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"A Kingdom," said Locke, "grows rich or poor just as a farmer does, and no other way"; and while there is a sense in which this is wholly true, the meaning attached to it by the mercantilists was that foreign competition meant national weakness. They could not conceive a commercial bargain which was profitable to both sides.
Privileges, titles of nobility, exemption from taxation, generous grants of money, and other favors were accorded to enterprising business men who undertook to introduce new branches of manufacture. In general, however, the efforts of such mercantilists as Colbert have been adversely criticized by economists.
Sir Josiah Child was only expressing a commonplace observation of the mercantilists when he wrote "That all colonies or plantations do endamage their Mother-Kingdoms, whereof the trades of such Plantations are not confined by severe Laws, and good execution of those Laws, to the Mother-Kingdom."
'As we cannot fully understand the work of Adam Smith without giving some attention to the physiocrats, nor the physiocrats without looking at the mercantilists: so the beginnings of mercantile theory are hardly intelligible without a knowledge of the canonist doctrine towards which that theory stands in the relation partly of a continuation, partly of a protest.
Unlimited competition replaced the state paternalism of the mercantilists. Adam Smith in 1776 espoused the cause of economic liberty, believing that if business and industry were unhampered by artificial restrictions they would work out their own salvation. His pronouncement was scarcely uttered before it became the shibboleth of statesmen and business men.
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