English Mercantilist of the "liberal" stripe.
Born in Westminster, of a family of English notables. His father was Dudley North, the 4th Baron North, an English peer, his brother Francis (Baron Guildford) was a notable jurist who would later become the Lord Chancellor of James II and another brother John became a cleric and master of Trinity College, Cambridge. Dudley North, the fourth son, showed little aptitude for schooling, and was early designated for the mercantile life. He was apprenticed to a overseas merchant involved in the English trade with Russia and the Ottoman empire. In 1661, North was sent as a factor to Smyrna, Anatolia, but subsequently quarreled with his employer-partner, and began trading on his own account. North's business flourished and he eventually moved to Constantinople. North soon amassed a fortune and rose in the ranks of the English Levant Company, becoming treasurer by 1670.
Feeling wealthy enough, before the age of forty, Dudley North returned to England in 1680, leaving his business in Constantinople in the hands of another brother (Montague North). As a prominent figure in the City of London with well-placed relatives loyal to the crown, Dudley North was quickly fingered by the royal council of Charles II as a potentially useful figure, "their man" in otherwise hostile London. In June, 1682, they arranged for North's election as sheriff of London, over the howling opposition of the Whigs. North was knighted in the course of his year's service and, around the same time, married Ann Cann Gunning, a wealthy widow and heiress, with a fortune larger than his own. In 1683, North was appointed commissioner of customs, and a year later, in July 1684, appointed to the Treasury commission. After the death of Charles II in 1685, North returned to the customs commission and was elected in 1685 as member of parliament for Bambury (cb).
At the Glorious Revolution of 1688, North did not flee England with other Jacobites, but stayed in London and transferred his loyalty to William of Orange. Nonetheless, vengeful Whigs tried to implicate him in their retroactive investigation of his time as sheriff (notably his arrangement of the kangaroo trials that followed the Rye House plot in 1683), but North shook off the charges. Dudley spent his remaining years focused on his trading business, and managing his fortune and that of his relatives. He died on December 31, 1691.
A few weeks before his death, Sir Dudley North anonymously published his Discourse on Trade, one of the earliest treatises breaking the Mercantilist mould, moving it away with its obsession with precious metal and advocating free trade. North's motives were to calm fears of the nascent English "currency crisis", when it was widely believed there was a scarcity of coinage due to a variety of factors, including gold and silver flowing out of the country by trade imbalances. As a leading trader in London, North felt obligated to correct that impression. Unlike his more empirically-minded contemporaries, like Petty, who swamped their readers with masses of data to support their case, North takes a "rationalist" approach, reminiscent of Newton and Descartes, to support his positions. He systematically sets out fourteen propositions (prop), and defends them one by one.
While North acknowledged money had real value as a metal commodity, and also an extra value for its convenient services in transactions, the wealth of the nation really consists of the satisfaction of consumption wants. North regarded trade as a "commutation of superfluities" (a way to get rid of produced surpluses, excess supplies in return for excess demands), and should not be merely though of as a way a nation could acquire treasure. North asserts that trade benefits traders and also benefits the country. He denounces trade monopolies, which he argues are really curtailing trade under the veil of promoting it, and produce no benefit but simply transfer profits from one merchant to another. He argued that prices, including the value of money as a commodity, are determined by supply and demand, and explains the relationship between excesses and price adjustment.. That the volume of money in circulation may be temporarily too little or too much, but ultimately the quantity of money adjusts to the needs of trade (he posits an automatic mechanism to explain hoarding and dishoarding of coins; he also underlines the importance of free minting and the "theft" of debasement). Consequently "shortage of money" is often a red herring, and really is just an indicator of some kind of problem in real markets, with lack of revenues and profits, due to overproduction, some disruption of trade or shortfall in demand (he hints at an underconsumption thesis). North advocates the lifting of trade restrictions, the elimination of price controls and a low interest rate policy to promote trade. And once trade picks up, the "currency crisis" will resolve itself.
North's 1691 tract did not have an impact - its print run was exceedingly small (North's brother suggests it was suppressed by royal order) and its existence largely unknown to contemporaries. John Ramsay McCulloch stumbled on a copy and had it printed in his 1822 and then again in his 1856 collection on early English tracts.
[Note: McCulloch also suggested that a second scarce tract (Considerations of the East-India Trade, published in 1701 (p.541)), might have also been written by Sir Dudley North. As a result, the Considerations were for a long time attributed by historians of economic thought to North, but scholars (such as Viner) have shown otherwise (e.g. it refers to two East India Companies, which did not come into being until after North's death). The Considerations are now usually attributed to Henry Martyn.]
Historians have been divided on their estimation of Sir Dudley North. Some (e.g. Schumpeter) regard it as a confused tract, or not any more noteworthy than other contemporary Mercantilist writers of liberal leanings. But others have hailed North as a prescient anticipator of many of the arguments made a century later by Adam Smith (e.g. many assert North was among the first to distinguish capital as a separate factor of production). They argue that North at least deserves the honors of ancestor to British Classicism similar to those afforded to his contemporary Boisguilbert by the French school. The difference, of course, is that Boisguilbert was actually read by descendants, and was a decided influence, whereas North was only retroactively discovered.
[Note: Scholars (e.g. Letwin) have also raised the question of whether North actually composed the Discourses by himself, at least as it is written, some suggesting the material may have been rearranged and massaged by his brother Roger North from a differently-organized draft left by Dudley, that Dudley was just a dyed-in-wool Mercantilist with muddled ideas, and it is Roger that deserves to be credited for deriving its liberal policy conclusions.]
Major Works of Sir Dudley North
Resources on Dudley North
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