Topics: Mercantilism, International trade, Economics Pages: 5 (1812 words) Published: March 14, 2011

How do you develop a successful government that will please an entire nation? Since colonization the United States has been a country in pursuit of economic dominance over nation states. Mercantilism, liberalism, and structuralism have at some point in time been used to accomplish this goal of subjugated national welfare. These philosophies can be thought of as blueprints by which the state operates and from which its policy emanates, always changing across nations never truly in a state of agreement. Although there are many differences between international economic policy, without fundamental views such as mercantilism, liberalism, and structuralism humanity would quickly devolve into erratic economic policy. Which analysis of IPE is better than the other is up for debate, but there is a strong belief that mercantilism in the 1600’s and 1700’s was successful and mercantilism should be reincorporated into our governmental system today. Mercantilism has strong historical roots in British government. It was the predominant school of economic thought throughout two centuries, spanning the 1500s to the 1700s. Adam Smith was the first to use the term Mercantile System, defined as a system based on the government actively fostering economic policies of protectionism that would promote export and discourage imports, so as to enhance capital. The intent is to maintain a positive balance of trade by facilitating the influx of gold and silver (bullion), the origin at that time for measuring the wealth of a nation. It was during this era of mercantilism that much of what constitutes modern capitalism was instituted, as witnessed by the economic policies of government intervention and control. Historically it was a system that benefited the merchants and manufacturers since they enjoyed state protection and support. For example, capital for new businesses would come from the state, as would exemptions from taxes. The state would also reward high yield producers with titles or pensions. And with regards to trade, the state would enforce tariffs and restrictions on importers so as to protect the local industries. It would even prohibit the export of skilled workers, tools and goods. Though mercantilism has been defined differently among other nations and over time, there are nine principles of national economy that represent mercantile ideas as a whole. First every inch of soil should be utilized either for agriculture, mining, or manufacturing. Second large working population should be encouraged. Third all raw domestic resources should be used for producing final goods like tools and cloth that are of more value. Fourth only manufactured goods should be exported but raw materials are forbidden to export. Fifth no gold or silvers can/should be exported. Sixth if raw materials are imported, it should be paid for by exporting other goods. Seventh new market should be sought and extended for exporting its surplus goods. Eight Only raw materials can be imported, and lastly if a good is sufficiently and suitably supplied at home “your country”, it should not be prohibited to be imported. These nine characteristics of mercantilism doctrine were a reaction against the economic problems of earlier times. States were too weak to lead their economies and every town implemented it own tariffs on goods passing through its borders. The modern age brought the rise of powerful nation states such as Holland, France, Spain and England it was almost immediately marked by constant warfare. underlying mercantilist theory was the belief that wealth was finite. If one nation hoped to grow richer, it had to do so at the expense of some other nation. For mercantilists, the international economy is an arena of conflict between opposing national interests, rather than an area of cooperation and mutual gain. The economic competition between states is thus regarded as a ‘zero sum game’; one state’s gain is another’s loss. Additionally,...
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