Mercantilism

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Mercantilism was known as the “greatest whipping boys in the economic history” (C.W., 2013). Mercantilism was a theory of trade that was adopted by major European powers in the 1500’s to the 1800’s (Mercantilism, n.d.). It was also an economic nationality for the purpose of building a wealthy and powerful nation. The “mercantile system” is used to describe the political economy that sought to enrich the country through restraining imports and focus on exports (LaHaye, n.d.).
The idea of mercantilism was for nations to export more than they important and accumulate gold or silver, but mainly gold, to make up the difference (Mercantilism, n.d.). At the heart of mercantilism was that by maximizing net exports that would lead them to the best route to national wealth (C.W., 2013). This started “bullionism”, the idea that the only way a person could measure a country’s wealth and success was by the amount of gold that had (C.W., 2013). The best way to achieve “bullionism” was by making fewer imports and much exports. By doing that they make a net inflow of foreign exchange and maximizing the country’s gold stock (C.W., 2013).
Mercantilism start as a reaction against the economic problems of the earlier times. During those times the states were too weak to govern or guide their economies. This lead to every town having their own tariffs on goods passing through their borders (Mercantilism, n.d.). Concepts of mercantilism developed from the rise of powerful nation states, such as, Holland, France, Spain, and England. These nations where marked by constant warfare. The nation states needed money to support their growing armies and navies. The bigger their armies and navies were the more power they were (Mercantilism, n.d.).
Important economic rationale for mercantilism was consolidation of the regional power centers of feudal era by establishing colonies outside of Europe

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