The Freeman 1972 - The Ludwig von Mises Institute

1972 THE MERCANTILE IMPASSE 49send specie to England, discouragedfrom receiving specie fromthat country, and discouragedfrom developing markets in Americawhich could serve either Englandor other countries. Therewere, however, many unwantedside effects of these policies. Theyare commonly referred to as theinner contradictions of mercantilism.The Road to WarThe most dire result of mercantilismwas war. Indeed, somebelieve that mercantilism did notso much lead to war as war ledto mercantilism. One writer saysthat the "needs of constant warfare,especially its costs, had encouragedevery power to developand marshall its resources, attemptingto become self-sufficient,especially in the sinews of war.. . . This economic nationalism,generally described as m,ercantilism,is less a theory than aweapon - the use of economicmeans to serve political ends."9There is no doubt that mercantilistmethods were used sometimesin warfare, but the usual causalrelation is the other way around.Mercantilism ranges governmentpower behind the commercial activitiesof a nation, uses govern-9 Engen Weber, A Modern History ofEurope (New York: Norton, 1971), pp.145-46.ment power to support the merchantsof a nation against thoseof other nations, prohibits tradeactivities of '. foreigners in orderto give advantages to native tradesmen.In order to support or protecttheir tradesmen, other nations.retaliated with similar restrictionsand sought colonies which wouldbe protected trade areas for theirpeople. If tr~de is free, competitionis peaceful, but mercantilismshifts the contest into the-, realmof governmental power. When governmentscontest for advantage inthis way they are moving in thedirection of the ultimate recourse-war.Such were the results of mercantilismin the seventeenth andeighteenth centuries. War followedupon war with monotonous regularityas naval and colonial powerscontested with one anotherfor dominance and advantages.The wars between the British andDutch in the, mid-seventeenth centurywere clearly mercantile inorigin'and character. Nettels notesthat the Navigation Act of 1651"precipitated the First Anglo­Dutch War of 1652-54."10 Further,4e says that the "acts of 1660-63threatened to exclude the Dutchcompletely from the English coloniesand consequently new fuelwas added to the old rivalry. In1664 occurred the Second Anglo-10 Nettels, Ope cit., p. 281.