ABSTRACT
John Maynard Keynes feels that preoccupation with the trade balance will also help to augment it indirectly through the instrumentality of a lower interest rate. At the very outset of his consideration of mercantilism, Keynes points out that, contrary to his previous views, a protectionist policy can effectively raise the level of home employment. Keynes is particularly impressed by the mercantilists' attempt to maintain the level of home employment by getting rid of a surplus of domestic goods through the channels of foreign trade. Keynes gives further credence to this view by then asserting that, in an economy where there is a gold standard operative, it is entirely proper that the Government authorities should be preoccupied with the balance of trade. Keynes was more biased towards the restrictionist methods of the mercantilists than towards the laissez-faire policies of the classicists. Keynes summarizes his arguments for conscious control of the trade balance.
