Table Of Content72
TIMOTHY J. BRENNAl吋
KohlehHCInz l986InternJEdfate Adtcroeconomtcs Glenview,IL Scott,Foresmarl
Leamer，臼ward E. 19日3 “Let's Take the Con Out of Econom圳臼 " American
乙COFZLPmtC Rugew733l43Mandeld, Edwm I979Mzeroecononucs
Theory and Applications. New York: Norton
McCloskey, Donald N. 1983 “The Rhetoric of Economics. Journal 0/ Economic
It
Lilerawre 21: 481-517
Mises, Ludwig v凹. 1976. Epistemological Problems 01 Ecoliomics. New York: New
York Unive自ity Pr臼S
NoU, Rogcr G., and Bruce M. Owen. 19日9 “The Anticompetitive Uses of THE POLITICAL BALANCE
Regulation." In The Antitrust Reνolution， edited by J ohn E. Kw oka and
Lawrence J. White. Glenview, IL: Scott. Foresman
OF TRADE...? ?
Pindyck, Robert S., and Daniel L. Rubinfeld. 1989λ1icroecoflomics， New York
Macmillan
S臼am】l扎間uA肥els，Warren J. 1ω9紗89
Res甜t甘r削a1叮m叫11."Re ν附t倌'ew0/ ，s品OC口r叫álιEcon叩o叫叩叩m馴η附1郎1r阻C臼S. 47: 11口3-寸I凹13刃3
Smith, Vernon L. 1982 “Microeconomic Systems as an Expcrimental Science."
American Economic Review 72: 923-955
S訕li唱直le丸r， George J. 1975 “The Theory of Eeχ刀Jnoml旭c Regu叫Jl刮atl叩00."In 刃771e Cit挖izenand
Salim Rashid
T刊e叩n叫
且 ress
U. S. Department of Justice. 1982 “U.S. vs. Western Elcctric Co.. Inc.. and AT&T;
Competitive Impact Statement ln Connectlon with Proposed ModIncatlon
of Final Judgment." Federal Regisler 47: 7170刁184 Before they learn there is a God to be worshψψed they leam
一一一一一_. 1987 “Report and Recommendations of the United Statcs Concernimz there are Frel1chmel1 to be detested.
thc Line of Business R叫ctions IrI口呻
Fougebert de Montbron, quoted in Porter (1982)
ByThe訕M臼odi凶f且Ïcationof Final Judgment."ι丘 ν吋's. Weslern E/佮I'eclricCo., In叮C.，
and AT&T, Civil Ac叫li叩on 82-01凹92， Feb. 2
Weintraub. E. Roy. 1985. General Equilibrium Analysis: Sludi凹的Appraisal. New f子om the time of the creatiol1 of modem 1可'ral1ce its growth al1d
York: Cambridge University Press l1atiol1al self-image had beel1 cOl1ditiol1ed by rivalry wi的 the
WilJiamson, Oliver E. 1968 “Economies as an Antitrust Defense Revisited." Plal1tagel1et mOl1archy of El1glal1d. The fortul1es of the two
Universily 0/ Pennsylνania Law Reνiew 125: 699-713
coul1tries had beel1 il1extricab鈔 mterwoνel1 as had their cultural
Zelln弋Arnold 叫4. Ba叩s別icIssue臼.'s1吋1 叫0111甜e叫
developmel1t.
且 ress
一Lord Belo缸， quoted in Crossley and Small (1989)
1. INTRODUCTION
It is well-known that concern for the balance of trade is the
distinguishing mark of the economic thought of the century prior to
Adam Smith. No one would deny that the balance of trade is ol1e
R凹earchin the History of Economic Thought and Methodology, Vol. 11, pag且73-92
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74 SALlM RASt宜D 甘1ePolitical Balal1ce o[ Trade...? ? 75
important aspect of trade. What is striking is the enormous Of the innumerable company of English mercantilist writers and
importance attached to the Balance of Trade under the Mercantile pamphleteers, onc has, by common consent, a pre-eminent c1aim to be chosen
System.1 Was the almost hysterical stress laid upon the Balance of 品 spokesman of the somewhat heterogcneous group. It is not merely that
Thomas Mu n (1571-1641) approaches rnost nearly to a systematic statement
Trade a sign of demented economic thought or was the hysteria a
of mercantilist principles; of no less the fact that he wrote at
imponan自 is
cover for some noneconomic objectives of the pamphleteers? Adam a lime when Mercantilism was yet scarcely the forces
expose址to d山ntegrating
Smith attributed the Balance of Trade doctrine- a phr品e used which made the mcrcantilist of the middle and later periods in some respects
throughout this paper to denote the determination of economic policy anticipators of a more liberal policy (Gray, 1983, p. 73)
by considering everything other than the balance of trade as
Nonetheless, scholars who have explored the doctrines embodied in
secondary- to a failure to distinguish real from nominal wealth and
the Balance of Trade have concluded that nothing was invented in
suggested that the doctrine originated with Thomas Mun in the 1620s.
the 1620s except the phrase (Viner, 1937).' The suggestion that Mun's
The near unanimity with which historians of economic thought have
ideas circulated widely in manuscript form and influenced policy even
accepted Adam Smith's characterization has had its influence upon
before the publication of Mun's pamphlet in 1664 has not received
both political and economic historians. D. G. E. Hall's article on
independent confirmation, and seems unlikely because of the high
“Anglo-French Trade Relations under Charles II" (1922) accepts
likelihood of publication having been decided upon by the
fully the viewpoint of Adam Smith, while Charles Wilson, in an
government in 1664 in order to provoke anti-Dutch feeling (Seaward,
otherwise excellent volume on England甘 Apprenticeshψ 1603-1763 1987). Indeed, for someone who is reputed to have founded an “ism,"
(1965), provides seemingly contradictory“authors" for Mercantilism
it is the paucity of referenc治s to Mun that is striking. This would
in both Thomas Mun and Sir Charles Downing. This paper focuses
suggest that Mercantilism, as characterized by a discovery of the
more precisely on the rise of the Balance of Trade (interpreted in the
importance of the balance of trade, probably did 1101 begin in the
extreme sense noted above) in order to suggest that Thomas Mun
1620s
had very little to do with the rise of this doctrine. Insofar as the
While the primary focus of this paper is upon the Balance ofTrade,
balance-of-trade scare requires a paternity, Samuel Fortrey appears
it is worth referring brief1y to a second 出pect of Mercantilism, also
to have been the most inf1uential figure in arousing popular concern in Book IV of the Wealth 0/ Nalions (Smith, 1976), that of protection
This suggests that the doctrine of the Balance of Trade may have
for domestic industri間. If protection for domestic industries is taken
been a cover for discussing the noneconomic dangers of the Anglo
to characterize the Mercantile System, then we have to explain why
French trade and, if the conjecture is reasonable, it would require
duties upon bOlh exports and imports were low and equal upon the
a substantial change in our view about Mercantilism. Hall concludes
accession of William JJI in 1688 and only slowly altered to a protective
his article by noting that though there were many other historical
system by the second decade of the eighteenth century. The empirical
reasons for Anglo-French conf1ict,“lt w品 stimulated and fostered evidence f1atly contradicts the supposition that protection was a
by the fallacious economic doctrines of the mercantili呦， based upon dominant feature of English commercial policy prior to 1690 (Davis,
the assumption that one nation's property meant another's poverty" 1954, 1966)
(Hall, 1992, p. 30). Instead, it will be argued here that the Balance There are two main issues connected with the 8alance of Trade
of Trade doctrine was drawn up large1y to fill a political purpose; Fir此， why was a favorable balanc旭 of trade so frequently and so
the “economics" of Mercantilism was subordinate to political aims emphatically d自ired by English political econornists between 1600
and seldom acted as an independent force. and 1750? Second, since the politic剖 economists of this period also
A long-established tradition in the history of economic thought had other goals, what was the relative importance of the balance of
credits the East India merchant, Thomas Mun, with being the chief trade and why did its relative importance change over time? It has
architect of what Adam Smith called the Merc been frequently remarked that politics dominated economics in this
era, but the observation has not been satisfactorily applied. Scholars
76 SALIM RASf甘D The Political 8alance of Trade...? ? 77
have generally been content to acccpt Adam Smith's characterizal10n in 1621, thcn developed further in 1628, his manuscript (supposcdly)
of the balance of trade as a Midas-like hunt for the precious metals 口rculated extensively in the 1630s, and the work itself was published
and his ascription of inDuence to Thomas Mun has led to the latter only in 1664, Smith's account does Iittle to inform us about the actual
being generally credited as the founder of the Balance-of-Trade inf1uence of the Balance-of-Trade policy
dogma. lt will be argued here that the rise of the balance of trade In his Lectures 01 Jurisprudence. Smith is much more informative
由 a talisman of economic policy owes much to Anglo-French about the growth of balance-of-trade doctrines, describing the origins
relations between 1660 and 1720, a point originally made by WilJiam of the Mercantile System as fol\ows
Ashley (1987) and developed further by L. B. Packard (1923)3 When
Anglo-French conf1ict became less acute in the years that foUowed, The wealth of the kingdom has by allmostl?allJ lhe authors after Mun been
the use ofthe Balance ofTrade dcclined. Such an interpretation helps considered as the gold and silver in it. In his book... he endavours to show
to synthesize various disparate interpretations extant in the Iiterature, the ballance of trade is the only thing which can supporr England.... On this
doctrine of which however has been adopted by all succeeding
such as the Tory origins of free-trade policy, the rise of protection h的， fool的h
wrilers... (1978, p. 300)
as an aspect of English trade policy, and the emphasis on specific
balances in the overall balance of trade This sys1em, so different from 1hat 1 have been endavouring to explain, has
The interpretation of the Balance of Trade as a political construct becn hinted at by prcccding write凹， but Mr. Mun was the fÏrst who formcd
it inlo a regular system (p. 381)
serves to reinforce Ashley's argument that“free trade" was a politically
motivated Tory policy by showing that the Tory view was itself a
Smith goes on to point out that John Locke provided a more
reaction to some earlier Whig positions. Second, it will be seen that
philosophical, but no more successful, defense of these notions. A
the motivation for protectionism has to be viewed on a country-by
little later, however, his chronology appears to change:
country basis, since the purely political objections to French trade need
have no bearing on, say, the decision to protect England against Indian
No nalion can bc ruined by the ballance of trade being thc This
cloth. Finally, the clear recognition of the general balance of trade a且臼nSl l11. • . •
indeed has been the c句， ever sillce the lime 01 Ch. 2d, and nOlwithstandin且
由 an economic concept need not conf1ict with the great emphasis laid of this country has continually improved in riches, in strength and opulence
on specl日c balanc潤 in the pamphlet literature: When arguing as (1978, p. 393, cmphasis added)
economists, the former was important, but when the economist turned
politician, it was the latter that mattered most. It is appropriate to consider Smith 's qualification,“ever since the tìme
ofCh. 2d Why does Smith focus upon this period, that is, after 1660?
"
n. He must have known from the prefatory account written by Mun 's
son that Thomas Mun had written the pamphlet much earlier and
that he was long since dead. The choice of this period is, however,
In the Wealth 01 Nations. Adam Smith provided a carefuUy ambiguous
most interesting because it shows Smith's perceptive recognition of
account of Thomas Mun's inf1uence. We a閃 simply informed that:
the fact that a new emphasis was being given to the balance of trade
at this period. Smith offers no explanation for this sudden rise nor
The title of Mun's book, England's Trcasure in Foreign Tradc, became a
fu ndamental ma訓m in the political econorny. oot of England only, but of does he suggest that the importance of the doctrine had declined in
all othcr commercial countrics (Smith, 1976) the eighteenth century- indeed, he tries to emphasize that the
doctrine was still dominant in his own day.
We are not told when M間'sbook was written, when it was published, Why should the English worry so much about the speciflc balance
whether the book itself was inf1uential, or whether its title merely of trade with France- contrary to Jacob Viner's claim that specific
ref1ected an accepted policy. Since Mun 's views were first published balances mattered only as part ofthe general balance oftrade (Viner,
78 SALIM RASHID TIIe Political Balance of Trade...? ? 79
1937, p. 1 I)? lt is necessary to review some ofthe prominent features humiliate his father-in-Iaw, the King of Spain. The Spanish got the
of the political scene, especially since these have not been utilized better of the French in the fights that took place in London and
by most historians of economic thought who have examined Samuel Pepys observed that “all the city did rejoice. And indeed we
Mercantilist ideas' Charles II gave the English nobility and cIergy do naturally all love the Spanish and hate the French" (1953, pp.
much to worry about. The Resloration had provided Charles II with 853). In 1661, the French Royal Council of Commerce was created
an income dependent upon the Customs revenues and hence upon and Louis XIV himself presided over the Council every fortnight;
the balance of trade. The greater the physical volume of foreign in the same year, the French ambassador in Rome deliberately picked
trade, the greater the King's revenues, and henceforth “free-trade" a quarrel with the Pope, then made lhe Pope apologize and even
was much in favor among the Tories. A nation lhat had been insisled upon the erection of a pyramid as an expression of papal
reluctant to pay ship-money for fear that CharIes' father would Sorrow.
become too strong could be expected to be suspicious about making
Charles overly independent. So careful were some Englishmen on That 46 thousand rnen has p扭扭d through Lyons to Marselliers and 50 for
this point that in 1673 and 1674, some of the most Protestant and Italie, I am an eye-wittness of it and there are more daily passing
notwithstanding the articles and the Piramede which is erected in Rome very
patriotic leaders of the opposition were secretIy meeting the French
high for thc King [of] France and 50 proude that none but the lta1iens would
ambassador, even while urging Charles to publicly enter the war
suffer it (Correspondence of John Locke, 1, 218)
against F rance
Charlcs' evident partiality for Roman Catholicism, his lies with More directly insulting was the order issued by Louis to English
France, and his admiration for his French cousin, Louis XIV, soon warships to salule the French f1ag in the Mediterranean. Louis even
aroused suspicion. The measures of religious toleration that he discovered a locallaw of succession in Brabant lhat would inf1uence
initially espoused were seen as a cover for helping Roman Catholics lhe choice of heir to lhe ailing King of Spain, thus giving himself
Charles' marriage in 1662 to lhe Portuguese princess, Catherine of a reason for interfering in the affairs of that kingdom. Samuel Pepys
Braganza, instead of a Protestant princess could also be interpreted noted in his Diary for 1663
similarly, as was the appointment of Catholic sympalhizers such as
Henry Bennet to Secrelary of State in 1661 (lo the evidenl The Duke a150 lold us of sevcral Christian commanders (French) gone over
dissatisfaction of his main counsellor, the strongly Protestant Earl to the Turks to serve them; and upon inquiry 1 find that the King of France
of Clarendon) to do by this aspire to the Empi悶. and 50 10 get the Crowne of Spayne al50
upon the death of the King, which is very probable, it seems (1825, p. 179)
Actually, Charles did not have to do very much to arouse English
suspicions. The policies of Louis XIV would have pul on guard even
French ambassadors were conslantly at work lrying lo bribe local
an indifferent spectator. The natural wealth of the French had long
polilicians so as to achieve lhe ends of Louis' foreign policy. The
been obvious and the following commenls of an Italian in 1661 ref1ecl
atlention paid by French minislers such as Mazarin and Colbert to
a virtually unanimous opinion
the needs of war is neatly summed up in Colbert's phrase,“Trade is
lhe source of [public] flllance and [public] flllance is lhe vila1 nerve
Heaven itself has given the nation alm05t miraculous gifts. It is full of fertile
land.. . excellently situated upon tWQ oceans. watered by many navigable ofwar"(MercaI11i1ism II, 17). II was only to be expected that the English
would relaIiate with similar sentimenls. The clearesl Slalement of this
rivers... well-populated... rich in wealth and in solders (Ashley, 1948, p. 32)
is to be found in an (undaled) memorandum of Lord Shaflesbury
Immediately after taking over power personally in 1661, Louis made
That which makes the Consideration ofTrade of far greater import now than
his presence felt. In October 1661, Louis used a quarrel between the
ever is that the lnterest of Commerce, though formerly neglecled，的 of late
French and Spanish ambassadors in London to force the Spanish
years Become an Express A[faÎr of State as well with the French as with thc
ambassador in France to provide a public apology and thereby Hollander and Swede. And because it Îs understood by laucr expcricnce to
80 SALlM RASHID The Polilical Balance of Trade...? ? 81
be more Conducing towards an universal Monarchy (e岫er for the gaining lt cannot be said that the pamphlet was only aimed at the Balance
or preventing of it) then either 3n Army or Territory, though ncver 50 gre剖， of Trade, even though this is the point that attracted the greatest
of which Instances out of several kingdoms might easily be Produced, ln attention. On pages 21-30, Fortrey provides a list of items showing
rcgard lt is Trade and Commerce alone that drawelh 5tofe of wcaIth along
the yearly loss of 1::1,600,000 to England, suggests that the English
wilh it and its Potcncy at sea By shipping which is not otherwise to be had
(Beer, 1938, p. 242) take steps to patronize their own products and reject French ones,
and draws up rules for treating imports in a manner familiar to all
students of this literature. Fortrey goes on to claim that laws to
It is in this atmosphere of growing distrust and suspicion that the
prohibit the transport of bullion are needless, since the f10w will
pamphlet of Samuel Fortrey should be placed.'
follow the balance of trade. Fortrey introduces the list of items on
the French balance by claiming that it represents one “which not long
III, since was delivered in to the King of France, upon a design he had
to have forbidden the trade between France and England."This again
Samuel Fortrey was “one of the Gentlemen of his Majesties most serves to underline the fact that much English thought was reaclive
Honourable Privy Chamber" (Memoirs and Corre司，ponden凹， p in nature to perceived French belligerence.
225). Fortrey's pamphlet Eng/al1d's Inleresl al1d Improνemel1l (1856) AJI the ideas connected with Mercantilist trade are c1early and
was published in 1663 and, significantly, dedicated to Charles 11.' concisely described by Fortrey.lt is only a year later that Thomas Mun's
lt is a pamphlet deserving of much greater attention than has hitherto b喀lal1d's Treasure by Foreign Trade was first published by Richard i|i!i
been given to it. For more than a ha旺 century， this pamphlet and M間， the son of TIlOmas. Richard's claim that the manuscript had
its figures were quoted as demonstrating the injury England received circulated widely has not been independently confirmed. McCulloch
from her trade with France. The pamphlet is an able one, which c1aimed that the publication of Mun's work was to support the policy !lj
begins by noting that England's prosperity lies in increasing its offree expo悅。fbullionwhich was permitted in 1663 (McCuUoch, 1856,
“Store" (production) and “Trade" (exchange). The easy acceptance p. vi). Even if this be true, and no evidence h品 hitherto been provided
of industrious foreigners is urged and the dangers to religion from to support the conjecture, it is worth noting that the policy itself was j
e
greater toleration considered and shown to be minimal. (Certainly, advocated a year earlier by Fortrey and, apparently, discusscd by him
a topical issue.) Fortrey's acutcness in the pursuit of a profit- a at the court before the measure was enacted. The evidence would
property he attributed to mankind in gcneral一is repeatedly shown. therefore suggest that it is Fortrey who initiated concem with the Balance iie-tf
He urges the cultivation of items “which are of least charge at home, of Trade, particularly with France, and that Mun's work, ap缸t from
and greatest value abroad." On these grounds, he strongly supports its serviceability against the Dutch, was perhaps published to take l
enclosures, a topic heatedly debated in thc 1650s, and he also supports advantage of the concem created by Fortrey.
monopolies for trade when the monopoly can be effective. The fact There is only one point in Fortrey's pamphlet that appears to
that a profit-oriented individual wish臼 to do something is a strong support the Midas fallacy
ground for permitting the thing to be done, according to Fortrey
lTlhe only way to be rich, is to have plenty of that commodity to venl, that
is of greatest value abroad; for what the price of anything is amongst our
First, that inclosures would not have been opposed, had it not appeared, that
most landlords endeavoured it; which is a greatef argument of Im provement; selv間. whether dear or cheap it matters not; for as we pay. so we receive,
and the country is nothing damnified by il; but the art is when we deal wilh
for did not the landlord suppose it would improve his land to a higher value;
shortages to sell dear and to buy cheap (Fortrey, 1856, p. 237)
he would nevcr have been persuaded to do Ît; and the reason why it would
have been of greater advantage to the landlord. is becausc the tenant could
make more profit of il, or else wc should not find them so greedy aftcr pasture This is consistent with the notion that gold and silver are the only
(Forlrey, 1856. p. 228) fonns of real wealth. The rest of the pamphlet does not support this
82 SALIM RASHID The Political Balmlce of Trade... , , 83
notion and Fortrey even directly contradicts the money-is-wealth destructive of the English woolen market. In 1673, Fortrey's
“
notion when he writ間， a little later, that our money and coin, which pamphlet was reprinted and Fortrey reported an increase in general
is also a commodity as well as the rest [of commoditiesl" (p. 240). interest in his ideas. Finally, in 1674, a group of 14 important Whig
At a critical point in his argument, just after showing the loss to merchants produced “A Scheme of T rade" in which the overbalance
France, he states: with France was set at a million pounds.' Anti-French feeling grew
in strength and, in 1678, an act was passed prohibiting the import
[Q]ur treasure rnust needs to be wasted to even the balance; and so our own of many French goods, including wine, brandy, cloth, and silks. A
people remain idle and poor (p. 236)
pamphlet war was set in motion and Ashley has focused on the fact
that most of the arguments for free trade with France have
This stress upon employment is not new but only continues a theme considerable theoretical gaps and are more properly attributed to the
earlier introduced when Fortrey spoke of the benefits of Tory sympathies of their authors than to calm intellectual
manufactures. convictions. This aspect of Ashley's argument cannot be faulted.
However, by focusing upon free trade, he has touched upon
In the next place, our manufactures are to be considered, 011 which chief1y something that had a limited influence between 1680 and 1715-by
depends boll> the wealth and prosperity of this kingdom; for by the increase dealing with the Balance of Trade instead, Ashley would have been
and encouragement thereof, the Subjects are imployed in industrious callings,
able to illuminate a concept that spanned the entire period from the
rnaintained and preserved from want, and those mischiefs which commonly
Restoration of Charles II to the publication of the Wealth 01 Natio s.
attend idleness: the people furnished at home with all things both of necessity l1
and pleasure and by the overplus procure from abroad, what ever for use Indeed, despite his open sympathy with the historical school of
or delighl is wanting (p. 231) econOffil囚， Ashley often writes as though the free-trade point of view
is the only“scientific" one.
A careful study of the pamphlet literature does not provide The main points of difference between Ashley and this paper lie
evidence to support the notion that Thomas Mun initiated the in focusing upon the balance of trade rather than upon free trade,
emphasis upon the Balance of Trade. Since the fact of such an 的 Ashley does, and in dating the beginnings of the balance-of-trade
emphasis is undoubted, someone presumably h出to take the“blame" scare. The emphasis of Mun's pamphlet was primarily anti-Dutch
for having begun the Balance ofTrade scare. Samuel Fortrey appears While English policy was concerned with both the Dutch and the
to be the only plausible candidate for such a role in the years 1663- French in 1660, the alarm over the Balance ofTrade does not appear
1664. to have included the Dutch at any point (Seaward, 1987, p. 339)-'
As an examination of the pamphlets of the period, such as those of
Sir Josiah Child or Dudley North, will show, it was the interest rate
IV.
that attracted attention when the Dutch were considered. In any case,
the Dutch were clearly beaten and outdistanced by the English in
Most of the rest of the story has been carefully told by Ashley, in the 1680s and, henceforth, the French were the primary concern of
“
his justly famous paper on The Tory Origins of Free Trade Policy"
the English. Ashley notes some antecedents of the Scheme of Trade
(1987), so it is necessary to make only brief reference to subsequent but nonetheless considers 1674 to be a critical date. On the other
events. The increasingly close relationship of Charles II with Louis hand, it has been argued above that antipathy to the French increased
XIV, including a secret treaty, subsidies, and even a French mistress, steadily between 1660 and 1663. There are further reasons for
would have aroused Anglican suspicion at the best oftimes. The Whig considering the years 1660-1663 as important for the growth of the
party steadily strengthened its anti-Catholic and anti-absolute balance-of-trade doctrine. Charles Davenant, in reviewing the growth
monarchial stances and, therefore, anti-French attitude. In 1667, ofEnglish commercial policy,
Colbert introduced a tariff that was practically prohibitive and
84
SAL恥1RASHID The Political Balan臼ofTrade...? ? 85
About the year 1660 品 France became the risin且 empire. And it rose 50 AIl nations of the world therefore should be regarded as one body of
[ast as to beget just apprehensions to England for our future safety. In the tradesmen, exercising their various occupations for the mutual benefit and
meanwhile several good patriots, perceiving the Court then fatally runnjng advantage of each other.... 1 wiJl 001 contend for a free and unrcstrained trade
ìnto French interest and measures, and finding it would be difficult to engage with respect to France, though 1 can't see it could do us harm even in that
the people (newly come out of a civil war) to foUow and join with them in case (Vanderl圳， 1734, p. 47)
more national councîls, by speculations merely political concerning the
progress of the French arms and power, they thought the best course to Between 1688 and 1815, England and France were locked in a
awaken Englishrnen was to alarm them about the danger they were in to lose
superpower struggle and were at war approximately one year in
their trade; and, for this reason, nothîng was 50 comrnon as to cry "that
two." The fact that economists also appear to have freely adopted
England was undone by the prodigious overbalance the French had upon us"
(Davenant, 1775, p. 362) their economics to their politics has not, however, received adequate
nolice. The political affiliation of men like Charles Davenant or
Margaret Priestley (1951) has pointed out how there were extensive Dudley North has been fairly obvious but it is only recently that we
negotiations for an Anglo-French commercial treaty between 1663 have come to appreciate that Gregory King's famous tabulation hides
and 1672- a concern that seems explicable by the thesis that the many Tory prejudices (Holmes, 1977)." More revealing 的 the fact
Balance of Trade had risen to the status of a bogey by the time of that Henry Martin, whose Considerations on the East lndian Trade
Fortrey's pamphlet. Indeed, when figures were drawn up on this issue, has long been hailed as one of the landmarks of free-trade thought,
contributed wholeheartedly to the violently anti-French British
the figures for l662and l673were consMered Why were these dates
chosen? Whether we settle upon 1663 or 1673, it is clear in either Merchant. How is this change explicable unless we admit the
malleability of economics under political pressure (McLeod, 1983)?
case that Thomas Mu的 pamphlet 1叫 little to do with the rise of
The importance of the Balance of Trade as a critical element in
the balance of trade to prominence. When Fortrey wrote England's
national power is also seen in the activities of the philosopher John
于te圳， he made it clear 出at he was only expressing what al1
"mgemous persons" always knew, so that he was original only in the Locke. While the economic arguments of Locke's Consideratiol1s
clearly display an appreciation for the free market, Locke was quite
narrow sense. Insofar as the English needed a pedagogue to impress
emphatic in not allowing foreign trade to regulate itself.
them w仙 the impo巾nce of the balance of trade, It was Sa;戶nu
For此t間rey and not Thomas Mu山1叩0 whof血il1ed 由tha剖t role'
Money also is necessary to 間. in a certain proportion to the plenty of it
The concern about French power is visible in the writings of almost
amongst our neighbors. For, if any of our neighbors have it in a much greater
all EnElish travelersmFrance and, ln I702, John NorthleiEh took abundance than we, we are many ways obnoxious to them. 1. They can
as the first reason for the growth of French power an issue directly maintain a greater force. 2. They can tempt away our people, by greater wages,
connected with the Balance of Trade to serve them by land or sea, or in any labor. 3. They can command the
markets, and thereby break our trade, and make us poor. 4. They can on
any occasion engross naval and warlike stores, and thereby endanger us
That which has facilitated the French Conquest is the want of Money in those
(Locke, 1976, p. 140)
Neighboring Countries they have attacked; and where they cannot pay for
thetr own defense,they always want hands and hearts to fight for u (quoted
in Lough, 1985, p. 180) There can be little doubt that Locke had the French primarily in
mind. The editor of Locke's travel diary，正ÆJcke甘 Travels in France
1675-1679, writes that:13
Awareness of the French presence iS VISIble ln the works of English
intel1ectuals from al1 fields, whether mathematicians such as John
Wal1is or poets such as John Dryden. When the cosmopolitan Jacob Though he is mentioned only seldom by name, Colbert and his multifarious
activities figure prominently in the pa且自 ofthe J ournal. Besides his work for
vanderlintwrote some 5Oyears later, he had to Insert a quallIIcation
the French navy and his conduct of the French finances during the war years,
about the French.'o
a subject to which Locke devoted much space, we see reOected here his attempt
86 SALIM RASHID ηIe Political Balallce of Trade...? ' 87
to bring about a great development of French trade and industry (Lough, lt is curious to note that thc rise of the balance-of-trade scare as
1984, p. xliii) a late-seventeenth-century phenomenon was clearly known to
scholars in the mid-eighteenth century. We have seen earlier how
Even though it is not explicitly designated as such, a careful Adam Smith hints at the origin of these ideas during the reign of 11
examination of chapter 3 of Book IV of the Wealth ofN ations, which Charles 11. William Robertson, the historian and contemporary of
deals with restraints upon importation, will show that the argument Adam Smith, is more explicit in his letter congratulating Smith on
is closely geared to the earlier debates on Anglo-French trade. And the publication of the Weallh of Nalions. In referring to the
when the balance of trade was no longer significant, Charles James “Mercantile System," Robertson writes:
Fox showed the old Whig hostility to France in opposing the French
Commercial Treaty of 1787 on the grounds that France and England i!ilfi the English bc capable of extending th口r ideas bcyond the narrow and j!ji
were natural enemies. i\\iberal arrangements introduced by the mercantile supporters of Revo\ution
The contrast between John Locke and that opportunist merchant principles, and countenanced by Locke and some of their favourite writers
1977 p. 192)
politician, Sir Josiah Ch凶， is noteworthy. The Discourse of Trade (Sm仙， , :
(1751) of Child was readily found even in the 1850s, so great was 1
its populari句， and the manner in which the balance of trade was Robertson, it appears, dates this system only from 1688! 1
treated by someone who did not wish to wield it against France is Since anti-French sentiment certainly did not die down during the J
much more pragmatiιChi1d is fully aware of the significance of eighteenth century, it remains only to ask why the balance of trade
lïnancial surpluses of war. 14 had ceased to be of such importance by 1720. Of the change itse旺，
l
many scholars are in agreement- Charles Wilson (1965) and E. A
Since the introduction of the ncw artillery of powder, 5hot, and fire-arms, J. Johnson (1937), for example- and a plentitude of quotes can ta
in the world, all war is become much rather an cxpense of moncy than men, support them (Johnson, 1937; Beer, 1938). Let us note that
and succ臼5attends those that caDm ost and longest spend money. rather than employment was always an important consideration in English
men; and, consequently. princes armies in Europe are become more economic thought and what needs explanation is the rise and fall of
proportionable 10 their purses, than to the numbcrs of their people (Child,
the Balance of Trade, rather than the prominence of employment.
1751, p. 146)
';1
There appear to be four explanations for the decline of the balance
Nonetheless, he emphasizes how difficult it is to know what the of-trade scare. First, the need for investible capi叫， stressed by Max
balance of trade really is and then argues that the baJance of trade Be旭r(1938) and by Barry Supple (1959), declined with the considerablc
be used primarily to direct our thinking about the economy trade surplus臼 arising after the Commercial Revolution (Supple,
1959). Second, with the reform of the coinage and the success of the
1 answer; that tho' thc study of the ballance of trade, in this last-mentioned Bank of England, the need for bullion品acirculating medium became
respect, be a study very ingenious and commendable; y剖.m my poor oplfilon, easier to satisfy. Third, war finance- an item whose importance is
the enqui旬， whether we get or lose, does oot so much deserve our greatest denied by Viner (1937) but shown to be significant by Davis (1954,
pains aod care, as how we may be sure to g前; thc former beiog of 00 use 1966)- gave risc to the Bank of England and to the explosive growth
but in order to the latter; and this therefore leads to the consideration of the
of the National Debt and made the balance of trade of lesser
other ballance of trade, as most useful and necessary, viz
importance (Dickson, 1967). Finally, concern for the power of the
、Nhat is to be done in England to improve its trade, to such a degree, as
to equalize or over-ballance our neighbours in our national profit, our foreign nation became increasingly focused upon colonial policy rather than
trade (Child, 1751, p. 124)1 the BaJance of Trade and reached fairly mature formulations in the
writings of Joshua Gee (1733) and Malachy Postlethwayt (1757)'5
By using the balance of trade primarily as an organizing device, Child What does all this tell us about the evolution of economic ideas?16
succeeds in anesthetizing all of its political overtones. First, that the foreign-trade doctrines of the English economists are
01
88 SALlM RASHID The Political Balallce Trade...? 7 89
of little value unless studied in close conjunction with the detailed considerations wcre primary (pp. 39， 圳， 45, 52) and the doctrinal point that
politics of each period.17 Second, since foreign-trade policy was so employment was always of equal importance (p. 38). The employment aspect has
heavily colored by party politics that the purely economic views of also been stre品ed by sevcral scholars, such as Charles Wilson (1965) and W. D
Grampp
the Mercantilists have to be obtained from their microeconomic
8. The lack of serviceability of Mun on this issue is suggestcd by the fact that
arguments and their views of the domestic macroeconomy. Finally, when England's升eastlrewas reprinted in 1696, the title was changed to The Benefits
it would appear that there is a doctrinal continuity in English ond Adνantages o/Ihe Easl-lndia TI叫'e. The Dutch were an entrepot cconomy,
economic thought in the two centuries prior to Adam Smith, but that so their balancc of trade was also harder to intcrpret in political tcrms
this is based on a concem for employment. If the thesis of this paper 9 “Fortrey's Tract has been referred to over and over again, especially during
Is correct, the “Balance of Trade" was largely a political shibboleth the discussions on the commerical treaty with France in 1673" (McCulloch, 1856,
p. ix)
lO. Money Answers AII Things (London, 1734). J. F. Scott, 171e Malhematical
ACKNOWLEDGMENT Work 0/ Jolm 晰lilis (New York: Chelsea, 1981). John Dryden, Selected Works.
ed. W. FroSl(New York: Holl, Rineharl, WinSlon, 1967), 1-66
11. The War oflhe Grand A1liance (League of Augsburg), 1689-1697; lhe War
1 am grateful to Paul Seaward for his comments, and especially indebted
of the Spanish Succession, 1802-17日; the War of Austrian Successi凹， 1740-174且，
to Jeremy Black for his advice and encoura且ement.The usual caveat applies the Seven Year's War (French and Indian War), 1756-1763; the American War of
Independence, 1776-1783; lhe French Revolulionary War, 1793-1801; lhe
Napolenoic Wars, 1803-1815. Each country also fought other battles with less direct
NOTES
involvement ofthe other. For a careful and detailcd study ofthc problems ofbalance
oftrade belween 1690 and 1715 see D. W. 10nes, ([988). Even in 1758, lhe Duke
1. Whcn refcrring to the politically motivated version of the balance of trade, of Ncwscast1e emphasized the importance of money (rather than men) in fighting }F l
1 have capitalized it as Balancc of Trade Continental wars (Scott, 1989, p. 76) l丸
2. The myth of Mun's discovery appears to have grown ovcr lime (see Boorstin, 12. Charles' need for money throughout this period should also be kept in mind l
1985; Michelman, 1985) For one important period, sce Hulton (1986) 1
3. Pa缸ckar吋d's (υ1宛923刀) n唸ee剖gl閏eCl阻ed 臼e:S阻Say makes the valuable point 山ha剖t mtense 13. In trying to substitute Piedmontese wine for French claret in 1751, an English |:
Anglo-Fre叩nch Tivalry can be dated to an 間ea盯rlier pe叮riod than 出tha叫t emphas釗ized by consul obscrved “what moneys we spend in France in whatever shape is certainly
As叫h叫Iy furnishing arms a且ainst ourselv四"(Rice， 1986) EL
on 出lhi昀ssubject caused the House of Commons to undertake a prohibition of French 14. For an extensive but critical account of Child, see Letwin (1963). J. R ,t憶中
trade- a prohibition quite unreckoned, apparently, in Ashley's intcrpretation of thc M uCulloch (1856) declined reprinting Child's D凹的Stlrein the 1850s on the grounds au
significance of lhal of 1678" (p. 420) that it was rcadily available 14叫-
4. 1 have oot tried 10 document facts well-known to historians. The general 的 For gcneral statements and analysis of ant卜French sentimen峙， see Jeremy 和叫
sources [ have relied upon are Clark (1956), Ashley (1978), and Kenyon (1978). 112, Black (1986). Russian and Swedish attempts at monopoly pricing during the early 可4，
3
211 1700s wcre instrumental in turning British eyes to the American colonies for their
5. Both Heckscher and Beer provide a variety of other quotes supporting the naval stores, with thc question even being raised in the King's speech of 1721 (Re凹，
gencral thesis of this essay 00 the dependence of the balance of trade on politics 1925)
G. O. Nichols (1966, pp. 82-110), also discusses lhese i阻U自 16. It should be clear that the viewpoint of this臼sayis opposed toJoycc Applcby
6. Fortrey's parnphlet is reprinted in McCulloch (1856). In a leucr of May 8, (1978), in intel
1682, Pepys (1920, p. 225) writeSlo a W. Hewer of a “Mr. Fort旬， one of the Duke's
lof York1 bedchamber." In view of the pressure that York brought to bear for war
with the Dutch in 1664阻wellas the encouragement he gave to commercial projects,
this fact may be significant. Even though the Dutch bore the prime animus of Sir
George Downing's trade policy, Downing was also considerably worried about teh
French (Roseveare, 1984). 1 am grateful to Paul Seaward for these points
7. Data on the actu叫 balance of trade during this period are presented by M
Pricstlcy (1951). For a further examinatωn of lhe figures, see Davis (1954, 1966)
This article also provides several quotes to support my contentÎon that political
SALlM RASHID Tlte Political Balallce of Trade...? ? 91
90
Hutton, R. 1986 “Thc Making of the Secret Treaty of Dover, 1668-70." Historù:al
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