[Excerpted from An Austrian Perspective on the History of Economic Thought, vol. 1, Economic Thought Before Adam Smith. An MP3 audio file of this article, read by Jeff Riggenbach, is available for download.]
It used to be held that the famous “antimonopoly” common-law decisions of Chief Justice Sir Edward Coke (1552–1634), the eminent early 17th-century jurist, were an expression of the alleged commitment of a rising class of Puritan merchants to economic liberalism and laissez-faire. A particularly prominent advocate of this thesis is the prolific English Marxist historian Christopher Hill, who needs this view to fit into the Marxian schema of the English Civil War.
It turns out, however, that there are many grave flaws in this thesis. Coke himself was a moderate Anglican, and not particularly concerned with religious issues. He was also not in any sense a merchant or a spokesman for merchants; he was a country gentleman from Norfolk who successively married two heiresses, and spent most of his career as a government lawyer, successively attorney general and chief justice. Also, Coke showed no interest whatever in the new juristic concerns of merchants, such new branches of the law as joint-stock ownership, insurance bankruptcy, negotiable instruments, and commercial contracts.
More important, Coke never displayed any sympathy for laissez-faire. As an MP, Coke supported many mercantilist measures. Furthermore, he had imbibed from his close associate, William Cecil, Lord Burghley, an admiration for the elaborate Tudor structure of state controls. His approach to foreign trade was profoundly mercantilist. Thus, in the 1621 session of Parliament, after he had broken with the Crown, Coke deplored the economic effects of the alleged scarcity of coin. He attacked the unfavorable balance of trade, deplored the fact that the East India Company was allowed to export bullion, and attacked the import trade with France as introducing into England immoral luxury items such as “wines and lace, and such like trifles.” Coke also called for outlawing the importation of tobacco from Spain.
Coke also tried his best to cripple the new practice of exporting unfinished cloth to the Continent and then reimporting the finished cloth. He consistently advocated prohibiting the importation of foreign cloths, as well as the export of unfinished cloth, and also tried to outlaw the export of raw wool to be used by foreign manufactures.
In general, Sir Edward Coke had no quarrel with government regulation and control of trade, or with the creation of monopolies; what he objected to was the king doing the regulating or monopolizing, rather than Parliament. Coke favored the detailed regulation and cartelization of industry, the wage controls, and the compulsory employment imposed by the Statute of Artificers of 1563. He supported the laws against “forestalling and engrossing” that, under the guise of attacks on monopoly and high prices, were actually price-raising and cartelizing devices prohibiting speculation in food products and prohibiting sales outside officially designated local “markets.” Laws against forestalling were lobbied for by privileged owners of local markets trying to exclude competitors and to raise their own prices.
Most important, Coke’s well-known opposition to government-granted monopolies was merely an opposition to grants by the king rather than to grants by Parliament. Thus, in the famous Statute of Monopolies, passed in 1623 and drafted largely by Coke, Parliament abolished royal grants of monopoly privilege, but explicitly reserved to itself the right to grant such privileges, which it soon proceeded to do. The statute also specifically exempted from abolition large categories of royal monopoly, including such industries as printing, gunpowder, and saltpeter, and the rights of “corporations” such as London to prevent non-Londoners from engaging in trade within the city limits, or monopoly corporations engaged in foreign trade. Furthermore, Coke personally favored the monopoly Russia, Virginia, and East India Companies.
Coke’s legal-economic philosophy might be summed up in a phrase he used in Parliament in 1621: “That no Commodity can be banished, but by Act of Parliament.”1
This article is excerpted from An Austrian Perspective on the History of Economic Thought, vol. 1, Economic Thought Before Adam Smith. An MP3 audio file of this article, read by Jeff Riggenbach, is available for download.
- 1Coke did not fully break with the king and adopt the Parliament-over-all position until 1621. In 1616, he was ousted from his post in the Privy Council, but immediately won his way back into King James’s favor by marrying his daughter to Sir John Villiers, the older brother of the Duke of Buckingham. He was still a privy councilor in 1621, and was expected to remain in the Court Party, but the king’s bypassing him for promotion to Lord Chancellor led to Coke’s final break with the Crown.
