Sowell presents mercantilism as a misconception of what is best for a nations' economy. This conception is based on what mercantilists think is best, this is to have more goods being exported from your country then goods being imported in to your country. Sowell describes this system as one that benefits merchants who in essence capitalize on the hard work and sweat of the common man or poor man as he puts it. In addition to this system being set up this way there were also controls put in place to keep it this way. Maximum wage laws and educational selection were examples of such controls used to perpetuate mercantilism. Maximum wage laws were used to lower costs thus allowing merchants to sell goods cheaper than that of other countries. Educational selection was used to teach poor children skills for specific jobs. This tool used by mercantilists keeps poor families in poverty by not allowing them equal education so they have no way to climb out of the lower class.
Gunboat Smith (LOC)
Smith Street, Warwick - no's 55 to 61 Smith Street
Ethel Smith (left) and Fanny Rosenfeld (second fro...This same idea is seen present day in ghettos and impoverished areas and was of the main reasons for riots such as the Watts riots of L.A. Another characteristic of mercantilism was the class separation and the effects on the common man; this is where Smith's ideas come into play.
Smith's book IV is a response to mercantilism in that it was written during a time of elitist domination of the lower class in France and England. Smith attacked the current system and stated that the amount of a nations gold should not be the way it wealth is measured. This is the basis for Smith's response and leads to the idea that it is possible for all nations to grow wealthier at the same time through the gaining of...