I always feel obligated when it comes up to throw in a teeny defense. Today we just read "mercantilist" and think "protectionists that thought money was wealth". I obviously don't agree with that perspective. But I want to defend the historical mercantilists just a little bit.
1. There was a wide range. You had real theorists, and you had merchant pamphlet writers of lesser value. All were jumbled under the label "mercantilist". Remember that whenever you think about "mercantilists" as a monolithic group.
2. Mercantilist wrote at a time before the Bank of England was established. Remember that Mun died a century before Smith wrote his repudiation of him - he was not arguing with a set of contemporaries. Much of Smith's complaints were that it was silly to want "treasure" from exports because we have banknotes and Navy bills and all sorts of other things. Of course they didn't have those when Mun wrote his book! The concern with "treasure" was primarily a monetary concern. When your domestic currency supply is inelastic, you have to start looking other places for cash.
3. Some probably did, but the more sophisticated mercantilists that were not just spinning out rent-seeking pamphlets did not identify money with wealth. Surprisingly, one of the most eloquent statements of this point is by Michel Foucault.
4. The mercantilists were early theorists of the mechanics of the balance of payments and made important contributions here.
So go ahead and keep denouncing mercantilism because everyone reads that as "gold obsessed protectionists" anyway. But know in the back of your mind that the actual mercantilists were not always the modern caricature.
Procrastinating on February 26, 2017
42 minutes ago