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Updated: June 26, 2025
But in the eighteenth century, Francois Quesnay, a bourgeois physician at the court of Louis XV, announced to his friends that mercantilism was all wrong.
Hence, Russian mercantilism was predominantly a state mercantilism. Even where Peter succeeded in enlisting private initiative by subsidies, instead of building up a class of independent manufacturers, he merely created industrial parasites and bureaucrats without initiative of their own, who forever kept looking to the government.
If the first course aroused the fury of the Abolitionists, the second course found no favor with the Free Soilers, and ambitious Whigs, drawing upon abolitionism and free soilism for food, for northern mercantilism and for a larger slavery of both blacks and whites.
Mercantilism was still in the ascendant when Adam Smith came to write. Few statesmen of importance before the younger Pitt had learned the secret of its fallacies; and, indeed, the chief ground for difference between Chatham and Burke was the former's suspicion that Burke had embraced the noxious doctrine of free trade.
Hume has an eminent place among economists, and for one to whom the study of such phenomena was but a casual inquiry, it is marvelous how much he saw. He is free from the crude errors of mercantilism; and twenty years before Adam Smith hopes, "as a British subject," for the prosperity of other countries.
Roscher says that it contains 'a theory of money, elaborated in the fourteenth century, which remains perfectly correct to-day, under the test of the principles applied in the nineteenth century, and that with a brevity, a precision, a clarity, and a simplicity of language which is a striking proof of the superior genius of its author. According to Brants, 'the treatise of Oresme is one of the first to be devoted ex professo to an economic subject, and it expresses many ideas which are very just, more just than those which held the field for a long period after him, under the name of mercantilism, and more just than those which allowed of the reduction of money as if it were nothing more than a counter of exchange. 'Oresme's treatise on money, says Macleod, 'may be justly said to stand at the head of modern economic literature.
The mercantilism against which the work of Adam Smith was so magistral a protest was already rather a matter of external than internal commerce when he wrote. He triumphed less because he suddenly opened men's eyes to a truth hitherto concealed than because he represented the culmination of certain principles which, under various aspects, were common to his time.
The Bourbons, especially King Louis XIV, were fanatical adherents of this doctrine and Colbert, his great minister of finance, became the prophet of Mercantilism to whom all Europe looked for guidance. The entire foreign policy of Cromwell was a practical application of the Mercantile System. It was invariably directed against the rich rival Republic of Holland.
In actual practice the abolition of restrictions on industry was destined to give free rein to the avarice and cruelty of the most selfish employers, to enrich the bourgeoisie, and to leave the lower classes more miserable than ever. The "Wealth of Nations" was to be the wealth of the bourgeoisie. But meanwhile, it was to destroy mercantilism.
Moreover, the mercantilist theory, having in this case produced such unfortunate results, henceforth began to lose ground, and it is not without interest that Adam Smith's Wealth of Nations, the classic expression of the new political economy of free trade, of laisser-faire, as the French styled it, which was destined to supplant mercantilism, was published in 1776, the very year of the declaration of American independence.
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