Studies in the Theory of International Trade, I. Introduction

A study of the theories of foreign trade before Adam Smith must of necessity consist of an examination of the mercantilist doctrines with respect to foreign trade and of the contemporary criticisms thereof. It is a common impression that they have already been sufficiently studied, but the economic historians and the economists of the German historical school have been almost alone in studying the mercantilists, and they have generally been more interested in the facts than in the ideas of the mercantilist period, have often based sweeping generalizations as to the character of mercantilist doctrine on what they found in a handful of the mercantilist writings, have displayed neither interest in, nor acquaintance with, modern economic theorizing with respect to monetary and trade process, and have almost without exception shown a tendency to defend the mercantilist doctrines by reasoning itself of decidedly mercantilist flavor. The severe critics of mercantilist doctrine have generally been economic theorists of the English classical-school tradition, and they have usually relied on Adam Smith's account plus the vague mass of nineteenth-century tradition for their information as to the contents of mercantilist doctrine.

The present study, is therefore, primarily an inventory of the English ideas, good and bad, with respect to trade prevalent before Adam Smith, classified and examined in the light of modern monetary and trade theory. Its aim is rather to discover and explain the divergencies of doctrine than to formulate inclusive and simple formulas descriptive of mercantilist doctrine en masse, formulas which are almost necessarily half-truths at best or empty. It is based on a careful study of such of the actual economic literature of the period as was available to me, and its findings will be supported by as much of the evidence derived from that literature, in the form of quotations and references, as space limitations permit.

No attempt will be made to compare in detail the results of this investigation with the findings of other modern commentators on English mercantilism, but those who are sufficiently interested to make such comparisons for themselves will find, I believe, that the differences as to fact and interpretation are numerous and of some importance, and that new information is presented on a number of points. To keep the study within manageable proportions, the doctrines of the period with respect to the fisheries, population, and colonies will be ignored even when they are closely related to the general foreign-trade theories.