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Chapter 2 : The Merchantilist School (Major Tenets (Nationalism (Only a…
Chapter 2 : The Merchantilist School
Major Tenets
Nationalism
Only a powerful nation could capture and hold colonies, dominate trade routes, win wars against rivals and complete succesfully in international trade
Colonisation and monopolisation of colonial trade. Opposition to internal tolls, taxes and other restriction on movement of goods
Merchantilist didn't favour free internal trade in the sense of allowing people to engage in any trade that they wished
Gold and silver are most desirable form of wealth
Only can be obtained from surplus of exports
Against of internal tools,taxes & other restrictions on the movement of goods
Strong Central Gov
To grant monopoly privileges to companies engaged in foreig trade
To achieve nationalism,protectionism,colonialism and InternationalTrade
To impose tariffs to protect these sectors
To restrict free entry into business at home to limit competition
Thomas Mun
Director of East India Company
He argued that as long as total exports exceeded total imports, the drain of species from a country in any one area
His argument calling on the government to support export from England while restricting imports from abroad
Money is key to wealth and the growth of wealth that international trade brings money (gold) into countries that can't produce it.
Gerald Malynes
expressed ideas of
Gov need to regulate the goods to ensure high quality exports
More money would raise prices and stimulate business
Trade was too low for the aristocracy
Jean Baptiste Colbert
Bullionist- strebgth of state depend on its finances, rest on collection of taxes and tax revenues in turn are greatest
He favored expanded exports, reduced imports, and laws preventing the outflow of bullion from the country
emphasized on four profession
Trade
War on land
Agriculture
Petty Views
Division of labour
recognized the economies associated with the specialization of labour and division of tasks
Rent Teory
Realized that land near the market yielded a higher rent bcs the cost of transporting the produce was lower
Velocity of circulation
rate at which money change hand
Importance of Capital