Question 1: What Economic Problems Were The Mercantilists In ✓ Solved

Question 1what Economic Problems Were The Mercantilists Interested In

Question 1what Economic Problems Were The Mercantilists Interested In

QUESTION 1 What economic problems were the mercantilists interested in solving and for whose benefit? How do those compare with the problems addressed by the Scholastics? Was foreign trade a “win-win” proposition for both nations involved in exchange? QUESTION 2 1. Why did the early mercantilists oppose the exporting of gold bullion? What was Mun’s argument in favor of it? QUESTION 3 1. How did Mandiville's argue that that self love (in the form of greed) is what caused a society to flourish? Can you find a problem with this argument? What was Adam Smith's reaction to Mandiville's ideas? QUESTION 4 1. According to Sedlacek, how is Smith’s concept of self interest consistent with his previous argument that “sympathy” is the foundation of a moral society

Sample Paper For Above instruction

Introduction

The economic landscape of the 16th and 17th centuries was predominantly shaped by mercantilist thought, which focused on accumulating wealth through trade surpluses and national economic strength. Contrasting this with scholastic economic ideas reveals different priorities and approaches. Additionally, the debate over gold bullion exports highlights practical economic policies of the period. Philosophical perspectives, such as Mandiville’s and Adam Smith’s, offer diverse views on the motivations behind economic activity and social harmony.

Mercantilist Economic Problems and Their Beneficiaries

Mercantilists mainly aimed to enhance national wealth and power, specifically through accumulation of precious metals, establishing favorable trade balances, and fostering domestic industries. Their primary beneficiaries were the state and merchant classes, as policies were designed to enrich the nation and empower monarchs and trading elites. Unlike the scholastics, who emphasized moral considerations and charity in economic dealings, mercantilists prioritized national self-sufficiency and competitive advantage in international trade.

The mercantilist approach often promoted exports and discouraged imports, especially gold and silver, to maintain monetary reserves. This focus on bullion reserves aimed to strengthen royal authority and national prestige, often at the expense of balanced or mutually beneficial exchange. Therefore, for mercantilists, economic problems centered around ensuring resource flow into the country for strategic and wealth accumulation purposes.

Comparison with Scholastic Economic Thought

Scholastics, influenced by Christian ethical teachings, regarded economic activity as a means to serve moral ends, emphasizing justice, charity, and fair dealing. They scrutinized the moral implications of economic practices, promoting generosity and social harmony. In contrast, mercantilists were primarily concerned with safeguarding national interests and increasing wealth, often disregarding moral considerations in favor of economic dominance.

While scholastics viewed economic exchanges as inherently moral pursuits aligned with divine law, mercantilists saw them as strategic tools for power and wealth accumulation. This fundamental difference shaped their respective proposed solutions to economic problems.

Foreign Trade as a “Win-Win” Proposition

Mercantilists generally believed that trade was not a genuine win-win for both nations, but rather a competitive contest where one nation’s gain was another’s loss. They emphasized the importance of maximizing exports and minimizing imports to achieve a trade surplus, thus increasing national wealth. This zero-sum view limited the idea of mutually beneficial trade, contrasting with later economic theories that advocate for the advantages of free trade and comparative advantage.

According to this perspective, foreign trade could only be advantageous if it favored the national interest, often at the expense of trading partners, who were viewed more as competitors rather than collaborators.

The Opposition to Exporting Gold Bullion and Mun’s Argument

Early mercantilists opposed exporting gold bullion because they believed it reduced national reserves of precious metals, thereby weakening the economy and diminishing the country’s wealth. Gold bullion was viewed as a key indicator of economic strength and a source of monetary stability. Exporting it was seen as detrimental to economic independence and royal power.

Louis de Neville, known as Mun, challenged this view, arguing that exporting gold could be beneficial under certain circumstances. Mun believed that if gold exports financed productive investments or facilitated necessary imports that contributed to national prosperity, then such exports could be justified or even advantageous. Mun’s argument suggested a more nuanced understanding of gold flow, emphasizing the importance of economic growth over strict accumulation.

Mandiville’s View on Self-Love and Society’s Flourishing

Mandiville argued that self-love, expressed through greed, was fundamental to societal progress. He believed that individuals pursuing their own interests inadvertently contributed to economic growth and societal welfare. This idea echoes the concept that personal pursuit of gain can result in a collective benefit, as individuals seek to improve their circumstances.

A potential problem with Mandiville's argument is that unchecked greed could lead to social inequality, exploitation, and ethical breaches, which might undermine social cohesion. Moreover, without moral restraint, self-interest could result in destructive competition rather than sustainable prosperity.

Adam Smith reacted critically to Mandiville's ideas, emphasizing that while self-interest drives economic activity, it must be tempered by moral sentiments such as sympathy and justice to create a balanced and harmonious society.

Smith’s Concept of Self-Interest and Sympathy

According to Sedlacek, Adam Smith’s notion of self-interest is compatible with his assertion that sympathy forms the moral foundation of society. Smith argued that individuals act out of self-interest but are also capable of sympathy, which allows them to understand and share the feelings of others. This duality ensures that economic pursuits do not occur in moral vacuum but are embedded within a framework of social empathy and justice, fostering societal harmony.

Smith’s "invisible hand" concept demonstrates how self-interest can lead to positive social outcomes when aligned with moral considerations like sympathy. Personal pursuit of wealth, combined with an innate capacity for social understanding, promotes both economic efficiency and moral virtue.

Conclusion

The economic problems targeted by mercantilists differed significantly from those of the scholastics, with the former emphasizing national wealth accumulation and the latter moral considerations. The debate over gold exports reflects the evolving understanding of resource management. Philosophers like Mandiville and Smith offered contrasting views on the role of self-interest, revealing complex insights into economic and social dynamics. Smith’s integration of self-interest and sympathy highlights the importance of moral foundations in economic systems and social cohesion.

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