ABSTRACT
THE DEVELOPM ENT OF TH E CLASSICAL TH EORIES
While mercantilism was popular in the period described in the preceding chapter, in the latter half of the eighteenth century it gradually came to be considered as a hindrance to economic progress. About the year 1750 many of the mercantilist doctrines were criticized and new systems of thought were advanced in their stead. The most important of the thinkers, who were responsible for the downfall of the mercantilistic system of thought, are David Hume, the French Physiocrats, and Adam Smith. The contribution of Hume lies mainly in his theory of international price relationships, which served the purpose of a refutation of the theoretical foundations of mercantilism. In the writings of the Physiocrats and Adam Smith are reflected the existing economic and social conditions of France and England respectively. They attacked the mercantilists mainly on practical grounds.
