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MERCANTILISM AND THE EAST INDIA TRADE

MERCANTILISM

AND THE

EAST INDIA TRADE

An early phase of the
Protection v. Free Trade Controversy

By

P. J. Thomas, M.A., B.Litt.
Madras University and Balliol College, Oxford

Lecturer in Economics, University College, Colombo

LONDON:
P. S. KING & SON, LTD.
ORCHARD HOUSE, GREAT SMITH STREET,

WESTMINSTER

PRINTED IN GREAT BRITAIN BY HEADLEY BROTHERS, 18, DEVONSHIRE STREET, E.C.2 ; AND ASHFORD, KENT.

soth.
Isoben

15538'

PREFACE

9 12-12-27 at

The object of this monograph is to trace the beginnings of Protectionism in England. Towards the last quarter of the seventeenth century, the Mercantile system became increasingly protectionist in aim, and this is disclosed by the numerous controversies that raged in the sphere of foreign trade at the time. The opposing views of Protection and Free Trade were clearly stated by a galaxy of talented writers, whom we may justly regard as the pioneers of modern economic thought. These controversies resulted in the triumph of Protectionism, and for more than a century it remained the settled economic policy of Great Britain. This early clash between Protectionism and Free Trade is only barely noticed in the existing books, but it deserves a prominent place in the history of economic development. The importance of this topic can only be brought out by segregating it from the general current of Mercantilism— by extricating it from that tangled web which has almost baffled analysis and has greatly confused the inexperienced student. This aim the present writer has kept clearly in view.

Of the many branches of English foreign trade, the East Indian was the one that figured prominently in the protectionist controversy, and hence the importance attached to it in this work. It must be noted, however, that the controversy was not between England and the East Indies, but between two powerful interests within England : the English woollen and silk manufacturers were pitted against the English East India Company and the English calicoprinters. The subject is therefore essentially connected with England, and is only incidentally connected with India. It is a chapter—and an integral chapter—in the history of economic thought in general and of English economic development in particular. It is from this standpoint that the subject has been dealt with in the present work.

At a time like the present when there is a distinct revival of Protectionism in most countries, the subject of this treatise may be of special interest, not only to students but to statesmen. The safeguarding of “key” industries is

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