The History of Economic Thought
Online ISSN : 1884-7358
Print ISSN : 1880-3164
ISSN-L : 1880-3164
Economic Thought of the British Mercantile Empire in the 18th Century
Jiro Kumagai
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JOURNALS OPEN ACCESS

2020 Volume 61 Issue 2 Pages 1-21

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Abstract

Contemporary British historians are almost unanimous in positing a close relation between the growth of the British economy and the colonial empire after the Glorious Revolution. The formation of the British colonial empire concurrently led to a new turn in mercantile economic thought. During the late 17th and early 18th centuries, the rationale for the concept and significance of the advantages of foreign trade shifted from the “balance of trade” theory to the “balance of labor” or “foreign-paid incomes” one. L. Magnusson, a leading contemporary scholar on mercantilism, attributes the emergence of the latter theory partly to the advent of a new science of trade,2 but he hardly mentions the relation between the theory and the remarkable development of colonial empire trade. Most mercantilists employing this theory, however, assiduously regarded British colonies and dependencies as growing and promising markets for the development of various industries as well as the increase in labor employment in Britain. This paper attempts to illustrate the importance of the theory in the context of both an emerging transatlantic colonial empire and an awareness of the economic crisis of Britain in relation to European competitors. This paper mainly deals with the arguments of Daniel Defoe, Malachy Postlethwayt, Mathew Decker, and Josiah Tucker. By examining their discourses, it shows conclusively that in the mid- and late 18th century, there was a typical mercantile imperialist (Postlethwayt) at one extreme and a so-called free trade imperialist( Tucker) on the other. However, the extreme-position holders shared the view that the colonies and dependencies were indispensable for the development of the British economy and the more extensive circulation of its trade.

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