Unfair trade, mercantilism and economic development. Great Britain: 1660--1800

Date of Completion

January 2002

Keywords

History, European|Economics, History

Degree

Ph.D.

Abstract

This dissertation argues that English mercantilist theory has been inadequately credited for its growth and development elements by both mainstream and rent-seeking interpreters of mercantilism. Modern economic theory examines mercantilist arguments and policies using static analysis. In contrast, this dissertation examines expected and actual outcomes of mercantilist thought and policy. ^ Chapter one reevaluates mercantilist literature to illustrate that elements of their theories, in many cases, parallel the ideas of modern development and growth theorists. To illustrate this argument, and to create a context for analyzing mercantilist goals, the concept of Myrdal-Porter growth is developed, based on the development theories of Gunnar Myrdal and Michael Porter. ^ Chapter two explores the reasons behind the passage of the chief mercantilists act of the period, the 1660 Navigation Act. Recent theorists have argued, following the rent-seeking interpretation of mercantilism, that the act was an example of merchant rent seeking. I argue, based on strong circumstantial evidence, that merchants lacked the political strength to push through this legislation. Based on the scant evidence available, I argue that Jacob Viner's “Power and Plenty” interpretation of mercantilist thought and policy provide the best explanation for the passage of the legislation. ^ Chapter three illustrates the results of a Myrdal-Porter process in action through analyzing the impact of trade between the Chesapeake region and West-Central Scotland. The trade pattern that emerged was one that mercantilists argued was most beneficial to Scotland. Specifically, Scotland produced and sold manufactured goods in return for tobacco from the Chesapeake region. I argue that a Myrdal-Porter process took place. Over time, western Scotland experienced strong economic growth and development while the Chesapeake region stagnated, despite having the most valuable export crop, tobacco. ^ All three chapters, taken together, provide support for the argument that both mercantilist thought and policy were far more sophisticated than generally given credit for. Furthermore, they provide evidence that strategic trade policy can have beneficial effects if it can allow one nation to capture the developmental impacts of a trade. Finally, the dissertation provides a dynamic counter-argument to trade based upon comparative advantage. ^

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