Bullionism is an
economic
An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the ...
theory that defines
wealth
Wealth is the abundance of Value (economics), valuable financial assets or property, physical possessions which can be converted into a form that can be used for financial transaction, transactions. This includes the core meaning as held in the ...
by the amount of
precious metal
Precious metals are rare, naturally occurring metallic chemical elements of high economic value.
Chemically, the precious metals tend to be less reactive than most elements (see noble metal). They are usually ductile and have a high lustre. ...
s owned.
Bullionism is an early or primitive form of
mercantilism
Mercantilism is an economic policy that is designed to maximize the exports and minimize the imports for an economy. It promotes imperialism, colonialism, tariffs and subsidies on traded goods to achieve that goal. The policy aims to reduce a ...
.{{Citation needed, date=October 2018 It was derived, during the 16th century, from the observation that the
Kingdom of England
The Kingdom of England (, ) was a sovereign state on the island of Great Britain from 12 July 927, when it emerged from various Anglo-Saxon kingdoms, until 1 May 1707, when it united with Scotland to form the Kingdom of Great Britain.
On 1 ...
, because of its large
trade surplus
The balance of trade, commercial balance, or net exports (sometimes symbolized as NX), is the difference between the monetary value of a nation's exports and imports over a certain time period. Sometimes a distinction is made between a balance ...
, possessed large amounts of
gold
Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile met ...
and
silver
Silver is a chemical element with the Symbol (chemistry), symbol Ag (from the Latin ', derived from the Proto-Indo-European wikt:Reconstruction:Proto-Indo-European/h₂erǵ-, ''h₂erǵ'': "shiny" or "white") and atomic number 47. A soft, whi ...
—
bullion
Bullion is non-ferrous metal that has been refined to a high standard of elemental purity. The term is ordinarily applied to bulk metal used in the production of coins and especially to precious metals such as gold and silver. It comes from t ...
—despite the fact that there was not any mining of precious metals in England.
Examples of bullionists
Thomas Milles (1550–1627) and others recommended that England increase exports to create a trade surplus, convert the surplus into precious metals, and hinder the drain of money and precious metal to other countries. England did restrict exportation of money or precious metals around 1600, but Milles wanted to resume using
staple ports (ports where incoming foreign merchants were required to offer their goods for sale before anywhere else) to force merchants from abroad to use their assets to buy English goods and prevent them from transferring gold or silver from England homewards. Milles's opinions, however, were not widely valued. One of his contemporaries wrote, "Milles was so much out of step with the time that his pamphlets had little influence."
Gerard de Malynes
Gerard de Malynes (fl. 1585–1627) was an independent merchant in foreign trade, an English commissioner in the Spanish Netherlands, a government advisor on trade matters, assay master of the mint, and commissioner of mint affairs. His dates of b ...
(1586–1641), another bullionist, published a book named ''A Treatise of the Canker of England's Common Wealth'', that asserted that the exchange of foreign currency had been a trade of value rather than exchanging the weight of metals. Therefore, the unfair exchanging of precious metals by
banker
A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets.
Becaus ...
s and money changers would cause a deficit in the English
balance of trade
The balance of trade, commercial balance, or net exports (sometimes symbolized as NX), is the difference between the monetary value of a nation's exports and imports over a certain time period. Sometimes a distinction is made between a balance ...
. To ban the flow of
exchange rate
In finance, an exchange rate is the rate at which one currency will be exchanged for another currency. Currencies are most commonly national currencies, but may be sub-national as in the case of Hong Kong or supra-national as in the case of ...
s, he demanded the strict fixing of exchange rates for
coin
A coin is a small, flat (usually depending on the country or value), round piece of metal or plastic used primarily as a medium of exchange or legal tender. They are standardized in weight, and produced in large quantities at a mint in order t ...
s, only by the concentration of precious metals and weights, and for strict regulation and monitoring of foreign trade. He failed, however, to convince his contemporaries “...that the cambists were responsible for gold outflow or to elicit enthusiasm for a
monopoly
A monopoly (from Greek language, Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situati ...
sale of exchange, par pro pari, by the royal exchanger." He did succeed in creating one of the first economic controversies, and
Edward Misselden
Edward Misselden (fl. 1608–1654) was an English merchant, and leading member of the writers in the Mercantilist group of economic thought. He argued that international movements of money and fluctuations in the exchange rate depended upon the in ...
opposed him in 1623 in his book ''The Circle of Commerce: Or, the Balance of Trade''.
See also
*
Commodity money
Commodity money is money whose value comes from a commodity of which it is made. Commodity money consists of objects having value or use in themselves (intrinsic value) as well as their value in buying goods.
This is in contrast to representati ...
*
Gold standard
A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the early 1920s, and from the la ...
*
Bimetallism
Bimetallism, also known as the bimetallic standard, is a monetary standard in which the value of the monetary unit is defined as equivalent to certain quantities of two metals, typically gold and silver, creating a fixed rate of exchange betwee ...
*
Metallism
Metallism is the economic principle that the value of money derives from the purchasing power of the commodity upon which it is based. The currency in a metallist monetary system may be made from the commodity itself (commodity money) or it may us ...
*
Monetary policy
Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often a ...
*
Monetary economics
Monetary economics is the branch of economics that studies the different competing theories of money: it provides a framework for analyzing money and considers its functions (such as medium of exchange, store of value and unit of account), and ...
*
Silverite
The Silverites were members of a political movement in the United States in the late-19th century that advocated that silver should continue to be a monetary standard along with gold, as authorized under the Coinage Act of 1792. The Silverite co ...
References
* Irvin L. Jeffery (2008). “Paradigm and Praxis: Seventeenth-Century Mercantilism and the Age of Liberalism” Ph.D. diss., University of Toledo.
International trade theory
Metallism
Preclassical economics