[265-3] Compare my discourse on the relation of Political Economy to classic antiquity in the transactions of the royal Saxon Academy of Sciences, May, 1849; also many excellent remarks in Knies, Polit. Oekonomie. Chr. J. Kraus, has zealously discussed the question whether the development of humanity turns about eternally in a circle, or whether it forever advances to a progressively better future. He strongly advocates the latter view, and on grounds which appeal both to the head and to the heart. (Vermischte Schriften, III, 146 ff.; IV, 277 ff.)
APPENDIX II.
INTERNATIONAL TRADE.
INTERNATIONAL TRADE.
SECTION I.
THE MERCANTILE SYSTEM.
The principal peculiarities of the so-called mercantile system depend on a five-fold over-estimation: of the density of population, of the quantity of money, of foreign commerce, of the industries concerned with the transformation of materials (Verarbeitungsgewerbe), and of the guardianship of the state over private industry.[A2-1-1] All these tendencies are very intelligible, and almost self-evident, in a sovereign city-economy (Stadtwirthschaft) as opposed to the governed and worked-out (ausgebeuteten)[TN 122] country districts; as they are found even in the city-republics of later medieval times. But they are also natural in whole national economies, during that period of youthful and rapid growth in which the increasing density of population continues still, for a long time, to be really only a spur and an assistance, and in which, therefore, there can be no expression of anxiety concerning over-population; in which the new and rapidly growing division of labor draws attention particularly to the market-side of all businesses and to the circulation of goods; in which the progress from trade by barter to trade by money necessarily makes the volume of money needed even relatively greater; but especially are they natural in that world-period in which foreign trade suddenly increased enormously in consequence of the discovery of the whole earth; when the citizen classes of the people assumed immense importance as compared with the landed and clerical aristocracy, and when, in the internal affairs of state absolute monarchy, and in foreign politics, the system of equilibrium, through the instrumentality of the great compact-formation of states prevailed.
All these tendencies are most intimately connected with one another. If precious metal-money be really the essence of national wealth,[A2-1-2] a people who possess no gold and silver mines themselves;[A2-1-3] for instance, Italy, France and England, can become richer only through foreign trade,[A2-1-4] by means of a favorable balance produced by a preponderance of their exports over their imports; and only inasmuch as this excess is balanced by a payment in money from foreign parts. And so, too, in foreign trade, one nation can gain only what another nation has lost.[A2-1-5] Gain is promoted not only by direct obstacles placed in the way of the exportation of the precious metals, but still more by the value-enhancement of the exported commodities, and by the value-diminution of the imported commodities.[A2-1-6] And as commodities which have undergone the process of transformation are, on an average, more valuable than raw materials, the state can best carry out this policy by import duties, import prohibitions, and export premiums on manufactured articles, as well as by export duties, export prohibitions and import premiums on raw materials.[A2-1-7] This is extremely necessary against those nations who are superior to others in culture, wealth, the cheapness of labor and capital; and hence the envy of the mercantilists was directed chiefly against Holland, and after Colbert's time also against France.[A2-1-8] Such commodities as are not at all adapted to the nature of a country, because of its climate, for instance, the nation should produce at least in colonies of its own, that it might, in this way, emancipate itself from foreign countries.[A2-1-9] As the clear distinction drawn to-day between money and capital has asserted itself only since Hume's time, the notion that prevailed for centuries, that much money, much trade and a large population mutually conditioned one another, was a very natural one.[A2-1-10]
The younger and more refined conception of the mercantile system is distinguished from the coarse Midas-believing one, by two tendencies especially:
A. By the more thorough consideration of the balance of trade and the consequent limitation of the traditional supposition, that the excess of exports over imports would be always made up in cash money.[A2-1-11]