Harmony and the Balance
An Intellectual History of Seventeenth-Century English Economic Thought
Publication Year: 2000
Published by: University of Michigan Press
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The importance of the work done in seventeenth-century England to the development of modern economic thought has long been acknowledged, but studies of this work invariably end in verdicts of “confusion” and “inconsistency.” To take but one example: John Maynard Keynes credited John Locke (1632–1704) with “twin” quantity theories of money but ...
Part I. Geist vs. Weltanschauung
1. Merchants and the Body Politic
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The spirit, or Geist, presumed to animate the marketplace has long had a bad press. The citizens of ancient Athens feared its contagion so much they banned its practitioners from setting foot in the Agora (the square where the political assembly was held) unless summoned by the magistrate.1 When Cato recommended disposing of elderly slaves as one did worn-out oxen2...
2. Gerard de Malynes: Institutio Mercatoris Christiani
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Gerard de Malynes (fl.1586–1626) was a slightly older contemporary of Sir Francis Bacon (1561–1626) and William Shakespeare (1564–1616). A merchant, an autodidact, and a part-time spy, his was a mercantile career shaped by the cutthroat nature of Elizabethan commerce. But when his first two books, A Treatise of the Canker of England’s Commonwealth and St....
3. Edward Misselden and the "Natural Freedom" of Trade
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Edward Misselden (fl. 1608–1654) is known to posterity for two books, Free Trade, or the Means to Make Trade Flourish (1622) and The Circle of Commerce (1623), in which he crossed metaphors with Gerard de Malynes over the true cause of England’s trade “crisis” and took up arms for the “Balance of Trade” and against the par pro pari as the First Commandment of commerce ...
4. Thomas Mun and the Finite Zeitgeist
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Thomas Mun (1571–1641), like his associate Edward Misselden, is known to posterity for two books, A Discourse of Trade, from England unto the EastIndies (1621) and Englands Treasure by Forraign Trade (posthumously published in 1664), in which seemingly opposing economic views are espoused. While the first book was simply too much like the common run of ...
5. Harmony and the "Balance of Trade"
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In the first third of the seventeenth century, merchants routinely accepted that one nation’s gain must come at another nation’s loss. How could it be otherwise in a world of finite resources anchoring a closed universe? And, as usual, the personal formed the model for the political.“ Covetousness,” as St.Thomas Aquinas explained, was “a sin directly against one’s ...
Part 2. The New Model Economics
6. Mechanically Minded
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The central decades of the seventeenth century were tumultuous ones for England. Rebellions in Scotland, Ireland, and England fused into a civil war that did not so much end with the execution of Charles I in January 1649 as transform into an unsuccessful eleven-year experiment in republican government. These same decades witnessed an unprecedented ...
7. The Number, Weight, and Measure of Sir William Petty
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Sir William Petty was a pioneer in the application of the new mechanico-physiological model of the body and its emerging mathematical method to the realm of economic ideas. He explored the concepts of division of labor, national income, velocity of circulation, the multiplier, and the components of value, albeit with uneven success, a century before Adam Smith explored...
8. Sir Josiah Child: What Price Money?
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Sir William Petty (1623–1687) and Sir Josiah Child (1630–1699) both came from minor mercantile families. Each, measured by the wealth he left behind, proved to be an excellent businessman. But, whereas Petty pushed himself out of those limited socio-intellectual confines into the ranks of the scientific innovators and the landowning elite, Child stayed closer to home,...
9. John Locke: Nineteen Shillings do not a Pound make
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John Locke’s monetary works present us with a split economic personality: a man who tried to use arguments for a market-determined interest rate to prove the necessity of reinstating a statutory monetary standard that had been ignored by the marketplace for over two decades, who believed solutions derived from a stagnant economy applied to an inflationary one, and...
10. Accounting for Economics
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Sometimes supporting and sometimes in competition with the mechanical philosophy was the mathematical orientation of the century’s intellectual revolution. This orientation, however, was itself subject to contradictory pulls as the century’s philosophers tried to decide if the essence of mathematical thinking (and of thought itself ) was deductive or inductive ...
Part 3. Balance vs. Equilibrium
11. In the Balance
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By midcentury the doctrine that the nation’s economic health was in jeopardy whenever imports exceeded exports was so fimly accepted that a massive political overhaul of the realm from monarchy to republic and back again could not dislodge it. The “Instructions to the Council of Trade” in 1650 required its members to consider of some way that a most exact account be kept of all ...
12. Sir Dudley North: Merchants and Markets
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There is no doubt that Dudley North relied more on self-regulating principles in his economic arguments than had any English writer before him. He could demonstrate the effect of changes in the interest rate on the price of land and changes in the price of produce on the rent land could command. But he also insisted that falling rents were not the cause of falling...
13. Nicholas Barbon and the Quality of Infinity
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The century’s most radical attack on balance of trade theory came not from the merchant class per se, but from a physician turned builder whose activities straddled the worlds of science and commerce. Whereas Thomas Munand Josiah Child had stressed the difficulties in constructing an accurate balance and the need to distinguish between bilateral and overall balances,...
14. Charles Davenant and the Brave New World
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Charles Davenant’s work presents us with our final variation on the efforts of seventeenth-century English writers to create a science of economics in support of their inherited value system. But Davenant’s chief concern was less with the values of the marketplace itself than with preventing those values from infecting society as a whole. He lived through a key ...
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One of the longest-running disagreements in the interpretative literature concerns who among these nine authors deserves to be considered a fore-runner of laissez-faire liberalism and who was simply some variety of mercantilist. E. A. J. Johnson saw Mun and Misselden as liberals, but Sir Eric Roll moved them (along with Malynes and Petty) into the mercantilist ...
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Page Count: 392
Publication Year: 2000