economics: Mercantilism, the Physiocrats, and Adam Smith
Mercantilism, the Physiocrats, and Adam Smith
In the transition to modern times (16th–18th cent.), European overseas expansion led to the growth of commerce and the economic policies of mercantilism, a system that inspired a substantial body of literature on the subject of economic nationalism. In the late 17th and the 18th cents., protest against the governmental regulation characteristic of mercantilism was voiced, especially by the physiocrats. That group advocated laissez-faire, arguing that business should follow freely the “natural laws” of economics without government interference. They regarded agriculture as the sole productive economic activity and encouraged the improvement of cultivation. Because they considered land to be the sole source of wealth, they urged the adoption of a tax on land as the only economically justifiable tax.
In the 18th cent. important work in economics was done by the Scottish philosopher David Hume. His analysis of the natural advantages that some nations enjoy in the cultivation of certain products and his observations on the flow of commerce became the basis for the theory of international trade. The most important work of the 18th cent., however, was Adam Smith's
Sections in this article:
- Since World War II
- Further Evolution of Classical Economics
- The Socialists and Marx
- Malthus, Ricardo, and Mill
- Mercantilism, the Physiocrats, and Adam Smith
- Ancient and Medieval Periods
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2023, Columbia University Press. All rights reserved.
See more Encyclopedia articles on: Economics: Terms and Concepts