Simultaneously with this opposition, the theory of the international balance of trade underwent important refinements, a new and improved edition, so to speak, of old Colbertism.[A2-3-1] Each school is wont to estimate the favorableness of the balance according to the preponderance of that which they consider the most important element in a nation's economy. Thus the population-enthusiasts, after the middle of the 18th century, distinguished the "balance of advantage" from the "merely numerical:" the former is favorable to the country which, by means of its exports, employs and feeds the greatest number of men; the latter to the country with a preponderating importation of money. And they call the former much more important than the latter.[A2-3-2] The great advance which this view constitutes over the old system lies chiefly in two points: that the number and employment of men are evidently, so far as the whole national economy and national life are concerned, a much more important element than the quantity of money in a country; and further, that now, at least, the possibility of a simultaneous profit on both sides is admitted.[A2-3-3] The best writer in this direction, Jos. Tucker, is among the great-grand-parents of the Manchester theory of to-day!
A further advance was made by men who introduced the higher notions of nationality and of the stages of civilization into the theory of international trade. Thus, at about the same time, the socialistic J. G. Fichte, with his shut-in commercial state, and the romantic reactionary, Ad. Müller, with his organic whole of national economy.[A2-3-4] Finally, Fr. List,[A2-3-5] with his "National system of Political Economy," and his severe subordination of the mere "agricultural state" to the "agricultural, manufacturing and commercial state," acknowledges the favorableness of the balance in the nation which by means of the exportation of manufactured articles, the importation of the means of subsistence and of articles to be manufactured, demonstrates and promotes its higher stage of civilization.[A2-3-6]
[A2-3-1] Compare Mengotti: Il Colbertismo (prize essay of the Georgofili at Florence), 1791. If, with H. Leo, we were to designate the whole period from the issue of the struggles of the Reformation to the preparations of the French Revolution as the "age of the mercantile system," Colbert would be a very appropriate type of it.
[A2-3-2] Compare § 254. Here belong Forbonnais, Necker, Tucker (Important Questions, IV, 11; V, 5; VII, 4; VIII, 5. Four Tracts, 1774, I, p. 36); Justi in his middle period (Roscher, Gesch. der N. O. in Deutschland, I, 451 ff.); but especially Sonnenfels (politische Abhandlungen, 1777, Nr. 1), who sees the best sign of a favorable balance in the increase of population. (Grundsätze, II, 333.) When Austria, for 2,500,000, purchases diamonds of Portugal, and sells Portugal linen to the amount of 2,000,000, it has the numerical balance against it, but obtains the "balance of advantage." (II, 329 seq.) With an admixture of physiocratism, this doctrine appears in Cantillon, Nature du Commerce, 1755, p. 298 ff.; with an admixture of free trade, in Büsch, Geldumlanf, V, 12.
[A2-3-3] Justi, Chimäre des Gleichgewichts der Handlung und Schiffahrt (1759), supposes a gain on both sides in all commerce between nations. Hence, no nation can attain to a flourishing trade in any way except it be to the advantage of those with which it has to do. (p. 14 ff., 43.) Here, it may be presumed, Hume's Essay, On the Jealousy of Trade, exercised an influence. Sonnenfels distinguishes, in foreign trade, five grades of advantage: 1, most advantageous, when finished commodities are exported and cash money is imported; 2, when finished commodities are exchanged for raw materials; 3, finished commodities against finished commodities; 4, raw material against raw material; 5, raw material against finished commodities. (Grundsätze, II, 202.)
[A2-3-4] It is as necessary that every nation should constitute a separate commercial body as that it should be a separate political and juridical body. The person who asks: why should I not have commodities in all the perfection in which they are made in foreign countries? might as well ask: why am I not completely a foreigner? (Fichte, Geschloss. Handelstaat, 1800: Werke, III, 476, 411.) Ad. Müller compares universal freedom of trade to a universal empire, which will ever remain a chimera. (Elemente der Staatskunst, 1809, I, 283.)
[A2-3-5] List (Werke, II, 31 ff.) had, after 1818, recognized that a passive balance for whole nations was possible, if they were not able to cover their wants, supplied from abroad and then consumed, by their income, but were obliged to make inroads on their national capital.
[A2-3-6] Ch. Ganilh, who expects a real enrichment of a nation only from foreign trade (Dictionnaire de l'E. P., 1826, p. 131), ascribes the most favorable balance to the nation that exchanges dear labor against cheap; that is, principally to a nation of tradesmen as contradistinguished from a nation of agriculturists. (Theorie de l'E. P., 1822, II, 239 ff.)
SECTION IV.
PARTIAL TRUTH OF THE MERCANTILE SYSTEM.