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Bullionism

Bullionism

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Bullionism is an economic theory
Theory
The English word theory was derived from a technical term in Ancient Greek philosophy. The word theoria, , meant "a looking at, viewing, beholding", and referring to contemplation or speculation, as opposed to action...

 that defines wealth
Wealth
Wealth is the abundance of valuable resources or material possessions. The word wealth is derived from the old English wela, which is from an Indo-European word stem...

 by the amount of precious metal
Precious metal
A precious metal is a rare, naturally occurring metallic chemical element of high economic value.Chemically, the precious metals are less reactive than most elements, have high lustre, are softer or more ductile, and have higher melting points than other metals...

s owned. Bullionism is an early or primitive form of mercantilism
Mercantilism
Mercantilism is the economic doctrine in which government control of foreign trade is of paramount importance for ensuring the prosperity and security of the state. In particular, it demands a positive balance of trade. Mercantilism dominated Western European economic policy and discourse from...

. It was derived, in the 16th century, from the observation that the English state
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...

 possessed large amounts of gold
Gold
Gold is a chemical element with the symbol Au and an atomic number of 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Chemically, gold is a...

 and silver
Silver
Silver is a metallic chemical element with the chemical symbol Ag and atomic number 47. A soft, white, lustrous transition metal, it has the highest electrical conductivity of any element and the highest thermal conductivity of any metal...

, in spite of the fact that there was no mining of precious metals on English soil, because of its large trade surplus
Balance of trade
The balance of trade is the difference between the monetary value of exports and imports of output in an economy over a certain period. It is the relationship between a nation's imports and exports...

.

Examples of bullionists


Thomas Milles
Thomas Milles (bailiff)
Thomas Milles was an English customs official, known for his economic writings, in which he defended the staple system.-Life:...

 (1550-1627) and others recommended increasing exports in order to get a trade surplus, converting it into precious metals and hindering the drain of money and precious metal to other countries. Although England practised the interdiction of exportation of £ or precious metals at about 1600, Milles desired to return to staple ports in order to force merchants from abroad to use their assets to buy English goods and to prevent them from transferring gold or silver from England homewards. But Milles was viewed as one who had any valuable words to say on the subject, as 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
Gerard de Malynes 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.-Books:...

 (1586 - 1641), another bullionist, published a book, called A Treatise of the Canker of England's Common Wealth, in which he 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 bankers and money changers, would result in the deficit of English balance of trade. In order to ban the flow of exchange rate
Exchange rate
In finance, an exchange rate between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency...

s, he demanded the strict fixing of exchange rates for coin
Coin
A coin is a piece of hard material that is standardized in weight, is produced in large quantities in order to facilitate trade, and primarily can be used as a legal tender token for commerce in the designated country, region, or territory....

s, only by the concentration of precious metals and weights and for strict regulation and monitoring of foreign trade. But de Malynes did not convince his contemporaries “…that the cambists were responsible for gold outflow or to elicit enthusiasm for a monopoly
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...

 sale of exchange, par pro pari, by the royal exchanger…" But he succeeded in creating the first economic controversy: Edward Misselden
Edward Misselden
Edward Misselden was an English merchant, and leading member of the writers in the Mercantilist group of economic thought. He argued that international movements of specie and fluctuations in the exchange rate depended upon the international trade flows and not the manipulations of the bankers,...

opposed him 1623 in his book The Circle of Commerce: Or, the Balance of Trade.