Jim Hlavac
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Economic Theory
| Economic Theory |
Mercantilism is that period of economic activity most commonly
associated with the beginnings of the industrial revolution. That is
Western Europe from about 1650 to 1850 or so. It is the system
where the government is actively involved in the economy by
awarding privileges to certain merchants to ensure their business
survival, and the repression of other people trying to engage in that
business. Often done under the guise of economic development, or
protection of workers, or of the national based industry. The forms
of the privileges ranged from tax breaks, to grants, to outlawing
other similar businesses, granting monopoly rights, providing
security, providing subsidies and many other measures. It was a
system based on the supposed need of entrepreneurs to be protected
as they started out in their endeavors.
However mercantilism is yet another name for the divine right
of kings to control the right to survival, and garner power to itself.
The things which define mercantilist policies, supposedly an era long
superceeded by the modern world, are exactly the same things
which every nation on earth still does. That the president of France
and its parliament grants a certain privilege to Renault to produce
cars, offering all sorts of breaks, privileges, and protections so that it
survives, regardless of the business practices or level of success it
has, is no different than the British monarchy creating the East India
Company. The East India Company is only the greatest example of
mercantilism.
But even a cable tv monopoly in the United States is a
mercantilist policy -- the government granting to one company the
freedom to operate without competition. Governments have been
passing out such monopolies and privileges since the dawn of time.
The only difference between ancient China and 1700's England
and France today is the names used for the same practices. The
technology has changed for sure, but the idea is the same. The
government, by the divine right it claims, gives out a privilege
which necessarily must interfere with another individual's right to
survive as he sees fit. For if this individual wants to engage in the
business protected by the government he cannot.
It is part of the confusion relating to the discussion of economics
that we try to set off the mercantilist period as if it was somehow
wholly different. And the man we have to thank for this separation
of so called economic periods is Karl Marx.
But he defined the same thing with yet another different set of
names. However, mercantilism is no different than feudalism. Only
the technology changed, not the idea. We forget that the first
'merchants' and 'industrialists' were in fact funded by royalty, who
controlled the land and the resources and the money. That an
individual came up with the idea that royalty then backed doesn't
make it entrepreneurialism. Or capitalism. The source of the funds
was still coercion and the divine right of kings.
associated with the beginnings of the industrial revolution. That is
Western Europe from about 1650 to 1850 or so. It is the system
where the government is actively involved in the economy by
awarding privileges to certain merchants to ensure their business
survival, and the repression of other people trying to engage in that
business. Often done under the guise of economic development, or
protection of workers, or of the national based industry. The forms
of the privileges ranged from tax breaks, to grants, to outlawing
other similar businesses, granting monopoly rights, providing
security, providing subsidies and many other measures. It was a
system based on the supposed need of entrepreneurs to be protected
as they started out in their endeavors.
However mercantilism is yet another name for the divine right
of kings to control the right to survival, and garner power to itself.
The things which define mercantilist policies, supposedly an era long
superceeded by the modern world, are exactly the same things
which every nation on earth still does. That the president of France
and its parliament grants a certain privilege to Renault to produce
cars, offering all sorts of breaks, privileges, and protections so that it
survives, regardless of the business practices or level of success it
has, is no different than the British monarchy creating the East India
Company. The East India Company is only the greatest example of
mercantilism.
But even a cable tv monopoly in the United States is a
mercantilist policy -- the government granting to one company the
freedom to operate without competition. Governments have been
passing out such monopolies and privileges since the dawn of time.
The only difference between ancient China and 1700's England
and France today is the names used for the same practices. The
technology has changed for sure, but the idea is the same. The
government, by the divine right it claims, gives out a privilege
which necessarily must interfere with another individual's right to
survive as he sees fit. For if this individual wants to engage in the
business protected by the government he cannot.
It is part of the confusion relating to the discussion of economics
that we try to set off the mercantilist period as if it was somehow
wholly different. And the man we have to thank for this separation
of so called economic periods is Karl Marx.
But he defined the same thing with yet another different set of
names. However, mercantilism is no different than feudalism. Only
the technology changed, not the idea. We forget that the first
'merchants' and 'industrialists' were in fact funded by royalty, who
controlled the land and the resources and the money. That an
individual came up with the idea that royalty then backed doesn't
make it entrepreneurialism. Or capitalism. The source of the funds
was still coercion and the divine right of kings.