Thomas Mun (1571-1641) (20 agos 1571 año – 20 agos 1683 año)

Descripción:

LIFE:
Thomas Mun is the figure most closely associated with Mercantilism. Born in 1571 he led his early career working as a merchant trading around the Mediterranean Sea mostly between Italy and modern day Turkey, Syria, and Lebanon. When he was 41 he married Ursula Malcott and had three children John, Mary, and Anne. A few years after his marriage, Mun, who had settled down in London, was elected as a director/committee member of the East India Company. In 1621 he was also appointed to the standing commission on trade. He died in London in 1641.

MAJOR WORK(S) & CONTRIBUTIONS:
A few years after Mun started working for the East India Company, a dispute broke out in London around the ‘excessive’ outflow of silver and precious metals caused by the voyages of the East India Company. London in the 1620’s was experiencing a silver shortage, and Mun as one of the director’s of the East India Company wrote a pamphlet titled A Discourse of Trade from England into the East Indies (1621) in defense of the company’s actions.

In this pamphlet, Mun lays out reasons for why trade was in general a good thing for England so long as exports exceeded imports. Trade he argued, could be “the very touchstone of a kingdom’s prosperity,” so long as “certain rules [were] diligently observed” and there was no reason to be concerned that the company itself was paying out more bullion to India then it received for this gap was made up for by selling the commodities the Company bought to buyers in England, the Mediterranean, and the rest of Europe. He argued against those who claimed that England would have been better off had they never established a trade route with the East Indies and that the country was wasting precious metals on the voyages of the East India Company. He responds also to criticisms that claimed England was wasting precious timber on building boats that were sent to the Indies and returned depreciated or broken. He responds even to criticisms that claimed the East India Company left many of England’s women widowed and children orphaned. Regardless of the visible downsides, Mun argued, the East India Company created a surplus of wealth in England by importing highly necessary and highly demanded commodities such as drugs, spices, raw silk, indigo and callicoes. Trade with the East Indies, Mun argued, was a source of wealth for England.

Mun’s most famous work, England’s Treasure by Foreign Trade, was not published until after his death in 1664. It was most likely written by Mun in the 1630’s, but was only published posthumously by his son John. Adam Smith has referred to this book as the handbook of mercantilism (Book I, Wealth of Nations), and in it, Mun elaborates in a more erudite manner the ideas he put forth in his Discourse of Trade… The most important chapters of this book for the purposes at hand are chapters 2 and 4, and it is in these chapters you will find Mun’s main arguments. In chapter 2 (‘The General Rule Whereby the Kingdom is Enriched and our Treasure Augmented), Mun states that the most effective way of increasing a nation’s wealth is to trade. He further states (and this is what he is most remembered for) that trade will be an effective strategy so long as a country “sells more to strangers yearly than we consume of theirs in value” (p. 7). In chapter 4 (The Exportation of our Monies is a Means to Increase our Treasure), Mun returns to the topic of inflows and outflows of bullion between two trading partners. He argues that it is misleading to simply compare the amount of precious metals exchanged between two trading partners, because, and especially in the case of the East India Company, the profits made from selling the imported goods domestically and to other neighboring nations can exceed the net deficits accrued from the initial trade. The book goes on for another 16 chapters, where Mun addresses other consequences and mechanics of trade. In chapters 16-18, he addresses the role the government (or prince) must play in setting aside some portion of bullion for shortages and possible war, and he considers what constitutes the right portion. He considers both deflationary and inflationary pressures, which he claims would result if the government kept too much or too little aside respectively.

A DISCOURSE OF TRADE FROM ENGLAND INTO THE EAST INDIES (1621)
ENGLAND’S TREASURE BY FOREIGN TRADE (1630/1664)

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