Abstract
Abstract:
This article aims to realise the concept of commerce on market economy in Sir James Steuartʼs An Inquiry into the Principles of Political Economy.
Studies concerning the social function of commerce remain limited, whereas commerce has performed an essential role for the functioning of the market. Sir James Steuart, known as a mercantilist, focused on importance of commercial activities and theorised on it in early times. I shall read his theory and offer an explanation of the idea and function of commerce in it.
According to Steuartʼs Inquiry, Book II, the main concept of commerce is not an inter-mediary role between producers and consumers but a trade among merchants. Merchantsʼ be-havioural principle is rational, unlike the limited rationality of producers and consumers. Trade among merchants creates the proper market price through the operation of ʻdouble competitionʼ and provides market information to non-merchants, producers or consumers, by the market price determined by it. Moreover, through the emergence the current prices in trade, commerce promotes the use of money in consumersʼ hands.
Steuartʼs theory of commerce provides an explanation of the reason for the necessity of merchants and commerce in market economy. His theory of the principle of commerce should be considered as an effective economic theory focusing on the significance of com-merce in modern economy.
JEL classification numbers: B 11, B 31, D 49.
