Thomas Mun facts for kids

Sir Thomas Mun (17 June 1571 – 21 July 1641) was an English writer on economics and is often referred to as the last of the early mercantilists. Most notably, he is known for serving as the director of the East India Company. Due to his strong belief in the state and his prior experience as a merchant, Mun took on a prominent role during the economic depression which began in 1620. To defend the East India Company and to regain England's economic stability, Mun published A Discourse of Trade from England unto the East-Indies.

Through mercantilist principles, Mun created a proposed set of "means to enrich a kingdom" which centred on ensuring that exports exceeded imports. In other words, Mun advocated for achieving a positive balance of trade which would cause England's wealth to steadily increase. Thomas Mun is also widely considered to be a sophisticated thinker and has become a hugely important part of the history of economic theory.

Life and background

Thomas Mun was born in June 1571. He was the third child of a substantial London family based in the vicinity of St Andrew Hubbard, where he was baptised on 17 June 1571. His father, John Mun, and his stepfather both earned their livings as mercers. His grandfather, also named John Mun, was provost of moneyers in the Royal Mint of England. Through his family ties It can be assumed that Thomas gained insight into matters pertaining to currency and to the economy as a whole. At the age of forty-one, Thomas married Ursula Malcott and together they had three children: John, Ann and Mary. They chose the parish of St Helen Bishopsgate as their home.

Nothing is known about his education, but Thomas's own career as a merchant started around 1596 where he was a member of the Mercers' company and engaged in Mediterranean trade, especially with Italy and the Middle East. He was successful as a practising merchant and was able to amass a large fortune. In 1615, due to his prosperity, Mun was elected as the director of the East India Company and in 1622 was appointed as a member of the standing commission on trade. The rest of his professional career was spent advocating for and promoting the East India Company's interests.

Director of the East India Company

In conjunction with the British Crown, The East India Company was a trading business established to colonise new lands and to pursue trade with the East Indies. In 1615 Mun was elected as the director of the company and set out to ensure that it was operating at full capacity. To achieve this meant that wealth would be maximised and exports would be increased. In 1620, during the onset of the depression, Mun's role within the economy was greatly enhanced. He was forced to not only defend the East India Company and its practices, but also aid the government in correcting the economy.

The trade crisis that eventually led to the depression stemmed from two separate events. First, through the East India Company, England was importing from India at a much higher rate than it was exporting. This negative balance of trade, or trade deficit, meant that England was sending out more money than it was bringing in, a clear detriment to the economy according to the principles of mercantilism. Second, to pay for all of their imports, England sent precious metals to India. As the only real determinant of affluence in the 1600s, due to the fact that paper money was not yet in use in Northern Europe, exporting precious metals was generally unheard of. For the East India Company, however, the exportation restrictions on bullion were reduced. Due to this stipulation, the exchange of silver for luxuries brought a lot of negative attention to the East India Company; citizens believed that it was a large factor in the economic downturn. Mun was thus put forward as a representative of the enterprise. His task was to clear the name of his company while also convincing his clients, and the general public, that the actions taken were ultimately for the best. He conveyed his views through his first published book, A Discourse of Trade from England Unto the East Indies.

Economic policies

According to Mun, foreign trade was the best way to increase the wealth of a nation. More specifically, it was necessary for exports to exceed imports. All other corrective economic policies were secondary. As he says in England's Treasure by Foreign Trade, we must "sell more to strangers yearly than we consume of theirs in value." To achieve this positive balance of trade, Mun laid out a list of criterion which he urged England to follow

• Imported goods that can be produced domestically should be banned.
• Reduce luxurious imported goods by making Englishmen have a taste for English goods.
• Reduce export duties on goods produced domestically for foreign markets.
• If no alternatives are available to its neighbours, England should charge more money for its exports.
• Cultivate wasteland for higher production and to reduce the amount of imports needed from abroad.
• Shipping should be completed solely on English vessels.

See also

In Spanish: Thomas Mun para niños

• Mercantilism
• East India Company
• Balance of trade
• Bullionism
• History of economic thought
• Privy Council of the United Kingdom

Literature

 This article incorporates text from a publication now in the public domain:  "Mun, Thomas". Dictionary of National Biography. (1885–1900). London: Smith, Elder & Co.