CHAPTER 6
Mercantilism in England
LEARNING OBJECTIVES
Explain the importance of trade in the early phase of mercantilism.
OUTLINE OF CHAPTER
I. Early Mercantilism
II. The Conflict in Mercantilist Thought
VI. Summary
KEY TERMS
balance of trade
bullionism
the earliest phase of mercantilism
upward or downward trends of output that deviate
t over time
classical liberalism
new individualistic philosophy that arose in the eighteenth century advocating less government
intervention in the management of the economy
depression
ANSWERS TO END OF CHAPTER REVIEW QUESTIONS
Explain the importance of trade in the early phase of mercantilism.
1. What is bullionism? Why is it not possible for every country to achieve its main goal?
Earliest phase of mercantilism occurred during period of acute shortage of gold and
2. Why is exporting so important for countries in the bullionist period? What did countries
do to protect their exports?
Bullion was needed to purchase imported goods. Countries received bullion from
3. What is the motivation for creating trade monopolies?
4. How did the restrictions on trade and production impact the new middle class of
merchants and industrial capitalists? What was their response?
Comprehend the battle of ideas: Christian paternalistic ethic and mercantilism.
5. What are the two themes underlying the development of English mercantilism? What
does this mean for the role of the church and the role of the state in protecting the social
welfare of its citizens?
6. As the state begins to take over the role of the church in interpreting and enforcing the
Christian paternalistic ethic, what are some early mercantilist policies?
Early mercantilist policies sought to balance feudal and capitalist interests. Implemented
7. Mercantilists advocate for full employment policies. What problems is unemployment
causing in the late 1500 and early 1600s? What is the cause of widespread
unemployment in this period?
The movement of landlords to remove peasants from their lands to make way for sheep
8. In 1563, a maximum wage is set. Why? Who is this designed to protect? Why?
9. As the state assumes more and more responsibility for the general welfare of society, it
creates the Poor Laws. What are the Poor Laws? What are they designed to do?
Poor Laws passed in 1531 and 1536 attempted to deal with the problems of
Compare and contrast Christian paternalist view with those of emerging individualists and
Protestants.
10. What is classical liberalism? Why did it end up prevailing over the older paternalistic
view of the world?
11. What is considered to be the dominant motive needed to function successfully in a
capitalist market economy? How is this justified by classical liberalism?
The dominant motive in capitalism is acquisitive behavior or the desire to accumulate
12.
Why does individua
capitalists?
The basic tenet of Protestantism was the doctrine that human beings were justified by
13. Using individual self-interest as a foundation, what are arguments put forward supporting
removal of restrictions on trade and production? Be sure to give specific examples as
part of your answer.