This was the backdrop in which Adam Smith’s The Wealth of Nations was born in 1776. Thus, things like repressing wages, imperialism and slavery, and other similar things were encouraged to promote the nation, and especially those rulers. The government was a primary figure in this process.

The important thing for the mercantilists, though, was not the movement of resources, but the increase of power of their own nations versus others, and their respective rulers most of all. This has led to the notion, still popular today, that an export surplus is better than a surplus of imports (though, as discussed in earlier chapters, this is basically circumstantial).

The mercantilists were a group of 16th and 17th century writers who equated net positive inflow of gold with wealth. Let’s take a look at the history of this development, and how it has shaped modern day thinking on economics. What was special about Smith’s philosophy was its legacy and development in the following decades after it was written up until even today. Of course, the millennia of human civilization and existence has produced many different thinkers on the subject, from Xenophon in classical Greece to Thomas Aquinas in the middle ages. What most people think of when the history of economics is brought up is Adam Smith and his famous book, The Wealth of Nations. If you haven’t read my previous summaries and thoughts on this book, please click here. And that’s just what we’re going to do in this 26th chapter of Thomas Sowell’s Basic Economics. In this entire book about economics, so far, we haven’t really touched on the history of the subject.

Thomas sowell's classic basic economics