compare mercantilism with an embedded institution essays

compare mercantilism with an embedded institution essays In this essay I will try to answer the proposed essay question: Compare and contrast ancient/medieval and mercantilist economic ideas on the market as an embedded institution. I will begin by discussing ancient/medieval economic ideas and talk a little bit about Thomas Aquinas. The entire premise begins where there is a large piece of land and the owner of the land, lord of the manor (landlord) who is usually a military person, has peasants working on his land to cultivate it in return for their labour they remain on his land. The manor takes a portion of whatever is produced on his land. In this situation people will travel to towns to exchange their goods for goods that they need. This constitutes an exchange which satisfies peoples wants and not for making money. The next progression in the ancient medieval society is the guild (which are similar to unions) they produce one product and they have a monopoly with respect to that product. In order to manufacture the product you have to be a member of that particular guild which in turn wipes out all competition. Therefore this is not a market economy due to the fact that they have zero competition and there is a set price and buyer. We begin to see a change when the merchants are introduced into th e equation. Merchants specialize in making money. They buy from a landlord at a set price and then sell it to a consumer for a higher price. Aquinas tends to favour the peasant - manor relationship, he feels that it is a more stable society and he feels that merchants should not take a profit when reselling to the consumer. Though he will justify a profit if it is for a reasonable purpose, i.e.: transportation costs or for charity. Aquinas wrote on the idea of a just price. I found this article and thought it was a few of the points the writer makes are interesting: "The just price of things is not fixed with mathematical precision," writes Aquinas in the su...