4 CONCEPTIONS OF HISTORY

AND SOCIETY IN MERCANTILISM,

1650-1730
Lars Herlitz

1. Meanings of Mercantilism-A Return to the

"Systems"

Eli F. Heckscher's Mercantilism from the early 1930s was presented as a

synthesis of historicist and economic approaches, of those of Gustav
Schmoller and William Cunningham on one hand, and of Adam Smith on
the other. Heckscher wanted to judge of the performance of mercantilism
in view of its end or purpose. Mercantilism was then conceived of as a
phase in the history of economic policy. Its aim was to overcome feudal
disintegration and medieval particularism and to strengthen the power of
the state on the basis of wealth. For this Heckscher referred to Schmoller
and Cunningham, who had expounded mercantilism as a system of unifi-
cation and of power, respectively. He found, however, that under their
influence, the economic sides of mercantilism, its nature of a protectionist
and monetary system, had been neglected. The sympathy with mercan-
tilism that generally dominated the members of the historical school had,
therefore, to be balanced by the criticism developed by Adam Smith.
In Heckscher's opinion, Smith's main advantage of all later writers on
mercantilism was his insight into economic theory. 1

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L. Magnusson (ed.), Mercantilist Economics

© Kluwer Academic Publishers 1993
88 CLASSICAL MERCANTILISM

Thus Heckscher came to judge of mercantilism in view of tasks con-

ferred upon it by the historical school and by criteria derived from
classical economic theory. He assigned to mercantilism some intellectual
advance from traditional to more rational conceptions of world and society.
But he concluded that economic liberalism became not only its conqueror
in the fields of economics and of humanitarian values but also its executor
in realizing unity, an efficient though more limited state power, and a
thoroughly rational understanding of society as well. 2
Quite a few critical comments have been raised on Heckscher's syn-
thesis in the course of time. Some of them related to the legacy from
Schmoller and Cunningham. The very idea of a homogenous phase, or
system, of economic policy was questioned. Heckscher's insistence on the
power of the state as being an end in itself with mercantilists especially
met with valid objections. On the other hand, the derivation of the
mercantilists' "monetary system" from a perverted "fear of goods," bred
by the very existence of a monetary economy, seemed unreal, turning
mercantilism into a state of mind. Furthermore, it was noted that the
discontinuity between mercantilism and laissez faire as presented by
Heckscher was strongly due to his sparing use of works from the
18th century. 3
Some concessions were, however, made by Heckscher himself in the
last part of his work, "Mercantilism as a conception of society.,,4 Here he
noted a certain amount of consensus between mercantilism and liberalism
in some respects. Mercantilists expressed a rather unanimous though not
unreserved praise of freedom of trade, and more generally of economic
freedom. Moreover, they broke with the religious and ethical attitude of
the Middle Ages and developed a pronounced amoralism with regard to
ends and means. This was suited to their strong belief in an inevitable
social causation conformable to inexorable laws. Why, then, such a great
contrast between liberalism and mercantilism in the practical results
arrived at from a point of departure that was largely common to both?
Heckscher's account left some room for hypocrisy and logical inconsistency
on the part of mercantilists. But mainly he referred to the belief of
liberalism in a predetermined harmony inherent in the nature of economic
phenomena themselves, as revealed by Adam Smith's statement of the
invisible hand. 5 Social causation, as conceived of by mercantilists, lacked
this automatic mechanism. Therefore, it allowed statesmen to exert an
influence on it in the direction of any objective, however amoral. And
here the very amoralism of mercantilism was conducive to the ruthlessness
of its practical conclusions, thus sharpening the contrast to laissez faire.
Accordingly, the transition from mercantilism to laissez faire was in