Mason Gaffney is right to focus on the origins of the concept of mercantilism as well as the name.
In using a different name for the same, Mason cites Anne Krueger and Gordon Tullock on “rent-seeking” (through the special pleading of interest groups seeking protection).
A famous case in point is David Ricardo’s campaign for the abolition of the 19th century Corn Laws (of great relevance for the Brexit debate today). Following Adam Smith’s condemnation of mercantilism, Ricardo urged the protection of consumers’ rather than producers’ interests. Or, rather, in Ricardo’s view, that consumers should be protected against the interests of _landlords_. For farmers’ interests did not necessarily coincide with those of landlords because high food prices also meant high rents for _tenant_ farmers. For the social interest to prevail, and to reduce destructive taxes on earned incomes, Ricardo wanted the state to collect unearned rents instead. These were “the free gifts of nature”, as well as the result of taxpayer-funded rural and urban infrastructure; and increasing demand for land presses against a fixed supply.
Ricardo’s most enthusiastic follower was Henry George who, in Protection or Free Trade (1886), made a much broader argument than in the modern “rent-seeking” literature. For even with a complete abolition of tariffs, there would still be rent.
Indeed, even more than before. For liberalised trade increases productivity. Increased real incomes then increase demand for land, driving up rural and, especially, urban rents. If governments do not collect these, they must tax earned incomes instead. Ironically, the resulting adverse incentive effects and “deadweight losses” in turn depress rents. But the converse is also true, as the physiocrats understood.
That message is deeper than in modern “rent-seeking” literature: absent rent as the primary source of state revenue, “free trade” will not abolish privately captured rent; it will only redistribute it. And, in line with Henry George’s most famous book (1879), Progress and Poverty will continue to go hand in hand.
- Roger Sandilands



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From: Societies for the History of Economics [[log in to unmask]] on behalf of Mason Gaffney [[log in to unmask]]
Sent: Thursday, July 27, 2017 12:08 AM
To: [log in to unmask]
Subject: Re: [SHOE] who coined the term "mercantilism"

Dear Petur,
               Far be it from me, a confirmed and enthusiastic semanticist, to belittle the study of words and their evolution.  I tried to make that clear, but perhaps should have tried harder.
               Rather, in the thread on which I commented, it seemed to me the participants were so exclusively intent on word-chasing that they were neglecting the historical realities that earlier went by different names.  Schmoller, for example, uses the word routinely to describe policies dating from early clan and Gemeinde associations, through city-states and commercial leagues and many following stages, without apparently concerning himself with whether the 12th Century powers and merchants used the word.  In doing so he showed great insight, so it seems to me, that could be lost if we overlooked the similarities of concept when implemented under different names.
               You are right that the term  “rent-seeking” was coined for the academic literature centuries after the behavior was recognized, e.g. in criticisms of the appropriative doctrine in western water law (“First in time, first in right”).  The hazard in academe is the weakness to write and think as though “In the beginning was the Word … and The Word was God” (John 1:1).  And thus, by extension, Anne Krueger and Gordon Tullock discovered rent-seeking, instead of just giving it a new and catchy name.

Mason Gaffney

From: Societies for the History of Economics [mailto:[log in to unmask]] On Behalf Of Jonsson, Petur
Sent: Friday, July 21, 2017 6:39 AM
To: [log in to unmask]
Subject: Re: [SHOE] who coined the term "mercantilism"

Mason Gaffney wrote:

“This thread is of great linguistic importance, but … not to poop the party …  it is also important to note that sovereigns PRACTISED mercantilism for centuries before the term was coined.”

This is of course also true of all economic behavior. It existed before we came up with specific terms to describe it. People practiced entrepreneurship long before we started using the term entrepreneur; they also bought and sold things in markets long before we came up with the terminology we now use to describe transactions in markets; they also practiced rent seeking, etc., etc., etc.

The thing is, when we discuss economic thought, we are discussing observation followed by the conceptualization and formalization of analysis and discourse. That is what economic thought is all about. And, conceptualization it intricately tied to the vocabulary that we use to describe phenomena.

All the best

Petur O. Jonsson