The mercantilist error refuses to die.  It rests on the belief that one man’s gain must come at another’s expense.  Trade, they insist, is a zero-sum struggle, where nations and individuals compete over a fixed pie of wealth.  Yet nothing could be further from the truth.  Plunder fits that description, not exchange.  War enriches one only by stripping another.  Markets do not.  Voluntary trade enriches both sides, or it would never occur.

Consider the craftsman and his customer.  The craftsman sells a chair, and the customer buys it.  The craftsman earns profit, while the customer gains comfort and utility.  Neither has lost.  The craftsman didn’t injure the customer to create demand, the need already existed.  Profit isn’t theft but the reward for meeting another’s want.  To call this exploitation is to call every improvement in life a crime.

Envy fuels the mercantilist impulse.  If the craftsman prospers, critics cry “price gouging.” If merchants succeed, they cry “excess profits.” These charges are not arguments but disguises for resentment.  They collapse under the simplest test: would the customer prefer to keep his money and forgo the good?  If not, then the exchange was beneficial.  What’s truly unfair—paying dearly for a chair, or having none to sit on?

The harmony of the market lies not in utopia but in its constant movement toward balance.  Buyers seek sellers, sellers seek buyers.  Prices adjust, shortages invite production, surpluses lower costs.  The process is never complete because human wants are never finished.  Perfect foresight would freeze the world in equilibrium, but reality is change, and the market is its most effective response.

This truth doesn’t stop mercantilists from drawing false lines.  Trade across town is welcomed, but trade across borders is condemned.  As though a political boundary transforms gain into loss.  It doesn’t.  Buying bread from your neighbor and buying cloth from abroad both follow the same law: voluntary exchange for mutual benefit.  To deny this is to deny logic itself.

Legislators, intoxicated by mercantilist ideas, imagine they can secure prosperity through restrictions.  Ban “overpriced” goods, cap profits, or bar foreign competition, and they believe they have protected the public.  In reality, they have destroyed choice, driven producers out, and reduced wealth.  When a physician leaves practice because his skills are undervalued, or when a merchant closes shop because imports are banned, who suffers most?  Not the physician, not the merchant, but the family left without care or without goods.

The mercantilist fallacy is old, but its sting is fresh.  It appears every time envy overrules reason, every time a lawmaker claims to protect the people by chaining down trade.  The result is always the same: fewer goods, higher costs, diminished lives.  Trade is harmony.  Plunder isn’t.  The market creates.  The mercantilist destroys.

Reference

Ludwig von Mises; Human Action