Name:________________________
Date:_________________________
Questions on “From Mercantilism to Laissez Faire”
From The Human Record
Introduction: page 165
1) Describe the economic policy of “mercantilism”. Which governments at which time in history pursued
this policy? Why?
2) Why did many critics argue against “mercantilism”? Who were these critics in France? Which Scot
became the most famous critic of “mercantilism”?
The Advantages of Mercantilism: pages 165-169
3) Describe the background of Jean-Baptiste Colbert. Why was he so important in 17th century France?
What was Colbert’s goal for the French economy? How did he attempt to accomplish this?
4) Read Colbert’s “Memorandum on English Alliances (1669). How does he describe what commerce
causes in both peacetime and war?
Capitalism’s Prophet: page 169
5) Describe the background of Adam Smith. Which book was he most famous for? When was it
published? Why is it so important?
Read the excerpt from The Wealth of Nations and answer the following questions: pages 169-173
6) Smith denies that a nation’s wealth consists of the amount of gold and silver it controls. What
arguments does he present to defend his position and what are their implications for trade policy?
(over)
7) Smith proposes that each individual by pursuing his or her own self-interest promotes the general
welfare of society. What examples of this paradox does he provide? What implications does this paradox
have for government policy?
8) Which groups in society would you expect to be most enthusiastic about Smith’s ideas? Why? What
groups might be expected to oppose them?
9) How do Smith and Colbert disagree on…
a) the benefits of government regulation?
b) economic competition among nations?
c) the meaning of the balance of trade?