Mercantilist Economics.

• Author: Ekelund, Robert B., Jr.

There are fundamental differences between most economists, general historians, and economic historians. Many general economic historians and "traditional" economic historians - there really is not much difference - get apoplectic about bringing order to history. They take refuge in "historical-sociological" approach wherein all motives are given more or less weight in interpreting doctrinal and institutional change. Some "historians of economic thought" profess the same gestalt. This volume contains merely one of the latest attempts to defend chaos and pointlessness in the interpretation of an historical epoch. At a purchase price of about 30 cents a page, it is decidedly no bargain. Although several essays in this collection offer important insights - in particular those of Donald Walker and William Grampp - the major thrust of the volume struck by editor Magnussun recounts the same old hedging and historiographic voodoo about mercantilism and neomercantilism. The underlying message of this uneven collection is clear: If "idea collecting" is not the best way to characterize some particular epoch, employment prospects for some of these "historians of economic thought" might be considerably less secure.

This collection has no stated purpose other than (ostensibly) to get a grip on the definitions of mercantilism and neomercantilism in the post-Hecksher, post-British socialist era of "economic thought." Not only does it fail to advance, it takes two steps backwards. No wind is the right wind when the port of call has not been chosen. With two or three exceptions, these essays betray total innocence and ignorance of how modern economic theory might be applied to institutions and institutional change over the period 1550-1776. All they offer is "stories" surrounding mercantile ideas and policies - an approach that led one able historian (aptly) to call mercantilism "a red herring of historiography" [3].

The mercantile era was a period punctuated by rapidly evolving institutions which happened to result in the transition to liberalism and greater reliance on free markets. Ideas - especially those relating to markets, labor, and the balance of payments - undoubtedly had consequences over this period. But ideas, like technological advance, changes in transactions cost, and innovations, are but "shocks" to a given system composed of institutions. These shocks must work through institutions that are established and evolve through markets guided by self interested activity. (Rent seeking, unlike self interest, does not create value). At any point in time institutions act as a constraint to activity and constitute a "static" period for analysis where some factors must be considered exogenous. Over time, economic activity interacting...