MERCANTILISMO. – M. is the theory that subjects all the economic activity of a nation to state intervention, so that through the active protection of the domestic and foreign markets the state may acquire the economic means necessary for a policy of power. It represents the extreme expression of the voluntarist conception of the economy, which had prevailed throughout classical antiquity and the Middle Ages. But this is an entirely new form of voluntarism, in which the economy is removed from the constraints of moral and religious conscience, becoming a mere instrument for asserting the political power of the state.
I. HISTORICAL OUTLINE
Its emergence coincided with the formation of the great absolute monarchies, which tended to centralize the entire internal life of the nation in their own hands, to form permanent national armies, and to pursue an international expansionist policy. It also coincided with the rise of the bourgeois class, at the expense of a nobility essentially rooted in landed property, and with the ever greater discovery of new lands.Mercantilism developed in a philosophical climate that strengthened and rationally justified II. This climate, characteristic of the second half of the sixteenth century and the whole of the seventeenth, depended on many diverse factors: the autonomy of politics from morality; the theory of raison d’état; the theory of the immediate divine origin of the sovereign’s authority; the doctrine of individual instincts as essentially egoistic and therefore harmful to the common good; and the Protestant glorification of professional activity. The philosopher who best justifies mercantilism is certainly Hobbes.
When speaking of mercantilism, one should not understand an organic and fixed system of doctrines, but rather a general attitude. This general attitude is expressed in the following supposed economic principle, characteristic of mercantilism: money is the principal means of enriching a nation, and therefore the quantity of money possessed is the cause of the economic power of the State. A favorable balance of trade thus became the fundamental concern of economic policy.
Through more or less simplistic observations and under the pressure of immediate necessities, this policy of a favorable trade balance was oriented along several fundamental lines: 1) The strengthening of industrial production at the expense of agricultural production. It was believed that the effect of state intervention in agriculture would be almost negligible, because natural factors prevail in it, and human will can influence them only slightly and slowly. It can thus be understood how a State eager for rapid and easy monetary enrichment would abandon every aspiration to an agrarian policy in order to concentrate all its energies on industry, which, by continually increasing the quantity of manufactured goods, made possible the conquest of international markets and hence the inflow of money. 2) Customs protectionism, designed to bring ever greater quantities of gold and silver into the country and prevent their outflow.
There was thus an absolute prohibition on the export of precious metals and of raw materials useful to the industries of competing nations, together with the imposition of heavy duties on the importation of finished products. 3) All this was intended to achieve the conquest of international markets, overcoming the competition of other nations in the sale of products and in the accumulation of raw materials. 4) Maritime policy: directed toward the maximum strengthening of the merchant fleet and the defense of freedom of the seas by means of a powerful naval fleet. 5) Colonial policy: the conquest of colonies had an eminently economic purpose. Precious metals and raw materials could be obtained from the new lands, and they provided a secure market for the sale of one’s own finished products. 6) Demographic policy: an abundant population contributed to the nation’s military power and also to its economic enrichment.
Mercantilism originated in the second half of the sixteenth century with the theory of chrysohedonism. The sudden imbalance in prices, caused by the ever-increasing influx into Europe of precious metals from the newly discovered lands, led scholars to interpret this serious phenomenon and to the simplistic conclusion that the quantity of money was the surest guarantee of the country’s enrichment. The Malestroiet, Bodin, Scaruffi, and Davanzati took part in the discussion; and in Spain and Portugal, which had felt the gravity of the phenomenon most keenly and where chrysohedonism developed, López de Gómara, Ortiz, De Monchada, Olivarez, Gomez, and De Castanares.
Mercantilism began to acquire a definite character at the beginning of the seventeenth century, when the monetary defense of countries was entrusted to state intervention through the theory of the balance of contracts, regulating international trade, and subsequently through the definitive theory of the balance of trade.
There are three principal mercantilist authors: Antonio Serra, Antoine de Montchrétien, and Thomas Mun. They were followed in the seventeenth century by Turbolo, Bocchi, Montanari, Lunetti, Sully, who attempted an agrarian protectionism in France, Child, Temple, Davenant, Höringk, Schröder, and others. In the seventeenth century mercantilism found its most important application in England under Cromwell and in France under Colbert, from whom mercantilism also acquired the name of Colbertism. In the eighteenth century there were still mercantilist theorists, although their positions were often considerably qualified by various reservations: Law, Nation, Dutout, Genovesi, and, ultimately, Galliani as well.
Criticism of mercantilism began chiefly in England, where individualism, both philosophically and politically, soon prevailed over monarchical absolutism, and where the application of mathematics to the study of social phenomena increasingly led to the search for constant laws in politics and economics. Already in the second half of the seventeenth century, the economic observations of John Locke and the quantitative methods applied to the social world by William Petty, John Grant, and Gregory King paved the way for the English prenaturalist movement of the first half of the eighteenth century. Among all the prenaturalists, the dominant figure is the Englishman Riccardo Cantillon (1697–1734), whose posthumous work Essai sur la nature du commerce en général (1755) is of capital importance in the history of economic doctrines. In France and Italy, criticism of mercantilism had a rather contingent significance, although it helped prepare the advent of physiocracy and came to be called agrarian protectionism. Its principal representatives were Boisguillebert (1646–1714), Vauban (1633–1707), Bandini (1677–1760), and Pascoli (1674–1744). Prenaturalists and agrarian protectionists are usually grouped under the single designation of liberal mercantilists, although they express very different intellectual positions and practical implementations. Liberal mercantilism is the collection of those economic theories which, while subordinating the economy to politics and calling for state intervention in the interest of a sound economy, defend the existence of natural economic laws and the importance of private initiative. Those writers known as syncretists may also be attributed to liberal mercantilism, because, despite affirming liberal physiocratic and naturalistic theories, they sought to reconcile the postulates of these doctrines with those of mercantilism. Particular mention should be made, for the eighteenth century, of Beccaria, Verri, Filangeri, Carli, Ward, and Tucker. In our own day mercantilism is judged less severely than it was by liberal authors in the last century. Indeed, contemporary neovoluntarism permits the acceptance of a moderate, active intervention by the State in economic life. Moreover, the importance of mercantilism in the development of modern history and in the evolution of economic doctrines themselves cannot be denied.
II. EVALUATION
1. Philosophical value. — In comparison with medieval voluntarism, m. certainly represents a regression. For, once detached from ethical principles, the economy completely loses its human significance and becomes an instrument of utilitarian competitions, all to the detriment of the true civilization and prosperity of human beings. Politics, likewise independent of ethical principles, considers the economy simply as an empirical means for implementing its plans of power.A positive significance of m. may be seen in its having emphasized the social value of the economy, bringing it from an entirely private sphere to that of the public good. Yet, even in this respect, the lack of a philosophical-ethical foundation meant that the ever-greater importance assigned to the economy educated people to see material prosperity as the principal end of social and individual life.
2. Economic value. — It is necessary to distinguish the economic value of the doctrines from the practical results achieved by m. Mercantilist doctrines undoubtedly reveal the superficiality of the observations and the groundlessness of many important conclusions; nevertheless, they represent a great step toward the formation of modern economic science. The immediate practical results were: the establishment and independence of individual national economies; the development of movable wealth and of the State’s economic functions; the expansion of international trade; the birth of highly important industries; and the formation of an active and competent bourgeoisie. The remote and general effects, on the other hand, were very serious, because such comprehensive state intervention, unsupported by sufficient knowledge of economic laws and indeed guided by partial or fallacious explanations, was bound to lead to the most disastrous economic imbalances.
3. Historical value. — “Voluntarism contributed enormously to fostering the struggle of the emerging State against residual particularism and to imposing upon private initiatives distant goals useful to the community. It encouraged private initiative and largely succeeded in making it an instrument of a sustained policy of power. It transformed the economies of nations, created the modern character of French industry, laid the foundations of the Dutch colonial empire, built England’s maritime power, and marked the era of the birth of modern Russia and Prussia” (A. Fanfani, Storia delle dottrine economiche: il volontarismo, 3ª ed., Milano 1943, pp. 244-245).
BIBLI: E. Mengotti, Il colbertismo, Florence 1901; C. Supino, La giustificazione storica del m., Naples 1905; C. Harsini, Les doctrines monétaires et financières en France du XVIe au XVIIIe siècles, Paris 1928; A. Marchal, La conception de l'économie nationale et ses rapports internationaux chez les mercantilistes français, there 1931; Ch. Cole, French mercantiliste doctrine before Colbert, there 1932; A. Fanfani, Dal m. al liberismo, Milan 1936; I. Mazzoli, Schema di una storia della politica economica internazionale nel pensiero del sec. XVII, XVIII, XIX, Turin 1936; E. Heckscher, Il m., Italian translation, there 1936; G. Tagliacozzo, Economisti napoletani nel secc. XVII e XVIII, Bologna 1937; G. De Maria, La politica economica dei grandi sistemi coercitivi, Turin 1937; G. Luzzatto, Storia economica: l'età contemporanea, Padua 1938; A. Fanfani, Storia economica dalla crisi dell'Impero romano al principio del sec. XVIII, Milan 1940; id., Indazione sulla rivoluzione dei prezzi, there 1940; id., Storia del lavoro in Italia dalla metà del sec. XV ai primi del sec. XVIII, there 1942; id., Storia delle dottrine economiche: il naturalismo, 2ª ed., there 1946.