Tuesday, November 30, 2004

Here's an interesting bit from

A Discourse of Trade by Barbon, Nicholas (1640-1698). First published: 1690.

|62|* Of the Chief Causes that Promote TRADE.
THE Chief Causes that Promote Trade, (not to mention Good Government, Peace, and Scituation, with other Advantages) are Industry in the Poor, and Liberality in the Rich: Liberality, is the free Usage of all those things that are made by the Industry of the Poor, for the Use of the Body and Mind; It Relates chiefly to Man's self, but doth not hinder him from being Liberal to others.

The Two Extreams to this Vertue, are Prodigality and Covetousness: Prodigality is a Vice that is prejudicial to the Man, but not to Trade; It is living a pace, and spending that in a Year, that should last all his |63| Life: Covetousness is a Vice, prejudicial both to Man & Trade; It starves the Man, and breaks the Trader; and by the same way the Covetous Man thinks he grows rich, he grows poor; for by not consuming the Goods that are provided for Man's Use, there ariseth a dead Stock, called Plenty, and the Value of those Goods fall, and the Covetous Man's Estates, whether in Land, or Mony, become less worth: And a Conspiracy of the Rich Men to be Covetous, and not spend, would be as dangerous to a Trading State, as a Forreign War; for though they themselves get nothing by their Covetousness, nor grow the Richer, yet they would make the Nation poor, and the Government great Losers in the Customs and Excises that ariseth from Expence. |64|

The Library of Economics and Liberty is full of these old treatises. Here is their introduction to this one and another similar one. Hmm. I guess I'll have to exerpt it, it won't be on their front page forever.

Ah, it's short:
Featured Books
A Discourse of Trade, by Nicholas Barbon. (1690)
Discourses Upon Trade, by Sir Dudley North. (1691)

These two early works in economics illustrate how well the economics of international trade was understood even in the 17th century. Not only did North and Barbon pre-date Cantillon, Hume, and Smith, but they are worth revisiting today for their delightful, independent insights on the foundations of free trade.

Although Mercantilism persisted until Adam Smith's Wealth of Nations (and continues today in political debates about trade), it was not an idea held lockstep by everyone pre-Smith. Consider this quote from North:

No Man is richer for having his Estate all in Money, Plate, &c. lying by him, but on the contrary, he is for that reason the poorer. (Essay 2, par. 2.5.)

North argued strongly that money is not the same as wealth; and also that encouraging exports merely to accumulate money is not the source of economic well-being, neither for individuals nor for nations. North is mentioned in historical context in Lalor's Cyclopedia, in the article on the Physiocrats.

From Barbon, consider the chapters illustrating benefits of free trade, the ease of slipping into trade wars, and money versus credit. Barbon's book has almost the organization of a modern economics textbook: the definition of goods, real versus nominal values, exchange, trade, applications!

The archaic spellings of these two short books belie their modern writing styles. Both are excellent reminders of how economists struggle to address age-old politically-motivated arguments.

I've found it very easy to read. It's pretty simple, jargon-free English.

There were a few Latin phrases, which I just plugged into Google and usually the translations were right up front. For instance, "'valet quantum vendi potest' - A thing is worth only what someone else will pay for it." Barbon is showing the antiquity of this economic principle by using the Latin. Interesting how close people were to the concepts of subjective value and marginal utility for thousands of years without truly discovering them.

It's kind of interesting to me, as a half-a***d linguist, to see how much English had changed from the time of the publication of the King James Bible in 1605 (if I remember right) until 1690.

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