mercantilism it would unfairly brand him as a traitor to the Lutheran cause for the rest of his life Melancthon provided a kind of balance to Luther that Luther himself appreciated He was not a strong leader, and many rightly accuse him of being too eager to compromise Yet his key role in many of the Reformation documents and his personal influence and friendship with many of the reformers clearly show how essential Melancthon was in the early years of the Reformation Melancthon died in 1560 and was buried next to Luther in the castle Church of Wittenberg See also humanism in Europe Further reading: Aland, Kurt Four Reformers: Luther, Melancthon, Calvin, Zwingli Augsburg: MPLS, 1979; Melancthon, Philip Loci communes 1543 J A O Preus, trans St Louis, MO: Concordia Publishing House, 1992; Cox, Francis Augustus The Life of Philip Melancthon: Comprising and Account of the Most Important Transactions of the Reformation Whitefish, MT: Kessinger Publishing Company, 2006 Bruce D Franson mercantilism The theory and practice of mercantilism in early modern Europe were densely entwined with both the emergence of capitalism and the formation of overseas empires Briefly, capitalism can be defined as an economic system in which goods and services, produced by individuals and privately owned firms, are bought and sold in markets, thus benefiting individual owners of capital and private property In early modern Europe, mercantilism extended this notion regarding capitalist production and exchange to the level of the state More specifically, it refers to the theory and practice of how the early modern European states and nation-states related to each other and to their respective colonies The basic theory behind mercantilist practice was fairly simple The whole point of creating overseas colonies was to augment the economic, political, and military power of the colonizing state, often referred to as the “mother country,” though this locution is deceptive, since the unit of analysis is less a “country” than a specific state apparatus Colonies were to serve the colonizing state in two principal ways: as a market for manufactured goods produced in the home country, and as a source of raw materials from which the nation-state’s private producers would cre- 243 ate manufactures An ideal mercantile relationship was thus conceived as hierarchical, reciprocal, and exclusive; the colonizing power was to be dominant, the colony subordinate Manufactures were to flow in one direction, raw materials in the other At the same time, rival colonizing states were to be excluded from this relationship It would not serve the English state’s mercantile interests, for instance, for its rivals (e.g., Spain or France) to trade with its colonies From the perspective of any given colonizing state, the whole point of creating overseas colonies was to enhance its own power vis-à-vis competing states It would therefore be counterproductive for a colonizing state to permit its rivals to benefit by trading with its colonies by either exporting manufactures to them or receiving raw materials from them The exclusionary nature of the ideal mercantilist relationship was thus just as important as its hierarchical and reciprocal qualities Finally, mercantilism also called for low wages and minimal consumption in the home country and for maximizing of exports, thus encouraging industrial development and permitting the greatest percentage of money and resources to be kept in the hands of the state Mercantilist practice often deviated from mercantilist theory, however, depending on time, place, and circumstance Spain, the New World’s first colonizing power, endeavored relentlessly to forge an exclusive mercantile relationship with its colonies, with decidedly mixed success Despite an abundance of laws and decrees intended to ensure an exclusive relationship, smuggling, contraband, and other forms of illicit trade made Spain’s mercantile system, hermetically sealed in theory, exceedingly leaky in practice In addition, Spain did not have the industrial base with which to meet its own or its colonies’ demands for manufactured goods As a result, much of the silver and gold plundered from its New World colonies slipped through the fingers of the Spanish state on its way to Dutch, Flemish, and English merchants, who were able to provide the industrial manufactures that Spanish merchants were not The English were more successful in achieving the mercantilist ideal, principally through a series of Navigation Acts (most notably in 1651 and 1660) that required England’s colonies to trade exclusively with the mother country But here, too, smuggling and contraband poked many holes in the system, rendering mercantilist practice a far cry from the ideal The Dutch state, committed to free trade and frequently encouraging its capitalist class to invest in its rivals’ colonies, rarely adhered to mercantilist theory, yet Dutch