Damaris Coffman, Professor at UCL, Craig Muldrew, a Cambridge economic historian, and Helen Paul from the University of Southampton delve into the ideology of mercantilism that shaped Europe between the 16th and 18th centuries. They discuss the drive for exports and the critique by Adam Smith highlighting the flaws in mercantilism. The conversation explores the interplay between mercantilism and colonialism, along with its lasting influence on modern economics and the persistent debates over trade policies and globalization.
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insights INSIGHT
Mercantilism and Zero-Sum Game
Mercantilism views trade as a zero-sum game, leading to trade wars and military conflict.
It incorrectly ignores the potential gains from trade and cooperation between nations.
insights INSIGHT
Zero-Sum Game Definition
Zero-sum game: one player's gain is another's loss. There are no overall gains from trade and therefore it's a very, shall we say, cynical worldview.
So if someone wins, for example, £100, someone else loses the same amount.
insights INSIGHT
Bullionism: A Simplistic View
Bullionism is the belief that a nation's wealth is solely its gold and silver reserves.
This view is simplistic because it ignores other forms of money and capital like bills of exchange.
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Published in 1776, 'The Wealth of Nations' is Adam Smith's magnum opus that laid the groundwork for modern economics. The book critiques mercantilist economic theories and introduces the concept of the 'invisible hand,' which describes how individual self-interest leads to societal benefit. It emphasizes the division of labor, the accumulation of capital, and the importance of free markets. Smith argues that a nation's wealth is not measured by its gold and silver reserves but by the stream of goods and services it produces. The book also outlines the core functions of government, such as maintaining defense, enforcing civil law, and promoting education, while advocating for limited government intervention in market activities.
Melvyn Bragg and guests discuss how, between the 16th and 18th centuries, Europe was dominated by an economic way of thinking called mercantilism. The key idea was that exports should be as high as possible and imports minimised.
For more than 300 years, almost every ruler and political thinker was a mercantilist. Eventually, economists including Adam Smith, in his ground-breaking work of 1776 The Wealth of Nations, declared that mercantilism was a flawed concept and it became discredited. However, a mercantilist economic approach can still be found in modern times and today’s politicians sometimes still use rhetoric related to mercantilism.
With
D’Maris Coffman
Professor in Economics and Finance of the Built Environment at University College London
Craig Muldrew
Professor of Social and Economic History at the University of Cambridge and a Member of Queens’ College
and
Helen Paul, Lecturer in Economics and Economic History at the University of Southampton.
In Our Time 
