Trade and Nation: How Companies and Politics Reshaped Economic Thought is a fascinating romp through the history of economics in Early Modern England. If you like money, history, and/or a combination of the two, you should pick it up.
Through excellent historical storytelling and intelligent sociological insight, author Emily Erickson has added a new work of great value to the historiography. With the help of new fangled machine learning technology, Erickson has successfully reimagined a problem as old as the field of economic history itself: when and how did classic, empirical economics begin?
Setting the Scene
While Trade and Nation examines events of the seventeenth-century, Erickson beings by explaining the history of European economic thought.
Throughout the Medieval period, thinkers who examined problems of economics did so from a decidedly theological standpoint. The reason for their inquires was not to find the mathematical underpinnings of trade, but rather to discuss its moral implications. As Erickson put it:
“They chastised users and expounded upon the principles of fair exchange and just price. They were concerned about greed and corruption. They were worried the rick and powerful might take advantage of the poor. And behind all these concerts lay the mora imperative of salvation. Money was considered a necessary evil, and medieval scholars most often were devising waist to circumscribe its corrupting effects on humanity.” (2)
After her introduction to medieval thought, Erickson sets up the rest of the book by describing the shift that occurred in the seventeenth-century. For some reason, economic thought drifted away from concern about the individual to concern about the nation, and A LOT more works were published on matters of the economy, specifically in England.
The Actors Take the Stage
As in other works of historical sociology that seek to better understand the history of socio-economic interactions, Trade and Nation examines the men working as merchants. Unlike other works, however, Erickson puts intellectuals at center stage. Though the seventeenth-century produced some of Europe’s greatest thinkers, most of the men under discussion in this work have not gone down in the annals of great philosophers (with a few notable exceptions, the most obvious being John Locke and Adam Smith).
Why? What eventually became classical economics began as a series of pamphlets semi-unabashadley advertising policies that benefited particular companies. For many merchants, the ability to write for a wide audience gave them ability to essentially market their company and the way it conducted trade. A perfect example of this was Thomas Mum. Through his many writings, Mum became a central architect of the theory of mercantilism, a theory that dominated Early Modern economic thought. For example, he argued that “the bullion used by the English East India Company was not lost but instead transmuted into goods.” (70) But, as Erickson points out, Mun was an important member of the East India Company. Thus, Mun’s work should be read as “a principled defense of his own company’s practices” that evolved into “an early principle of economic theory.”
As with all actors, even the historical kind, there was drama. The blatantly advertorial nature of many of the pamphlets published did not go unnoticed or uncalled out. Authors from other companies often launched attacks on the theories put forth by their competitors in trade, or hired others to do it for them; only adding to the sheer volume of pamphlets produced.
Scooching Closer to the Seat of Power
Undoubtedly, the seventeenth-century changed the way the western world viewed the exchange of goods. The real crux of the matter for Erickson is why these texts were authored.
In this era of English history, merchants lay outside of the seat of power. This was frustrating as the crown and parliament could make decisions that effected these merchants and the companies they built. The companies to whom the government gave monopolies or the foreign policies they pursued could, literally, change the fortunes of many. The merchant class wanted in on this action.
Through their pamphlets, early economic writers hoped to bridge the gap that existed between the machinery of the state and that of the trading companies. By doing so, they could help inform trading policies, petition for their companies to receive monopolies or other benefits from the crown, and overall better their standing and that of their company.
As Erickson put it: “Courtship, dance, negotiation, or contest – no matter how it is characterized, the interaction between the state and the merchants was central to the development of the new literature. The transformation and proliferation of economic thought arose from attempts to bridge the gap between the state and commercial spheres.” (235)
Closing Thoughts on Trade and Nation
I highly enjoyed reading this book. As someone who has a background in history, but not historical sociology (let along the machine learning models used during the sociological analysis) I found some portions of the book challenging. But don’t let this deter you – you’ll come out the other side a smarter person for it.
This books is well worth the read.
If you’d like to check it out for yourself, head over to Columbia University Press.
Note: I was not paid or reimbursed in any way by Columbia University Press for this review; all thoughts are my own.