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The Trade Crisis of the Early 1620's and English Economic Thought

Published online by Cambridge University Press:  03 February 2011

J. D. Gould
J. D. Gould
Affiliation:
University College of Leicester
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Extract

The export crisis of the early 1620's, the causes of which formed the subject of an earlier paper, was without doubt one of the most widely discussed topics of the day. It figured largely in the Parliamentary debates of 1621 and 1624; it gave rise to much official inquiry and unofficial documentary discussion; and it produced a number of books which, though published as frank livres de circonstance, have come down to us as representative of the economic views of the period in general. A careful reconsideration of these works in the light of the immediate circumstances that prompted diem would help t o explain die peculiarity of some of the arguments put forward, and would be a valuable essay on die origins of Mercantilist concepts. The aim of the present paper is to select two particular topics which illustrate how close the connection was between die discussion of immediate issues and what passes for more abstract Mercantilist “theory.”

Type
Articles
Information
The Journal of Economic History , Volume 15 , Issue 2 , June 1955 , pp. 121 - 133
Copyright
Copyright © The Economic History Association 1955

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References

1 Gould, J. D., “The Trade Depression of the Early 1620's,” Economic History Review. Second Series, Vol. VII, No. I (1954), 81–90.CrossRefGoogle Scholar

2 British Museum (=BM), Add. MSS. 34,324, fos. 177–78. Several other documents in this volume are relevant to this section of the article. It is justifiable to infer from the pains which the Council took to obtain other views on Malynes' arguments, that they took these arguments seriously. The report originating this discussion was referred to by , Malynes in The Centre of the Circle of Commerce (London, 1623), whence it appears that those associated with him in this controversy included Lord Mandeville, Sir Robert Cotton, Sir Ralph Maddison, J. Williams (the King's Goldsmith) and W. Sanderson (a prominent Merchant Adventurer). Malynes, therefore, did not lack influential support for his views, and I am by no means convinced that they were quite so foolish as they appear in the light of classical economic theoryGoogle Scholar.

3 This has been clearly shown in a recent article by Supple, B. E., “Thomas Mun and the Commercial Crisis, 1623,” Bulletin of the Institute of Historical Research, Vol. XXVII, No. 75 (05 1954)Google Scholar.

4 Gould, J. D., “The Royal Mint in the Early Seventeenth Century,” Economic History Review, Second Series, Vol. V, No. 2 (1952), 241–42.Google Scholar

5 BM Add. MSS. 34,324, f0. 155.

6 That it is still, however, so used, readers of R. de Roover's study of Sir Thomas Gresham will be aware. It is interesting to note that Adam Smith, in his painstaking rebuttal of Mer-cantilist trade policy, did not himself use this particular argument against it. It may also be noted that a few years ago, a group of leading economists expressed doubts as to “whether, even in the heyday of the international gold standard, induced movements in relative price-levels had any major regulatory influence on the balances of international transactions.” National and International Measures for Full Employment, United Nations, 1949. All this does not, of course, at all mean that Mercantilist trade policy cannot be justifiably attacked on other grounds.

7 Angell, J. W., The Theory of International Prices (Cambridge: Harvard University Press, 1926), pp. 13–15. The part of Professor Angell's book dealing with this period is, unfortunately, of limited usefulness. He was content to rely entirely on published works, and had apparently read only one of Malynes' books, and neither of Misselden's. The work of Chi-Yuen Wu,CrossRefGoogle ScholarAn Outline of International Price Theories (London, 1939), is much more valuable, and indeed displays a real penetration in its insistence on the importance of those few years in the history of economic thought. Dr. Wu was not, however, concerned to show how the reorientation of economic thought originated in changing economic circumstances, and he is content to use the self-regulating principle to disparage the constructions of Malynes and of MunGoogle Scholar.

8 Mun, T., England's Treasure by Forraign Trade (London, 1664), pp. 43–44.Google Scholar

9 For example, Mr. Brooke on 8th March, 1621: “that the Cheapness of Corn now, not so much the Plenty of Corn, as the Scarceness of Money,” Journals of the House of Commons, I, 544–45. Several others made similar observationsGoogle Scholar.

10 Public Record Office, London (=PRO), S.P. 15/42/96.

11 Viner, J., “English Theories of Foreign Trade before Adam Smith,” Journal of Political Economy, Vol. XXXVIII (1930). See esp. pp. 419 ff.Google Scholar

12 Heckscher, E. F. adopts the same view: Mercantilism (trans. London, 1935), II, 240–50, and so apparently doesGoogle ScholarSchumpeter, J. A.: History of Economic Analysis (New York, Oxford University Press, 1954). The latter work did not appear until after the writing of the present paper. Had it been available earlier, reference to the views of that great scholar would certainly have been made in the text. Despite the difference of view just mentioned, the present writer is gready encouraged by the similarity of some of Schumpeter's judgments on this period to his own: see, for example, his sympathetic remarks on Malynes (pp. 344–45). Readers should note, however, that the chapter on “The ‘Mercantilist’ Literature” is apparently one which Schumpeter would have revised had he lived to complete the work (Editor's Appendix, p. 1185)Google Scholar.

13 Malynes, G., Lex Mcrcatoria (3rd ed., London, 1686), p. 65;Google ScholarMaintenance of Free Trade (London, 1622), pp. 22 and 45–46;Google ScholarA Treatise of the Cancer of England's Commonwealth (London, 1601), pp. 11–12 and 53-55. Dr. Wu doubts whether Malynes' assumption of an inelastic demand for exports was wholly consistent, but his view seems to me grounded on a misinterpretation. In any case, that assumption was clearly more fundamental to his system of thought than its opposite. In one passage, Malynes went some way to meet critics of his assumption (Treatise of the Cancer, pp. 117–18)Google Scholar.

14 Gould, J. D., “The Trade Depression of the Early 1620's,” loc. cit.Google Scholar

15 Theoretically, of course, the general rise of prices would not have been incompatible with stable or even falling prices in the cloth industry, had the expansion of output in the latter been accompanied by a more than proportionate injection of capital and the adoption of more productive methods. In practice, though we should not underestimate the social and economic significance of the well-known capitalist figures of the industry, it would probably be true to say that the increase of output was achieved in the main by using more factors of production, and not by increasing productivity. It is doubtful whether the large-scale clothiers used in general more productive methods, except that possibly they achieved some exteraal economies. There was of course at this period strong opposition, and it had Government sympathy, to improved methods of a labor-saving character [see, for example, the outcry against a “newe devise of a loome for many peeces at once] (PRO S.P. 14/81/56 and 14/121/155), and see Fisher, F. J., “London's Export Trade in the Early Seventeenth Century,” Economic History Review, Second Series, Vol. III (1950), No. 3]Google Scholar.

16 BM Add. MSS, 34,324, fos. 171-72.

17 , Mun, England's Treasure, pp. 17 ff.Google Scholar

18 Ibid., pp. 43-44.

19 PRO S.P. 16/44/38.

20 PRO S.P. 16/155/53; BM Hargrave MSS. 311, fo. 38; , Misselden, Free Trade; or, the Meanes to make trade florish (London, 1622), p. 28Google Scholar.

21 , Angell, Theory of International Prices, pp. 211 ff.Google Scholar

22 See “The Date of -England's Treasure by Varraign Trade,” pp. 160–61, this issue.