New ``commercial nations'' took
their place and gold and silver were no longer a curiosity.
Through Spain and Portugal and Holland and England,
precious metals began to find their way to Europe The sixteenth
century had its own writers on the subject of political
economy and they evolved a theory of national wealth which
seemed to them entirely sound and of the greatest possible
benefit to their respective countries. They reasoned that both
gold and silver were actual wealth. Therefore they believed
that the country with the largest supply of actual cash in the
vaults of its treasury and its banks was at the same time the
richest country. And since money meant armies, it followed
that the richest country was also the most powerful and could
rule the rest of the world.
We call this system the ``mercantile system,'' and it was
accepted with the same unquestioning faith with which the
early Christians believed in Miracles and many of the present-
day American business men believe in the Tariff. In practice,
the Mercantile system worked out as follows: To get the
largest surplus of precious metals a country must have a
favourable balance of export trade. If you can export more to
your neighbour than he exports to your own country, he will
owe you money and will be obliged to send you some of his
gold. Hence you gain and he loses. As a result of this creed,
the economic program of almost every seventeenth century
state was as follows:
1.
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