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Emily Erikson, Trade and Nation: How Companies and Politics Reshaped Economic Thought

Aashish Velkar
p. 731-736
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Emily Erikson, Trade and Nation: How Companies and Politics Reshaped Economic Thought, New York: Columbia University Place, 2021, 312 pages, 978-023118435-9

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1Trade and Nation describes important changes that occurred in the economic literature in seventeenth-century England and explains why these changes occurred in this period. As the author, Emily Erikson, claims, ‘in the 17th century people began to frame and conceptualise economic matters differently. Growth replaced fair exchange as the standard by which economic activity was judged.’ (3). Her overarching argument is that English merchants, attempting to influence state economic policy, ‘began to write and publish large amounts of work on issues related to trade and finance. This new literature ultimately served as a foundation of classical economics. They shifted the trajectory of economic thought by developing a new literature on economic matters.’ (2)

2Merchants in early modern England, in contrast to other parts of Western Europe such as The Netherlands, were not well integrated or represented in the government. State interventions into commercial affairs such as the granting of patents and monopoly privileges caused unrest and dissension both among merchants and between merchants and the state. When attempts to lobby the state through the parliament failed the merchants resorted to publishing works for all to read to ‘convince the largest possible constituency of their arguments and gain support and influence’ with the state. (126)

3Erikson describes this process, which occurred throughout the seventeenth century, as a ‘courtship’ between merchants and the state. The seemingly unusual choice of the term ‘courtship’ nonetheless conveys not only its more modern usage to mean ‘wooing’ in order to win favour, but also its early modern meaning of adhering to diplomatic and political process of ‘courtcraft’ or ‘courtiership’ (i.e. one who observes the prescribed behaviour in a royal court). This process of courtship, the author argues, was instrumental in the rise of a newly economically powerful commercial class in England as well as a new form of economic thinking based on abstract concepts and empirical observations.

4Erikson also attempts to provide explanations as to why this change uniquely occurred in England and not other European countries. Compared to The Netherlands, for example, England at the time was not an economically powerful nation; ‘a small peripheral country’, as Erikson puts it (8). Her explanations hinge upon the number of new companies established in England compared to The Netherlands in the same period. In fact, the role of chartered companies underscores another important theme developed in this book. Companies were an institution that provided a crucial stimulus for debates, a proliferating economic literature, and ‘a newly popular nationalist rhetorical framework’ for the new literature (112). Her explanation therefore for why this precocious and ‘singular development’ occurs in England rather than elsewhere in Europe has to do with the marginalisation of the merchants from the political process, the rise of chartered companies in this country, and the thriving, interconnecting networks of merchants and mercantile institutions.

5Quite appropriate for a book that is published in ‘The Middle Range’ series of Columbia University Press, Erikson uses computational and comparative approaches to textual and network analysis to draw out her arguments. In addition, various other quantitative and qualitative analytical methods are used in some sections to examine various hypotheses or alternative explanations. Overall, the book is methodologically sophisticated and allows Erikson to systematically ‘test’ her hypothesis and various alternative explanations for why well-connected seventeenth-century English merchants produced a prodigious amount of economics literature.

6The main evidence base for the textual analysis comes from large databases of early modern literature such as Early English Books Online, Making of the Modern World, and English Short Title Catalogue. From these databases Erikson uses texts which cover economic topics and are available in machine readable format to assemble a corpus of literature to be analysed (36). Biographical data on authors is assembled from the Oxford Dictionary of National Biography, Palgrave’s Dictionary of Political Economy, the History of Parliament Project, and Wikipedia (135). The data are cross referenced with ownership data of chartered companies to establish a relationship between investment in chartered companies and the authorship of economic texts analysed in this work (146). This evidence base forms the backbone of Erikson’s computational and network analysis spanning several chapters. Such evidence is complemented by other economic, political, and social data underpinning supplementary analysis at a more macro level.

7The textual analysis which combines computational methods as well as ‘close reading’ of many of the texts allows Erikson to establish the large cultural shifts overtaking economic discourse in this period. Thus, in addition to establishing evidence of ‘secularisation and nationalisation in economic discourse’, she excavates the intellectual contributions made by some of the more influential and well-connected merchants that she studies (96).

8Similarly, the network analysis of authors, their investments in chartered companies, and their publications allows Erikson to establish how merchants, who were more marginalised from the political process and were better connected through investment ties with chartered companies, were more prodigious than other social groups (e.g. professionals or clergy) in producing key economic texts in this period. She is also able to establish how the authorship of the economic texts occurred at an increasing rate and closely associated with company formation.

9The book is broadly structured in two parts. The first three chapters outline the main hypothesis and develop the key arguments. Chapters four, five and six essentially test the various arguments. The first chapter locates the timing of the change that Erikson is primarily interested in investigating; the ‘declining important of fair exchange’ and the concomitant rise of ‘growth’ in economics literature. This ‘corpus’ of literature from the seventeenth century, would seem familiar to economists as it contains ‘modern’ concepts such as balance of trade theories and ‘national economic growth’ (31). The economic logic in these works is presented in an abstract manner, albeit using pre-modern language, is devoid of mathematics, and is culturally distinct from texts of the sixteenth century. The second chapter excavates the various debates that the merchants were involved in such as balance of trade versus bullionism, free trade versus protectionism, monopolies, and so on.

10Chapter three develops the argument that the economic thought which became more sophisticated, empirical, and theoretical can be located within the interconnecting networks of mercantile institutions such as chartered companies, and the political economy of the period. As Erikson says, ‘a powerful clue [as to why these changes took place] lies in the intended audience’ of the texts that the merchants produced (98). A central argument in this chapter is that merchants who did not entirely lack political power and influence nonetheless found that their control over the actions of the state was limited. Because of low rates of representation in the state merchants fought their battles variously by proxy, lobbying politicians, providing parliamentary testimony, petitioning or public appeals. The prodigious amount of literature that the merchants produced, so this argument goes, enabled them to provide reasoned arguments to amplify their lobbying efforts. Erikson sees the role of the chartered companies as ‘a key institutional device motivating the relationship between the state and merchants’ (132).

11Chapter four develops a network of authorship of texts and ownership of chartered companies to locate the prominent merchants and influential economics texts within this ecosystem. The ‘structural analysis’ developed in this chapter intends to show how distance from the state institutions and membership of companies were both important factors that drove the development of a new economic discourse.

12Chapter five contains a comparative analysis of Erikson’s hypothesis in the context of alternative explanations provided in the historiography as to why the new economic thought developed in the seventeenth century. The competing explanations tested include the emergence of the public sphere, the increasing logistical complexities of overseas trade, the role of international competition between nations, and trade depressions during the century. Time series analysis is used to examine all the various explanations including the author’s own. Ericsson concludes that the evidence is compelling for ‘the relationship between changes in company founding rates, rates of merchant representation, and publication rates for economic texts’ and that merchants were ‘prodded into publishing works by the lack of political power and the controversy, resources, and high stakes introduced by chartered companies’ (201).

13Chapter six is a comparative analysis between England and The Netherlands which the author uses to provide ‘another angle of illumination for revealing the factors they drove the increase of economic writings in England’ (203). The main argument advanced in this chapter is that although the two countries were very similar in the early modern period (the Dutch in fact were economically ahead of the British) what The Netherlands possessed and England did not was a government dominated by merchants. Consequently, England saw a much greater number of charter companies established in this period compared to The Netherlands demonstrating that the exclusion of the merchants who ran these companies from economic policy making resulted in an associated rise in economics literature in seventeenth-century England.

14Whether one finds the arguments in this book convincing, in toto or partially, or not, there is no denying that this is an important work on the subject in recent years. There is considerable scholarly literature on merchants, economic thought and the political economy of trade and nationalism in the early modern period. Erikson has contributed to this substantive literature with her previous work on the East India Company. With Trade and Nation, her major contribution is to situate mercantile institutions—the seventeenth century chartered companies such as the East India Company—at the forefront of the changes in economic literature, thought and discourse. It shifts the narrative away from the competition-between-European-states explanations and more towards the self-interests-of-well-connected-merchants explanations for shifts in early modern economic thought. It also cannily avoids the ‘enlightenment’ based explanations that have dominated some historical studies of the late-early modern period.

15As a sociologist, Erikson brings methodological sophistication to historical analysis by assembling and examining an impressive archive of early modern economic texts, the authors of these texts, and their political and mercantile connections. The comparison with The Netherlands helps to situate the English story in a broader European context, which historians of English economic thought often neglect to do. Her explanations for why the Dutch economy gave rise to so few chartered companies in contrast to the situation in England at the same time is compelling even though some historians may remain unconvinced by her explanations. It is certainly a book that all modernists—those scholars who rarely venture before the eighteenth century—should read.

16Notwithstanding the numerous strengths of this well-researched book, to this reviewer there were some unresolved issues. At times the tension between historiography and theory remained unresolved or at least resolved in a rather clunky manner. For instance, the answer to why differences in state-merchant relations led to development in abstract economic thought is not satisfactorily developed. Erikson contends that merchants began to reframe their thought in a nationalistic language to bridge the discursive gulf they experienced between ‘the world of the merchants and the world of the state’. This is not surprising as such practices are not unique to the early modern period—merchants before the seventeenth century and in later periods have resorted to this device to influence state policy (as they continue to do so in the twenty first century). Thus, the argument that ‘the nationalist framing can be understood as a rhetorical move intended to persuade an audience of state elites that was further encouraged by the public/private nature of companies (133),’ is convincing and historically sound.

17The tension between historiography and sociological theory becomes apparent where Erikson argues that ‘the new abstract nature of the debate can be explained by the large number of disputants dispersed throughout England. The empiricism can be explained by the habits of the mind of the merchants who authored the texts (133).’ For such claims to be convincing the analysis needed to reconcile this behaviour with the broader shifts towards abstraction, quantification, or empiricism around this time. Here, the historical evidence Erikson provides is thin and the argument is instead based on a reasoned critique of theorists of the ‘public sphere,’ notably Harrison White. The importance of the public sphere is not the issue here, relevant though it is, nor is the marginalisation of merchants that compelled them to resort to public debates on economic policy by using nationalistic language to promote their thought. To explain the shift towards abstraction in economic thought from the medieval language needed a more robust empirical and historical framework than the public sphere one that she has used.

18Another aspect which remains unresolved in this book, which arises from Erikson’s entirely reasonable focus on the seventeenth century, is how and why joint stock company formation declined in the eighteenth century only to be resurrected in greater force in the nineteenth century. The implications of decline in company formation after 1720 following the Bubble Act on subsequent changes in economic thought is left dangling. Surely, there continued to be major shifts in economic thought during the eighteenth-century even if they were not the kind of changes that Erikson was interested in. Her statement ‘the year 1720 also lies after the main contours of economic thought had already been changed’ (5) does not do justice to this broader question.

19The late-early modern period may not have been the focus of her analysis, partly resulting from the fact that she was mainly interested in examining the corpus of economics literature that she had assembled for this study. Nonetheless, the question of the nature and manner of mercantile and corporate influences on shaping economic thought after 1720, given the marked increases in economic literature of the eighteenth century is an important aspect that emerges from Erikson’s work. Although this latter period is better studied, often in relation to the innovation—or industrialisation—oriented influences on economic thought, modernists need to engage with the insights from this book to re-examine received views about the place of merchants and mercantile institutions on economic thought.

20Trade and Nation is an important piece of historical work that should be read by early-modern and modern historians, economic, business and political historians, and most importantly by economists and historians of the social sciences. Although historians may find the book a bit repetitive in terms of its style—continually returning to the arguments advanced in the first part of the book—social scientists may welcome the care with which the computational analyses are conducted. This book should also be required reading in post-graduate programmes in any of these various disciplines.

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Aashish Velkar, « Emily Erikson, Trade and Nation: How Companies and Politics Reshaped Economic Thought »Œconomia, 11-4 | 2021, 731-736.

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Aashish Velkar, « Emily Erikson, Trade and Nation: How Companies and Politics Reshaped Economic Thought »Œconomia [En ligne], 11-4 | 2021, mis en ligne le 01 décembre 2021, consulté le 23 mai 2022. URL : http://journals.openedition.org/oeconomia/11927 ; DOI : https://doi.org/10.4000/oeconomia.11927

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