1. Foreign Trade
In the first place the mercantilists laid great empha¬sis on a favourable balance of trade. They held that the strength and richness of a country depends on two things-the possession of gold and silver mines and favourable balance of trade. As all the countries did not possess mines of gold and silver, they could built up rich stocks of these metals by exporting maximum of their manufactured articles and import¬ing minimum of commodities from other countries. Highlighting the im¬portance of foreign trade Thomas Mun wrote: "The ordinary means....to increase our wealth and treasure is by Forign Trade....This ought to be encouraged, for upon it hangs the great revenue of the king, the honour of the kingdom, the noble profession of the merchant, the school of our arts, the supply of our poor, the improvement of our lands, the nursery of our mariners, the walls of the kingdom, the means of our treasures, the sinews of our wars and the terror of our enemies." For the maintenance of a favourable balance of trade the mercantilists favoured commercial regulation. They insisted on discouraging the im¬ports through imposition of heavy duties and prohibitions on foreign goods. On the other hand, the exports should be encouraged through bounties and other artificial stimulation of domestic agriculture and indus¬try. For the promotion of the country's trade a number of Navigation laws were passed to ensure that the country's trade remained in the hands of the native shippers. The mercantilism not only laid emphasis on the regulation of foreign trade but also emphasized the principle of monopoly. In most of the European countries the right to engage in foreign trade was vested only in a small privileged section of the society. For example, the British govern¬ment allowed its subjects to trade freely only with a small area (viz. France, Spain and Portugal) while the rest of the world was divided for trading purposes amongst numerous joint stock companies. Each...
Please join StudyMode to read the full document