3. Encourage those industries which change raw materials into
exportable finished products.
4. Encourage a large population, for you will need workmen for
your factories and an agricultural community does not raise enough
workmen.
5. Let the State watch this process and interfere whenever it is
necessary to do so.
Instead of regarding International Trade as something akin to a force
of nature which would always obey certain natural laws regardless
of man’s interference, the people of the sixteenth and seventeenth
centuries tried to regulate their commerce by the help of official
decrees and royal laws and financial help on the part of the government.
In the sixteenth century Charles V adopted this Mercantile System
(which was then something entirely new) and introduced it into his many
possessions. Elizabeth of England flattered him by her imitation. The
Bourbons, especially King Louis XIV, were fanatical adherents of this
doctrine and Colbert, his great minister of finance, became the prophet
of Mercantilism to whom all Europe looked for guidance.
The entire foreign policy of Cromwell was a practical application
of the Mercantile System. It was invariably directed against the
rich rival Republic of Holland. For the Dutch shippers, as the
common-carriers of the merchandise of Europe, had certain leanings
towards free-trade and therefore had to be destroyed at all cost.
It will be easily understood how such a system must affect the
colonies. A colony under the Mercantile System became merely a
reservoir of gold and silver and spices, which was to be tapped for the
benefit of the home country. The Asiatic, American and African supply
of precious metals and the raw materials of these tropical countries
became a monopoly of the state which happened to own that particular
colony. No outsider was ever allowed within the precincts and no native
was permitted to trade with a merchant whose ship flew a foreign flag.
Undoubtedly the Mercantile System encouraged the development of
young industries in certain countries where there never had been any
manufacturing before. It built roads and dug canals and made for
better means of transportation. It demanded greater skill among the
workmen and gave the merchant a better social position, while it
weakened the power of the landed aristocracy.
[Illustration: HOW EUROPE CONQUERED THE WORLD]
On the other hand, it caused very great misery. It made the natives in
the colonies the victims of a most shameless exploitation. It exposed
the citizens of the home country to an even more terrible fate. It
helped in a great measure to turn every land into an armed camp and
divided the world into little bits of territory, each working for its
own direct benefit, while striving at all times to destroy the power
of its neighbours and get hold of their treasures. It laid so much
stress upon the importance of owning wealth that “being rich” came to
be regarded as the sole virtue of the average citizen. Economic systems
come and go like the fashions in surgery and in the clothes of women,
and during the nineteenth century the Mercantile System was discarded
in favor of a system of free and open competition. At least, so I have
been told.
[Illustration: SEA POWER]