Question

(History of Economic Thought) Question.

1-) What were the two phases of mercantilism? Give dates for these phases. What was the focus of the economists in these phases?

2-) What are the three classes that we see in the Tableau? Define and explain each briefly.

Answer 1

Mercantilism is defined as an economic theory where the government seeks to regulate the economy and trade in order to promote domestic industry often at the expense of other countries

THE English Mercantilism is often divided into three phases

1) The crude "Bullionist" stage which started from the 1580s to 1620

2) The "Traditional" stage which started from 1620 and ended in 1700,

3) The "Liberal" stage which started from the 1680s and ended in 1750s.

THE focus of the economists in these phases are as follow

The Keynes approved two mercantilist ideas out odf which first was that  more money for business expansion and more money for lowering the rate of interest. Mercantilism paved the way for many western nations for their transformation from 'commercial capitalism' to 'industrial capitalism'. The mercantilists ideas were that  powerful that even today world is following those principles.

The three classes that we see in the Tableau are as follow:

The Tableau économique Economic Table is an economic model first described by French economist François Quesnay in 1758, which laid the foundation of the Physiocratic school of economics.

François Quesnay divided his economy into three sectors or  "classes" of people they are as follow

1)Proprietary class (landlords),

Explanation:  The "Proprietary" class consisted of only landowners.

2)The productive class (people in the agricultural sector) and

Explanation: The "Productive" class consisted of all agricultural laborers.

3)The sterile class (those in manufacturing and commerce).

Explanation :The "Sterile" class is made up of artisans and merchants.

The flow of production and/or cash between the three classes started with the Proprietary class because they own the land and they buy from both of the other classes.

The Tableau shows the reason why the Physiocrats disagreed with Cantillon about exporting food. The economy produces a surplus of food, and neither the farmer nor the artisan can afford to consume more than a subsistence level of food. The landlord is assumed to be consuming at a level of satiation; therefore, he cannot consume any more. Since food cannot be stored easily, it is necessary to sell it to someone who can use it. This is where the merchant provides value.