The Mercantile System

24 August 2010


Anyone with a passing familiarity with the history of economics will recognize the term “mercantilism” as an ill-defined doctrine of the early modern period. Lionel Robbins in his masterful lectures A History of Economic Thought, said of mercantilism, “…the very meaning of the word ‘mercantilism’ is the subject of learned debate.” (p. 46) I will not here attempt to enter that debate, but I simply want to borrow the term (to exapt it, as it were) in order to use it as a convenient label to identify a transition between periods of integral history, what in The Next Axial Age I called an intra-civilizational axis.

I will use the term “mercantile” in a much wider sense than that typically employed in its economic sense, and although I don’t feel any need to justify my exaptation of the term I will, in this connection, mention the interesting definition of mercantilism given by Max Weber in his General Economic History, which is concerned at some length with economic structures of the early modern period. There Weber offers a forthright definition of what is otherwise a polysematic and amorphous term, and does so in political terms (or, at least, terms that allow us to equate the political and the economic):

“The essence of mercantilism consists in carrying the point of view of capitalistic industry into politics; the state is handled as if it consisted exclusively of capitalistic entrepreneurs. External economic policy rests on the principle of taking every advantage of the opponent, importing at the lowest price and selling much higher. The purpose is to strengthen the hand of the government in its external relations. Hence mercantilism signifies the development of the state as a political power, which is to be done directly by increasing the tax paying power of the population.”

Max Weber, General Economic History, translated by Frank H. Knight, Collier Books, NY, NY, 1961, p. 255-256

I will not further discuss this definition of a term usually simplified as an argument for a favorable balance of trade that forbids the export of gold, except to point out its more sophisticated character that rightly sees economic and political structures whole. From this we see what is possible in terms of an extended sense of “mercantilism,” and I will be using “mercantilism” in an extended sense in what follows.

Several comments by Christopher Thompson on my The World Turned Right Side Up called attention to the inadequacy of my calling early modern England an agricultural society. These criticisms were just, and caused me to think about the matter. Obviously, early modern England was no exemplar of pure agriculturalism, though it still falls generally within the agricultural paradigm in so far as it had not yet made the transition to an industrial society.

Also, I have recently been listening to Kenneth Bartlett’s lectures for The Teaching Company concerning The Italian Renaissance. These are a wonderful and sophisticated series of lectures that I strongly recommend. Since I got them from the library as they were available, I ended up listening to them in reverse order, and have only now finished the first set of lectures, in which he describes some of the details of the economics and governance of the Republic of Florence. Upon listening to this I realized that the Republic of Florence during its efflorescence also presents difficulties in terms of classifying it under the agricultural paradigm. Further reflection made me think of the proto-industrial cities of Flanders during the later Middle Ages (which I mentioned in The Division of Labor) which present similar difficulties.

The flag of the Medici dynasty, who ruled in Florence during the greatest period of the Republic of Florence.

But these are difficulties that can be adequately met, I believe. From the perspective of the longue durée a transitional period can last hundreds of years. When the periods of the longue durée stretch into thousands of years (as with the primary divisions of integral history) extended transitional periods are to be expected, and they can be studied in their own right and on their own terms. The intra-civilizational axis between agriculturalism and industrialism constitutes just such a period, and I will call this period (especially those instances that best exemplify interesting forms of transition) the mercantile system. Thus the three examples I cited above — early modern England, renaissance Florence, and late medieval Flanders — are instances of the mercantile system as I have here characterized it.

A mercantile political and economic system can emerge as agriculturalism matures into something beyond agriculturalism but which cannot yet make the transition to a fully industrialized economy (for any number of reasons), or when an industrializing society stalls in its development and enters an extended period of partial industrialization that fails to complete that development. These mercantile political and economic systems constitute various points on a continuum between agriculturalism and industrialism, and can become extended transitional periods (perhaps stretching to hundreds of years) if the process of industrialization stalls.

If we quantify integral history as stage 0.0 prior to the emergence of anatomically modern human beings, the nomadic integral period as stage 1.0, the agricultural integral period as stage 2.0, the industrial integral period as stage 3.0, and extraterrestrialization as stage 4.0, we can quantify the first integral shift as stages 0.1, 0.2, 0.3, …, the second integral shift as 1.1, 1.2, 1.3, …, and so forth. Given this quantification, mercantile systems are stages 2.12.9 in the integral shift from agriculturalism to industrialism.

The above quantification can be extrapolated to any level of detail, so that beyond stage 2.9 we can postulate stages 2.91, 2.911, and so on, ad infinitum, for the finest of fine-grained accounts. The problem with this elaborate schema is that there is no single, quantifiable factor by which we can establish a metric for the either the decline of institutions of the agricultural paradigm or the emergence of institutions of the industrial paradigm. There will, of course, be several factors operating in parallel, some specific to agriculturalism’s decline, some specific to industrialism’s emergence, some specific to where to two paradigms interact in the mercantile system, and yet some factors that cover all of these stages.

Though these transitional stages are transitional between well-defined and longer periods, as we noted above they can last for hundreds of years and can be studied on their own terms (though the finer-grained accounts can pass on to any level of temporary detail). The longer transitional stages are also unique periods of history with their own properties. I will try to examine some of these properties in future posts. For the moment, this is my first attempt at a sketch at offering a greater articulation of the periodization of integral history, and in this sense marks a further development on my attempt to make good my effort to “identify the major formations of social paradigms within agricultural civilization and show how these formations evolved,” which I mentioned at the end of The Agricultural Paradigm.

Hopefully, more will follow.

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3 Responses to “The Mercantile System”

  1. Christopher Thompson said

    My point was that England was not a peasant society in the early modern period. It was certainly predominantly an agricultural one even in 1700.

    • geopolicraticus said

      Thanks for the clarification.

      Do you have a ready-to-hand definition of peasant or peasant society? I was using the latter term intuitively.

      Best wishes,


  2. Christopher Thompson said

    If one writes about thirteenth or fourteenth-century England, the meaning of this term is clear. But sixteenth and seventeenth-century England were societies in which differentiation between groups at the lower end of society in rural and urban areas had proceeded well beyond the point at which references to a “peasant society” might apply. If you look at the book by Barry Coward that I cited in an earler comment, you will find some helpful guidance there.

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