I. WERNER STARK

Werner Stark (1909–1985) was a sociologist, economic historian, and historian of economic thought who is not widely remembered among history of economic thought (HET) scholars today. A number of contributions discuss his historiographical position (Clark Reference Clark and Stark1994a, Reference Clark1994b, Reference Clark, Medema and Samuel2001; Szmrecsányi Reference Szmrecsányi2001), but a full-scale investigation of his work, and the ramifications his work has on both how we write on economics of previous eras and how economic theory relates to context, has yet to be undertaken. The present paper intends to contribute to this investigation by 1) exploring the strengths and weaknesses of Stark’s approach to historiography, 2) seeing how this can frame and answer important questions in relation to the writings of the mercantilist era, and 3) developing a link between a pluralist understanding of economics and the sociology of knowledge literature. The reason for this reformulation is to extend Stark’s sociology of knowledge approach into a basis for pluralism in economics, and at the same time clarify the link between context and theoretical investigation that lies at the center of a sociology of knowledge understanding of economic theory.

The relative obscurity of W. Stark as a historian of economic thought is odd if one observes the significant academic work he produced from the 1930s, both in HET and later as a sociologist of knowledge. His HET work ranges in a variety of topics: from medieval economic thought to neoclassical theory, to editing Jeremy Bentham’s collected writings in economics (Stark Reference Stark1952a, Reference Stark1952b, Reference Stark1954a),Footnote ¹ explorations in historiography, and economic history.Footnote ² His personal history may partly explain why his work has not attracted the attention it deserves. He was born in 1909 in Marienbad, Bohemia, to a Jewish family. He enrolled at the University of Hamburg in 1928 as a student of social sciences, and earned his Dr. rer. pol. (Doctor of Political Science) in 1934. He attended the London School of Economics in 1930–31 and received a Dr. Jur. (Doctorate of Law) from the University of Prague in 1936.Footnote ³ Stark’s dissertation was on economic history, focusing on the origin and development of large-scale agricultural enterprise in Bohemia and Moravia (Clark Reference Clark and Stark1994a, pp. xiv–xv).

With the rise of the Nazi party in Germany, he moved to Prague in 1934, working originally outside academia (as economics editor of the Prague newspaper Prager Tagblatt from 1934 to 1936, and, later, obtaining a position at the Bohemian Union Bank from 1936 to 1939) and then joining the Prague School of Political Science in 1937. He was still teaching there at the time of the German invasion of Prague in 1939. He escapedFootnote ⁴ and found himself in England at the start of WW II, supported there by a grant from the Society for the Protection of Science and Learning. He spent the period from 1939 to 1944 in Cambridge, and lectured there for the year 1941–42. His stay in Cambridge was supported by John Maynard Keynes, who not only found him the visiting lectureship in the department for a year, published some of his work on Bentham in the Economic Journal (Stark Reference Stark1941a),Footnote ⁵ and supported him in editing Bentham’s economic works (funded by the Royal Economic Society) but also intervened and paid out of his own pocket (without Stark knowing) part of his grant, when the Society threatened to discontinue it. Keynes held Stark’s scholarship in high esteem. In 1941, he wrote in support of Stark to Ms Simson of the Society for the Protection of Science and Learning that “he is, I should say, one of the half dozen most learned people going on his own subject, namely the history and valuation of economic thought” (Clark Reference Clark and Stark1994a, p. xvii). Stark’s stay in Cambridge was an extremely productive one, and one that influenced him greatly. As Charles Clark notes, “almost all of Werner Stark’s published works in the history of economic thought derive from his residency at Cambridge” (Clark Reference Clark and Stark1994a, p. xv).

This is particularly true of his great monographs on the subject, which are The Ideal Foundations of Economic Thought (Reference Stark1943a)Footnote ⁶ and The History of Economics in Its Relation to Social Development (Reference Stark1944). The 1944 book is actually the last chapter of a larger volume that Stark wrote during this time and completed in manuscript but never published in his lifetime. Clark found the typescript in Stark’s archive, and edited and published the volume under the title History and Historians of Political Economy in 1994. Why this was never published remains unclear, although the correspondence between Keynes and Stark has Keynes discouraging Stark from publishing the book in the beginning of the war, as it would not sell then.Footnote ⁷ However, in correspondence with Maurice Dobb, Keynes appeared to have deeper misgivings that related, at least, to the style of the exposition. He writes:

Both Stark’s books received some attention at the time, with the History of Economics (Reference Stark1944) being translated into Italian (1950), Japanese (1954), German (1960), and Spanish (1961). However, contemporary reviews were mixed, with some being very critical. The resistance by some scholars lay, to some degree, on Stark’s central thesis, which is that historical epochs give rise to analytical structures in economics that are directly related to, and the outcome of.Footnote ⁹ This deep contextualization of economic theory stands in opposition to seeing economics as an ever expanding, decontextualized, and deductive analytical discipline.

For Stark, however, these investigations led him directly into working more on the social basis of theorizing and knowledge building, and this then led him to his substantial output on the sociology of knowledge, which became a central aspect of his research work during the remainder of his life.Footnote ¹⁰ This research path did not find great favor in the intellectual climate after WW II,Footnote ¹¹ in which economics became a more technical and decontextualized discipline. However, it was grounded in the particular central European background that formed his early intellectual life. His father was a doctor for a miners’ union and socialist city council member in Marienbad (Stagl Reference Stagl, Leonard, Strasser and Westhues1993, p. 199), and this was pivotal to Werner Stark’s early socialist sympathies, but also to the complex background of being both a bourgeoisie and to some degree a social outsider due to his Jewish roots.Footnote ¹² At the same time his broad educational experience gave him a unique vantage point that defines the multifaceted nature of his work. He not only completed two doctorates in separate fields of study (which was more common in interwar Europe than it is today), but also when he entered the University of Hamburg in 1928 for his undergraduate degree as a student of the social sciences, “given the wisdom of the day—he was warned against specialization and he actively studied history and philosophy” (Leonard, Strasser, and Westhues Reference Leonard, Strasser and Westhues1993, p. 1). As Eileen Leonard et al. note, “his European training gave his scholarship a breadth seldom matched today” (Leonard, Strasser, and Westhues Reference Leonard, Strasser and Westhues1993, p. 1). In fact, this broad perspective together with the view of the social ‘outsider’Footnote ¹³ is something that brings to the fore the very problematization of how social knowledge is constructed. Thus, E. Doyle McCarthy, in her introduction to Stark’s The Sociology of Knowledge, notes:

And McCarthy adds, “However much Scheler and Mannheim differed on the nature of truth within relativism, both agreed that this pursuit was no longer purposeful apart from socially and historically determined structures of meaning” (McCarthy Reference McCarthy and Stark1991, p. x).

At the same time post-WW II sociology followed a different path to Stark’s work and this strand of sociology of knowledge, and he saw the academic study of sociology as “increasingly addicted to the principle of specialization” (Stark Reference Stark1966–72, vol. 1, p. viii). In contrast, Stark’s work remained deeply interdisciplinary and he dismissed strict compartmentalization of knowledge into self-contained disciplines with the same breath with which he saw suspiciously efforts to make social theory appear unrelated to its social, economic, and historical context. This underlying consensus of postwar academic study (decontextualization and knowledge compartmentalization) became the deep discord between his intellectual program and academic developments around him, which may explain his obscurity both in economics and, to a lesser degree, in sociology.Footnote ¹⁴

Nevertheless his project in the sociology of knowledge retains an originality in scope, method, and approach, especially in its connection with economic historiography, that makes it worth revisiting it today. This is attempted in section II. In section III we use this approach to analyze the idea of a mercantilist school of economic thought. In section IV we augment Stark’s approach and discuss it in relation to pluralism. Section V concludes.

II. THE SOCIOLOGY OF KNOWLEDGE APPROACH TO THE HISTORY OF IDEAS

With this polemical statement, Stark opens his 1944 book that attempts to explain the development of specific periods in economics analysis (he discusses mercantilism, physiocracy, classical and neoclassical economics) in relation to the social and economic conditions prevalent in every epoch. In fact, Stark’s (Reference Stark1944) book together with Stark (Reference Stark1943a) and the longer book written at that time and published posthumously (Stark Reference Stark1994) constitute his theoretical work on the sociology of knowledge approach as applied to the history of economics.

This approach has been reviewed in Clark (Reference Clark and Stark1994a, Reference Clark1994b, Reference Clark, Medema and Samuel2001) and Tamás Szmrecsányi (Reference Szmrecsányi2001). Both authors note the difference between Stark’s and Joseph Schumpeter’s approach to historiography. These two paradigms of doing historiography in economics are captured in the above quote, and Stark is a strong advocate of the second, contextual, view. Without reviewing in detail the complex framework that Stark builds in his attempt to bring a more context-driven approach to the evolution of economic theory,Footnote ¹⁵ this section will focus on some key analytical clarifications that Stark derives from his explorations in historiography, and explain the nature of his approach.

The first is the analytical distinction between ideology and the theory of the sociology of knowledge. Stark’s later work in the sociology of knowledge (Stark Reference Stark1958c) develops this distinction clearly by noting that the two belong to different spheres of analysis. As Doyle McCarthy writes, “Sociology of knowledge is primarily directed towards the study of the precise ways that human experience, through the mediation of knowledge, takes on a conscious and communicable shape” (McCarthy Reference McCarthy and Stark1991, p. xii). To put it in other words, sociology of knowledge is to investigate the conditions that give rise to a material and intellectual culture, i.e., the formation of a society in its totality. It is, as Stark notes, the social determination of knowledge. This Stark finds to be a precondition to any discussion on ideology, which comes later, and is seen as the view that members of that society form about themselves and others. This distinction is not simply semantic but forms a basic block in Stark’s effort at building the proper foundations for understanding the social element of knowledge creation. He writes:

And he continues several lines later:

With this distinction Stark can then place the study of the sociology of knowledge firmly in the sphere of social science, whereas the problem of a theory’s ideological position is seen as a separate problem.

From this basis we can built an understanding of social knowledge in two directions. One is investigating the material and social conditions that gave rise to specific theories at a given point of time. The second approach is to trace the theory of ideas as they travel through time and influence the intellectual atmosphere of an era and beyond. Both layers are necessary, as Stark was aware of the complex relation between theory and economic reality. Theories form, change, and are formed by the existing social conditions, and are, at a deep level, co-determined.Footnote ¹⁶ Therefore, the creation of social knowledge is determined by both material conditions and individual thought and action.

This stratification of context comes in Stark’s work through the orientation of his two books from the 1940s (Stark Reference Stark1943a, Reference Stark1944). In The Ideal Foundations of Economic Thought (Reference Stark1943a), he investigates the philosophy that gave rise to basic paradigms in economic thought. His focus is on unified theories of thought that pervade the whole intellectual community and determine the viewpoint of that society. He starts by noting that the end of the medieval system of life meant also the end of the philosophical system (“the old cosmology of the schools”) that it supported. He then writes that “it took more than two hundred years before a comprehensive world-view corresponding to the changed realities emerged. Of this new cosmology classical economics was an integral part” (Stark Reference Stark1943a, p. 1). And he continues: “thus the roots of the theories set forth by Francois Quesnay and Adam Smith lie not only in the economic and social, but also in the philosophic thought of the time that preceded them: and, indeed, they owed more to Locke and Leibniz than to Monchretien and Mun” (Stark Reference Stark1943a, p. 1). The view is one of the totality of human knowledge, and its link with social and material conditions, through path-breaking thinkers who epitomize this new era. For this reason he investigates three pairs of theorists: John Locke and Gottfried Leibniz, Thomas Hodgskin and William Thompson, Hermann Gossen and Richard Jennings. These pairs of theorists trace the deep conceptual foundations of the transformation of the vision of the social order from the medieval period to neoclassical economics. It is rather odd, and a recurring criticism of the book, that the thinkers chosen are somewhat obscure and the main economic theorists (Adam Smith, David Ricardo, John Stuart Mill, Alfred Marshall, etc.) are less central in the narrative than one would expect. Stark’s reason seems to be that he wants to discover the origin of ideas, and the people involved at inception, even if they were not the clearest theorists, or their work the best or most precise articulation of a new concept. The importance of this is that these people captured first, if we can put it that way, the essential aspects of the new social order of their time.

This interest in first and more forceful articulation of a concept is apparent in his work on Jeremy Bentham. Stark, both as an editor of his economic writings (Stark Reference Stark1952a, Reference Stark1952b, Reference Stark1954a) and in two assessments of Bentham’s work in The Economic Journal (Stark Reference Stark1941a, Reference Stark1946), displays the particularities of his method when assessing the contribution of an individual economist, the context of his writings, and also his influence on later thought. In Bentham’s collected economic writings, Stark starts the three-volume work by writing that “the introductory essays at the beginning of each volume do not attempt to analyse Bentham’s theories and to assess their value: they are entirely unambitious and only try to provide the historical background necessary for a full understanding of the works that follow” (Stark Reference Stark1952a, p. 9). He notes this is important for Bentham not only because his theories cannot be seen outside an enlightenment context and its intellectual climate (Stark Reference Stark1941a) but also because Bentham was not interested in knowledge for knowledge’s sake.Footnote ¹⁷ Bentham was interested in the social sciences and political economy in particular because it had the ability to answer policy and other important social questions of the day. And yet the collected writings start with the most abstract of topics: the philosophical foundations of Bentham’s economic writings, which is the parceling of all human knowledge in categories constructed by Bentham and showing the universe of his thought. Stark argues that the whole of Bentham’s materialist philosophy is underpinned by the following psychic principle: humans are “a pleasure-seeking and pain-fleeing animal” (Stark Reference Stark1941a, p. 57). Then the particular political and social issues that Bentham writes on are extensions of this fundamental position and the proper application of this insight.

Thus this editorial work achieves an interesting combination, both to show to the reader how Bentham’s various works relate to pressing social issues, and to try to uncover the basic principles that guide all his thought. That Bentham’s ideas influenced economists from many intellectual paths is the main argument of Stark (Reference Stark1946), and Stark shows that elements of his thought can be found not only in classical political economy writers but also in neoclassical ones and even in the historical school.

Furthermore, Stark’s historiographical method when editing Bentham’s papers both reveals and makes immediately apparent another interesting aspect of his work, which is how unique and epoch-defining Bentham’s viewpoint on human society was. Stark interestingly reserves for the end of Volume III (after reprinting material on the rate of interest and usury laws, monetary and credit matters, trade, and many other topics) statements and ideas that relate to the “psychology of economic man.” And although this section is what, from a modern perspective, we most associate with Bentham as his legacy in economics, Stark, while reminding us that this would not be Political Economy proper for Bentham,Footnote ¹⁸ makes the following assessment:

And with this simple statement Stark reminds us both how specific and even limiting Bentham’s conception of human psychology and action was, and how central it became as a basic understanding in the economics that followed.

However, what intellectual history in the form of pure ideas and their evolution does not cover is the relation of theory to broader material conditions. The relation of these two aspects is the central theme of his History of Economics in Its Relation to Social Development (Reference Stark1944). To understand the complex theoretical position the analysis of this volume occupies, we need to visit Stark’s posthumous work on History and Historians of Political Economy (Reference Stark1994). In the 1994 volume he distinguishes three approaches on how historians of economic thought write about past theory and its relation to social reality. The first is the critical approach, which sees ideas outside their social and historical context, and proceeding independently of them, as abstract economic theory improves and refines over time. The second and third approaches view theoretical developments in relation to their social context but are distinguished in their ability to reach different levels of abstraction in their understanding of the association of theory to reality. The second approach he calls “descriptive,” because it exhausts itself in a description of the theories that existed and their social context. But description alone is not the only task of the historian of economic thought. Stark writes that writers in this category “showed indeed how, but not why, things happened” (Stark Reference Stark1994, p. 165). However, judgment is not external to the act of understanding, describing, and implicitly evaluating theories of the past. This act of judgment Stark makes explicit in his narratives and tries to combine with an understanding of context. This forms the third approach, which he calls “explanatory.” He writes: “perfect objectivity, freedom from valuation in the strict sense in which Max Weber understood the word, is entirely beyond the reach of any historian of political economy” (Stark Reference Stark1994, p. 212). What is then the domain of the explanatory method? Stark writes:

With this position, trying to balance judgment and understanding, context and theory, Stark forms his alternative way of doing intellectual history. This approach has elements of both the critical and the descriptive traditions, but is a coherent third alternative.Footnote ¹⁹ What exactly is its nature? At one end it is practically impossible to reconstruct past context, however much we try. All our efforts are bound to be modern projections to some degree, however well-meaning and erudite. At the other end, a constant effort to focus on context will get us too close to description, instead of an attempt at theorizing about the causal mechanisms of that epoch or reaching analytical understandings by approaching that period’s theoretical output. Perhaps the best way to understand Stark’s position is captured in the following quote by McCarthy:

This gives Stark’s approach to understanding social reality a particular orientation that shares deep links with Max Scheler (1874–1928) and Karl Mannheim (1893–1947), on whose contributions Stark’s sociology of knowledge approach builds.Footnote ²⁰ Scheler is chiefly remembered today for his work on phenomenology, and it is Stark’s writings that made his contributions better known in postwar US academia.Footnote ²¹ Stark takes from Scheler’s workFootnote ²² what he sees as a clear distinction between ideology and “the axiological layer of the mind—this a priori system of social valuations or prejudgements which enables us to form, out of the infinitude of the knowledgeable, the finite and hence comprehensible universe of the known” (Stark [1958c] Reference Stark1991, p. 113). From Mannheim, Stark’s approach takes almost the opposite impulse, the inability to distance and disentangle the ideological element from this deeper axiological level, as the two, given the patina of time and the inescapable modern viewpoint of past society and its literary and other heritage, are irreducibly conjoined. However, if one views Mannheim’s work as a hermeneutic or interpretative method, instead of a superficial attempt to see a text or theory only with broad reference to its historical conditions,Footnote ²³ this opens up an interesting space of inquiry for the sociology of knowledge approach. That is the method of reflective speculation in order to understand and interpret the past that allows the researcher to try to theorize on the nature of argument and its evolution, based on a tentative subjective reconstruction of the social and historical context. This requires not only an understanding of the past but also a realization of the particular conditions of the present. Arthur Perrin Simonds, in his analysis of Mannheim, notes that “it is absolutely essential to Mannheim’s method that the sociology of knowledge treat as problematic not only the social context of the author of the expression to be understood, but also the social context of the observer who is seeking to understand” (Simonds Reference Simonds1975, p. 100). He further notes that “our own historical position is acknowledged, however, not by absolutizing it, but by making it subject to critical scrutiny and open to a dialogic relationship with whatever ‘other’ we would claim to understand” (Simonds Reference Simonds1975, p. 100).

It is this particular synthesis of analytical stratification of concepts, together with a realization that these constructs are only attempts to understand and see the past from a narrow and historically situated present, that defines Stark’s position of doing history of economic thought. How exactly historians can operationalize this complex construction and apply it to a specific historical period and its writings is seen in the next section, which attempts to use this framework in relation to the mercantilist literature.

III. MERCANTILISM THROUGH STARK’S SOCIOLOGY OF KNOWLEDGE

The very label of “mercantilism” and what it means have been in dispute for 250 years, or at least since Adam Smith used the term in The Wealth of Nations. Contemporary economic historians and historians of economic thought continue to debate a host of questions. These range from a discussion on whether the term has any meaning and should be used at all, or is simply a rhetorical device pointing at a somewhat arbitrary list of authors, to questions of whether the authors of that period can be properly called economists, should be viewed as theorists, or are practitioners and current-affairs-writing merchants.

A historiography of the debates and interpretative lines that the term has attracted will not be attempted here.Footnote ²⁴ The focus will be to investigate the nature of mercantilist thought through the prism of the sociology of knowledge approach that was introduced in the previous section. The suggestion is that this approach can add to existing discussions on the nature of mercantilist thought and an understanding of its context.

One recurrent question in this literature is the discussion whether mercantilism was simply a politically motivated ideology supported by vested interests, or a distinct viewpoint of the economy that contributed to the development of later economic thought. In the terms employed in the previous section, it is important to investigate if mercantilism is primarily a policy stance, and therefore constitutes an ideological position within that society, or if it is a more fundamental view of the social order, and therefore a term that denotes analysis at the level of the sociology of knowledge. Therefore, is it capturing a profound viewpoint of the understanding that society had about itself and its social order, or is it a collection of writings brought together and forming a partisan narrative used for instrumental purposes by a power-seeking pressure group?

The different answers to this question constitute one of the fixed points of this debate from the beginning. To take the most celebrated example, Adam Smith in The Wealth of Nations created an unsympathetic view of the mercantilist writers as confused thinkers whose main aim was political power and influence to further their own private interests. He writes rather revealingly:

This extended quote is interesting because, in some ways, it captures part of the enduring narrative among a number of writers on the subject, seeing mercantilism as a partisan, politically oriented pressure group that lacks true insight on the economy at large.Footnote ²⁵ Smith remarkably claims that while the merchants knew perfectly well their own interests, they did not care to hazard a guess, or wish to theorize even in the most primitive fashion, about the effects of these policies across the economy—a subject that they wrote extensively about. When they did so, it was with the single purpose of advancing their own interests, and clothing them in arguments that would deceive others whose interests where different from their own. Of course, this is a rhetorical device that Smith uses for his own purposes, and we need not take it too seriously. But what is an enduring trope of the discussion on mercantilism is whether it is possible for us to speak of an ideological position as more fundamental to an understanding of social reality—i.e., to what constitutes an insight on how people try to understand their social environment.

One way to see Smith’s argument is to reconstruct it this way. Merchants knew their interests, and these interests (like the pursuit of profit) arise through some pre-social basic understanding that exists in a state of nature. They would not, and would have no reason to, look into how a situation may benefit society at large, as it is not their business. What is their business is to construct arguments that appear plausible to others that would, however, protect and further their own interests. How far these arguments capture an element of social reality, and therefore move us towards a new understanding, is a peripheral, and almost unintended, consequence of this process. This narrative reverses Stark’s order of how we arrive at an understanding of social reality. It starts with interests and these interests then form the basis of tentative social knowledge, which can be twisted and partisan as it is constructed from a narrow ideological position. It may gain wide currency during an era, but that would not make it either indicatory of the period or anything other than the manifestation of the interests of a specific group and its power at that time.Footnote ²⁶

This is, admittedly, a far-fetched reconstruction of Smith’s argument, but it reveals an interesting issue: the quote above clearly shows a society in transition between an old and a new social reality. However, it does not answer the question why is it that people in power (princes, nobles, etc.) did not know how to handle this new situation, and were willing, it seems, to accept the position of ‘merchants’ whose partisan interests, if not evident, could easily be suspected. More substantially, why was there a vacuum in knowledge that these new merchants had to fill with their suggestions, analysis, and policy positions? Is it simply that one group (some producers, merchants) could see more clearly their interests, but the opposing group (the consumers, fiscal authorities) could not yet view theirs? Even if we agree with this viewpoint, it accepts the fundamental insight that there was social transformation that required the formation of new language and argument to fit this new reality.

In his work Stark clearly identifies this transitional period in which mercantilist analysis developed, and speaks approvingly of writers who note the historical context. He agrees with Wilhelm Roscher and finds in his analysis of mercantilism that the historical school is showing “its best side” (Stark Reference Stark1994, p. 196). He writes: “thus, where others, grossly misunderstanding mercantilism, speak of its errors, Roscher grasped its historical meaning: to be the guide of national economy toward modern capitalism” (ibid.). Stark demonstrates how the five principles that Roscher investigatesFootnote ²⁷ related to needs of the time, but qualifies this analysis by arguing that this knowledge is highly contextual and soon became outdated. For example, the importance of increasing the mass of precious metals in a country—a known recurring theme of mercantilist writers—cannot be seen as simply an analytical confusion between real wealth and money, or between private wealth and national wealth, a criticism that has been repeated since Adam Smith’s time, but instead as an understanding that the increase of precious metals in a country would improve circulation and therefore commerce and production at a period in which social structures were undergoing fundamental change. It is this social transformation that lies at the center of this pressing social need. At one end the monetary structure and the price system of the economy remain fairly medieval; at the other, new patterns of trade and production require entirely new foundations to prosper. The writers dealing with the economic realities at the time try to square this transitional phase, and to theorize from what is a socially acceptable position.Footnote ²⁸ Stark writes: “a natural economy with little circulation was about to be transformed into an exchange economy with much circulation: thus more means of circulation had to fulfil their mission, i.e. to circulate” (Stark Reference Stark1944, p. 11). He continues by saying that from a later perspective,Footnote ²⁹ this increase in metals may appear unnecessary, as prices should adjust appropriately to the existing volume of precious metals in a country, so this preoccupation with increasing them seems entirely unjustified. But he writes:

He notes, however, that this preoccupation with more silver and gold—as well as the other preoccupations of the mercantilists—can apply only in the very specific social conditions of this transitional phase. Thus, “all these ideas, however, were only proper to a time of transition and necessarily became senseless as soon as the development of national economy had reached its first stage of equilibrium” (Stark Reference Stark1944, p. 13). So Stark manages an interesting combination of validation of the mercantilists vis-à-vis their social reality and, at the same time, a judgment of their theoretical insight as an irrelevant viewpoint, completely confined to its historical period, and of interest only in relation to it. This achieves a disassociation of later economic analysis with mercantilist thought, not through the usual channel of bad or primitive analytical argument but because of the complete transformation of society that embeds their language and thought.

In some ways Stark’s brief analysis of mercantilism falls short of the full vision of his own complex historiographical scheme.Footnote ³⁰ At one end he uses language and economic analysis that are fairly modern to explain why mercantilist thought was right for its time, projecting therefore modern understandings and analysis into their writings, and at the other end exhausts his analysis to a mere description of the relation of theory to its historical setting—the very type of reductionism that he wrote against in Stark (Reference Stark1994) as the weakness of the descriptive school of historical analysis. What is missing is an abstraction, a speculation, on what formed the basis of their social vision and its consonance with the transformative social period that it flourishes in.

One suggestion forward is to assemble insights found in the secondary literature investigating mercantilist thought and give them a unifying framework. This framework is that society was both medieval in its impulses and thoughts and proto-modern in its profit motive and exchange relations, and the mercantilist writers were trying to form a view that combined these tensions. Their advantage was that future economy and society had not yet taken the form that they would assume after the Industrial Revolution. Their vision of the future was inevitably broader than what was historically realized—or forms the social understanding of later society. This allowed an understanding of the present and the future that could not be replicated in later periods.

In broad terms, it may be argued that this viewpoint was formed by the following preoccupations. First, as Gustav Schmoller (Reference Schmoller1896) noted, mercantilism has an interest in nation-state building, as a new social and economic entity that transformed social reality from its medieval social center, the village and its social relations, to a system that had an unprecedented level of centralized organization. It is not really contested that most mercantilist writers were in favor of this transformation, and their work was to situate commercial relations within this new political and social context. Their policy advice was to form, strengthen, and broaden this new polity. Second, they generally held to a viewpoint of a natural hierarchical relation in consumption and production in society,Footnote ³¹ as well as a particular ethical stance concerning the different parts of society and their obligations and duties.Footnote ³² In this they were quite premodern. The viewpoint of a society populated by individuals of equal rights and responsibilities doing felicific calculus and that this necessarily achieves a socially desirable maximum is as alien and unintelligible to them Footnote ³³ as the belief that the restriction of the ability to buy certain luxury goods from abroad is not a welfare-reducing outcome for society at large is to us.Footnote ³⁴

The conflation of these two contradicting realities, the modern nation-state’s economy with its production and exchange relations and an almost medieval viewpoint on the nature of society, lies at the center of their unique vision of the social and economic order. It brings together under one roof concepts that seem alien to us. For example, Eli Heckscher observed that this social transformation moved the mercantilists from “a policy of provision,” an element characterizing medieval village life, to a “system of protection” that was characterized by the impulse that “selling was an end in itself” (Heckscher [1935] Reference Heckscher1955, vol. II, p. 118). As Lars Magnusson writes, “this psychological attitude to fear goods had its historical roots in the autarchic conditions of the medieval age, Heckscher suggested” (Magnusson Reference Magnusson2015, p. 27). And this is only one example of this medieval attitude. The concern with unemployment, or their concern with underpopulation that mercantilist writers return to frequently in their writings, are problems that would typically occupy a local community that tries to survive under adverse conditions. That these concerns are now mapped onto a nation-state is part of the new social and political reality and defines their viewpoint. This particular viewpoint developed, at times, interesting cross-purposes; for example, their attitude towards inducing the importation of precious metals can be seen as facilitating the new exchange economy—and therefore corresponding to a new need arising in mercantile society’s increasing volume of interpersonal trade—and from a medieval impulse in provisioning that suggested that such hoards can be useful in a variety of situations, even to purchase armies in time of threat. This particular viewpoint is of a time when the medieval certainty of reproduction of production practices together with autarchy and community isolation start to be abandoned, but the later viewpoints of individual liberty and market equilibrium, or class struggle and class interests, have yet to arise as coherent viewpoints of the social order.

Perhaps one of the best summary statements of this composite viewpoint can be found in the following lines by Charles Davenant that Stark (Reference Stark1943b) also approvingly quotes:

In reading these lines, it is difficult not to be swept by a sense of urgency, almost anxiety, concerning how many things are needed for “true and lasting Riches.” Complacency is not one of the sins mercantilist writers can be accused of. In fact, it is revealing to see that this transitional viewpoint does not presuppose an inherent new social balance either within or between states. The medieval mind, as Stark noted (Stark Reference Stark1956), was set against change, and the creation of this new mercantile economy that started developing was perceived as a threat to the social order even during the late medieval period. By the time of the mercantilist writers from the seventeenth century onwards, this social transformation was a certainty, and the very nature of this new social class, together with new production methods and a new array of traded goods, necessitated the creation of a new social understanding. It would appear the mercantilist writers were aware of this, and were also concerned with the outcome of these new impulses to profit and trade, something that they understood as it defined their professional lives. However, these impulses must have left them uneasy about the inherent balance of the social system at large. Both actual experience and religious and secular writings would point to this mercantile economy as upsetting a pre-existing balance. This creates the natural anxiety that social chaos was a future that could not be ruled out as a distinct possibility and as a new social reality.

This speculative reading of their work may be another reason behind the enlarged role they seem to ascribe to the nation-state. It could be seen as a natural extension of the institutional framework that had worked during the Middle Ages and as the new social and emotional core that it was now expected to represent. The vision of a paternalistic state organized under the aegis of a king had a significance and acceptance for that society that cannot be fully understood, and certainly be morally accepted, today.Footnote ³⁵ This may also explain their continual interest in economic policy as the practical manifestation of this new social institution. It also defined their particular methodology of how to approach policy problems, by bringing together analytical argument and practical experience, without necessarily expecting a correspondence between the two that later economists would require as proof of scientific argument. This can explain, for example, Sir Josiah Child’s methodology, which is captured, in a critical manner, in the following modern assessment by William Letwin:

That this approach sounds incoherent to theorists trained to recognize theoretical argument and policy recommendation shaped in specific modern terms is perfectly reasonable. But such a modern reading defines an approach to the history of economic thought that does not start with an effort to distance oneself from the present and to construct a tentative understanding of the type of discourse that this society produced and used in its argument and debate. Letwin, for example, further notes that Child’s method of argument was to rest

Letwin follows through this argument to its natural conclusion, and writes that

Thus Letwin, as a modern reader, ascertains that if this method of argument cannot convince him, then it would not have convinced Child’s contemporaries. This narrative reasons the opposite way to what Stark’s sociology of knowledge approach attempts, which is to approach the past by becoming increasingly aware of the preconceptions that form present discourse.

And yet, Child was extremely successful in making a fortune, and was a constant participant in the public debates at the time in which his arguments and this discourse were discussed and at times even imitated.Footnote ³⁷ More broadly, this mixture of practice, abstraction, and experimentation indicates a specific form of discourse that was coherent and accepted as authoritative at the time. Magnusson perceptively writes:

This discourse united political, economic, and social realities, with a coalescing understanding about the social order, into a specific viewpoint that this society had from itself and about itself.

IV. FROM CONTEXTUAL THEORIZING TO PLURALISM

The analysis above argued in favor of a more speculative, and therefore tentative, reading of the mercantilist literature in order to understand and judge the success of these writers within their social context and intellectual milieu. It has, however, left open the charge that this remains an antiquarian exercise of little use if our objective is an understanding of contemporary society. As noted, Stark argued that the mercantilist writers hold no insight outside their own social context. This extreme position creates lateral breaks in the evolution of economic thought, as new social realities produce new thought arising primarily from their social conditions that correspond to that social order. Any kind of discussion with the past seems to have to traverse an unbridgeable chasm. Our theorizing is as useless to understand their society as theirs is to understand ours.

This kind of relativism is particularly strong in Stark (Reference Stark1944). It is also what Keynes, in his correspondence with Stark, commented upon as the main departure of how he thinks of the past. He writes to Stark on January 6, 1945:

Keynes’s position as an historian of economic thought remains a somewhat controversial topic. While his erudition is not in question, his work on the subject, especially in chapter 23 of The General Theory, where he outlines his grand historical narrative on an alternative tradition that unites his views on mercantilism, the usury laws, and the history of under-consumption theory, has been variously received. Footnote ³⁸ Roy Harrod, reading this chapter in proof, noted:

This was in answer to Keynes, who a few days earlier (on 27/08/1935) had tried to defend his position on the mercantilists by noting:Footnote ³⁹

One interesting question is why Keynes was so attached to the mercantilists and also to tracing antecedents to his theoretical positions.Footnote ⁴⁰ As he wrote to Stark, he believed in progress in economic thought, and yet, this was not the usual linear progress where new theories overtake old ones. In fact, the whole of The General Theory is constructed on a narrative that partly, purportedly, attempts to resurrect ideas from T. Robert Malthus and other writers lost in the mists of time, but which hold relevance over existing orthodoxy.

Therefore, the contrast between these two positions allows us to construct an alternative basis that grounds Keynes’s understanding of the uses of past theory and discourse. In chapter 23 of The General Theory he starts by originally defining mercantilism as the opinion “that there is a peculiar advantage to a country in a favourable balance of trade, and grave danger in an unfavourable balance, particularly if it results in an efflux of precious metals” (Keynes Reference Keynes1936, p. 333). A few lines later he adds that “it will be convenient, in accordance with tradition, to designate the older opinion as mercantilism, and the newer as free trade, though these terms, since each of them has both a broader and a narrower signification, must be interpreted with reference to the context” (Keynes Reference Keynes1936, p. 333; emphasis in original). This qualification is important not only because Keynes immediately introduces context as an important element when discussing abstract theoretical positions and broad constructs (like the concept of mercantilism) but also because he soon evolves this definition by arguing that mercantilists held more complex views than what is traditionally ascribed to them, and understood an array of real world problems from a variety of policy perspectives. The whole narrative of the chapter is constructed around the axis of mercantilists and then later writers whose core view of the economy was antagonized by the classical school of economics, versus the classical school itself.Footnote ⁴¹ Keynes rephrases mercantilist arguments into the language of The General Theory and finds correspondence of their views with his, when transferred into modern parlance.Footnote ⁴² Furthermore, he does not intend to entirely disregard analytical findings that are identified with the classical school, and, for example, he writes, “the advantages of the international division of labour are real and substantial, even though the classical school greatly overstressed them” (Keynes Reference Keynes1936, p. 338). At the same time he cautions that the mercantilists did not always advocate trade restrictions, and, therefore, “the reader must not reach a premature conclusion to the practical policy to which our argument leads up” (Keynes Reference Keynes1936, p. 338; emphasis in original).

The reader senses that Keynes does not question the analytical superiority of the classical economists over the mercantilists but their practical relevance. The real question is: If the classical school is starting from this superior ground of theoretical clarity, why not extend it to encompass these policy questions and instead argue that the very nature of classical analysis did not allow these questions to be meaningfully asked?

A usual answer to this question is that Keynes was employing a rhetorical device to highlight his own contributions to economic theory. The implicit argument is that economic theory evolves and extends to new analytical domains as more theoretical findings are added to this approach and fine-tune its relation among theory, policy, and economic reality. However, starting from Stark’s historiographic framework, we may tentatively argue that Keynes’s narrative is following another path, which is that these theoretical paradigms are constituted around different core visions of economy and society and therefore lead to different ways of doing economics.Footnote ⁴³ Furthermore, these core visions employ a different kind of discourse that is related to the particular literature this society comes up with. If one sees the past through this lens, one can argue that Keynes found in the mercantilists a social vision that was akin to his own. From this base he intended to extend their framework by adding theoretical clarity and updating it in a variety of ways that would suit his modern needs.Footnote ⁴⁴

What is this vision? For Keynes of The General Theory, it seems to be the fact that there is no natural tendency of the economic system to balance itself. For example, he writes that “Mercantilists’ thought never supposed that there was a self-adjusting tendency by which the rate of interest would be established at the appropriate level” (Keynes Reference Keynes1936, p. 341). He also notes the centrality of the problem of full employment by mercantilist writers, who did not presuppose that the system would reach equilibrium but could instead have chronic underemployment due to monetary conditions. He notes that “there was wisdom in their intense preoccupation with keeping down the rate of interest,… by maintaining the domestic stock of money and by discouraging rises in the wage-unit” (Keynes Reference Keynes1936, p. 240). Therefore, Keynes finds a significant relation with what he perceives to be the underlying systemic vision of society of these writings and his own,Footnote ⁴⁵ but he also finds that alternative traditions in economics construct economic knowledge in different ways. For example, Keynes notes that the mercantilists “were under no illusions as to the nationalistic character of their policies and their tendency to promote war” (Keynes Reference Keynes1936, p. 348). They were fully aware of the normative nature of their theoretical and policy positions, and did not eschew the political and moral ramifications of their analysis, even if this was, at times, unpalatable. Keynes finds this mind frame more useful than what he perceives as the opposite, which he calls “the confused thinking of contemporary advocates of an international fixed gold standard and laissez-faire in international lending, who believe that it is precisely these policies which will best promote peace” (Keynes Reference Keynes1936, p. 348). Thus, in Keynes’s view as expressed in The General Theory, there is no piece of technical analysis that stands outside moral and political context and is an analytical truth that leads to unqualified policy prescriptions. Free trade has moral, political, distributional, and socially transformative effects that cannot be ignored or discounted as irrelevant to the economic argument. Therefore, these different overarching narratives of social reality (mercantilism and the classical system) have each their own strengths and weaknesses, and comprehending this leads to a more complex understanding of past theory, instead of reading past texts only with a view to uncover technical refinements of abstract argument over time.

These differences of understanding of social reality at large are, to Keynes, more central than the analytical refinements of later eras. Instead, he sees these technical refinements as being able to be grafted onto the mercantilist general vision of society and economy. He writes:

This allows an extension of the sociology of knowledge historiographic view into new directions. Instead of seeing the past as a corpus of theory and social reality that is only of antiquarian interest, it can be seen as a library of alternative visions of the social order that the modern theorist can try to access through study of their context, language, and theory, and in this way attempt to see if the vision has something of value for understanding today’s reality. This attempt to access another universe of perspectives allows a very deep kind of pluralism that is delineated by history, its literature, and our ability to conceptually and practically access it. In this way, Stark’s sociology of knowledge historical approach becomes a hermeneutic tool of past text and its context. It also gives the history of economic thought a place in modern theorizing that is both unique and vital, as it keeps the theorist returning to the very nature of their fundamental and historically situated viewpoint of society. This allows the theorist to explore anew what are the constitutive elements of their social vision and renew their perspective if a perceived dissonance between reality and theory develops.

V. CONCLUDING REMARKS

This paper’s intension was to, first, explore in depth the meaning of using instrumental concepts for understanding a past period of economic and social history through the lens of economists’ own theorizing, and, second, turn the lens to our own economy and society to see if we can use it to illuminate unexplored or underexplored parts of our reality.

The central reason for attempting this archeology of theory is because looking at the past offers viewpoints that not only do not exist today but cannot arise today unless that process starts through a historical investigation. This is because both the social and intellectual context of modern theory is already formed at an elemental level, and it is based on an understanding of society that defines our thought. In other words, the general vision of society has already been set, and this setting may allow different social understandings and ideological positions, but these cannot extend beyond the limits set by our own social and intellectual reality—by the imagination of the present.Footnote ⁴⁶

In our own struggle to escape from ideas that ramify every corner of our minds, texts from the past and the effort to understand their context allow the opening of vistas that would be closed to us otherwise. Kenneth Boulding calls this “the principle of the extended present” by arguing that great writers of the past must be studied “from the point of view of what they have to say to us today” (Boulding Reference Boulding1971, p. 234). Boulding implicitly argues that texts are, to some extent, vessels of their context, and, as such, embody a perspective that is different from our own. This position, as well as a renewed interest to see and analyze past texts through literary analysis, has been advanced by Keith Tribe (Reference Tribe1978, Reference Tribe2015). Both Boulding and Tribe effectively argue that as long as this perspective is still illuminating parts of our society, then the text has modern relevance.

This activity of modern use is inevitably an attempt to decontextualize the theory, method, and understanding of those writers from their social context for a kind of instrumental application to our own. In this practice there are no generally agreed-upon guidelines on how this activity should take place, as it is by necessity an effort to reduce the wealth of the original insight and place it into a modern narrative. Indeed, the activity will take different forms, depending on what the purpose of the exercise is. If this is an interest to understand the past and therefore implicitly make one better understand the present, Stark offers another perspective that mediates the difficult ground between past and present, context and theory. Iara Vigo de Lima’s work on Foucault’s Archaeology of Political Economy (Vigo de Lima Reference Vigo de Lima2010) as well as Keith Tribe’s Economy of the Word (Tribe Reference Tribe2015) also explore anew this important relation. Stark’s work can be seen as another perspective coming from a different intellectual background and offering another set of analytical distinctions, and therefore permitting another type of speculative theorizing on the context and theory insights of the past.Footnote ⁴⁷ This kind of pluralism of approach allows more insights to be gained, and moves us away from the formulaic application of a singular way to approach the past. Tribe notes that “methodology, like the philosophy of science, is too often thought of as a technique, rather than as a means for reflection” (Tribe Reference Tribe2015, p. 3).

And while the poetics of this exercise are an interesting investigation that lies beyond the limits of this paper, one important insight emanating from Stark’s work is that this should not be a transference that reduces a complex intellectual milieu only to a modern ideological position. The narrative that reduces mercantilism to a one-dimensional policy position in favor of protection across ages and different contexts is one such case of reductionism. The problem with such narratives is that they retain nothing of the wealth of the original insight and the term becomes simply a placeholder in the modern ideological spectrum,Footnote ⁴⁸ especially if used in conjunction with language and theoretical argument drawn from a modern framework, without adding anything new to the debate.

Instead, Keynes’s instrumental use of mercantilism in The General Theory was an attempt to involve the reader in a more substantial activity of narrative creation and self-reflection. His work attempted a dialogue with past texts and authors with the intention of providing a radically different view of contemporary society. This mental and rhetorical trick, forcefully used by Keynes throughout The General Theory, intended a problimatization of the viewpoint that his readers would take as natural and beyond dispute. The past was used instrumentally but to great effect and with purpose, and this fitted within Keynes’s scheme of introducing his readers to novel ideas, suggesting that they need to reread and rethink what they take as given, inspect it anew, and through this exercise contemplate social realities, new and old, that would otherwise be outside the scope of their imagination.