The economics of the mercantilist school was concerned with how the powerful nations of Western Europe could pursue policies to increase their wealth and power at a time of expanding trade and colonialism. The mercantilists argued the following three interrelated ideas. First, that the wealth and power of the kingdom could be increased by enlarging the domestic money supply, consisting of both gold and silver. Two, that to expand the domestic money supply the government needed to create a favorable balance of trade. And finally, that a favorable balance of trade could be obtained by acquiring colonies and regulating foreign trade with the aim of expanding exports and discouraging imports.
Write an essay in which you provide a detailed explanation of each of three principal aspects of mercantilist doctrine listed above. In addition, explain the contributions to mercantilist thought of Thomas Mun, Gerard Malynes, Charles Davenant, William Petty, and Jean Baptiste Colbert. Finally, explain and evaluate the disagreements both Francois Quesnay and David Hume had with mercantilist thought. Do you think their criticisms are valid? Defend your choice.
Long Essay 2 –
The mercantilist, the physiocrats, and the forerunners to the classical school each had well-developed theories of the relationship between trade and the creation of wealth. Explain the role of trade in creating wealth in each of these three schools of thought. Also, compare and contrast their different views of the link between trade and the creation of wealth. Which of these three views do you find most interesting? Defend your choice.
Part II: Do ONE of the following TWO Short Essays
Short Essay 1 –
The mercantilist argued against a harmony of interests and the forerunners of the classical school believed in the harmony of interests doctrine. Explain the arguments for and against a harmony of interests. Which school do you think got it right? Defend your answer.
Short Essay 2 –
Many economists believe that Hume’s price-specie-flow mechanism proved that Mun’s favorable balance of trade doctrine would not work. Explain the mercantilist doctrine and Hume’s critique of it. Do you believe Hume was right? Defend your answer.
