Thomus Mun

Thomas Mun (British, 1571-1641)

He worked on Italian trade, then for East India Company. He was the first mercantilist to

recognize it doesn't matter what your particular flow with any one country is. Rather, what

matters is the overall flow. It's okay to pay a little extra money in one country as opposed to

others. He saw this because he worked for the East India Company. He was actually engage in the

trade and understood there were valuable things you could get and that wouldn't happen if you

weren't willing to spend specie sometimes. "Spend a little money here and you lose some coins.

Then, bring it back to England and sell it at a higher price. You'll gain more coins than you lost the

first time". That was not really what the mercantilists thought for the first part. Mun made that

point for them.

Mun realized that production and the accumulation of capital goods was itself

important because capital goods could increase export flows. He didn't realize that capital goods

are good because they produce things. He just saw them as good because they produce more

things that you could sell. Again, the mercantilists were always looking at selling things to get bullions. They produced something just for the sake of producing it. No, if it couldn't turn into gold, then it's not important.

He knew that you could bring new land under cultivation and created new industries. Now that you produced it yourself, there's no need to buy from someone else and that means our gold was not flowing out. NO REAL FOCUSING ON THE ACTUAL BENEFITS OF THE INDUSTRIES, THAT IS YOU'VE GOT MORE STUFFS.

So, internal trade couldn't enrich the nation. A lot of mercantilists have that view.

He recognized invisible trade. Mun was the first one who said there's other things going on. For example, donating money to the holy land, French people send money back to France, and etc. These are all other sources of inflows and outflows.