Topic > Mercantilism - 869

Mercantilism was known as the “greatest scourge in economic history” (CW, 2013). Mercantilism was a theory of trade adopted by major European powers from 1500 to 1800 (Mercantilism, n.d.). It was also an economic nationality with the aim of building a rich and powerful nation. The “merchant system” is used to describe the political economy that sought to enrich the country by limiting imports and focusing on exports (LaHaye, n.d.). The idea of ​​mercantilism was that nations exported more than they were worth and hoarded gold or silver, but mostly gold, to make up the difference (Mercantilism, n.d.). At the heart of mercantilism was the maximization of net exports which would put them on the best path to national wealth (CW, 2013). This began “bullionism,” the idea that the only way a person could measure a country's wealth and success was by how much gold they owned (CW, 2013). The best way to achieve “bullying” was to do fewer imports and lots of exports. This way they create a net inflow of foreign currency and maximize the country's gold reserves (CW, 2013). Mercantilism begins as a reaction against the economic problems of previous times. At that time, states were too weak to govern or lead their own economies. This led to each city having its own tariffs on goods crossing its borders (Mercantilism, n.d.). Concepts of mercantilism developed from the rise of powerful nation states, such as Holland, France, Spain, and England. These nations were marked by constant warfare. Nation states needed money to support their growing armies and navies. The larger their armies and fleets, the greater their power (Mercantilism, n.d.). An important economic motivation for mercantilism was the consolidation of feudal-era regional power centers by establishing colonies outside Europe