What is the mercantile theory?
Mercantilism, economic theory and practice common in Europe from the 16th to the 18th century that promoted governmental regulation of a nation's economy for the purpose of augmenting state power at the expense of rival national powers. It was the economic counterpart of political absolutism.
Mercantilism was the main economic system of trade utilized from the 16th to 18th century. Mercantilist theorists believed that the amount of wealth in the world was static. The goal was to increase a nation's wealth by imposing government regulation that oversaw all of the nation's commercial interests.
- While China is perhaps the most egregious example of a country practicing innovation mercantilism, it is by no means the only one, as similar (if not as prevalent) practices can be found in Brazil, Argentina, India, Japan, Russia, Singapore, South Korea, and a host of other, even European Union, nations.
- Adam Smith coined the term “mercantile system” to describe the system of political economy that sought to enrich the country by restraining imports and encouraging exports. This system dominated Western European economic thought and policies from the sixteenth to the late eighteenth centuries.
- In mercantilism, industries are run and controlled by monopolies which are protected and supported by the government through subsidies. Capitalism views wealth creation as the key to economic growth while mercantilism believes that economic prosperity can be achieved through the extraction of wealth.
SparkNotes: SAT Subject Test: U.S. History: The Colonial Economy: Mercantilism. Beginning around 1650, the British government pursued a policy of mercantilism in international trade. Mercantilism stipulates that in order to build economic strength, a nation must export more than it imports.
- The best-known triangular trading system is the transatlantic slave trade, that operated from the late 16th to early 19th centuries, carrying slaves, cash crops, and manufactured goods between West Africa, Caribbean or American colonies and the European colonial powers, with the northern colonies of British North
- The British victory in the French and Indian War had a great impact on the British Empire. Firstly, it meant a great expansion of British territorial claims in the New World. But the cost of the war had greatly enlarged Britain's debt.
- The Navigation Acts, while enriching Britain, caused resentment in the colonies and contributed to the American Revolution. The Navigation Acts required all of a colony's imports to be either bought from Britain or resold by British merchants in Britain, no matter what price could be obtained elsewhere.
Updated: 28th November 2019