Mercantilism and Capitalism Essay

The development of mercantilism produced a profound impact on the development of Western Europe and the entire world. Historically, mercantilism defined the basic ideology that dominated in Western Europe and western civilization in the 1600s and even in later epochs, even though mercantilism was not shaped as a theory at the early stages of its development. Nevertheless, the mercantilist ideology was one of the mainstream ideologies of that epoch and it proved to be so powerful and significant that it had managed to replace Christianity as the dominant ideology, though mercantilism has preserved some elements of Christianity, adapting its ideas and beliefs to more pragmatic theoretical assumptions of mercantilism. In such a context, the decrease of the role of the Roman Catholic Church and the consistent strengthening of mercantilism became two major factors that laid the foundation for the capitalist system which gradually outgrew into the dominant system which define socioeconomic and political relations throughout the world.

At the same time, the emergence of mercantilism and the decline of the role of the Roman Catholic Church did not bring positive results only. In fact, the hegemony of the Roman Catholic Church was far from perfect and, being based on Christian beliefs and principles, the church used the religion as a tool of manipulating and control of the mass consciousness, while the mercantilism undermined the position of the Roman Catholic Church and changed the perception of the world dramatically. Mercantilism became the alternative to the Roman Catholic Church, which paved the way to the capitalism, while the dominance of the Roman Catholic Church would more likely prolonged the stagnation of the international economic relations and maintain the backwardness of western civilization. In this respect, mercantilism turns to be an effective tool with the help of which, through the development of capitalism, countries of western Europe had made an economic breakthrough and eventually launched their aggressive imperialistic policy of colonization of the New World and other parts of the world. On the other hand, the emergence of capitalism was inevitable and the ongoing dominance of the Roman Catholic Church or the absence of mercantilism are likely to delay the development of capitalism but they could not prevent it because capitalism was developed on the basis of the changes that took place in socioeconomic relations while mercantilism and Christianity mainly refer to the ideological sphere, they explain socioeconomic relations and they even develop certain rules. However, their theoretical assumptions and rules only interpret and mirror the socioeconomic reality but they do not create it.

On analyzing the development of mercantilism, it is necessary to point out that mercantilism did not appear spontaneously. In stark contrast, mercantilism developed steadily as a response to the consistent qualitative changes that took place in the socioeconomic life of western European society in 1600s. In this respect, it is important to underline the fact that mercantilism was, to a significant extent, opposing to the Roman Catholic Church, but it was not the only movement which actually offered an alternative view compared to the view of the Roman Catholic Church. In actuality, mercantilism was developed under the impact of the growing opposition to the Roman Catholic Church in different parts of western Europe. The process of Reformation, the growing dissatisfaction of the population with the Roman Catholic Church, the moral decay and the deterioration of the public image of the Roman Catholic Church among its adepts, who grew more and more disenchanted with the Roman Catholic Church and ideas it promoted, contributed to the emergence of various alternative religious movements, which are known as Protestantism.

In fact, Protestantism had different forms and was inspired by different historical figures. It is possible to name such outstanding historical figures as Luther and Calvin who opposed to the Roman Catholic Church and insisted on the necessity of its reformation. Basically, they attempted to make Christianity closer to people and change the role of church as a mediator making people closer to God and facilitating their communication with God. In such a context, the trend to strengthening of Christian churches on the national level grew stronger. At this point, it is possible to mention the formation and strengthening of the Anglican Church, which actually became the real power in England after Henry VIII’s break with the Roman Catholic Church in 1533-1534 (Landreth and Colander, 2002). As a result, the king of England became the head of the Anglican Church. The similar trends could be observed in other European countries, while in some territories, protestants’ opposition to the Roman Catholic Church was enforced by the presence of other religions, such as Judaism as it was the case in Amsterdam. In such a way, the strengthening opposition to the Roman Catholic Church in domain of the religion made the weakening of the Roman Catholic Church practically inevitable.

At the same time, the growing opposition to the Roman Catholic Church created the favorable conditions for the emergence of mercantilism because the spread of Protestantism, the creation of the Anglican Church and similar historical events put under the question the basic postulates of Christian religion as it was taught by the Roman Catholic Church. What is more important, people had started to question whether Christian ideal and standards imposed on them are worth believing while Christian norms and rules are worth observing. Instead, people attempted to change their life and refuse from the conventional stereotypes and lifestyle imposed on them by the Roman Christian Church. In this respect, Protestantism and strengthening of national churches, such as the Anglican Church, stimulated the development of mercantilism, which promoted more pragmatic ideas compared to the Roman Catholic Church.

On the other hand, mercantilism was nourished not only by the growing opposition to the Roman Catholic Church, but also by the growing wealth of some nations and larger economic opportunities western European countries, such as England or Netherland, had got after great geographic discoveries made in the late 15th – early 16th centuries (Magnusson, 2003). In this respect, it should be pointed out that socioeconomic development of leading countries of that epoch was accompanied by consistent changes. The discovery of the New World, the economic development accelerated by the progressing international trade led to the dramatic changes in the socioeconomic development of western Europe and overseas colonies, which created conditions for the development of capitalism. To put it more precisely, the international trade and the rapid enrichment of the class of merchants led to the replacement of the nobility by merchants or traders. At the same time, the changes in the economy and technologies allowed the development of the production of commodities suitable for international exchange which contributed to the enrichment of merchants and countries which controlled the international trade. In such a situation, owners of ship, land, merchants and state became the main power in the socioeconomic life. In such a context, the control over trade flows and overseas territories, which were rich and prospective from economic point of view, became the determinant factor in the international policy of leading countries because the more territories and trade flows a country controlled the richer it would be and the more wealth it could appropriate. In fact, this idea became one of the major postulates of mercantilism. Hence, it is obvious that mercantilism was grounded on the objective reality and socioeconomic relations, which developed independently from any theoretical developments that means that the emergence of capitalism was inevitable even without mercantilism or even if the Roman Catholic Church had preserved its power over human minds. The inevitability of capitalism is obvious because the progress of technologies and new opportunities such western European countries as England got made the socioeconomic relations purely capitalistic in principle.

As for mercantilism, it should be viewed as a theoretical framework, which explains and interprets basic socioeconomic trends which took place in Western Europe and in colonies in the 1600s. Obviously, mercantilism did not force countries to colonize the New World, for instance. Instead, countries struggled for new colonies because it was the question of their economic and, therefore, political leadership. Naturally, England could not ignore the strengthening of Spain due to colonization of American territories. At this point, the key idea of mercantilism, according to which the prosperity of the nation depends upon its capital, and that the volume of the world economy and international trade is unchangeable, seems to be secondary compared to objective reality of that epoch. What is meant here is the fact that England, for instance, was likely to accelerate its imperialist policy not because of this key concept of mercantilism, which has been just mentioned above, but because England had lost its leading position in Europe and in the world, while strong Spain was a threat to national interests of England because if Spain had a stronger fleet it would control overseas trade (Niehans, 1990). Consequently, Spain grew richer while England would be in a very difficult position. Thus, the imperialism and colonization, which indicated to the progressing capitalism, developed independently from the theoretical framework of mercantilism.

In such a context, it is possible to presuppose that even the ongoing dominance of the Roman Catholic Church could not stop the progress of capitalism, while mercantilism just became an almost perfect theory, at the epoch, to explain the major socioeconomic trends and rules. In fact, the ideology of the Roman Catholic Church is focused on the worshipping of God and, what is more, the Roman Catholic variant of Christianity promotes certain asceticism, while mercantilism lays emphasis on material values and individualism. It is quite natural to presuppose that if the Roman Catholic Church remained in power it could have preserved the world from the emergence of capitalism because Catholicism did not appreciate the strife for wealth and the supremacy of material richness over spiritual one.

However, objectively the development of capitalism was inevitable, as it has been already proved above, and the maintenance of the dominance of the Roman Catholic Church could not stop it. The possible outcome of such dominance would be a permanent crisis in territories under the control of the Roman Catholic Church because the gap between the actual, real life and ideas and principles promoted by the Roman Catholic Church would grow wider. As a result, Catholic ideas would be viewed by people as some unreal ideals, a kind of utopia, which had nothing in common with the real life. It proves beyond a doubt that the gap between the dominant ideology and the objective reality perceived by people in their routine life would inevitably lead to the profound crisis of the dominant ideology, i.e. the Roman Catholic Church’s ideology. Eventually, the contradictions between the objective reality and myths imposed on people by the Roman Catholic Church would become unbearable and led to the ideological revolution, which actually took place in the real life and history of Europe and overseas colonies prove the righteousness of such a hypothesis concerning the prospects of the ideological domination of the Roman Catholic Church. In addition, the position of the latter would be undermined by scientific and technological progress, which, besides, became a very important factor that accelerated the development of capitalism because in later epochs it stimulated industrialization, which, in its turn, made capitalism the dominant socioeconomic system which proved to be the most effective in the current situation.

In such a context, the emergence of mercantilism became the result of the emergence of the early capitalism. However, it is impossible to underestimate the role of mercantilism in the further progress of capitalism. As the matter of fact, mercantilism stimulated the formation of capitalism and laid foundation for the present day capitalism. In this respect, it is important to underline the fact that the further development of capitalism could hardly be as effective as it was without the theoretical framework provided by mercantilism. What is meant here is the fact that mercantilism provided the theoretical ground of capitalism, it explained the strife for wealth and imperialism of European states by the necessity to increase the nation’s capital in order to improve the life of the people through the enrichment of the country. In fact, this idea justified the policy of colonization, which was accompanied by terror and physical elimination of the native population of America, which was absolutely unacceptable for Christian morale, but, nevertheless, was amply supported by the Roman Catholic Church that proved the devaluation of its traditional Christian principles in the 1600s and later epochs when capitalism grew stronger. At the same, such ideological justification of colonization and the promotion of individualism, pragmatism and materialism, which constituted an essential part of mercantilism, affected dramatically the development of the American colonies, which naturally inherited the new ideology of European countries.

Thus, taking into account all above mentioned, it is possible to conclude that mercantilism emerged on the basis of the growing opposition to the dominance of the Roman Catholic Church on the ideological level and as an effective theory which proved to able to explain and justify basic socioeconomic trends which progress in the 1600s. In fact, mercantilism became a theoretical framework which explained and justified the early capitalism and laid the foundation for the modern capitalism. In such a situation, the Roman Catholic Church could not resist to the ideological expansion of mercantilism because the development of capitalism was inevitable due to the objective socioeconomic changes that took place in the world at the epoch. The only thing the dominance of the Roman Catholic Church could do was to delay the beginning of the capitalist era.

References:
 Landreth, Harry and Colander, David C. (2002). History of Economic Thought, 4th edition, Boston: Houghton Mifflin.
 Magnusson, Lars G. (2003). “Mercantilism”, in Biddle, Jeff E.; Davis, Jon B.; Samuels, Warren J.: A Companion to the History of Economic Thought. Malden, MA: Blackwell Publishing.
 Niehans, Jurg (1990). A History of Economic Theory: Classic Contributions, 1720–1980. Baltimore, MD: Johns Hopkins University Press.

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