ch. 2 3 NOTES ON MERCANTILISM, ETC. 345

monasteries and the export surplus of precious metals, which,to him, was indeed the worst possible thing which he couldthink of. Davenant explained the extreme poverty of manyEastern nations—who were believed to have more gold andsilver than any other countries in the world—by the fact thattreasure “is suffered to stagnate in the Princes’ Coffers”. . . .If hoarding by the state was considered, at best, a doubtfulboon, and often a great danger, it goes without saying thatprivate hoarding was to be shunned like the pest. It wasone of the tendencies against which innumerable mercantilistwriters thundered, and I do not think it would be possible tofind a single dissentient voice. 1

(2) The mercantilists were aware of the fallacy ofcheapness and the danger that excessive competitionmay turn the terms of trade against a country. ThusMalynes wrote in his Lex Mercatoria (1622): “Strivenot to undersell others to the hurt of the Common-wealth, under colour to increase trade: for trade dothnot increase when commodities are good cheap, be-cause the cheapness proceedeth of the small requestand scarcity of money, which maketh things cheap:so that the contrary augmenteth trade, when there isplenty of money, and commodities become dearer beingin request”. 2 Professor Heckscher sums up as followsthis strand in mercantilist thought:

In the course of a century and a half this standpoint wasformulated again and again in this way, that a country withrelatively less money than other countries must “sell cheapand buy dear”. . . .

Even in the original edition of the Discourse of the CommonWeal, that is in the middle of the 16 th century, this attitudewas already manifested. Hales said, in fact, “And yet ifstrangers should be content to take but our wares for theirs,what should let them to advance the price of other things(meaning: among others, such as we buy from them), thoughours were good cheap unto them? And then shall we be stilllosers, and they at the winning hand with us, while they selldear and yet buy ours good cheap, and consequently enrich

1 Heckscher, op. cit. vol. ii. pp. 210, 211.

2 Heckscher, op. cit. vol. ii. p. 228.