334 THE GENERAL THEORY OF EMPLOYMENT bk. vi

to outweigh such advantages as mercantilist practicecan fairly claim, but that the mercantilist argument isbased, from start to finish, on an intellectual confusion.

Marshall, 1 for example, although his references toMercantilism are not altogether unsympathetic, had noregard for their central theory as such and does noteven mention those elements of truth in their conten-tions which I shall examine below. 2 In the same way,the theoretical concessions which free-trade economistshave been ready to make in contemporary contro-versies, relating, for example, to the encouragementof infant industries or to the improvement of the termsof trade, are not concerned with the real substanceof the mercantilist case. During the fiscal contro-versy of the first quarter of the present century I donot remember that any concession was ever allowed byeconomists to the claim that Protection might increasedomestic employment. It will be fairest, perhaps, toquote, as an example, what I wrote myself. So latelyas 1923, as a faithful pupil of the classical school whodid not at that time doubt what he had been taughtand entertained on this matter no reserves at all, Iwrote: “If there is one thing that Protection can notdo, it is to cure Unemployment. . . . There are somearguments for Protection, based upon its securing pos-sible but improbable advantages, to which there is nosimple answer. But the claim to cure Unemploymentinvolves the Protectionist fallacy in its grossest andcrudest form.” 3 As for earlier mercantilist theory, no

1 Vide his Industry and Trade, Appendix D ; Money, Credit and Com-merce, p. 130; and Principles of Economics, Appendix I.

2 His view of them is well summed up in a footnote to the first editionof his Principles, p. 51: “Much study has been given both in England andGermany to medieval opinions as to the relation of money to national wealth.On the whole they are to be regarded as confused through want of a clearunderstanding of the functions of money, rather than as wrong in conse-quence of a deliberate assumption that the increase in the net wealth of anation can be effected only by an increase of the stores of the precious metalsin her.”

3 The Nation and the Athenaeum, November 24, 1923.