Adam Smith and Colbert

Jean- Baptiste Colbert and Adam Smith although wanted to increase the wealth of their respective countries, their ideologies differed greatly when it came to their recommendations. Jean- Baptiste urges mercantilist policies for France whilst Adam Smith advocates a free market capitalistic system for his country.

Jean- Baptiste Colbert, born 29 August 1619- 6 September 1683, was the Minister of Finance under the rule of king Louis XIV. During Colbert's time in office, he sought to ameliorate the economy from the verge of bankruptcy that was caused by the king's superfluous spending on wars. Colbert's main priority was to make France self- sufficient in economic terms. In order to achieve that Colbert worked to create a favorable balance of trade by that he exemplified classical mercantilism. In short, mercantilism is the economic ideology in which the government control of foreign trade is of prime importance for establishing the prosperity and security of the state. Mercantilist policies include but not limited to high tariffs especially on manufactured goods, monopolizing markets, exclusive trade with colonies, forbidding trade on foreign ships, subsidizations, limiting wages, and as well as maximizing the use of domestic resources. The most apparent way he utilized these mercantilist policies were in some of his acts. One specific example is when he subsidized the established cloth industries in Abbeville, Saint-Quentin, and Carcassonne. Also in order to protect French products, he put an end to many domestic tariffs and put into practice exorbitant foreign tariffs, which prevented foreign products from competing with French ones yet these examples are just a few. In the end, despite Colbert's endeavors, France became impoverished due to an inadequate tax base and heavy expenditures for war.

On the other hand, Scottish professor of philosophy Adam Smith (1723-1790) thought differently than that of the mercantilist ideals of Jean- Baptiste Colbert. In the Inquiry into the Nature and Causes of the Wealth of Nations (1776) Smith discusses the reflection on economics at the beginning of the industrial revolution and argues that free market economies are more productive and beneficial to their societies. A free market is a highly competitive market where prices are determined by the amount of supply and demand. He also was highly critical of the ideas of mercantilism in which he stated, meant a combination of stifling government regulations and unjust privileges for state- approved monopolies and government favorites. He advocated for individual power than government power and control. He argued that the government has "only three duties" protection against foreign invasion, maintain civil order, and sponsor certain indispensible public works that could never profit private invertors.

With the information provided, it is evinced how Jean- Baptiste Colbert and Adam Smith differed in their