Q:

What is mercantilism?

A:

Mercantilism, or mercantile system, is a political economic system whereby countries restrict imports and encourage exports. The rationale is to balance foreign trade in such a way that would increase revenue without negatively impacting domestic employment.

The mercantile system was the standard among Western European nations between the 16th and late 18th centuries.

One of its chief objectives was to colonize countries beyond the power centers of Europe. This was important as a means of expanding the scope of commerce and of instituting standardized monetary systems based on gold and silver.

Mercantilism gave rise to many violent military conflicts regarding territory. The goal of each nation had become financing a superior military, for both defense and colonial expansion.

For Western European countries, and for Great Britain especially, the mercantilist period was one of great economic growth.

Even so, Adam Smith argued in "The Wealth of Nations" that mercantilism neglected the welfare of the general population, while funneling benefits toward the political and commercial classes. His argument was in favor of free markets.

England gradually accorded with Smith's observation, abolishing all mercantile regulations and tariffs by 1860. As a result, Great Britain became Europe's strongest economy, supported by the extensive agriculture of the American colonies.

Sources:

  1. econlib.org

Is this answer helpful?

Similar Questions

  • Q:

    What are the imports and exports of Monaco?

    A:

    Monaco exports textiles, manufactured products and art products. The principality imports food, chemicals and transportation products. Monaco's import industry is smaller than its export industry. As of 2014, the area's largest trading partners were countries in the European Union. Monaco also trades with the United States and China.

    Full Answer >
    Filed Under:
  • Q:

    What were the effects of mercantilism?

    A:

    Mercantilism had an effect in many areas, including politics, economics and culture. Some of the major impacts included the expansion of colonies overseas, increased government regulation of trade and the promotion of manufacturing. Many of these effects still influence global trade and politics in modern society.

    Full Answer >
    Filed Under:
  • Q:

    What are LNG exports?

    A:

    "LNG exports" refers to the exportation of liquefied natural gas. Liquefied natural gas is a clear and odorless liquid that forms when natural gas is cooled to a temperature of roughly -260 degrees Fahrenheit. LNG has been handled safely and exported for several decades without incident.

    Full Answer >
    Filed Under:
  • Q:

    What are the advantages and disadvantages of mercantilism?

    A:

    The benefits of mercantilism include increased employment, the development of new technologies and products, and positive cultural exchanges as mercantilist nations seek new markets and raw material sources, whereas the disadvantages of the system include increased conflict between nations, growth in trade protectionism and the development of trade monopolies. The Library of Economics and Liberty defines mercantilism as a form of nationalism aimed at building a wealthy and powerful state.

    Full Answer >
    Filed Under:

Explore