by:
- Lord-vassal relationship
- Authority extremely local
- Authority based on landholding
- The emergence of landlord rights
Decreased supply of labor caused by the Black Death
Increased trade possibilities caused by travel
Reformation
The idea of private property and its clash with the idea of sovereignty
Not a single, unified body of thought
Characterized (quite logically) by unique characteristics of individual localities
Not even recognized as a body of thought except in retrospect
Broad agreement that economics should be subordinated to the interests of the state.
The genesis of mercantilist thought
Three powerful forces
- the rise of the nation-state
- the commercial revolution
- the decline of the medieval economy
The rise of the nation-state
Problems of scale (empires vs. city-states)
Posed as tradeoff between loyalty and resources Greater centralization of authorityDemands of the nobles for protection of their property
Magna Carta
The commercial revolution
Increase in the volume of trade
Widened geographical scope of trade
Introduction of new products
The decline of the medieval economy
New ways of thinking about economic activity-emphasis on production
Colbert to the town officials and people of Marseilles, 1664
External policies
Favorable balance of trade
Merchant marine
Colonial system
Internal polices
regulation of prices and wages
regulation of labor
poor laws
regulation of consumption
sumptuary laws
The assertion of national power and the presumption of right
Assumption that the welfare of the community would follow from the pursuit of national strength and power
The Duties of the classes and the harmony of interests
The laborer's lot
workers were to be poor but not impoverished
The responsibilities of the rich
to consume but only to increase the power of the state
The merchant's duty was to produce article for trade
to enhance the store of gold
The obligations of the nobility
to produce sufficient food and raw materials
The harmony of interests
well-ordered national community-no inherent conflict between or among the groups
a moral community
a visible and omnipresent hand
The international anarchy among states
Assumption of nothing but conflict and war
Economic competition was political rivalry
Commercial transactions are always political