Thomas Mun
Encyclopedia
Thomas Mun was an English
writer on economics
who has been called the last of the early mercantilists
. He was among the first to recognize the exportation of service, or invisible items, as valuable trade, and made early statements strongly in support of capitalism
.
Mun began his career by engaging in Mediterranean trade, and afterwards settled in London
, amassing a large fortune. He was a member of the committee of the East India Company
and of the standing commission on trade appointed in 1622. Mun’s time as the director of the East India Company coincided with a silver
shortage in England, and he was called on to defend the company’s practice of exporting large amounts of silver.
Mun’s 1621 work, A Discourse of Trade from England unto the East Indies, is in a large part a defense of company practices. However, it is for his work England's Treasure by Foreign Trade that he is best remembered. Although written possibly about 1630, it was not given to the public until 1664, when it was “published for the Common good by his son John," and dedicated to Thomas, Earl of Southampton
, lord high treasurer. While Mun is often compared favorably to Josiah Child
, another classic mercantilist, England’s Treasure was considered to be a direct repudiation of the arguments of Gerard de Malynes
. In it we find for the first time a clear statement of the theory of the balance of trade
.
According to Mun, trade was the only way to increase England
’s treasure
and in pursuit of this end he suggested several courses of action: frugal consumption in order to increase the amount of goods available for export, increased utilization of land and other domestic natural resource
s to reduce import requirements, lowering of export duties on goods produced domestically from foreign materials, and the export of goods with inelastic demand
because more money could be made from higher prices.
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
writer on economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
who has been called the last of the early mercantilists
Mercantilism
Mercantilism is the economic doctrine in which government control of foreign trade is of paramount importance for ensuring the prosperity and security of the state. In particular, it demands a positive balance of trade. Mercantilism dominated Western European economic policy and discourse from...
. He was among the first to recognize the exportation of service, or invisible items, as valuable trade, and made early statements strongly in support of capitalism
Capitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
.
Mun began his career by engaging in Mediterranean trade, and afterwards settled in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
, amassing a large fortune. He was a member of the committee of the East India Company
British East India Company
The East India Company was an early English joint-stock company that was formed initially for pursuing trade with the East Indies, but that ended up trading mainly with the Indian subcontinent and China...
and of the standing commission on trade appointed in 1622. Mun’s time as the director of the East India Company coincided with a silver
Silver
Silver is a metallic chemical element with the chemical symbol Ag and atomic number 47. A soft, white, lustrous transition metal, it has the highest electrical conductivity of any element and the highest thermal conductivity of any metal...
shortage in England, and he was called on to defend the company’s practice of exporting large amounts of silver.
Mun’s 1621 work, A Discourse of Trade from England unto the East Indies, is in a large part a defense of company practices. However, it is for his work England's Treasure by Foreign Trade that he is best remembered. Although written possibly about 1630, it was not given to the public until 1664, when it was “published for the Common good by his son John," and dedicated to Thomas, Earl of Southampton
Earl of Southampton
Earl of Southampton was a title that was created three times in the Peerage of England. The first creation came in 1537 in favour of the courtier William Fitzwilliam. He was childless and the title became extinct on his death in 1542. The second creation came in 1547 in favour of the politician...
, lord high treasurer. While Mun is often compared favorably to Josiah Child
Josiah Child
Sir Josiah Child of Wanstead, 1st Baronet , English merchant, economist proponent of mercantilism and governor of the East India Company, was born in London, the second son of Richard Child, a London merchant of old family.-Family:...
, another classic mercantilist, England’s Treasure was considered to be a direct repudiation of the arguments of Gerard de Malynes
Gerard de Malynes
Gerard de Malynes was an independent merchant in foreign trade, an English commissioner in the Spanish Netherlands, a government advisor on trade matters, assay master of the mint, and commissioner of mint affairs.-Books:...
. In it we find for the first time a clear statement of the theory of the balance of trade
Balance of trade
The balance of trade is the difference between the monetary value of exports and imports of output in an economy over a certain period. It is the relationship between a nation's imports and exports...
.
According to Mun, trade was the only way to increase England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
’s treasure
Treasure
Treasure is a concentration of riches, often one which is considered lost or forgotten until being rediscovered...
and in pursuit of this end he suggested several courses of action: frugal consumption in order to increase the amount of goods available for export, increased utilization of land and other domestic natural resource
Natural resource
Natural resources occur naturally within environments that exist relatively undisturbed by mankind, in a natural form. A natural resource is often characterized by amounts of biodiversity and geodiversity existent in various ecosystems....
s to reduce import requirements, lowering of export duties on goods produced domestically from foreign materials, and the export of goods with inelastic demand
Demand
- Economics :*Demand , the desire to own something and the ability to pay for it*Demand curve, a graphic representation of a demand schedule*Demand deposit, the money in checking accounts...
because more money could be made from higher prices.
External links
- Peter Jensen, 'Thomas Mun'